International Business Lectures (2014)Apunte Inglés
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International Business Lectures
What is International business?
It is a business whose activities are carried out across national borders. Includes all the steps involved in the
production of a product (international trade, foreign manufacturing, transportation, tourism, advertising,
construction, retailing, wholesaling, and mass communication)
The study of transactions across national borders which pursues to satisfy organizations and people
All business transactions (private and public) which involve two or more nations
Why is it important?
International competition is increasing worldwide
Most companies face international competition at home
It’s a process of shifting towards a more integrated and interdependent world economy. It’s reflected in increasing
cross‐border flows of three types of entities: goods and services, capital and know‐how.
Components Markets Fusion of different markets in one global market Production Firms get goods and services supplied from different firms around the world (advantages in quality and cost) Differences in meanings Multidomestic Company Has multi-country affiliates, each of which Formulates its own business strategy based on perceived market differences Global Company Standardizes and integrates operations worldwide in all functional areas Trends favoring Globalization Trends International trade growth Foreign Investment Tariffs reduction Development of communication technology Development of computers Internet Development of transportation Contenedorization More about Globalization PROS Lower prices for goods and services Economic growth stimulation Increase in consumer income Creates jobs → Countries specialize in production of goods and services that are produced most efficiently CONS Companies move to countries with fewer labor and environment regulations Loss of sovereignty Wage rates of unskilled workers in advanced countries declines Destroys manufacturing jobs in advanced countries CHANGES IN DEMOGRAPHICS OF THE GLOBAL ECONOMY → directly from http://aulaglobal20122013.upf.edu/file.php/3643/IB_INTRO_REI_2.pdf WHY? The important information is all represented in graphs.