Globalization and
International
Business
Copyright 2013 Pearson Education
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Objectives
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Introduction
Globalization is the ongoing process that
deepens and broadens the relationships
and interdependence among countries
International business is a mechanism to
bring about globalization
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Introduction
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Introduction
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Introduction
Factors in International Business Operations
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Measuring Globalization
Globalization can be difficult to measure
The A.T. Kearney/Foreign Policy
Globalization Index ranks countries by
Economic dimensions
Technological dimensions
Personal contact
Political dimensions
recently ranked Singapore and Hong Kong
as most globalized
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Costs of Globalization
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To expand sales
To acquire resources
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sales expansion
resource acquisition
risk minimization
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Modes of Operations in IB
Merchandise exports
Merchandise imports
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Modes of Operations in IB
Service exports
provider and receiver of payment
Service imports
recipient and payer of payment
Examples
Tourism and transportation
Service performance
turnkey operations and management
contracts
Asset use
licensing and franchising
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Modes of Operations in IB
Investments
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Types of International
Organizations
Collaborative arrangements
Joint ventures
Licensing arrangements
Management contracts
Minority ownership
Long-term contractual arrangements
Strategic alliance
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Types of International
Organizations
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Why IB is Different
The external environment affects a
companys international operations
Managers must understand social science
disciplines and how they affect functional
business fields
Consider
physical factors
social factors
competitive factors
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Geographic influences
Political policies
Behavioral factors
Legal policies
Economic forces
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Cost strategy
Differentiation strategy
market leaders have more resources for
international operations
local or international
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