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Background
Globalization Explore national resources/factor of production world wide and make profit making business by way of various entry mode. I.B is the process of focusing on the resources of the globe and objective of organization on global business opportunities and threats, in order to produce-buy-sell or sell of exchange of goods/services worldwide
Objectives
Increase Market share by way of export
Scope
Flows of good & services service export FDI inflows good for economy Manufacturing activities -100% -SEZ Increasing in foreign exchange reserve
Use of natural resources/ Human resources use of human capital Cooperation among countries- FTA Overall growth of economy
Importance
Company can survive Many companies are closedown in MIDC Opportunities for growth more profit Business development expansion of base Country can develop -India1991 to 2010
Current trend
Growth of service sector-banks Setting up manufacturing unit Strategic alliance shipping co Joint venture Merask +CONCOR Merger & Acquisition
Reasons of IB
There has been growth in globalization in recent decades due to the following factors Governments are removing international business restrictions. Example-Indias import policy Institutions provide services to ease the conduct of international business. ESSAR in foreign oil field Consumers know about and want foreign goods and services. Electronic items Competition has become more global. Political relationships have improved among some major economic powers. China & USA Countries cooperate more on transnational issues. Example-Communication or gas pipe line from Iron to India Cross-national cooperation and agreements.
Many FTA-Free Trade Agreements are taking place all over world
Approach
1)Domestic purely domestic strategy 2)Ethnocentric-I B is based on domestic experience only extension T.N to S A 3)Polycentric-Formulating different strategies for different market 4)Regiocentric producing in one country & exports to all country 5)Geocentric Transnational companies produce, markets, invest and operates across world. Linkage of Global resources with global market and make profit
Entry mode
Indirect export Deem export Physical export Service export Licensing arrangement with foreign company Franchising Education field Manufacturing Turn Key projects FDI for green field projects Strategic alliance shipping consortium Joint venture Merger & acquisitions
Risk
Economic Inflation Political risk Pakistan-Sri Lanka Africa Foreign debt- Pakistan Exchange rate instability Sri Lanka Legal issues India PSACO SEZ Cultural problem-India Pakistan National security HPS Hongkong in Indian port sector
Thanks
Thanks for your daily reading of business news paper and understanding of international Business