University of Cebu- Banilad

College of Business and Accountancy

Gov. Cuenco Avenue Banilad Cebu City

BA 423 – INTERNATIONAL BUSINESS

AND TRADE

Business Report for

Chapter 1: Introduction of International Business

by:

Angela B. Conde BSA Accounting 2

Presented to:

Ms. Amabella Grace N. Siaton, MBA

BA 423 Instructor

June 20, 2020

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Part I. Costs of Globalization
Challenge Explanation Possible Solution
One cost of globalization is that it In order to solve this challenge,
increases the rate of non-renewable one has to act with utmost care
resources. It means that once these not just for her business
resources have been used, they improvement but also for the
cannot be replenished or replaced. benefit of the environment where
Other cost of globalization to the his business stands. Moreover, the
environment is that toxic chemicals solution of this problem lays to
coming from factories may runoff the problem itself, that is,
into the rivers and oceans which globalization, which causes this
destroy the ocean life or the species havoc can be of big help in
living under waters. Along with the building a better structure which
Environmental globalization is the possibility of is economically feasible and
Stress
economic growth. As the economy environment-friendly.
grows, increased pollution and Globalization involves
global warming due to the competition of different business.
emergence of many transportation If there is one big company which
vehicles and manufacturing will take the lead of being
factories won't be avoided. environment-friendly, other
companies will follow in order to
compete. Given this solution, the
environment, which is the main
source of survival to human
being, will never be at stake
anymore.

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 Globalization has powerful The state’s sovereignty is very
economic, political, cultural and important for every country
social implications for sovereignty because it is something they
(Oji, 2011). Globalization has led to considered their own and apart
a decline in the power of national from other countries. In order to
State's
governments to direct and influence maintain this despite
sovereignty is
diminished their economies and to determine globalization, there is a need to be
their political structures. The moderate in the way international
impact of globalization varied businesses are allowed to make
according to the strength of the use of the power of the national
state. Globalization, impelled by governments and the way in
market sovereignty, has created which national sovereignty is
new inequalities among the yield to the international
countries as most international businesses. Nations should
capital movements concentrate the cooperate with each other in order
benefit of growth to the already to maximize the benefits of
advanced countries instead of those globalization and minimize its
weak ones. By allowing harmful effects.
international businesses to set the
economic in a certain country,
many people believed that the
nation state becomes irrelevant. The
point is that when capitalism runs
on the profit motive, the essence of
nation state which is for the welfare
of the citizen will be superseded.

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Part II. Firms Go Internationally

Reason 1: Sales Expansion

- Definition:
Sales expansion is the ability of the firm to expand their sales not just
within a certain location or country where their market is located but also
across the world.

- The expected business operation of the firm under this stage:

In this stage, the firm will focus on manufacturing products to be
distributed to different areas in the world. They will undergo importing and
exporting their products and services and other operations to reach out to their
local and international customers.

- The expected business challenges:

Firms that go internationally for sales expansion face challenges like
operational risks of hiring staff. In order to expand sales, the firm needs more
staff to handle the increase pressure on their firm in another country. Also,
firms/ businesses need to adapt or take into consideration the environment of a
certain country (including their culture, beliefs and policies and regulations) in
creating their strategy and products/ services. They'll also consider the risk
that their product or service won't fit in a particular in which results to lower
their sales.

- The expected business opportunities:

Firms that go internationally for sales expansion find new potential
markets. They will have an access to new investors, new products and new
techniques. They will also have an opportunity to compete along with other
international businesses.

- Example firm/business
LEGO

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 This toy industry is one of the successful business which expanded from
one country to another. Expanding into America, exceptional U.S sales drove
the LEGO's marketing team to deploy the same marketing and promotional
concepts they used in the U.S to another country (Levins, 2018). This only
shows that LEGO did not settle their business to one country, they couragely
take the risk of introducing their business to countries beyond their borders.

Reason 2: Competition
- Definition:
Competition allows business to buy and sell their services
internationally, which opens their door to increase profits and sales.

- The expected business operation of the firm under this stage:

Under this stage, most companies focus their operation on:
innovation; developing of new products or service; advertising and
marketing their products to their local and international customers; and
developing new strategies. This is done in order to compete with other
businesses and gain an advantage towards them.

- The expected business challenges:

The business will grow to have more competitors. This mostly
goes to companies who offer the same products. If their geographical
market areas overlaps and their price points also resemble with each other,
it's a certainty that they will be rivals. In relation to this, they will the
challenge of creating a product that will satisfy their customer's needs
based on the culture of that certain country.

- The expected business opportunities

Having more competitors means an opportunity for every company
to gain more knowledge and techniques for their company's growth.
Innovative techniques efficient in their use of resources can also be an
opportunity for the business which competes internationally. Companies

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 will also be able to gain information about their competitors that will help
them make new strategies.

- Example firm/business:
TOYOTA
In order to compete against the other luxury brands such as BMW
and Mercedes, Toyota went international and also marketed its brand of
luxury to the world.