

























































Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
The file is about the detail study of International business
Typology: Study Guides, Projects, Research
1 / 65
This page cannot be seen from the preview
Don't miss anything!
ThesuccessfulcompletionofthisprojectwasauniqueexperienceformeasI gotanopportunitytovisitmanyplacesandalsointeractwithvariouspeople.I achievedabetterknowledgeaboutthisproject.TheexperiencewhichIgained bydoingthisprojectwasessentialatthispointofmycareer.Thisprojectis beingsubmittedwhich,whosedetailedanalysisoftheresearchisundertaken byme. Thisprojecttitled,“INTERNATIONALBUSINESS”isanattempttoallow the readertounderstandtheinternationalbusiness,roleofglobalization,roleand impactofworldtradeorganizationintheinternationalbusinessenvironment.
This is to certify that the work contained in the dissertation report “InternationalBusiness”submittedbySagarBaloni( 17220110028 )forthe award ofthe degree ofBachelorofcommerce is a record ofbonafide researchworkcarriedoutbyhim underoursupportiveguidance. Iconsiderthatthedissertationhasreachedthestandardsandfulfillsthe requirementsofrulesandregulationsrelatedtothenatureofthedegree.The contentsembodiedindissertation reporthasnotbeensubmittedinanyother University. Date: Prof.ArchanaJasola Place: (Principal)
ISAGAR BALONIROLLNO. 17220110028 ofHIMALAYAN INSTITUTE OF TECHNOLOGYherebydeclarethatIhavesuccessfullycompletedthisproject on “INTERNATIONAL BUSINESS”during academic year 2019 - 2020 .The informationistrueandoriginaltothebestofmyknowledge.
1 IntroductionofInternationalBusiness 2 InternationalBusiness:AnOverview 3 ProblemsinInternationalBusiness 4 ModesofentryintoInternationalBusiness 5 Globalization 6 MultinationalCompany(MNCs) 7 InternationalMarketingIntelligence 8 Exim Trade 9 India-ImportRequirementsandDocumentations 10 MajorproblemsfacedbyexportsectorinIndia 11 BalanceofPayment(BOP)
(combines)theeconomiesofmanycountries.Thisisbecauseituses finance from one country, labour from another country, and infrastructure from anothercountry.Itdesigns the productin one country,producesitspartsinmanydifferentcountriesandassembles theproductinanothercountry.Itsellstheproductinmanycountries,i.e. intheinternationalmarket.
businessisdominatedbydevelopedcountriesandtheirmultinational corporations(MNCs).Atpresent,MNCsfrom USA,EuropeandJapan dominate(fullycontrol)foreigntrade.Thisisbecausetheyhavelarge financialandotherresources.Theyalsohavethebesttechnologyand researchanddevelopment(R&D).Theyhavehighlyskilledemployees andmanagersbecausetheygiveveryhighsalariesandotherbenefits. Therefore,theyproducegoodqualitygoodsandservicesatlowprices. Thishelpsthem tocaptureanddominatetheworldmarket.
benefitsto allparticipating countries.However,thedeveloped(rich) countriesgetthemaximum benefits.Thedeveloping(poor)countries alsogetbenefits.Theygetforeigncapitalandtechnology.Theygetrapid industrialdevelopment.Theygetmoreemploymentopportunities.All this results in economic development of the developing countries.Therefore,developing countries open up theireconomies throughliberaleconomicpolicies.
much)competitionintheworldmarket.Thecompetitionisbetween unequalpartnersi.e.developedanddevelopingcountries.Inthiskeen competition,developedcountriesandtheirMNCsareinafavorable positionbecausetheyproducesuperiorqualitygoodsandservicesat verylow prices.Developedcountriesalsohavemanycontactsinthe world market.So,developing countriesfind itverydifficultto face competitionfrom developedcountries.
gives a lotofimportance to science and technology.Science and Technology(S&T)helpthebusinesstohavelarge-scaleproduction. Developedcountriesusehightechnologies.Therefore,theydominate globalbusiness.Internationalbusinesshelpsthem totransfersuchtop high-endtechnologiestothedevelopingcountries.
restrictionsontheinflowandoutflowofcapital,technologyandgoods. Manygovernmentsdonotallow internationalbusinessestoentertheir countries.Theyhavemanytradeblocks,tariffbarriers,foreignexchange restrictions,etc.Allthisisharmfultointernationalbusiness.
nature.Anychanges in the economic policies,technology,political environment,etc.has a huge impacton it.Therefore,international businessmustconduct marketingresearchtofindoutandstudythesechanges.Theymust adjusttheirbusinessactivitiesandadaptaccordinglytosurvivechanges.
