INTERNATIONAL
BUSINESS
Msc. Nguyen Quang Huy
Department of International Business
School of Trade and International Economics
NEU
RULES
1. Attendance/Participation(10%)
• Full attendance: 9pts
• Contribution/Discuss: +0,5 pts/time
• Late: -0,5 pts/time
• Absence (with permission): -0,5pts/time
• Absence (without permission)/truant: -1pts/time
2
RULES
2. Group presentation (20%)
• The class is divided into groups of 4-5 (10 groups max)
• Presenting time allowed: max 25 min (receive minus points if the time
exceeds 5 min)
• At the beginning of each group presentation, please bring a hard copy of
group member participation (with the signature of all members) to the
lecturer
• Powerpoint/Canva slides are required only
RULES
3. Final exam (50%)
• Do not being absent more than 20% of lectures (maxium 3)
• Minimum attendance score of 5
• Actively participate in class activities
• Participate in all mid-term assessments
CHAPTER I
INTERNATIONAL BUSINESS
IN THE AGE OF
GLOBALIZATION
2
Objectives
After studying this chapter, you should be able to answer the following
questions:
• What is international business?
• Who participates in (related to) international business
• Motivations for companies to participate in international
business
• Globalization and international business
• How is international business different from domestic business?
Contents
1. Overview of international business
2. Globalization and its impact on
international business
1. Overview of international business
● International business concept
● Participants in International business
● Types of International business
● Motivations for companies to participate in
international business
1. 1. International Business Concepts
International Business is any business transaction
across national borders
Profits
Micro Economics
Soft border
Participants in International Business
Customers Companies Governments Financial
create demand create a healthily organizations
competitive help firms to solve
environment financial problems
Participants in International Business
Multinational Small and medium
companies (MNCs) enterprises (SMEs)
- your firm invest to build a conpany
in China -> multinational company
- firms appear in most countries
around the world -> global companies
- firms participate in international activities
-> international companies
Types of International Business activites
Licensing
International Foreign
and
Trade franchising Investment
- licensing: sell intangible products through a contract
- franchising: sell recipe, brand, ... -> business model (model)
-> check quality frequently
Types of International Business activites
On-spot
Export export and
import
International
Import
Inter Outsourcing
national
Trade
Types of International Business activites
Types of International Business activites
put money on other foreign countries to make profit -> foreign investment
có kiềm qsoat các hđộng k có quyền ksoat
đầu tư
MOTIVATION FOR PARTICIPATION IN
INTERNATIONAL BUSINESS
Internal Domestic
forces Environment
Foreign
Environment
Motivation from the Domestic environment
• Small Market, unstable revenue
• Decline in demand, market saturations
• Pressures from Economics of Scale
• Decline stage of products
• High intensity of competition
• Low profit margins
• Higher costs
gd3 sx giảm vì có nhiều đối thủ cạnh tranh, cnghe, sp bị
- đối với DN, sx càng nhiều -> chi phí càng thấp vì bão hòa, thay vì sx tiếp thì đầu tư trực tiếp nc ngoài
fixed cost chia cho nhiều đầu sp hơn
Motivation from the company
1. Access advanced market
2. Finding new market, increase the turnover
3. Finding resources
4. Finding business efficient
5. Lower Risks
6. Diversify business activities
Motivation from foreign markets
1. Larger market
2. Higher Demand
3. Higher profit margins
4. Available resources
5. Governments’ subsidies
CHAPTER I
Globalization and its impact on
international business
Globalization
What is The components of
Globalization? Globalization
Drivers of The impact on
Globalization business?
What is Globalization?
Globalization refers to the shift toward a more integrated and
interdependent world economy. Globalization has several facets,
including:
Globalization Globalization
of markets of production.
Globalization of Markets
The globalization of markets refers to the merging of historically distinct and
separate national markets into one huge global marketplace.
Falling barriers to cross-border trade and investment have made it easier to sell
internationally
Global Market
Globalization of Markets
Tastes and preferences of consumers in different nations are beginning to
converge on some global norm, thereby helping create a global market
Globalization of Markets
However, a company does not have to be the size of
these multinational giants to facilitate, and benefit from,
the globalization of markets.
In the United States, more
than 300,000 small and
medium-size firms exported
in 2017, accounting for 98
percent of the companies
that exported that year.
Globalization of Markets
In many global markets, the same firms frequently confront each other as
competitors in nation after nation.
VS VS
If a firm moves into a nation not currently served by its rivals,
many of those rivals are sure to follow to prevent their
competitor from gaining an advantage.
They bring with them many of the assets that served them well
in other national markets.
Globalization of Production
The globalization of production refers to the sourcing of goods and
services from locations around the globe to take advantage of national
differences in the cost and quality of factors of production (such as
labor, energy, land, and capital)
➢ Lower cost
structure
➢ Improve the
quality
Drivers of Globalization
Two macro factors underlie the trend
toward greater globalization
Declining Trade and Technological Changes
Investment Barriers
Declining Trade and Investment Barriers
Why countries applied formidable barriers to
international trade and foreign direct investment ?
Declining Trade and Investment Barriers
The larger the difference
between the growth
rates of world trade and
world production, the
greater the extent of
globalization and the
more important it
becomes to understand
international business
Role of Technological Change
Role of
Technological
Change
Internet of Transportation
Communications Things Technologies
The Globalization
Debates
The Globalization Debates
Is the shift toward a more integrated and
interdependent global economy a good thing?
Suggested keywords
For Against
Lower prices Culturally impoverished value
Stimulates economic growth Environmental degradation
Raises the incomes Wage rates of unskilled workers
Create jobs Job losses
