University Of Finance & Administration INTERNATIONAL BUSINESS [N_IB_B] Ing. Pavla Břečková, Ph.D.

2.2. INTERNATIONAL BUSINESS Full-time course = 12 lectures per 90 mins. INTERNATIONAL BUSINESS [IB], characteristics, indicators. WORLD BUSINESS TERRITORIES, challenges, integration, main trading blocks [TRIAD, BRIC] GLOBAL BUSINESS ENVIRONMENT. EMERGING MARKETS, characteristics, features, selected markets in detail BRICS in detail Doing business in ASIA Foreign market analysis PREDISPOSITIONS for working in IB, expatriation and HR in IB

3.3. CREDIT terms N_IB_B 12 lectures (per 90 mins) Completion: credit / 3 credits Completion CONDITIONS: Active participation in the lectures [active listening, discussing, reading, analyzing & interpreting of economic articles or case study results, presence at lectures – 50%] Case study elaboration & it’s active professional prezentation If unfulfilled => WRITTEN TEST to prove the knowledge

CASE study / team work CASE study on one of these topics: 1. BUSINESS TRENDS / opportunities in the next 10 years Largest threats & opportunities from the point of view of international business, where it (IB) is going. Areas where it is likely to find the business opportunities during next 10 years + explain what brought you to such results. 2. EXPORT STRATEGY Mid term view (3-5 years). What it should lie in, generally - how to support export (of CZ enterprises), concrete forms + in which business and industry areas (if in any / if not in all of them) + explain why 3. Finding the COMPETITIVE ADVANTAGE for the Czech Republic / or other country Competitive advantage + consequently what areas of business and industry should be preferential (if any) + what to do for succeeding in international business from the point of view of competitive advantage (micro and macro view). Possibly also what kind of business environment (or changes in the present one) would help developing the CZ businesses competitive advantage? 4. PRODUCT PLACEMENT – market study Placing of a product into a foreign market, including product description + argument why it is suitable for export, analyses of the preferential market (why this market, structure and potential of the target group), mapping competition, potentials + risks, argument why you think your product will succeed.

Team projects presentation - schedule 14/2/2013introductory lesson, setting the teams, choosing topics 28/2/2013consulting on the team projects 14/3/2013consulting on the team projects 28/3/2013presentation of teams /4/2013presentation of teams /4/2013concluding the course

6.6. LITERATURE SOURCES Povinná literatura / Mandatory reading: Charles W. L. Hill: Global Business Today, McGraw-Hill/Irwin, 7th edition, 2011 Doporučená literatura / Recommended reading: Allan Sitkin, Nick Bowen: International Business, January Stuart Wall, Dr. Bronwen Rees: International Business: A First Course, September Wild, J., Wild, K., Han, J.: International business: the challenges of globalization. 4th ed. – Pearson, Upper Saddle River, ISBN: Woods, M.: International business. Basingstoke, Palgrave, ISBN: Griffin, R.W., Pustay, M.W.: International business: a managerial perspective. 5th int. ed. - Upper Saddle River, Prentice Hall, ISBN:

7.7. INTERNATIONAL BUSINESS  What is international business? = exchange of goods and services undertaken by business bodies across the national border with the foreign business bodies = cross-border commercial transactions INT business = EXCHANGE across border

Barter / Import / Export International TRADE FDI / Portfolio investment / WOS etc. International INVESTMENT Licensing / Franchising / Management contracts etc. Other forms of int. business ACTIVITY 8.8. INTERNATIONAL BUSINESS CONSISTS IN:

9.9. International INVESTMENTS - generally FDI = Foreign Direct Investment investments made for the purpose of ACTIVELY CONTROLLING PROPERTY, assets, or companies located in host countris home x host country Forms of FDI GREENFIELD (new facility) ACQUISITION of (or merger with existing local firm) Portfolio Investment purchases of foreign financial assets (stock, bonds, certificates, deposits) for a purpose OTHER than CONTROL INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