1 .AccurateInformation 2 .Informationnotonlyaccuratebutshouldbetimely 3 .Thesizeoftheinternationalbusinessshouldbelarge 4 .Marketsegmentationbasedongeographicsegmentation 5 .Internationalmarketshavemorepotentialthandomesticmarkets
2 .InternationalFinanceandInvestments 3 .GlobalHR 4 .ForeignExchange
1 .Toachievehigherrateofprofits 2 .Expanding the production capacity beyond the demand ofthe domesticcountry 3 .Severecompetitioninthehomecountry 4 .Limitedhomemarket 5 .Politicalconditions 6 .Availabilityoftechnologyandmanagerialcompetence
Exportingmeansproducing/procuringinthehomemarketandsellingin the foreign market. Exporting is not an activity just for large multinationalenterprises;smallfirmscanalsomakemoneybyexporting. In recentdays,exporting has become easierthough itremains a
A licensingisanagreementwherebyalicensorgrantstherightsto intangibleproperty(patents,intentions,formulas,processes,designs, copyrightsandtrademarks)toanotherentity (licensee)foraspecified periodandinreturnthelicensorreceivesaroyalty/feefrom thelicensee.
Franchisingisbasicallyospecializedform oflicensinginwhichthe franchisernotonlysellsintangiblepropertytothefranchiseebutalso insiststhatthefranchiseeagreestoabidebystrictrulesastohow it doesbusiness.
Ajointventureentailsestablishingafirm thatisjointlyownedbytwoor
A firm in one countryagrees to operate facilities orprovide other managementservicestoafirm inanothercountryforanagreedupon fees.
Inaturnkeyproject,thecontractoragreestohandleeverydetailsofthe projectforaforeignclient,includingthetrainingofoperatingpersonnel. Atcompletingofthecontracttheforeignclienthandlesthe‘key’ofa plantthatisreadyforfulloperation
Astrategicinternationalallianceisabusinessrelationshipestablished bytwoormorecompaniestocooperateoutofmutualneedandtoshare riskinachievingacommonobjective.
Directforeigninvestmentisanotherimportantform ofinternational business.Companiesmaymanufacturelocallytocapitalizeonlowcost labor,to avoid high import taxes,to reduce the high cost of transportationtomarket,togainaccesstoraw materialsorgaining
TheoriesofInternationalBusiness
productaswell,thuscausingU.S.companiestosetupproductionin thosecountriesaswell,andlimitingexportsfrom theU.S.Then,itall happens again,butthis timeproduction comes online in developed nations.Ultimately,theU.S.becomesanimporteroftheproductthat wasinitiallyintroducedwithinitsborders.
considering such factors firm can rank countries in terms oftheir
Itisimportanttoconsiderthetimingofentry.Entryisearlywhenan internationalbusinessentersaforeignmarketbeforeotherforeignfirms. And late when itenters after other internationalbusinesses.The advantageiswhenfirmsentersearlyintheforeignmarketcommonly knownasfirst-moveradvantages
1 .it’stheabilitytopreventrivalsandcapturedemandbyestablishinga strongbrandname. 2 .Abilitytobuildsalesvolumeinthatcountry.sothattheycandrive them outofmarket. 3 .Abilitytocreatecustomerrelationship
1 .Firm hastodevoteeffort,timeandexpensetolearningtherulesofthe country. 2 .Riskishigh forbusinessfailure(probabilityincreasesifbusiness entersanationalmarketafterseveralotherfirmstheycanlearnfrom otherearlyfirmsmistakes)
1 .Exporting 2 .Licensing 3 .Franchising 4 .TurnkeyProject 5 .Mergers&Acquisitions 6 .JointVenture 7 .Acquisitions&Mergers
8 .WhollyOwnedSubsidiary
Itmeansthesaleabroadofanitem produced,storedorprocessedinthe supplyingfirm’shomecountry.Itisaconvenientmethodtoincreasethe sales.Passiveexportingoccurswhenafirm receivescanvassedthem. Activeexportingconverselyresultsfrom astrategicdecisiontoestablish propersystemsfororganizingtheexportfunctionsandforprocuring foreignsales.
