NATURE AND SCOPE OF INTERNATIONAL BUSINESS

NATURE AND SCOPE OF INTERNATIONAL BUSINESS

• INTERNATIONAL BUSINESS
• MEANING OF INTERNATIONAL BUSINESS
• INTERNATIONAL BUSINESS CONDUCTS BUSINESS TRANSACTIONS ALL OVER THE WORLD, THESE TRANSACTIONS INCLUDE THE  TRANSFER OF GOODS AND SERVICES ,TECHNOLOGY,MANAGERIAL KNOWLEDGE AND CAPITAL TO OTHER COUNTRIES
• ACCORDING TO MICHAEL H MOFFET,” INTERNATIONAL BUSINESS IS THE PROCESS OF FOCUSING ON THE RESOURCES OF THE GLOBE AND OBJECTIVE OF THE ORGANIZATION ON GLOBE OPPORTUNITIES AND THREATS AND IN ORDER TO PRODUCE, BUY AND SELL OR EXCHANGE OF GOODS AND SERVICES WORLD WIDE.

• INTERNATIONAL BUSINESS EVOLVED FROM INTERNATIONAL TRADE AND INTERNATIONAL MARKETING
• MICHAEL R CZINKOTA,” INTERNATIONAL BUSINESS CONSISTS OF TRANSACTIONS THAT ARE DEVISED AND CARRIED ACROSS NATIONAL BORDERS TO SATISFY THE OBJECTIVES OF INDIVIDUALS,COMPANIES AND ORGANIZATIONS
• ROGER BENNET :” INTERNATIONAL BUSINESS INVOLVES COMMERCIAL ACTIVITIES THAT CROSS NATIONAL FRONTIERS. IT CONCERNS THAT INTERNATIONAL MOVEMENT OF GOODS, CAPITAL SERVICE, EMPLOYEES AND TECHNOLOGY. IT COMPRISES IMPORTING AND EXPORTING CROSS BORDER TRANSACTIONS IN INTELLECTUAL PROPERTY
•  ( PATENTS,TRADEMARK ,KNOW HOW,COPY RIGHT MATERIALS ) VIA LICENSING AND FRANCHISING, INVESTMENT IN PHYSICAL AND FINANCIAL ASSETS IN FOREIGN COUNTRIES AND BUYING AND SELLING IN FOREIGN COUNTRIES.
• NATURE AND FEATURES OF INTERNATIONAL BUSINESS

1. MEANS CARRYING BUSINESS ACTIVITIES BEYOND NATIONAL BOUNDARIES
2. IT INCLUDES THE TRANSACTIONS OF GOODS,CAPITAL SERVICE AND INTERNATIONAL PRODUCTION, PRODUCTION MAY EITHER INVOLVE PRODUCTION OF PHYSICAL GOODS OR PROVISIONS OF SERVICES LIKE BANKING,FINANCE,INSURANCE,CONSTRUCTION ,TRADING  AND ETC
3. INTERNATIONAL BUSINESS IS AN ECONOMIC ACTIVITY ACROSS NATIONAL BORDERS  AND DIFFERS FROM DOMESTIC BUSINESS
4. ALL BUSINESS OPERATIONS ARE CONDUCTED ON LARGE SCALE. FIRST SELL IN THE LOCAL MARKET AND THEN ABROAD

5. INTEGRATION OF ECONOMIES:- INVOLVE THE ECONOMIES OF MANY COUNTRIES. FINANCE FROM ONE COUNTRY,LABOUR FROM OTHER COUNTRY AND INFRASTRUCTURE FROM ANOTHER COUNTRY
6. DOMINATED BY DEVELOPED COUNTRIES AND THEIR MULTINATIONAL CORPORATIONS
7. INTERNATIONAL BUSINESS FACES MANY RESTRICTION ON THE INFLOW AND OUTFLOW OF CAPITAL, TECHNOLOGY, AND GOODS.
8. THE INTERNATIONAL BUSINESS IS VERY SENSITIVE IN NATURE AND ANY CHANGE IN ECONOMIC POLICIES, TECHNOLOGY, AND POLITICAL ENVIRONMENT HAS HUGE IMPACT ON IT.
9. INTERNATIONAL BUSINESS GIVES BENEFITS TO ALL PARTICIPANTS COUNTRIES. BUT DEVELOPED COUNTRIES GET THE MAXIMUM BENEFITS
10. SPECIAL ROLE OF SCIENCE AND TECHNOLOGY:-HELP THE BUSINESS TO HAVE LARGE SCALE PRODCUTION
11. INTERANTIONAL BUSINESS INCLUDES PRIMARY AND ADDITIONAL TYPES OF INTERNATIONAL BUSINESS, THE PRIMARY TYPE INCLUDES IMPORT AND EXPORT TRADE AND DIRECT FOREIGN INVESTMENT WHERE AS THE ADDITIONAL TYPES INCLUDE LICENSING,FRANCHISING AND ARRANGEMENTS
12. IN INTERNATIONAL BUSINESS,THE POLICY MAKERS AND BUSINESS EXECUTIVE HAS TO CONSIDER THIS:

