International Business conducts business transactions all over the world.

These transactions include the transfer of goods, services, technology, managerial knowledge, and capital to other countries. International business involves exports and imports.The EPG model is a framework for a firm to better pinpoint its strategic profile in terms of international business strategyETHNOCENTRIC ORIENTATION :The ethnocentric orientation of a firm considers that the products, marketing strategies and techniques applicable in the home market are equally so in the overseas market as well.POLYCENTRIC OPERATION :When a firm adopts polycentric approach to overseas markets, it attempts to organize its international marketing activities on a country to country basis. Each country is treated as a separate entity and individual strategies are worked out accordingly.REGIOCENTRIC ORIENTATION :In regiocentric approach, the firm accepts a regional marketing policy covering a group of countries which have comparable market characteristics. The operational strategies are formulated on the basis of the entire region rather than individual countries.GEOCENTRIC ORIENTATION :In geocentric orientation, the firms accept a world wide approach to marketing and its operations become global. Imp of IB- high living standards, increased socioeconomic welfare, wider mkt,reduced risks,large scale economies, potential untapped markets, economic growth of world,optimum utili of world res. Problems of IB--Political Factors,Huge Foreign Indebtedness,exchange instability,Entry requirements,Tariffs, Quotas & Trade Barriers.,Corruption,Bureaucratic practices,Technological pirating,Quality Maintenance ,High cost, Hofstedes studies of the interactions between national cultures and organizational cultures demonstrated that there are national and regional cultural groupings that affect the behaviors of societies and organizations, and that are very persistent across timeLow vs. High Power Distance (PDI) focuses on the degree of equality, or inequality, among individuals in the country's society. A high power distance indicates that inequalities of power and wealth have been allowed to grow within the society. A low power distance indicates the society deemphasizes the differences between citizen's power and wealth.Masculinity (MAS) vs. Femininity focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power. A high masculinity ranking indicates the country experiences a high degree of gender differentiation. A low masculinity ranking or femininity indicates the country has a low level of differentiation and discrimination between genders.Individualism (IDV) vs. Collectivism is the degree to which individuals are integrated into groups. A high individualism ranking indicates a society in which the ties between individuals are loose. A low individualism ranking or collectivism indicates a society in which people from birth onwards are integrated into strong, cohesive groupsUncertainty Avoidance Index (UAI) focuses on the level of tolerance for uncertainty and

ambiguity within the society.Long-Term Orientation- Hofstede created a Chinese value survey which was distributed across 23 countries. From these results, and with an understanding of the influence of the teaching of Confucius on the East, long term vs. short term orientation became the fifth cultural dimension.

Entry modes Non Equity Based Modes-Exporting,Licensing-A contractual arrangement: one firm sells access to its patents, trade secrets, or technology to another,Licensee pays fixed sum and sales royalties (2%-5%) Ex- Fuji Xerox , Nike entered by licensing to Sierra Indstrl. Ltd.advan-Finance expansion,Reduce risk,Extend obsolete products, Upgrade technologies,disadvn-Restrict licensors future,Reduce global consistency,Potential competitor,Franchising-Form of licensing in which one firm contracts with another to operate a certain type of business under an established name according to specific rules. Company (franchiser) supplies another (franchisee)with intangible property over an extended period. Advan-Low cost and low risk, Rapid expansion,Local knowledge. Equity Based Modes-Wholly owned subsidiary-Subsidiaries could be Greenfield investments or acquisitions Advan: No risk of losing technical competence to a competitor, Tight control of operations. Disad: Bear full cost and riskMerger happens when 2 firms agree to go forward as a single new identity rather then remain separately owned & operated.This kind of action is more precisely referred to as a merger of equals.Examplewhen both Daimler & Chrysler ceased to exist & DaimlerChrysler was created.Acquisition-When one co. takes over another and clearly establishes itself as a new owner.From legal point of view the target co. ceases to exist & the buyer swallows the business .Joint Ventures-When 2 or more firms join together to create a separate new entity that is legally distinct from its parents.JV involve shared ownership.corporate entity formed by international company and local ownersEX TATA-TETLEY, PPP, M&M-Renault, MNAL etc.advan-Benefit from local partners knowledge. Shared costs/risks with partner. Reduced political risk. The General Agreement on Tariffs and Trade (GATT) was implemented to further regulate world trade to aide in the economic recovery following the war. GATT's main objective was to reduce the barriers of international trade through the reduction of tariffs, quotas and subsidies. WTO is a new international organisation set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc Barriers to entry are designed to block potential entrants from entering a market profitably. Barriers to entry have the effect of making a market less contestablePatents -Giving the firm the legal protection to produce a patented product for a number of years Limit Pricing-Firms

may adopt predatory pricing policies by lowering prices to a level that would force any new entrants to operate at a loss Cost advantages -Lower costs, perhaps through experience of being in the market for some time, allows the existing monopolist to cut prices and win price wars Advertising and marketing-Developing consumer loyalty by establishing branded products can make successful entry into the market by new firms much more expensive. Research and Development expenditure,Presence of sunk costs -some industries have very high start-up costs or a high ratio of fixed to variable costs. Some of these costs might be unrecoverable International trade restrictions,Sunk Costs-Sunk Costs are costs that cannot be recovered if a businesses decides to leave an industry

Securitization is the financial practice of pooling various types of contractual debt, such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations, and selling said consolidated debt as pass-through securities, or collateralized mortgage obligation (CMOs) to various investors. The cash collected from the financial instruments underlying the security is paid to the various investors who had advance money for that right. Securities backed by residential mortgage receivables are called residential-mortgage-backed securities (RMBS), while those backed by other types of receivables are asset-backed securities (ABS). Securitization can provide many advantages, such as lower cost of capital, diversification for investors, enhanced liquidity and others