Ifthecompanyselectsacompanyinthehostcountrytodistributethe company can enterinternationalmarketwith no orless financial resourcesbutthisamountwouldbequitelesscomparedtothatwould benecessary
Exporting involveslessriskasthecompanyunderstand theculture ,customerandthemarketofthehostcountrygradually.Laterafter understandingthehostcountrythecompanycanenteronafullscale.
Motivation for exporting are proactive and reactive. Proactive motivationsareopportunitiesavailableinthehostcountry.Reactive motivatorsarethoseeffortstakenbythecompanytoexporttheproduct toaforeigncountryduetothedeclineindemandforitsproductinthe
Inthismodeofentry,thedomesticmanufacturerleasestherighttouse itsintellectualproperty(i.e.)technology,copyrights,brandnameetcto amanufacturerinaforeigncountryforafee.Herethemanufacturerin thedomesticcountryiscalledlicensorandthemanufacturerinthe foreigniscalledlicensee.Thecostofenteringmarketthroughthismode
1 .Lowinvestmentandlowrisk 2 .Franchisorcan gettheinformation regarding themarketculture, customsandenvironmentofthehostcountry. 3 .Franchisorlearnsmorefrom theexperienceofthefranchisees. 4 .FranchiseegetthebenefitsofR&Dwithlowcost. 5 .Franchiseeescapesfrom theriskofproductfailure.
1 .Itmaybemorecomplicatingthandomesticfranchising. 2 .Itisdifficulttocontroltheinternationalfranchisee. 3 .Itreducethemarketopportunitiesforboth 4 .Boththepartieshavetheresponsibilitiestomaintainproductquality andproductpromotion. 5 .Thereisaproblem ofleakageoftradesecrets.
Aturnkeyprojectisacontractunderwhichafirm agreestofullydesign constructandequipamanufacturing/business/servicesfacilityandturn theprojectovertothepurchasewhenitisreadyforoperationfora remunerationlikeafixedpriceandpaymentoncostplusbasis.This form ofpricingallowsthecompanytoshifttheriskofinflationenhanced coststothepurchaser. Eg:nuclear powerplants,airports,oilrefinery,nationalhighways,railwaylineetc. Hencetheyaremultiyearproject.
Adomesticcompanyselectsaforeigncompanyandmergeritselfwith foreigncompanyinordertoenterinternationalbusiness.Alternatively thedomesticcompanymaypurchasetheforeigncompanyandacquires itownershipandcontrol.Itprovidesimmediateaccesstointernational manufacturingfacilitiesandmarketingnetwork.
1 .Thecompanyimmediatelygetstheownershipandcontroloverthe acquired firm’s factories,employee,technology ,brand name and distributionnetworks.
2 .Thecompanycanformulateinternationalstrategyandgeneratemore revenues. 3 .Iftheindustryalreadyreachedthestageofoptimum capacitylevelor overcapacitylevelin thehostcountry.Thisstrategyhelpsthehost country.
1 .Acquiringafirm inaforeigncountryisacomplextaskinvolving bankers,lawyerregulation,mergersandacquisitionspecialistsfrom the twocountries. 2 .Thisstrategyaddsnocapacitytotheindustry. 3 .Sometimeshostcountriesimposedrestrictionsonacquisitionoflocal companiesbytheforeigncompanies. 4 .Labourproblem ofthehostcountry’scompaniesarealsotransferred totheacquiredcompany.
Twoormorefirm jointogethertocreateanew businessentitythatis legally separate and distinctfrom its parents.Itinvolves shared ownership.Various environmentalfactors like social,technological economicandpoliticalencouragetheformationofjointventures.It provides strength in terms ofrequired capital.Latesttechnology requiredhumantalentetc.andenablethecompaniestosharetheriskin theforeignmarkets.Thisactimprovesthelocalimageinthehost countryandalsosatisfiesthegovernmentaljointventure.
1 .Jointventureprovidelargecapitalfundssuitableformajorprojects. 2 .Itspreadtheriskbetweenoramongpartners. 3 .Itprovideskillsliketechnicalskills,technology,humanskills,expertise ,marketingskills. 4 .Itmakeslargeprojectsandturnkeyprojectsfeasibleandpossible. 5 .Itsynergyduetocombinedeffortsofvariedparties.
1 .Conflictmayarise 2 .Partnerdelaythedecisionmakingoncethedisputearises.Then