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UNIT I

INTERNATIONAL BUSINESS
AND ENVIRONMENT
International Business
Business:
Set of activities relating to industry and commerce.
International Business:
When business activities takes place across the political borders of a
country, its considered as International Business.
Interface of International Business
Internationalisation
of Capital

Internationalisation of
Corporate Mindset

Internationalisation Internationalisation
of supply chain of Market Presence
World Trade in Goods & Services
• Food
• Cloths

Goods • Spare parts


• Beverages
• Currencies
• Jewellery and Gems

• Tourism

Services
• Banking
• Consulting
• Transportation
• Knowledge
Major Trends and Development

Barter system
Trade through waterways and by using animals
International trade through Silk way (Silk, Spices, jewellery, etc.)
17th century colonialism (British, Portuguese, Dutch, French),
Establishment of East India Company
18th Century – The Triangular Trade (Europe, Africa and America)
th
Trade in 19 Century

Establishment of Gold Standard


De- globalisation (1914- 1919 World War I)
Great Depression Period (1929)- US government passed Smoot – Hawley
Tariff Act in 1930.
World War II
Re- globalisation : Bretton Woods System, International Monetary Fund
(IMF), General Agreements on Tariffs and Trade (GATT), Establishment of
world bank
Framework for Understanding International
Business Environment
Micro Environment Macro Environment

• Customers • Economic
• Competitors • Political & Legal
• Suppliers • Sociocultural
• Marketing Intermediaries • Demographic
• Democratic • Natural
• Physical and Technological
• International
Analysis of Physical Environment
Different climatic conditions
Geographic conditions
Location of country
Analysis of Demographic Environment

Age structure Education


Gender Social Class
Income distribution Religion
Family size Race
Family life cycle Nationality
Occupation
Assignment 1
Assignment 1.docx
Analysis of Economic Environment
Economic Development
Income
Expenditure Pattern
Infrastructure
Monetary and Fiscal Policies
Commercial and Foreign Investment policies
Balance of Payments account
Analysis of Socio- Cultural Environment

Language
Aesthetics
Education
Religion & Superstitions
Attitude & Values
Customs & Manners
Supernatural Beliefs
Political Environment

Forms of Government & Political System


Political Ideology & Role of Government
Political Stability
Political Risk (Expropriation & Nationalisation)
Domestication
Relationship with other Government
Legal Environment
Common
Law

Civil or Legal Islamic


Coded
Syatem Law
Law

Marxist
Law
International Business Contract
1. Legal Provisions
2. International Sales Agreements