1. chapter 1 an overview of international business

2. Chapter Objectives • Discuss the meaning of international business • Explain the importance of understanding international business • Identify and describe the basic forms of international business activities • Discuss the causes of globalization • Comprehend the growing role of emerging markets in the global economy 1-2

3. The Business of the Olympics 1-3

4. The Business of the Olympics • Intense reflection of international business • Government of games by IOC • Competition for hosting • Revenue sources for the Olympics • Broadcast rights • Corporate sponsorships 1-4

5. What Is International Business? • Business transactions between parties from more than one country • Parties may include • Private individuals • Individual companies • Groups of companies • Governmental agencies 1-5

6. How Does International BusinessDiffer from Domestic? • Currency conversion • Legal systems • Culture • Availability of resources 1-6

7. Why Study International Business? • Large organizations • Foreign-owned subsidiaries • Small businesses • Competitors • Business techniques and tools • Cultural literacy 1-7

8. International Business Activities • Exporting and Importing • International Investments • Licensing, Franchising, and Management Contracts 1-8

9. Exporting and Importing • Exporting: selling of products made in one’s own country for use or resale in other countries • Importing: buying of products made in other countries for use or resale in one’s own country 1-9

10. Figure 1.1 Exports as a % of GDP 1-10

11. Visible and Invisible Trade • Trade in Goods • Merchandise exports and imports • Visible trade • Trade in Services • Service exports and imports • Invisible trade 1-11

12. Exporting at Boeing 1-12

13. International Investments • Capital supplied by residents of one country to residents of another • Two categories: • Foreign direct investments • Portfolio investments 1-13

14. Other Forms of International Business Activity Management contracts Franchising Licensing 1-14

15. Variations of Organizations Multinational Corporation Multinational Enterprise Multinational Organization 1-15

16. Multinational Corporations (MNCs) • Engage in foreign direct investment • Own and control foreign assets • Buy resources in multiple countries • Create goods and services in multiple countries • Sell goods and services in multiple countries 1-16

17. ExxonMobil Wal-Mart Royal Dutch Shell BP General Motors Chevron DaimlerChrysler Toyota Motor Ford Motor ConocoPhillips Table 1.1 The Largest MNCs 1-17

18. Motives for Globalization • To leverage core competencies • To acquire resources and supplies • To seek new markets • To better compete with rivals 1-18

19. Environmental Change and Globalization Changes in Political Environments Technological Changes 1-19

20. Figure 1.2 World Exports as a % of World GDP 1-20

21. Figure 1.3 Foreign Direct Investment Relative to World GDP 1-21

22. Argentina Brazil China India Indonesia Mexico Poland South Africa South Korea Turkey Globalization and Emerging Markets 1-22

23. Framework of Book • The World’s Marketplaces • International Environment • Managing International Business • Managing International Business Operations 1-23