INTERNATIONAL BUSINESS SWOT

TRADE-CHAPTER 1 SUMMARY - A strategic management that helps

an organization take stocks of its
WHAT IS INTERNATIONAL BUSINESS? internal characteristics to formulate
Globalization an action plan that builds on what it
does while working around
- The shift towards a more weaknesses and assess external
interdependent and integrated environmental condition that favor
global economy; creates greater or threatens the organization’s
opportunities for international strategy.
business.
Entrepreneurship
International Business
- Recognition of opportunities and the
- Encompasses a full range of cross- use of or creation of resources to
border exchanges of goods, services, implement innovative ideas for
or resources between 2 or more thoughtfully planned ventures.
nations.
Entrepreneur
National Business
- Person who engages in
- Encompasses a full range of cross- entrepreneurship.
border exchanges of goods, services,
or resources within the Intrapreneurship
country/nation. - A form of entrepreneurship that
Strategic Management takes place in a business that is
already in existence.
- Body of knowledge that answers
questions about the development Intrapreneur
and implementation of good - Person within an established
strategies and is mainly concerned business who takes direct
with the determinants of firm responsibility for turning assertive
performance. risk taking and innovation.
Strategy INTERESTED PARTIES IN INTERNATIONAL
- Central, integrated, and externally BUSINESS
oriented concept of how an
Stakeholder
organization will achieve its
performance objectives. - Individual or organization whose
interests may be affected as the
result of what another
individual/organization (E.g
 employees, managers, businesses - Advantages due to the choice of
government, and NGOs) foreign markets and can include
better access to raw materials, less
Stakeholder Analysis
costly labor, key suppliers, key
- Technique used to identify and to customers, energy, and natural
assess the importance of key resources.
individuals, groups, or institutions
INTERNATIONAL FORMS OF
that may significantly influence the
success of an activity, project, or GOVERNMENT
business. Government
FORMS THAT INTERNATIONAL - A body of people that sets and and
BUSINESSES TAKE administers public policy and
exercises executive, political, and
Business
sovereign power through customs,
- Person/organization engaged in institutions and laws within a state,
commerce with the aim of achieving country, or other political unit.
a profit.
Nongovernmental Organizations (NGOs)
3 Part Mission Statements
- Any non-profit, voluntary citizen’s
- Social & Environmental group that is organized on a local,
- Product national, or international level.
- Economic
THE GLOBALIZATION DEBATE
Importer
- Emphasizes 2 theories:
- Person/organization that sells  “We live in a Flat World.”
products and services from other  We live in a Multi-domestic
countries. World, Not a Flat World.”
Exporter
- Person/organization that sells
products and services from the
home country.
Foreign Direct Investment
- Investment of foreign assets into
domestic structures, equipment, and
organizations.
Location Advantage
TOM FRIEDMAN (THE WORLD IS FLAT) than anything like it ever before in
the history of the world. This is what
Tom Friedman
I mean when I say the world has
– Columnist for the New York been flattened.”
Times.
The Ten Flatteners
– Famous for Coverage of Arab-
 End of Cold War
Israeli Conflict
 Beginning of “Viral Marketing”
– Author of bestseller book “The
 Invention of Workflow Software and
Lexus and the Olive Tree”
Supporting Systems
Flat World View  Rise of Open-source Software
Movement
- A metaphor for viewing the world as
 Outsourcing of work by
a level playing field in terms of
Multinational Corporations to low-
commerce, where all competitors
wage workers in India and China.
have an equal opportunity.
 Off shoring of important operations
3 Phases of Globalization by MNCs
 Rise of complex, international supply
 Globalization 1.0 (1492-1800)
chains for many products and
- Countries
services.
- Muscles (Energy consumption)
 Insourcing
 Globalization 2.0 (1800-2000)
 In-forming
- Multinational Corporations
 Globalization 3.0 (2000 to present) Viral Marketing
- Driven by empowered
- Distribution of free software and
individuals from countries
services to create a platform for
outside US/Europe.
selling other things.
