INTRODUCTION TO
INTERNATIONAL BUSINESS
LEARNING OUTCOMES
• Understand the terms of International
Business including Globalization/
Internationalization
• Recognize the challenges of International
Business comparing with Local Business
• Recognize the changing Demographics of
Global Economy
• Understand how the process of globalization
creates opportunities and challenges for
management practice.
International Business all
business activities across nation borders.
International Commerce
BASIC TERMS Trade of goods and services
between nations.
International/Foreign
Investment focusing on global
investment as a part of an investment
portfolio
INTERNATIONAL VS LOCAL BUSINESS
• Differences in territory & business area
• What makes International business harder to manage ?
1. All countries are different.
2. Complexity of International Business Management
3. Framework of the international trade and investment system
4. International Monetary system & Exchange Rate
INSTITUTIONAL-BASED VIEW
Focus on dynamic interaction between institutions
and organizations
Challenges & Opportunities of International Business
differs and depends on the targeting nation.
Information/Knowledge of countries are required
(including cultures, language, market
characteristics)
Changing the product to adapt to each market.
VIETNAMESE LYCHEE IN JAPAN
STARBUCKS IN JAPAN
• Smaller serving size
• Lower sugar levels
• Matcha flavored item
• Budget-friendly premium
products
• Call customers by a
number instead of their
name
• Cozy living
• Seasonal Marketing
• Online on LINE
Etc.
RESOURCE-BASED VIEW
Internal factors decides International Business
Challenges and Opportunities depends on Internal factors.
Company’s resources and abilities decide the strategy & the
success in International Business
Develop optimal products and services to enter foreign
market.
RESOURCE-BASED VIEW
VRIO models
Institution-based
view
Decides the
success of an
organization in
International
Business
Enviroment
Resource-based
view
INTERNATIONAL BUSINESS
DRIVERS
• Expand the market
• Optimize the use of resources
• Taxes
• Limited competitive advantages and opportunities in local market.
• Protect domestic market
• Mitigate the risk
• Government incentives
GLOBALIZATION TRENDS
BASIC TERMS
Globalization vs Internationalization
• Globalization Bring all nations close together.
• Internationalization Make things adaptable
• Multinational Enterprises: Headquarter relates to 2
different countries.
• Transnational Corporation: Headquarter in 1
country, business runs in many countries
• Global Firm/International Corporate Operates
in more than 1 country.
GLOBALIZATION OF MARKET
• Growing interdependency among the economies of
the world; multinational nature of sourcing,
manufacturing, trading, and investment activities;
increasing frequency of cross-border transactions and
financing; and heightened intensity of competition
among a larger number of players. (Hout et al. 1982)
Make all markets in the world unite.
Build standards of products and services
Emerging global markets: BRIC
BRIC
25% WORLD’S LAND COVERAGE
40% WORLD’S POPULATION
COMBINED GDP (PPP) of $20 trillion
GLOBALIZATION
IN PRODUCTION
Take advantage of
resources/services/products from
different nations
Based on differences in price and
GLOBALIZATION quality of factors of production
IN (human resource, energy, natural
PRODUCTION resource, etc.)
Lower the price and increase
product’s quality
TYPICAL INTERNATIONAL ORGANIZATIONS
• The General Agreement on Tariffs and Trade
(GATT)
• The World Trade Organization (WTO)
• The International Monetary Fund (IMF)
• The World Bank (WB)
• The United Nations (UN)
Mission:
• Regulation, management, and supervision of the global
market.
• Establish an international legal system to operate a
global business system
DRIVERS OF GLOBALIZATION
• Declining Trade and investment barriers
• Role of technological change
DECLINING TRADE AND
INVESTMENT BARRIERS
VALUE OF WORLD TRADE, WORLD PRODUCTION, NUMBER
OF REGIONAL AGREEMENTS AND WORLD POPULATION
FROM 1960 TO 2020
TECHNOLOGY DEVELOPMENT
• WHAT TECHNOLOGICAL INNOVATIONS
PROMOTE THE PROCESS OF GLOBALIZATION ?
TECHNOLOGY DEVELOPMENT
Communications Internet of Things
Transportation
Digital Technology
Technology
DEVELOPMENT OF TRANSPORTATION MAKES
WORLD SMALLER
1500 -1840 1850 - 1930 1950s 1960s
Propeller Jet
Steam locomotives aircraft passenger
Best average speed of horse- average 65 mph. 300 - 400 aircraft, 500
drawn coaches and sailing Steamships average 36 mph. - 700 mph.
ships, 10 mph. mph.
Source: P. Dicken, Global Shift (New York: Guillford Press, 1992) p. 104.
ASIA-EUROPE STRATEGIC TRADE ROUTES
Factors promoting globalization
(Total Global Strategy II, Goege Yip)
Market
Toàn cầu Goverment
Cost hóa
Competitors
FORMS OF PARTICIPATION IN THE WORLD MARKET
• Export International Commerce
• Cooperation Agreement (licensing, franchising,
Production Contracts, Management Contracts…)
• Foreign direct investment (FDI)
GLOBAL COMPETITIVENESS INDEX
(WORLD ECONOMIC FORUM – WEF)
• Economic/Political system
• Infrastructure
Environment • Information technology application
COMPETITIVENESS INDEX
• Macroeconomic environment stability
• Strengths
Human Capital • Abilities/Skilss
GLOBAL
• Product and Service Market
• Labor Market
Markets • Finance systems
• Market Size
Innovative • Innovation Priorities
Ecosystem • Accepting and adapting Innovation
Transformation • Active in business activities
Readiness • Active in transformation
COMPARING TO OTHER ASIAN
COUNTRIES
Score Ranks/140 countries Score Ranks/140 countries
Political and Economic Systems
COMPARING TO OTHER ASIAN
COUNTRIES
INFRASTRUCTURE
SO SÁNH VỚI CÁC NƯỚC ASEAN
Technology Application
SO SÁNH VỚI CÁC NƯỚC ASEAN
Macroeconomics environment stability
RESEARCH: VIETNAM IN 2022
1. To which country does Vietnam export the
most ?
2. From which country does Vietnam import
the most ?
3. Which industry has the highest export
turnover?
VIETNAM GLOBAL COMPETITIVENESS INDEX(WEF)
RANK GRADE
GLOBAL COMPETITIVENESS INDEX
2020
1. Political & Economic system
2. Infrastruture
3. Macroeconomics Environment Stability
4. Basic Education & Health
5. Higher Education & Vocational Training
6. Efficiency of commodity markets
7. Efficiency of Labor markets
8. Technology Readiness
10. Market Size