MAN304_T2_2020_Week_01_FINAL
MAN304
Issues in International
Business
Week One – International
Business and The Global
Business Environment
1
COMMONWEALTH OF AUSTRALIA
Copyright Regulations 1969
WARNING
This material has been reproduced and communicated to you by or on behalf of
Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (the Act).
The material in this communication may be subject to copyright under the Act. Any
further reproduction or communication of this material by you may be the subject of
copyright protection under the Act.
Do not remove this notice.
2
Learning Outcomes
1 Understand what is meant by the term
Globalisation
2 Recognise the main drivers of globalization.
3 Describe the changing nature of the global
economy.
4 Explain the major arguments in the debate over
the impact of globalisation.
5 Understand how the process of globalisation is
creating opportunities and challenges for
usiness managers.
4
Where in the World?
GROUP ACTIVITY:
Can you find some of the
major and minor global
players on a map?
Each group will be given a
lank World Map and a list
of Countries to find –
Challenge Yourself and Your
Group to find as many as
you can
5
The Effects of International
Business (IB)
6
GROUP ACTIVITY:
How Does International
Business Affect
Your Every Day Life?
The Meaning of International
Business (IB)
• IB can be defined as a business activity, which
involves a cross border commercial transaction
(Mahoney et al., 2001).
• IB occurs outside the borders of the country in
which the firm is based, making it more complex
and diverse than localised operations.
• IB is often termed “International Trade”, “Global
Business”, “Globalisation” or “International
Commerce” (a transaction across national
orders)
Importance of International
Business
• Since the mid 1980’s, trade has expanded globally
and economies have been created that would
have been un-imaginable at the time.
• Countries such as China and India have
experienced exponential economic growth, mainly
due to international business.
• IB opens opportunities for a business to develop
new markets and for people around the world to
enjoy access to diversified products at competitive
prices.
• It is the creation of competition that allows a
usiness to grow and develop.
World’s Largest Companies
2019
• Is it Apple, Amazon, Microsoft, Alphabet or
Facebook? These giants have been in a tight
ace for the title of the most valuable publicly-
traded company for quite some time.
9
https:
www.gfmag.com/global-data/economic-data/largest-companies
https:
www.gfmag.com/global-data/economic-data/largest-companies
Top 10 Largest Companies by
Market Capitalisation
10https:
fortune.com/global500
https:
fortune.com/global500
Competition and International
Business
• International business creates competition
etween them so that buyers can gain
access to the most competitive products and
services regardless of where they are
produced.
• Countries with resources that allow for the
production of a good can, hence, have an
advantage and sell the product at a higher
quality and lower cost rather than competing
in in-efficient segments of its economy.
11
Why International Business?
• This video discusses how international
usiness differs from domestic business
https:
youtu.be/lMdhfBQUhtI
12
GROUP ACTIVITY:
Come up with at least five (5) examples of the
domestic businesses (from your country) that
have expanded internationally and discuss what
they have done differently to become and
International Business
https:
youtu.be/lMdhfBQUhtI
Importance of International
Business
• A better understanding of the competitive
usiness forces and consumer
preferences around the world can also
esult from conducting international
usiness.
• A business can learn more about their own
products, which can inspire innovation,
when they commence dealing with
international distributors or buyers.
What Is A
Multinational Enterprise?
• Multinational enterprise (MNE) - any
usiness that has productive activities in
two or more countries
• Almost one-third of global production is
done by MNEs and about one-fourth of
employment
• Top Multinational Performers
https:
www.fo
es.com/top-multinational-
performers/list/#tab:rank
14
https:
www.fo
es.com/top-multinational-performers/list/#tab:rank
International Management
• International Management involves
– Applying management concepts and
techniques in a multinational environment
– Adapting management practices to different
economic, political, and cultural contexts
• Multinational Corporation (MNC)
– Operations in more than one country
– International sales
– Nationality mix among managers and owners
What is Globalisation?
• Globalisation - the shift towards a more
integrated and interdependent world
economy
• The world is moving away from self-
contained national economies toward an
interdependent, integrated global
economic system
16
What Is The
Globalisation of Markets?
• Historically distinct and separate national
markets are merging
• It no longer makes sense to talk about the
“German market” or the “American market”
• There is a “global market” where:
• falling trade ba
iers make it easier to sell globally
• consumers’ tastes and preferences are converging on
some global norm
• Business can promote the trend by offering the same
asic products worldwide
17
The Power of Global
Organisations/Institutions?
• As the world finds itself in a phase of
transition, international organisations (IOs)
are crucial for global governance
• The global political arena is su
ounded by
international organisations, which have
different roles and varying degrees of
influence. They help in managing many key
areas from international monetary, trade and
economic policies to global health concerns.
18
https:
www.thenews.com.pk/print/191779-The-power-of-
global-institutions
https:
www.thenews.com.pk/print/191779-The-power-of-global-institutions
19
https:
www.researchgate.net/publication/27
1448205_An_Introduction_to_International_
Organizations
https:
www.researchgate.net/publication/271448205_An_Introduction_to_International_Organizations
Global Institutions
• World Trade Organization (WTO)
https:
www.wto.org/index.htm
• General Agreement on Tariffs and Trade
(GATT)
https:
www.wto.org/english/docs_e/legal_e/gatt47.pdf
• International Monetary Fund (IMF)
https:
www.imf.org/en/About/Factsheets/IMF-at-a-Glance
• World Bank
https:
www.worldbank.org
• United Nations (UN)
https:
www.un.org/en
• G20
https:
g20.org/en/Pages/home.aspx
20
https:
www.wto.org/index.htm
https:
www.wto.org/english/docs_e/legal_e/gatt47.pdf
https:
www.imf.org/en/About/Factsheets/IMF-at-a-Glance
https:
www.worldbank.org
https:
www.un.org/en
https:
g20.org/en/Pages/home.aspx
The Projected World's Top 5
Largest Economies in 2023
• We are cu
ently
witnessing the
changing of the
economic guard, with
emerging-market
economies—
particularly in Asia
making huge
development strides
and the domination of
the West looking
shakier than eve
21
This Photo by Unknown Author is licensed under CC BY-SA
https:
en.wikipedia.org/wiki/World_economy
https:
creativecommons.org/licenses
y-sa/3.0
World’s Top 5 Largest Economies
USD19.5 trillion in 2023
22
Rating Country USD
1. USA 24.9 Trillion
2. CHINA 19.5 Trillion
3. Japan 5.7 Trillion
4. Germany 4.6 Trillion
5. India 4.3 Trillion
https:
www.focus-economics.com
log/the-
largest-economies-in-the-world
https:
www.focus-economics.com
log/the-largest-economies-in-the-world
World’s Top 5 Fastest Growing
Economies
Rating Country USD Increase
%
1. Rwanda 7.7
2. Bangladesh 7,5
3. Senegal 7.3
4. Ethiopia 7.0
5. Myanmar 6.8
23
https:
www.focus-economics.com
log/the-
largest-economies-in-the-world
https:
www.focus-economics.com
log/the-largest-economies-in-the-world
What Is Driving Globalisation?
• Declining ba
iers to the free flow of goods,
services, and capital
– average tariffs are now at just 4%
– more favorable environment for FDI
• global stock of FDI was $20.4 trillion in 2011
– facilitates global production
• Technological change
– microprocessors and telecommunications
– Internet: information backbone of the global economy
– transportation technology
24
What Does Globalisation
Mean For Business?
• Lower ba
iers to trade and investment mean
usinesses can
– view the world, rather than a single country, as their
market
• Home markets under threat by the offerings of foreign
firms
• Technological change
– Lower transportation costs
– Low cost and ease of information processing and
communication
– Global communication networks and global media
(creating a single market where boundaries are less
important)
25
The Changing Demographics
of the Global Economy
Four trends are important:
1. The changing world output and world
trade picture
2. The changing foreign direct investment
picture
3. The changing nature of the
multinational enterprise
4. The changing world orde
26
Rewards of International
Business
• Greater market opportunities
• Diversification of national markets
• Ability to explore greater supply chain
efficiencies or value chain developments
• Exploring potential local partnerships and
alliances that enhance business efficiency
27
Learning Outcomes
1 Understand what is meant by the term
globalisation
2 Recogise the main drivers of globalization.
3 Describe the changing nature of the global
economy.
4 Explain the major arguments in the debate over
the impact of globalisation.
5 Understand how the process of globalisation is
creating opportunities and challenges for
usiness managers.
Any Questions?
MAN304�Issues in International Business
Slide Number 2
Slide Number 3
Slide Number 4
Where in the World?
The Effects of International Business (IB)
The Meaning of International Business (IB)
Importance of International Business
World’s Largest Companies 2019
Top 10 Largest Companies by Market Capitalisation
Competition and International Business
Why International Business?
Importance of International Business
What Is A �Multinational Enterprise?
International Management
What is Globalisation?
What Is The �Globalisation of Markets?
The Power of Global Organisations/Institutions?
Slide Number 19
Global Institutions
The Projected World's Top 5 Largest Economies in 2023
World’s Top 5 Largest Economies
World’s Top 5 Fastest Growing Economies
What Is Driving Globalisation?
What Does Globalisation �Mean For Business?
The Changing Demographics �of the Global Economy
Rewards of International Business
Slide Number 28
Any Questions?
MAN304_T2_2020_Week_02_FINAL
MAN304
Issues in International
Business
Week Two -
Strategies for International
Business
1
COMMONWEALTH OF AUSTRALIA
Copyright Regulations 1969
WARNING
This material has been reproduced and communicated to you by or on behalf of
Kaplan Business School pursuant to Part VB of the Copyright Act 1968 (the Act).
The material in this communication may be subject to copyright under the Act. Any
further reproduction or communication of this material by you may be the subject of
copyright protection under the Act.
Do not remove this notice.
2
Learning Outcomes
1 Identify the various forms of
international business entry
strategies.
2 Identify general approaches to
engaging in international business.
3 Identify general approaches to
engaging in international business.
4 Discuss reasons for the faster
globalisation of certain industries
over others.
Strategies International
Businesses Use
4
GROUP ACTIVITY:
• Pick a well-known International
Business and identify some of the key
usiness strategies that they use?
• Discuss how their industry affects the
type of strategy that they use?
What is Strategy?
• A business strategy refers to the actions
that managers take to attain the goals of
the business
• Businesses need to pursue strategies that
increase profitability and profit growth
– Profitability is the rate of return the firm
makes on its invested capital
– Profit growth is the percentage increase in
net profits over time
5
What Can Strategy Do?
• To increase profitability and profit
growth, business can
• Add value
• Lower costs
• Sell more in existing markets
• Expand internationally
6
Strategic Enterprise Value
7
Determinants of Enterprise Value
Hill, 2015
Why is Strategic Positioning
Important?