International Business Management (unit-1) Dr. A. Mohamed Riyazh Khan, Assistant Professor (Se.G) department of management studies,

Modes of international business 1. Merchandise export and imports 2. Tourism and transportation 3. Licensing and Franchising 4. Turnkey operations 5. Management contracts 6. Direct and Portfolio investment

Merchandise export and import Merchandise export: are tangible products (goods) sent out of a country. Merchandise import: are good brought into a country. (visible export and import) ……………………………………………… Eg.. Indonesian plant sends athletics shoes to the USA

Tourism and Transportation Williams sisters fly from the US to Paris on Air France to play in the French Open Tennis Tournament Olympic held in London so most of the players went to London… ( airlines, shipping, travel agencies and hotels)

Turnkey operations It is such as constructions, performed under contract, of facilities that are transferred to the owner when they are ready to begin operating. For example: Caterpillar construction company

Franchising It is a mode of business in which one party (the franchisor) allows another party (the franchising) to use a trademark that is an essential asset for the franchisee’s business. Example: providing components, mgt technology.

Licensing When companies allows others to use their assets, such as 1.Trademark 2.Patents 3.Copyright Under contract, also know as licensing agreement

FDI It is investment directly into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country.

International Orientations The degree and nature of involvement in international orientation of companies vary widely. The strategic important of international business and the marketing strategy differ between companies. 1. Ethnocentrism (home country orientation) 2. Polycentrism (host county orientation) 3. Regiocentrism (regional country orientation) 4. Geocentrism (world orientation)

Ethnocentrism orientations Overseas operations are viewed secondary to domestic operation are prime as a means of disposing of surplus. The position of small companies just entering minimal international operations because risk minimal no investment no additional selling cost Eg: Preethi mixture, ultra grinder ….

Polycentric Host country oriented Each national market is distinctive Focuses on the difference between the home and foreign mkt The multinational corporations are polycentric companies. The important merit of polycentrism is adaptation of the business strategies to the local conditions Eg: TATA oranisation

Regiocentric It’s view different regions as different markets. A particular region with certain important common marketing characteristics is regarded as a single market. Strategy integration organizational approach and product policy tend to be implemented at regional level. Objective are set by head quarters.

Geocentric It’s view the entire world as a single mkt and develops standardized marketing mix, projecting a uniform image of the company and its products, for the global mkt.