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Internantional Business

The document discusses globalization and international business, highlighting key drivers such as economic liberalization and technological advancements. It outlines various modes of entering foreign markets, including exporting, licensing, and joint ventures, as well as the EPRG framework for international market strategies. The content emphasizes the importance of adapting business practices to different markets while leveraging global opportunities.

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Amisha arora
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11 views13 pages

Internantional Business

The document discusses globalization and international business, highlighting key drivers such as economic liberalization and technological advancements. It outlines various modes of entering foreign markets, including exporting, licensing, and joint ventures, as well as the EPRG framework for international market strategies. The content emphasizes the importance of adapting business practices to different markets while leveraging global opportunities.

Uploaded by

Amisha arora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Globalization and

international business
1. key drivers of globalization
2. Ib AND ITS TYPES
3. MODES TO ENTER THE FOREIN MARKET
4. EPRG FRAMEWORK

LAKSHMI 12401983
ABHAY S.JASWAL 12401891
ANIL KUMAR 12402234
RAHUL RANA 12402233
Key Drivers Of
Globalization
Economic Liberalization & Technological
Advancements
1. Economic Liberalization
The reduction of government restrictions and trade barriers to allow
freer movement of goods, services, and capital across borders.
Example : Deregulation of markets and privatization of state-owned
enterprises.

2. Technological Breakthroughs
Advances in technology that facilitate international trade, business
collaboration, and the overall globalization process.
example : The rise of the internet, automation, and AI technologies.
Technologies Driving
Globalization
3. Manufacturing Technology
New technologies in manufacturing have improved production
processes, enabling companies to scale globally and reduce costs.
Example: Robotics, 3D printing.

4. Transportation Technology
Improvements in transport (shipping, air travel, rail, etc.) have made
it easier and more cost-effective to move goods and people globally.
Example: Shipping container innovation, faster cargo ships .

5. Information & Communication Technology (ICT)


ICT, especially the internet, has connected the world, enabling instant
communication, e-commerce, and remote work.
Example: Cloud computing, broadband expansion.
Global Integration &
Expansion
6. Multilateral Institutions
Organizations like the World Trade Organization (WTO) and the
International Monetary Fund (IMF) promote global trade, financial
stability, and conflict resolution.
Example: Trade agreements, international financial aid.

7. Rising Research and Development


Companies and countries investing more in R&D to stay
competitive globally, leading to technological innovations.
Example: Pharmaceutical, tech companies, and green energy
innovations.

8. Global Expansion of Business Operations


Companies expanding internationally to tap into new markets,
cheaper labor, and new resources.
Example: Multinational companies opening factories in emerging
markets.
INTERNATIONAL BUSINESS
IB is a part of globalization. It basically
include two words and they are elaborated
as below :
Internation
al Business

Beyond the national Industry / Trade


boundaries Commerce
Trade

 The buying and selling of goods and


services without changing their form. It is
further divided into:
• Wholesale Trade – Selling goods in bulk
to retailers or other businesses.
• Retail Trade – Selling goods directly to
consumers in smaller quantities.
Commerce

 Commerce is a broader term that


includes trade as well as all the activities
that help trade happen smoothly. These
activities include transportation, banking,
insurance, warehousing, and advertising.
Example: A business using trucks to
transport goods, banks to process
payments, and ads to promote products.
Types of International
business

Trade of Foreign
Trade of Portfolio
invisible direct
visible investme
goods investme
goods nt
nt
Modes to enter in Foreign
markets
Trade
related Investme
Contractua
modes l modes
nt modes

Related to Trade
1. Exporting – The least complicated mode of entry in which a firm produces the
product within its home market and exports it to other nations. It consists of:
Direct Exporting – The firm markets products directly to overseas customers.
Indirect Exporting – The firm markets by means of an intermediary (distributors,
agents).

2.Piggybacking – A local firm piggybacks off the distribution channel of another


firm in order to go abroad.
Illustration: A small manufacturer producing goods to sell to a bigger firm with
international operations.

3.Countertrade – Trade system whereby products/services are traded instead of


money, and usually found in countries facing currency constraints in developing
economies.
Types: Barter, counter-purchase, buyback arrangements.
Contractual Modes

1. Licensing – A firm gives permission to a foreign company to utilize its


intellectual property (patents, trademarks, brand names) for royalties or
fees.
Illustration: MICROSOFT
Benefits: Minimal investment, rapid market entry, and generation of
revenues without risks.

2.Franchising – A firm (franchisor) permits a foreign company (franchisee)


to do business under its name and model in return for fees and royalties.

Example: McDonald's is franchised throughout the world.


Advantages: Quick expansion at low capital outlay.

3.Management Contracts – A firm makes management skills and


operating control available to a foreign company for rent without ownership.

Example: Overseas hotel chains operating properties owned by local


investors.
Advantages: No investment of capital, consistent revenues, and international
Modes of Investment

Joint Venture (JV) – Agreement between a home country and


international firm to run the international business.
Example: Joint venture in mobile phones between Sony and Ericsson.
Advantages: Spreading of risk, local know-how, and simple access to
markets.

Merger & Acquisition (M&A) – Acquisition or merger with a foreign


business to establish market presence.

Wholly Owned Subsidiary (WOS) – An enterprise owns and controls a


business organization in a foreign nation entirely, either by establishing a
new facility (Greenfield investment) or by purchasing an existing firm.
Example: Toyota establishing a production facility in the U.S.
EPRG framework
The EPRG Framework is a model that companies use to decide how they
will expand and operate in international markets. It helps businesses
determine their approach to global business based on four orientations:

1. Ethnocentric (E) – The company sees its home country as superior and
uses the same strategies and products worldwide.
Example: A U.S. company selling the same burgers in every country without
changes.
2. Polycentric (P) – The company adapts its products and strategies for
each country, treating each market as unique.
Example: A fast-food chain offering different menus in different countries
based on local tastes.
3. Regiocentric (R) – The company groups countries into regions and
creates strategies for each region rather than individual countries.
Example: A car company designing different models for Asia, Europe, and
North America.
4. Geocentric (G) – The company sees the whole world as one market and
tries to create a global strategy while adapting where necessary.
Example: A tech company offering the same phone worldwide but adjusting
features based on regional preferences.

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