INTERNATIONAL
BUSINESS
MBA Tran Thi Thu Trang
LECTURER INFO
Lecturer: MBA Tran Thi Thu Trang
Email: trangttt@neu.edu.vn
Mobile: 0989886107
MBA in International Business at Foreign Trade
University, a Post graduate Diploma in Supply
Chain Management at Douglas in Vancouver,
Canada.
1-2
1-2
Why study IB?
1-3
1-3
Why Is IB Different?
In IB a firm operates in multiple environments
Domestic environment - uncontrollable forces
Has forces that surround and influence the firm’s
behavior in the home country
These remain mostly the same regardless of
where in the country the firm operates
LO5
1-4
1-4
https://moit.gov.vn/tin-tuc/bo-cong-thuong-voi-
doanh-nghiep/canh-bao-gia-mao-doanh-nghiep-
na-uy-lua-dao-doi-tac-nuoc-ngo.html
http://www.baohoabinh.com.vn/12/57663/Doanh_n
ghiep_bat_can_dinh_lua_tai_thi_truong_Pakistan.
htm
1-5
1-5
Why Is IB Different?
In IB a firm operates in multiple environments
Foreign environment country-by-country
uncontrollable forces influence the firm’s behavior
and are
different from those of the domestic environment
based on values that differ
difficult to assess for the firm’s home managers
interrelated
LO5
1-6
1-6
Why Is IB Different?
The international environment is characterized by
interaction
between domestic and foreign country
environmental forces
among foreign country environmental forces
Hence, decision making is more complex due to
environment force differences and interactions
culture differences that are difficult to learn
the tendency of manager’s to rely on their own
culture’s reference points
LO5
1-7
1-7
Object, scope of IB course
Object:
all transactions in business move cross-border
(not frontier).
Scope:
- micro-economics
- Business only
- export goods and services, foreign
investment
1-8
1-8
What are differences among international
business, international economics,
international trade, international
investment and foreign trade?
1-9
1-9
TEXT BOOK
Hill, Charles, (2021), International Business:
Competing in the global market place, 13th
Edition, McGraw-Hill/Irwin.
Ref.Book:
• Ball D. A, Geringer J. M, Minor M. S, McNett J.
M, (2010), International Business – The
Challenge Of Global Competition, McGraw-
Hill/Irwin..
• Wild, J. J, Kenneth L. Wild, J. C. Y. Han
(2000), International Business: An Integrated
Approach, Prentice Hall, New Jersey 07458. 1-10
1-10
Course Assessment
Grades Will Be Determined Using
Overall Course Grade Categories
These Percentages
Class Participation (During Class 10%
Sessions)
Individual Quizzes 20%
Group Project/Presentations (Week 10 20%
& 11)
Open Book Final Exam 50%
1-11
1-11
CLASS PARTICIPATION
Class participation points will be based on general
class attendance, contribution in class and
compliance with the class rules delineated below.
Poor class attendance, little contribution in class or
non-compliance with class rules will result in a poor
class participation grade.
1-12
1-12
CLASS RULES
1. Arrive on time, be seated and ready to begin when the class starts.
2. Come prepared to class each session by completing the homework
assignments and assigned reading.
3. Participate by contributing answers, thoughts, comments and questions
during class discussions. The instructor will call on students during the
class if participants do not volunteer.
4. Turn off cell phones during class time.
5. Do not engage in individual discussions and mute microphones when you
are not participating during online class time.
6. Student should use their webcams during the online class and should
have their audio and microphones ready for participation during class
time.
7. Please use common courtesy and be polite in class.
8. There will be no tolerance for acts of academic dishonesty. 1-13
1-13
13
INDIVIDUAL QUIZZES
TIME: Weeks 4 & 7
There are 2 individual quizzes. Each one
accounts for 10% of the total grade.
Quiz 1: 20 MCQ
Quiz 2: 40 MCQ
1-14
1-14
14
GROUP PROJECT
Group Project: PRESENTATION IN Week 10 & 11
Please choose a company that has joined international
business.
Analyze the company and a foreign market that the
company has penetrated.