1. HOW WILL OUR IDEAS,GOODS AND SERVICES AND FIT INTO THE INTERNATIONAL TRADE
2. SHOULD WE ENTER THE INTERNATIONAL MARKETS THROUGH TRADE OR INVESTMENTS
3. SHOULD WE OBTAIN OUR SUPPLIES DOMESTICALLY OR FROM INTERNATIONAL
4. WHAT PRODUCTS ADJUSTMENT
5.     POSSIBLE THREATS

• TYPES OF INTERNATIONAL BUSINESS
• PRIMARY TYPE OF INTERNATIONAL BUSINESS:-

1. EXPORT –IMPORT TRADE OF GOODS,CAPITAL AND SERVICES
2. DIRECT FOREIGN INVESTMENT

·         ADDITIONAL TYPE OF INTERNATIONAL BUSINESS:-

• LICENSING, FRANCHISING AND MANAGEMENT CONTRACTS. CROSS BORDER TRANSACTIONS IN INTELLECTUAL PROPERTY  I.E PATENTS,TRADE MARKS,KNOW HOW ,COPY RIGHT AND MATERIALS
• CLASSIFICATION OF INTERNATIONAL BUSINESS

1. TRADING
2. MANUFACTURING AND MARKETING
3. GLOBAL SOURCING FOR PRODUCTION

d.    ON THE BASIS OF MARKET ENTRY AND OPERATING STRATEGIES:

5. EXPORTING
6. CONTRACTUAL ARRANGEMENT
7. PRODUCTION /ASSEMBLY FACILITY IN FOREIGN MARKET

• SCOPE OF INTERNATIONAL BUSINESS

1. MERCHANDISE EXPORT AND MERCHANDISE IMPORT :TANGIBLES GOODS IMPORTED OR EXPORTED
2. SERVICE EXPORT AND IMPORT: INTANGIBLE GOODS IMPORTED OR EXPORTED. LIKE TOURISM,TRAVEL,ETC
3. LICENSING AND FRANCHISING :-LICENSING IS A PROCESS OF OF PERMITTING NEW PARTY IN FOREIGN COUNTRY IN ORDER TO PRODUCE OR SELL GOODS UNDER TRADEMARKS,PATENTS OR COPY RIGHTS IN LIEU OF SOME FEES
4. FOREIGN INVESTMENTS:-INVOLVEMENT OF FUNDS ABROAD IN EXCHANGE FOR FINANCIAL RETURN

• DIMENSIONS OF INTERNATIONAL BUSINESS

1. FIRST DIMENSION ---INTERNATIONALIZATION OF MARKET PRESENCE:- THE COMPANY TARGETS THE CUSTOMERS IN ALL MAJOR MARKETS THROUGHOUT THE WORLD. LIKE IBM,MICROSOFT WERE THE MOST GLOBALIZED FIRMS IN EUROPE AND NORTH AMERICA
2. SECOND DIMENSION----- INTERNATIONALIZATION OF SUPPLY CHAIN:- COMPANIES TRIES TO BROAD BASE ITS SUPPLY CHAIN ACTIVITIES AT THE MOST OPTIMAL LOCATIONS. TOYOTA HAS A GOOD SUPPLY CHAIN
3. THIRD DIMENSION------INTERNATIONALIZATION OF CAPITAL BASE :- EXTENT TO WHICH ACCESSING OPTIMAL SOURCE OF CAPITAL BASE
4. FOURTH DIMENSION-------INTERNATIONALIZATION OF CORPORATE MINDSET:- ABILITY OF COMPANY TO UNDERSTAND AND INTEGRITY DIVERSITY ACROSS CULTURE AND MARKETS

• OBJECTIVE OF INTERNATIONAL BUSINESS

1. PROFIT ADVANTAGE
2. GROWTH OPPORTUNITIES
3. HELPS IN REMOVING DOMESTIC CONSTRAINS : ARISING FROM THE SCALE OF ECONOMIES
4. TO EARN FOREIGN EXCHANGE
5. TO SPREAD BUSINESS RISK
6. TO GET BENEFITS FROM THE GOVERNMENT
7. REASONS FOR ENTERING INTO INTERNATIONAL BUSINESS

• DRIVERS OF INTERNATIONAL FORCES

1. PULL/ PROACTIVE ATTRACTIVENESS OF THE FOREIGN MARKETS:
2. PUSH FORCES /REACTIVE FORCES

• PULL/PROACTIVE FORCES

1. PROFIT ADVANTAGE DUE TO INCREASE IN VOLUME
2. LOW WAGES AND CHEAP LABOUR ATTRACTION
3. GROWTH OF REGIONAL BLOCKS LIKE WTO,NAFTA,EU , THESE PROMOTE INTERNATIONAL BUSINESS BY REMOVING TRADE AND INVESTMENT BARRIER
4. DUE TO FREE TRADE REGIME BUSINESS EXPANDED

• PUSH FORCES/REACTIVE FORCES

1. COMPULSIONS OF THE DOMESTIC MARKET
2. SATURATION OF THE DOMESTIC DEMAND
3. SCALE ECONOMIES AND TECHNOLOGICAL REVOLUTION
4. DOMESTIC RECESSION
5. COMPETITION AS DRIVING FORCE
6. GOVERNMENT POLICIES AND REGULATIONS
7. IMPROVING IMAGE OF THE COMPANIES
8. STRATEGIC VISIONS