Friedman’s Definition of Flatness - E.g.
 Mosaic and Netscape
 “The net result of this convergence
Navigator
was the creation of a global, Web-
 Free downloads (iTunes)
enabled playing field that allows for
 Free distribution
multiple forms of collaboration – the
(Radiohead album)
sharing of knowledge and work – in
 Ads on Google Search
real time, without regard to
geography, distance, or, in the near Workflow Software
future, even language. No, not
everyone has access yet to this - Efficient flow of documents or
platform, this playing field but it is tasks from one employee to
open today to more people in more another.
places on more days in more ways
Open-Source Software Insourcing
- A set of principles about how to - Penetration of large firms by
write software in which source other firms that provide services
code is available to others for and logistical support in the firm.
the purpose of improving it. - E.g. UPS and Dell Computers
- Pioneers: Eric Raymond, Richard
In-forming
Stallman, Linus Torvalds (Linux)
- Rise of search engine portals
Outsourcing
- E.g Google ; Yahoo
- Subcontracting a process, such
Multidomestic View
as product design or
manufacturing, to a 3rd party - A metaphor for viewing the
company. world’s markets as being more
- E.g. In 2004, Wyeth Pharma different than similar, such that
transferred it entire clinical the playing fields differs in
testing operation to Accenture respective markets; if the world
Ltd. is flat, international business
would be easy.
Off Shoring
CAGE Framework
- Relocation of business processes
from 1 country to another. - Analytical framework used to
- E.g. understand country and regional
 Assembly of product culture, administration,
 American call centers in geography, and economics.
India  Culture – people’s norms,
 Disk drive manufactured common beliefs, and
by Seagate in Singapore. practices.
 Sony LCD TVs  Administration –
manufactured in Korea. historical governmental
ties.
Complex Supply Chains
 Geography – differences
- System of organizations, people, in time zones, access to
technology, activities, ocean ports, shared
information, and resources in borders, topography, and
moving a product/service from climate.
supplier to customer.  Economics – economic
distance refers to
differences in
 demographic, and - Emphasizes the importance of
socioeconomic the world as a “unit” rather than
conditions. looking at individual countries.
- Flexible and fluid method and
ETHICS AND INTERNATIONAL BUSINESS
often criticized for focusing on
Ethics the Core countries.
- 3 Regions:
- A branch of philosophy that
 Core (Western Europe and US) -
seeks virtue and morality,
strong central gov’t, economically
addressing questions about
diversified, industrialized and
“right” and “wrong” behavior for
relatively independent.
people in a variety of settings;
 Periphery (Latin America and Africa)
the standards of behavior that
- relatively weak gov’t and depend
tell how human beings ought to
on a specific type of economic
act.
activity such as extraction of raw
Business Ethics materials and presence of inequality
of the people living in these
- Branch of ethics that examines
countries.
various kinds of business
- Influenced by Core Countries
activities and asks, “is this
which lessens their potential to
business conduct ethically right
improve and develop
or wrong?”
independently.
 Semi-Periphery Countries (India and
Brazil)
GLOBALIZATION THEORIES - In between core and periphery
Globalization and often not dominant in
international trade but
- Sharing of culture, money, and diversified and developed
products between countries economy.
because of international trade,
advanced communication, and Modernization Theory
advanced transportation. - All countries follow a similar
- Social awareness of each other’s path of development from
cultures traditional to modern society.
- Economic Interdependence - With guidance and help,
Theories traditional countries can improve
into modern countries.
World Systems Theory - Adaptation of traditional
countries to new and improved
technology.
Perspectives on Globalization
Hyperglobalist
- Legitimate process
- New Age of Human History
- Countries’ economies become
interdependent.
Skeptical
- Critical of globalization
- Considers international
processes as regionalized rather
than globalized.
- National borders are very
important.
Transformationalist
- National governments are
changing.
- World order is changing and its
patterns.