"Money Market" refers to the market for short-term requirement and deployment of funds. Money market instruments are those instruments, which have a maturity period of less than one year. The most active part of the money market is the market for overnight call and term money between banks and institutions and repo transactions. Call Money/Repo are very shortterm Money Market products money market functions-Transfer of large sums of money1Transfer from parties with surplus funds to parties with a deficit2Allow governments to raise funds3Help to implement monetary policy4Determine short-term interest rates. Treasury Bills are short term (up to one year) borrowing instruments of the Government of India which enable investors to park their short term surplus funds while reducing their market risk. These are discounted securities and thus are issued at a discount to face value. The return to the investor is the difference between the maturity value and issue price. Any person in India including Individuals, Firms, Companies, Corporate bodies, Trusts and Institutions can purchase Treasury Bills. A CD is a time deposit, financial product commonly offered to consumers by banks. In case of CDs the banks issue a certificate for a deposit made, such certificate is transferable, i.e. holder of CD is holder of deposit. CDs are negotiable instrument issued either in physical form transferable by endorsement and delivery or in demat form or as a Usance Promissory Notes. CDs issued by banks should not have the maturity less than seven days and not more than one year.

Commercial bill is a short term, negotiable, and self-liquidating instrument with low risk. It enhances the liability to make payment within a fixed date when goods are bought on credit. Bills of exchange are negotiable instruments drawn by the seller (drawer) on the buyer (drawee) or the value of the goods delivered to him. Such bills are called trade bills. When trade bills are accepted by commercial banks, they are called commercial bills. The bank discount this bill by keeping a certain margin and credits the proceeds. Commercial Paper is a money-market security issued (sold) by large banks and corporations to get money to meet short term debt obligations , and is only backed by an issuing bank or corporation's promise to pay the face amount on the maturity date specified on the note. Commercial paper is usually sold at a discount from face value, and carries shorter repayment dates than bonds. The longer the maturity on a note, the higher the interest rate the issuing institution must pay The Repo or the repurchase agreement is used by the government security holder when he sells the security to a lender and promises to repurchase from him at a specified time. Hence the Repos have terms raging from 1 night to 30 days. They are very safe due to government backing. primary markets deal with the trading of newly issued securities. The corporations, governments and companies issue securities like stocks and bonds when they need to raise capital. The investors can purchase the stocks or bonds issued by the companies. The secondary market is that part of the capital market that deals with the securities that are already issued in the primary market. The investors who purchase the newly issued securities in the primary market sell them in the secondary market Primary vs. secondary market says that the primary market deals with the newly issued securities while the secondary market deals with already traded securities. When the companies issue securities in the primary market, they collect funds directly from the investors through the securities sales. But, in the secondary market the money earned from selling a security does not go to the company. The money thus earned goes to the investor who sells the security.

Venture Capital is the fund/initial capital provided to businesses typically at a start-up stage and many times for new/ untested ideas. Venture capital normally comes in where the conventional sources of finance do not fit in. Venture capital funds are mutual funds that manage venture capital money i.e. these funds aggregate money from several investors who want to provide

venture capital and deploy this money in venture capital opportunities.Typically venture capital funds have a higher risk/ higher return profile as compared to normal equity funds and whether you should invest in these would depend on your specific risk profile and investment timeframe.

1. Financial Assets: The financial assets or near-money assets are the claims to money and perform some functions of money. They have high degree of liquidity but are not as liquid as money is. Financial assets are of two types: (a) primary or direct assets, and (b) secondary or indirect assets. Primary assets are the financial claims against real-sector units created by real-sector units as ultimate borrowers for raising funds to finance their deficit spending; they are the obligations of ultimate borrowers. The examples of Primary assets are bills, bonds, equities, book debits, etc. Secondary assets are financial claims issued by financial institutions against themselves to raise funds from the public; these assets are the obligations of the financial institutions. The examples of secondary assets are bank deposits, life insurance policies, Unit Trust of India units, etc. 2. Financial Markets: The financial system of a country works through the financial markets and the financial institutions. The financial markets deal with the financial assets of different types, currency deposits, cheques, bills, bonds, etc. Financial markets perform the following functions: (a) They create and allocate credit, (b) They serve as intermediaries in the process of mobilisation of saving, (c) They provide convenience and benefits to the lender and borrowers, (d) They promote economic development through a balanced regional and sectoral allocation of investible funds. Financial markets are credit markets which cater the credit needs of individuals, firms and institutions. Since credit is required and supplied for short period and long period, the financial markets are broadly divided into two types: (a) money market and (b) capital market. Money market deals with the short-period borrowing and lending of funds; in the money market, the short term securities are exchanged. Capital market deals with the long period borrowing and lending of funds; in the capital market, long-term securities are exchanged.

Financial market may also be categorized into: (a) primary market, and (b) secondary market. Primary market is a market in which newly issued credit instruments are sold and purchased. Secondary market, on the other hand, is market in which previously issued credit instruments are bought and sold. 3. Financial Institutions: Financial institutions or financial inter-mediaries act as half- way houses between the primary lenders and the final borrowers. They borrow funds (or accept deposits) from those who are willing to give up their current purchasing power and lend to (or buy securities from) those who require the funds for meeting the current expenditures. Financial institutions are generally divided into two categories (a) banks, and (b) non-bank financial intermediaries. The main difference between banks and non bank financial intermediaries is that the former possess, while the latter do not possess the demand deposits or credit-creating power.