Request: see details in Syllabus
1-15
1-15
15
Group Project
1. Divide into groups of 4-6 students
2. Presentation time is up to 15 minutes.
3. Time for Q&A: 15', Maximum 5 people are
allowed to ask questions for the presentation
group.
1-16
1-16
16
Group Project
1. Individual score = Group score x % participation +
questions
2. Individuals are allowed to ask questions to interrogate
presentation groups (maximum 5 questions). Each
question is rated from 0 to 1 point, which is added to a
score of 20% to a maximum of 10 points for each
individual.
3. The presentation must be attended by all members of
the group, if absent, there will be no points.
4. All students are required to attend lectures. 1-17
1-17
17
Final exam
Duration: 90 minutes
Accounts for 50% of the total grade.
Attend more than 80% of the total classes
and hand in both individual and group
assignments on time.
Make-up exams will be not offered.
1-18
1-18
18
Final Exam
Structure:
Question 1 (1.5 points): Analysis of concepts,
processes ... in the theoretical part
Question 2 (2.5 points): Practical
connection……..in the practical part
Question 3 (2 points): Multiple choice 4
questions, each question 0.5 points
Question 4 (4 points): Case study
1-19
1-19
19
Chapter One
The Rapid Change of
International Business
McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
NEWS of International Business
1-21
1-21
Learning Objectives
Understand definitions for firms that operate in several
countries
Understand drivers that lead firms to internationalize
Appreciate the dramatic internationalization of markets
Comprehend why international business differs from
domestic business
Describe the domestic, foreign, and international
environment in which a company operates
internationally
1-22
1-22
International Business Terminology
International business terms
Foreign business
Multidomestic company (MDC)
Global company (GC)
International company (IC)
LO1
1-23
1-23
International Business Terminology
International Business
A business whose activities are carried out across
national borders
(It is economics border, sometimes it is legal border)
Foreign Business
The operations of a company outside its home or
domestic market
Multidomestic Company
An organization with affiliates in many countries
Each formulates its own business strategy
Strategy based on perceived differences in
markets
LO1
1-24
1-24
International Business Terminology
Global Company
Attempts to standardize and integrate operations
worldwide in most or all functional areas
International Company
Denotes a global or multidomestic company
LO1
1-25
1-25
1-26
1-26
What is International Business?
International Business (IB): any business transaction across
national borders
Trade in goods
Cross-border services
consulting, advertising, legal, financial, accounting
tourism, banking, communications/media, construction
management, etc.
Company activity inputs may involve IB activity even if outputs
do not
Firm’s revenues may come entirely from the home country
Key raw materials, knowledge, processes may come
partially or entirely from other countries
LO3
1-27
1-27
Let’s play games
1-28
1-28
Rapid Growth of
International Business
The rapid growth of international business is a result
of
dramatic increases of foreign direct investment
(FDI) and exports
FDI: A firm invests in equipment, structures,
and organizations in another country while
retaining significant management control
Exports: Sale and transfer of any good or
service from the firm’s home country to another
country
LO3
1-29
1-29
Rapid Growth of
International Business
LO3
1-30
1-30
Players in international business
• Who are key players in international business?
– Governments? Companies? Customers?
– Who does this subject focus on?
• Why companies participate in international business?
