International Business, 6th Edition

chapter 1

An Overview
of
International
Business

Griffin & Pustay

1-1 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
 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

1-2
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 How Does International Business
Differ from Domestic?

• Currency conversion
• Legal systems
• Culture
• Availability of resources

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

1-3
 International
Business Activities

• Exporting and Importing

• International Investments
• Licensing, Franchising, and
Management Contracts

1-4 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

 Figure 1.1 Exports as a % of GDP

90
82.9
75
80

70
Percentage of GDP

60

50
44.1
39.7 35.7
40
31.8
28.8 27.1
30
21.4
17.8 14.5
20
10.8
10

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1-5 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

 Figure 1.2 World Exports
as a % of World GDP

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 Figure 1.3 Foreign Direct
Investment Relative to World GDP

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 The Era of Globalization

Globalization: the inexorable integration

of markets, nation-states, and
technologies…in a way that is enabling
individuals, corporations and nation-
states to reach around the world farther,
faster, deeper, and cheaper than ever
before

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 Contemporary Causes of
Globalization

Strategic Imperatives
• To leverage core competencies
• To acquire resources and supplies
• To seek new markets
• To better compete with rivals

1-9 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

 Environmental Change and
Globalization

Changes in
Technological
Political
Changes
Environments

1-10 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

 Why Study International
Business?

• Large organizations
• Foreign-owned subsidiaries
• Small businesses
• Competitors
• Business techniques and tools
• Cultural literacy

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