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

2.2. INTERNATIONAL BUSINESS Full-time course = 12 lectures (summer term 2010) 1-2 What is international business. Comparative advantage. Protectionism x Liberalism. 3-4 Internationalisation and Globalisation. Foreign expansion. Entry modes. 5-6 Culture and its role in IB. Culture differences. Negotiation and presentation of business results. 7-8 CASE Study elaborated in teams (no regular lecture held at VSFS, April 1 st, 2010) 9-10 Czech IB. European Union. International market research (analysis). Data collection International trade barriers. Economic integration. Personal preconditions for working in IB. SWOT of Czech companies. Within each lecture: - practical discussions on topical economical issues - article: reading + analyses - team knowledge competition INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

3.3. CREDIT conditions B_IB Full-time course = 12 sessions (summer term 2010) INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. / CONDITIONS: PRESENCE at IB lectures: 50% short TEAM PRESENTATION - preparation at home: min. presentation on international business issue lecture marks based on active PARTICIPATION: communication, reading and discussing topical economic issues / team knowledge COMPETITION If unfulfilled: 1. knowledge test / 2. semester elaborated paper + test

4.4. TEAM PREZENTATION mins. team presentation (normally in ppt, each team member talks/presents, preparation at home necessary) Following topics: Globalisation: influence on business, examples CSR (Corporate Social Responsibility): opportunity or necessity, examples EU (European Union): influence on Czech businesses, examples Personal preconditions for working in IB (International Business) INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

5.5. Common session STRUCTURE  IB NEWS – small talk / discussion – topical business issues  LECTURE  READING – analyzing – interpretation of an article (team work) / Prezentation of the materials prepared at home  Team PRESENTATION + audience evaluation  Quick team knowledge COMPETITION INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

6.6. Lecture content  History of Czech international business [IB]  European Union principles of IB  Opporturnities & threats of CZ membership in the EU  International market research (analysis)  Data collection & selection in IB INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

7.7. History of Czech IB  100 years ago: in “top ten” of the most advanced countries in the world  Before 2 nd World War: orientation on western markets, still Czechoslovakia =10 th most industrially developed country  After 2 nd World War (communist period): CZ „manufactury“ of the communist bloc with over 70 % of export into these countries  1989 fall of socialism: CZ’s IB shift to the western partners again (Questionable move today)  2004 CZ joins EU: Elimination of trade barriers (duties, quotas and other restrictions) Solid business climate in CZ => inflow of FDI (often based on governmental INCENTIVES) INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

8.8. CZ – joining EU CZ member of EU since (in the wave of 10 countries – the biggest enlargement in the EU history) 1 st half of 2009 Czech presidency of the EU today 27 countries members are sovereign nations that have agreed to cede certain of their powers to the EU Negotiations about further countries accession INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

9.9. EU business principles  single market  non-existence of tariffs (custom duty), quotas and administrative restrictions of import & export  prohibition of EU companies DISCRIMINATION (tenders, market operations, certification)  no DUTY CHECKS on the borders within EU members  single business, duty & immigration approach (policy) towards third parties  strict regulations – environment  single currency (EUR) / Schengen Space INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

10. Business Advantages & Disadvantages of Czech accession of EU DISADVANTAGES - stronger competition - less freedom in some of state economical decisions INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. / ADVANTAGES - duties elimination - free movement of goods / partly free mov.of labor - larger market (single market)

Elimination / removal of business restrictions Cut of bureaucratic cost Custom duties No need for additional certification Mutual approval of norms Low labour cost lower input cost easy access to financial & insurance services release of public orders / commissions Allocation of production units where more effective 11. OPPORTUNITIES for Czech ent. at EU single market INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

Threat of lowering the competitiveness of Czech companies (necessity to find another competitive advantage) Strong competition Pressure on lowering prices & profits SME more vulnerable in competition with MNE Labour market / different social conditions TAX systems 12. THREATS for Czech ent. at EU single market INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

13. ŘÍZENÍ OBCHODU [ROb] Ing. Pavla Břečková, Ph.D. / INT environment & its influence on business IB works in a certain environment, which has an influence on: Decision making WHETHER OR NOT to enter this market (market selection) Entry mode (the form of entry) Choosing of mktg strategy PEST analysis = analysis of int.envi: Political & Legal e. Economical e. Social & Cultural e. Technological e.

14. Basic business analysis Analysis of external environm. (market) PEST / STEEP / STEEPLE COMPETITION analysis Analysis of inner environm. (company) SWOT Factors: political, economical, social, technological (PEST), ecological (STEEP), legal and European (STEEPLE) Barriers to entry Threat of substitutes Buyer power Supplier power Rivalry / degree of rivalry of present competitors Strengths Weakness Opportunities Threats INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

15. ŘÍZENÍ OBCHODU [ROb] Ing. Pavla Břečková, Ph.D. / [PEST] P – Political & Legal environment Legal environment:  possibility to control ownership  possibility to buy properties (lands, buildings)  possibility to repatriate the profit abroad  law enforcement  possibility to set up a new company & finishing entrepreneurship Political environment: o political system and political stability o influence of interest groups / stakeholders o relation to foreign companies o corruption

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 16. [PEST] (P) - LEGAL environment INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

17. [PEST] (P) – POLITICAL environment Political IB barriers:  Sanctions  Embargo  Exchange rate manipulation  Dual-use  Nationalization o expropriation o confiscation  Privatization INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

18. [PEST] E – Economic environment  economic policy of government: o IB policy o rate policy  basic macro-economic measures and their development / trend  proportion of ‘grey economy’ INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

19. [PEST ] S – Social & Cultural environment Culture:  Extent of freedom of society  Hierarchy  Value orientation (e.g.: western pattern etc.) Institutions: –Family –Religious bodies –Educational institutions Further factors: –Language –Non-verbal communication –Way of dressing –Aesthetics –Life styles INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

20. [PEST] T – Technological environment  existence & quality of basic infrastructure  quality & availability of communication infrastructure: TV, broadcast, phones etc.  IT – possibility of data transfer abroad => internationalization of services, standardisation  approach to information  E-commerce / e-business  B2C, B2B, C2C (e-Bay), C2B INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

21. Basic business analysis Analysis of external environm. (market) PEST / STEEP / STEEPLE COMPETITION analysis Analysis of inner environm. (company) SWOT Factors: political, economical, social, technological (PEST), ecological (STEEP), legal and European (STEEPLE) Barriers to entry Threat of substitutes Buyer power Supplier power Rivalry / degree of rivalry of present competitors Strengths Weakness Opportunities Threats INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

22. Decision making – foreign market evaluation  PEST / STEEP / STEEPLE analysis  Competition analysis (Porter)  SWOT analysis  BENCHMARKING  Emerging market trends DATA collection:  Secondary data = was collected already  Primary data = necessary to obtain it INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

23. Data collection SECONDARY / desk analysing of secondary data low cost quick execution PRIMARY / terrain collection & analysis of primary d. relatively high cost time-consuming INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

-Czech presidency of the EU -EU international business principles -Single market -International market analysis / Competition analysis / Internal analysis -Types of law systems [Case / Civil / Religion / Bureaucratic] -Business Analysis -PEST – international business environment evaluation -Primary x Secondary data, collection 24. KEY terms INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

25. Thank you for your attention Ing. Pavla Břečková, Ph.D. INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /