GLOBAL BUSINESS

Arranged by:
Novintasari Angelia (1834021080)

Introduction To Business Lecture:

Amanda Setiorini, S.Psi.,M.M

University of Krisnadwipayana
Faculty of Economics
Study Program of Management
 PREFACE

Praise for the presence of the Almighty God, because of His mercy this writing can be
done well. This paper on "Global Business" was compiled by the author based on the
knowledge obtained by the author from several other books and references.

With the hope that people who read can understand this paper and for the future it is
hoped that it can improve the form and add content to the paper for the better.

The author realizes that writing this paper is far from perfect. Therefore, the authors
expect constructive criticism and suggestions to improve the publication of this paper in the
future

Jakarta, 12th March 2019

Novintasari Angelia

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 TABLE OF CONTENTS

PREFACE ...................................................................................................................................I
TABLE OF CONTENTS .......................................................................................................... II
CHAPTER 1 INTRODUCTION ............................................................................................... 1
1.1 BACKGROUND ..................................................................................................... 1
1.2 PURPOSE ................................................................................................................ 1
CHAPTER 2 DISCUSSION ...................................................................................................... 2
2.1 UNDERSTANDING OF GLOBAL BUSINESS .................................................... 2
2.2 SUPPORTING FACTORS IN GLOBAL BUSINESS............................................ 2
2.3 LEVEL OF GLOBAL BUSINESS .......................................................................... 3
2.4 GLOBAL BUSINESS STRATEGIES .................................................................... 4
CHAPTER 3 COVER ................................................................................................................ 5
3.1 CONCLUSION ........................................................................................................ 5
3.2 SUGGESTION ........................................................................................................ 5
REFERENCES .......................................................................................................................... 6

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 CHAPTER 1

INTRODUCTION

1.1 BACKGROUND

Companies that want to improve their performance will expand their markets outside
their own countries. Actually international business practice itself had existed since BC
when Venetian and Greek merchants sent representatives abroad to sell their belongings.
Although international-based companies have existed before before World War I, in
recent years the desire to promote international trade has increased and globalization has
become an unavoidable phenomenon in the business world. The world economy is
increasingly open and becomes a unity. The rise of international business has occurred as
a result of improving infrastructure, world political and social conditions. This is marked
by the rise of companies operating in cross-country.

1.2 PURPOSE

1. to find out the meaning of global business

2. to find out what are the supporting factors in global business
3. to find out the level in global business
4. to find out the global business srategies

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 CHAPTER 2
DISCUSSION

2.1 UNDERSTANDING OF GLOBAL BUSINESS

In economics, the definition of business is a activity or activity and work that brings
economic benefits or value added. And etymologically, namely business originating from
English, namely business, developing busy basic words which means "busy". Whereas in
terminology is a situation where a person or group of people is busy doing a job that
produces profit. And according to KBBI business is a commercial business in the world
of commerce; business fields; trading business.
While the etymological global understanding is, taken from the word globe, namely
the world so that it can be interpreted globally. And in general global is a global,
comprehensive and all-encompassing.
And the definition of international business according to Donald A. Ball (2000) is a
business whose activities cross national boundaries. This definition not only includes
international trade and overseas recording, but also other developing industries such as
fisheries, transportation, banking and others. And here is a definition of global business
from experts:
a. Charles WH Hill (2008), global business is a company involved in international
trade and investment.
b. Daniels, Radebaugh and Sullivan (2004), global business is all commercial
transactions both by private and government between two or more countries.
From this definition it can be concluded that global business is refers to buying,
selling, and trading of goods and service across national boundaries to gain profit. And
global business consists of transactions designed and implemented at national borders to
satisfy the goals of individuals, companies and organizations. The main types of
international business are import-export trade and foreign direct investment (FDI).
2.2 SUPPORTING FACTORS IN GLOBAL BUSINESS
There are five supporting factors in global business, including the following;
1. Political
There is a desire for the unification and socialization of the state community. With
good relations between one country and another, there will be a reduction in barriers
to foreign trade and investment. In addition, business opportunities can be opened
with the privatization of companies in communist countries.
2. Technology
Progress in the field of technology allows the flow of ideas and information more
easily, so that customers can learn foreign goods easily because they have obtained
information and made transactions through the internet. This has proven to have a
large influence on international trade.

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 3. Market
The saturation of the domestic market is a strong enough reason to conduct
international trade. In addition to the saturation of the domestic market, the desire to
expand the market for its products has become another driver for a company to be
involved in cross-country trade.
4. Costs
The existence of globalization will open opportunities for companies to place their
production in countries that have cheaper production factors. And economic of scale
is a management goal, which is one of the tools to reduce the development costs of
inventory production by controlling product lines. The company can also place
production in a country where production factor costs are lower. Thus the cost per
unit of a product will be lower.
5. Competition
The tight competition makes a company must strategically develop. With
globalization and free investment in other countries, companies that want to
maintain their products domestically try hard to enter the market in competing
countries to disturb them.
2.3 PARTICIPATING IN THE GLOBAL BUSINESS
1. Exporting, when a company decide to enter the global business, usually the least
complicated and least risky alternative is exporting, or goods and service that one
country sells to another country. A company, for example, can sell directly to
foreign importers or buyers.
2. Licencing and franchising
a. Licensing is a trade arrangement in which one company – the licensor – allows
another company – the licensee – to use its company name, products, patents,
brands, trademark, raw materials, and /or production processes in exchange for a
fee or royalty.
a. Franchising is a form of licensing in which a company – the franchiser – agrees
to provide a franchise a name, logo, methods of operation, advertising, product
and other elements associated with the franchiser’s business, in return for a
financial commitment and the agreement to conduct business in accordance with
the franchiser’s standard of operations.
3. Contract manufacturing, is a kind of contractual arrangement whereby one company
is willing to produce goods for another company, the product is in accordance with
the specifications of the second company request which they will later market
themselves.
4. Joint ventures, are somewhat similar to licensing agreements. In a joint ventures, the
domestic firm buys part of a foreign company with foreign company to create a new
entity. A joint ventures is corporate cooperation between countries by dividing costs
and business operations to achieve denser economic strength.
5. Direct foreign interstmen, is form of investment made by a company from a country
to invest in a long period of time for a company in another country. Direct investor
have either a controlling interest or a large minority interest in the firm.

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2.4 GLOBAL BUSINESS STRATEGIES
Planning in a global economy requires business people to understand the economic,
legal, political, and sociocultural realities of the countries in which they will operate.
These factors will affect the strategy a business chooses to use outside its own borders.
1. Developing strategies
Companies doing business internationally have traditionally used a multinational
strategy, customizing their product, promotion, and distribution according to
cultural, technological, regional, and national diferences and more and more
companies are moving from this customization strategy to a global strategy
(globalisation), which involves standarizing product (and, as much as possible, their
promotion and distribution) for the whole world, as if it were a single entity.
2. Managing the challenges of global business
Managers can meet the challenges of creating and implementing effective and
sensitive business strategies for the global marketplace can help lead their
companies to success.

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 CHAPTER 3

COVER

3.1 CONCLUSION

In this paper we can find out about what global business is, the supporting factors in
living a global business, the stages in global business, and the strategies in global
business so that they can make the company run properly.

3.2 SUGGESTION

I, as a writer, want to apologize for the lack of paper that I have made. Because I
know that this paper is far from perfect, so I need advice from readers to provide
criticism and suggestions that in the future this paper will be better. And thank you to the
readers for taking the time to read my paper.

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 REFERENCES
Sukardi. Paulus & Thealia Sari. Evi. (2007). Bisnis Internasional.Yogyakarta
Ferrel. O.C, Hirt. Geofrey A., Ferrel. Linda. (2008). Business: A Changing World. New
York.
Gitman. Lawrence J, McDaniel. Carl, Shah. Amit, Koffel. Linda, Talsma. Bethann, Hyatt.
James C. (2008). Introduction To Business. Texas.
https://en.wikipedia.org/wiki/International_business