– Profit formula
– Increase sales revenue
– Optimize resources
Companies Customers
Financial
Governments
organizations 1-31
31
1-31
Terms for companies doing
international business
Thiết lập chiến lược dựa trên yêu cầu của từng thị trường: Công ty quốc tế
(IC – International Company)
Công ty toàn cầu (GC - Global Company)
Attempts to standardize and integrate operations worldwide in most or all functional areas
Công ty đa quốc nội (MDC – Multi Domestic Company)
An organization with affiliates in many countries
Each formulates its own business strategy
Strategy based on perceived differences in markets
Trụ sở chính và việc thích nghi với các yêu cầu địa phương
Công ty đa quốc gia (MNC – Multi National Corporation)
Công ty xuyên quốc gia (TNC – Transnational Corporation)
vs (National Home – nước chủ nhà)
Size of companies by capital, number of employess and revenues
Doanh nghiệp lớn (Big enterprises)
Doanh nghiệp vừa và nhỏ (SME – Small & Medium Enterprise)
2013: Việt Nam -10 người trở xuống ➔ doanh nghiệp siêu nhỏ, từ 10 đến dưới 200
người ➔ doanh nghiệp nhỏ và từ 200 đến 300 người lao động ➔ doanh nghiệp vừa
1-32
32
1-32
International business
environment
International business
management
National
environment
Foreign
environment
International
environment
1-33
33
1-33
Two sets of forces in the IB
environment
Two sets of forces in the IB environment influence
the development and operations of a firm
External Forces (Uncontrollable)
Those that management cannot control
Internal Forces (Controllable)
Those that management can develop and use to formulate
and execute the firm’s strategy given particular external
forces
1-34
34
1-34
External Forces That Affect IB Due
To Cross-Border Differences
1. Competition
Michael Porter’s 5 forces
2. PESTLE
Political
Economic
Social
Technological
Legal
Environmental
1-35
35
1-35
Internal Forces That Managers Can
Influence Across Borders
Factors of production
Capital, raw materials, people
Activities of the organization
Personnel management, finance, production,
marketing
The Value Chain of the Company
1-36
36
1-36
The Value Chain of the
Company
Adapted from M. E. Porter, Competitive Advantage, New York: Free Press, 1985
1-37
37
1-37
GLOBALIZATION
1-38
1-38
Globalization
Globalization?
The shift towards a more integrated and interdependent world economy
(Charles W. L. Hill, University of Washington, International Business: Competing in the Global Marketplace,
5/e)
Two components
The globalization of markets
The globalization of production
Drivers for greater globalization
Decline in trade & investment barriers
Technological change: communication, Internet, transportation
Impact on business?
Impact on production: reduce transportation cost, optimize cost
structure, reduce communication cost
Impact on markets: global consumers
1-39
39
1-39
Globalization of markets
The process of integrating national markets
into a single market
The world market is becoming increasingly
unified in terms of "taste".
➔ Value chain and global distribution network
1-40
1-40
Globalization of production
The process of dispersing production to different
locations in the world to exploit national differences in
the cost and quality of factors of production.
The stages in the value-creation chain of products
are increasingly globalized in order to create the best
quality for the product at the lowest cost.
➔ Global production network and international supply
chain
1-41
1-41
Boeing 787 – an international airplane
1-42
42
1-42
Globalization’s Outcome: Globality
Globality: describes economic globalization’s
unavoidable outcome
Nothing that happens on our planet is only a
limited local event
All inventions, victories, and catastrophes
affect the whole world
LO2
1-43
1-43
Globalization Forces
Globalization is a result of
Political forces that
reduce barriers to trade and foreign investment
by governments
induce privatization of industries of former
communist nations
Technological forces that
lead to advances in computers and
communications technology
allow low cost network computing and ubiquitous
Internet collaboration across borders
LO2
1-44
1-44
Globalization Forces
Globalization is a result of
Market forces
lead to globalizing companies’ need for their suppliers to
globalize too
allow easier revenue seeking activity abroad due to home
market saturation
Cost forces
demand economies of scale -- product line and manufacturing
-- to reduce unit costs
lower cost production factor seeking efforts in other countries
Competitive forces
more intense due to explosive growth internationally of small
and new businesses
LO2
1-45
1-45
Globalization Debate
Supporting Free Trade
Free trade
enhances socioeconomic development
promotes more and better jobs
LO3
1-46
1-46
Concerns With Globalization
Produces uneven results across nations and
people
Has deleterious effects on labor and labor
standards
Contributes to the decline of environmental and
health conditions
LO3
1-47
1-47
Discussion
Why the Iphone can’t be made in the
USA?
https://www.tutor2u.net/business/blog
/why-the-iphone-cant-be-made-in-
the-usa
https://www.cnet.com/features/here-
is-why-your-iphone-may-never-be-
made-in-the-usa/
1-48
1-48
1-49
1-49
