economic geography- kazi matiur rahman.ppt

8/2/2019 Economic Geography- Kazi Matiur Rahman.ppt

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Muhammad Ruhul Amin

Course Instructor

Economic Geography

School Of Business

State University Of Bangladesh

International Business


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Kazi Matiur Rahman

# UG01-20-09-045

BBA

School Of Business

State University Of Bangladesh



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International business is a term used

to collectively describe all

commercial transactions

(private and governmental, sales, in

vestments, logistics,

and transportation) that take placebetween two or

more regions, countries and nations

beyond their political boundary.



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All value-adding activities including sourcing, manufacmarketing, can be performed in international locations.

The subject of cross-border trade can be products, servitechnology, know-how, and labor.

Firms internationalize via exporting, foreign direct investmenfranchising, and collaborative ventures



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Companies conduct value-adding

activities on a global scale, primarily toorganize, source, manufacture, andmarket

A level playing field has made

international activities appealing to alltypes of firms- large and small;manufacturing and service sectors (e.g.banking, transportation, engineering anddesign, advertising, and retailing).



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Integration is central to

globalization, which has resulted

in the widespread diffusion of

products, technology, and

knowledge worldwide, regardlessof where they originate.



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Greater integration and interdependency of national econom

freer movement of goods, services, capital, and knowledge

Rise of regional economic integration blocs

Growth of global investment and financial flows

Convergence of consumer lifestyles and preferences

Globalization of production



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Transfer of assets to another country or the acquisitionof assets in that country.

International Portfolio investment(typically short-term): Passive ownership of foreign securities such asstocks and bonds, to generate financial returns.

Foreign direct investment (FDI) (typically long-term): An internationalization strategy in which thefirm establishes a physical presence abroad throughacquisition of productive assets such as capital,technology, labor, land, plant, and equipment.



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Foreign Direct Investment (FDI) - (asset ownership

time frame) The ultimate commitment-level of internationalization

We focus primarily on FDI, as opposed to International Pinvestment.

Large, resourceful companies with substantial inter

operations leverage FDI to: Manufacture/assemble products in low-cost countries, e.g

Mexico, E. Europe

International Busin


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http://www.guardian.co.uk/public-leaders-supporter-zone-ernst-young/turn-risks-and-oppor

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Managers need to understand their implications, anticipate the

proactive action to reduce adverse effects.

Some risks are extremely challenging, e.g., the East Asian eco

of 1998 generated substantial commercial, currency, and count

Political and social unrest surged to Indonesia, Malaysia, Sout

Thailand, and the Philippines.

International Busin


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Multinational enterprise (MNE): A large company with sub

resources that performs various business activities through a nsubsidiaries and affiliates located in multiple countries.

In addition to a home office, an MNE owns a worldwide netw

subsidiaries.

Examples- Caterpillar, Kodak, Nokia, Samsung, Unilever, Ci

Vodafone, DHL Examples ofFortunes Global 500- Exxon Mobil, Royal Dutc

General Motors, DaimlerChrysler, Toyota, Ford, and Wal-Ma

International Busin


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Why do Firms Interna

1. Seek opportunities for growth through market

diversification

2. Earn higher margins andprofits

3. Gain new ideas about products, services, and

business methods

4. Better serve customers that have relocated abroad5. Be closer to supply sources, benefit from global sourcing adv

gain flexibility in the sourcing of products


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Why do Firms Internationalize

6. Gain access to lower-cost or better-value

factors of production

7. Develop economies of scale in sourcing,

production, marketing, and R&D

8. Confront international competitors more

effectively or thwart the growth of

competition in the home market

9. Invest in a potentially rewarding

relationships with foreign partners



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Increase sales

Maximize returns: Foreign markets often generate rsuperior to those in domestic markets.

Global scale economies: International players can mtheir efficiencies by securing cost-effective factor inp

around the world.

Resource acquisition: Access to otherwise unavailaresources

International Busin


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A facilitator of the global economy and interconnectedne A contributor to national economic well-being

A competitive advantage for the firm

An activity with societal implications

A source of competitive advantage

International Busin


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economic geography- kazi matiur rahman.ppt

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