10. How IB differs from DOMESTIC business?  currencies – conversions, risks, rates securing  culture – behavior, business practice  resources  technology – way of producing  often legal system – laws

11. How IB differs from DOMESTIC business? Cases create legal precedents COMMON / CASE law Detailed listing what IS and IS NOT permissible CIVIL law Based on the faith & practice of a particular religion RELIGIOUS law Often in communist and dictatorships is whatever the country’s bureaucrats say it is BUREAUCRATIC law

12. STRUCTURE of IB TERRITORIAL COMMODITY

13. STRUCTURE of IB = portfolio of all the business territories the company or country makes business with TERRITORIAL = portfolio of all the business commodities the company or country makes business with COMMODITY

INTELLECTUAL PROPERTY: o products of the mind (SW, screenplays, music, chemical formula for a new drug). o can be protected by PATENTS, COPYRIGHTS, TRADEMARK PATENT – grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale of that invention COPYRIGHT – exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit TRADEMARK – designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products Special hot issue: INTELLECTUAL PROPERTY 14.

Features / consideration: – Dollar / Euro ZONE – Business Culture – Law enforcement – Business Barriers – Business threats / opportunities WORLD BUSINESS 15.

The interesting QUESTION [from an economic perspective] is what the above means for the future: the 19th century was dominated by Great Britain and Europe as colonial powers the 20th century by the USA as the great economic power the 21st century will be controlled by Asia, and China in particular WORLD BUSINESS possible PROSPECT 16.

GLOBAL BUSINESS ENVIRONMENT  Session one is devoted to a discussion of the global context within which IB must function in the 21 st century.  The aim is to describe the external framework which exists today and which will influence company strategies in the international arena.  There are clearly some factors that will be more important than others in determining the likelihood of success in international markets:  The state of the world economy and the rules and regulations governing INT trade and investment are critical  The political and social environment also impinges on businesses, i.e. consideration of the role of culture in IB / importance of cultural empathy to business success

18. International ENVIRONMENT GLOBAL MACRO MICRO

19. Awareness of the GENERAL ENVIRONMENT – 2 levels of understanding BROAD = relevant to most companies [includes economy, political, tech. world and sociological issues] SPECIFIC = important to the individual business [includes customer / supplier relations, investor requirements, workplace issues] GLOBAL BUSINESS ENVIRONMENT Factors at BROAD level of IB understanding – influences on the IB environment

IB OPERATIONS (micro / operational level) ManufacturingAssemblingDistributionSelling 20.

POLITICAL Integration of LDCs and Centrally planned economies into INT economy Difficulties (& oppo) raised by econ.inequalities Role of OECD, WTO, World Bank, EU commiss. -direction of INT Trade & Investment Environmental concerns ECONOMIC INT economic agreem. (liberalisated trade & capital flows) => led to establishing REGIONAL ECONOMIC GROUPINGS - 3 main trading blocks TRIAD GATT ( ) =>WTO 2 particular issues of Importance for FUTURE: -Labour standards -Environmental issues FACTORS with SIGNIFICANT INFLUENCES on IB (BROAD level of understanding IB) 21. TECHNOLOGICAL Economic cycles in 50 years waves: -Prosperity -Recession -Depression -Recovery INFROMATION & COMMUNICATION wave (1980/90’) -driven via NETWORKS (comps, tech based com., production, control systems) TRANSPORTATION

QUESTIONS to prove knowledge in IB What is International business? Characterize, please. What IB consists in? 3 main categories. What is BARTER? What is FDI? What is HOME x HOST country? What is Portfolio investment? How IB differs from DOMESTIC trade? What are the main differences? What law / legal systems do you know? What is territorial / commodity structure of IB? GLOBAL business environment – 2 levels: Broad and Specific. Can you explain? Factors influencing IB: Political / Technological / Economic

INTERNATIONAL BUSINESS Thank you for your attention Ing. Pavla Břečková, Ph.D.