Negocios

INTRODUCTION TO INTERNATIONAL BUSINESS

WHAT IS “INTERNATIONAL BUSINESS”?

ANY BUSINESS ACTIVITY THAT TAKES PLACE THROUGH NATIONAL BORDERS THE EXCHANGE OF GOODS AND SERVICES BETWEEN INDIVIDUALS, ENTERPRISES, ORGANIZATIONS AND GOVERNMENTS FROM DIFFERENT COUNTRIES. HBR Business Dictionary INTERNATIONAL BUSINESS ARE THE COMMERCIAL TRANSACTIONS (INCLUDING SALES, INVESTMENTS AND TRANSPORTATION)THAT TAKE PLACE BETWEEN INDIVIDUALS, ORGANIZATIONS, INSTITUTIONS AND GOVERNMENTS FROM TWO OR MORE COUNTRIES. John Daniels

HISTORICALLY….
International business are not something new:
1550-300 b.c..

3100-539 b.c.. Mesopothamia Phoenicia Greece 500 b.c..330 a.d.

Trade routes in the Mediterranean Sea

England Spain Netherlands Trade routes to American and Asian Colonies

INDUSTRIALREVOLUTION
Increase of production levels (mass production) and the efficiency of raw materials facilitating international business

WHY? INDUSTRIALIZATION

 INCREASE IN THE DEMAND OF SUPPLIES  INCREASE IN THE AVAILABILITY OF RAW MATERIALS

 INCREASE FACILITY OF TRANSPORTATION
 INCREASE IN THE MOBILITY OF CAPITAL FLOWS,
PROMOTING REVENUES AND NEW INVESTMENTS BOTH IN THE COLONIES ANDIN DOMESTIC EUROPEAN MARKETS.

INVESTMENT IN DOMESTIC PRODUCTION

INCREASE MOBILITY OF REVENUES AND CAPITAL FLOWS

INCREASE OF PRODUCTION CAPACITY

AVAILABILITY OF NEW RESOURCES

INCREASE IN THE AVAILABILITY OF PRODUCTS

INCREASE OF REVENUES

INDUSTRIAL REVOLUTION

T E C H N O LO G Y

TECHNOLOGY ADVANCES ARE THE GREATEST ACCELERATOR OF INTERNATIONAL BUSINESS Towards 1880 theIndustrial Revolution peaks, both in Europe as in the United States. The productions of goods grew to high levels, pushing the creation and discovery of new inventions and scientific advances, the development of new energy sources , increases in the efficiency levels of production processes and better communication and transportation.

• Development and production of electricity

commercial• Development and commercial production of gasoline automobiles (Karl Benz, Gottlieb Daimler & Maybach) • First comercial production and sales of phonographs and phonographic recordings
• First structures of steel for sky-scrapers
Ferdinand de Lesseps

Home Insurance Building, Chicago, 1894

• A French company starts the construction of the Panama Cana.

DEVELOPMENT OF INTERNATIONAL MARKETSInternational Markets
Domestic Market – demand fully covered

DOMESTIC PRODUCTION

WHY DO COMPANIES START BECOMING GLOBAL? Faster transportation
Communications allow long-distance control Transportation and communication costs are lower, therefore facilitating international operations internacionales

GLOBALIZATION, INTERNACIONALIZATION, TRANSNACIONALIZATION... Exchangable terms, butthey are not the same

INTERNATIONAL BUSINESS

CREATION OF MULTINATIONAL ENTERPRISES

After the Industrial Revolution, a new kind of economic entity is born, with the objective of doing INTERNATIONAL BUSINESS

1- Internationalization

When exports start growing faster than the GDP (% of exports grows faster than production: the market is requesting products faster than you can producethem)

2- Transnationalization

FDI processes start and relocation is more and more common

3- Globalization

World –wide networks of information and production

Multinational corporations came to be at the end of the 19th. And the beginning of the 20th. centuries

From the beginning they had different and defined objectives: 1) PLACE EXCESSIVE DOMESTIC PRODUCTION
(Singer,International Harvester –Navistar, Remington, etc.)

2) GET RAW MATERIALS ABROAD TO SATISFY THEIR DOMESTIC DEMAND

(Standard Oil, US Rubber Co. , United Fruit, etc.)

3) TECHNOLOGY MNE’S THAT ARE LOOKING FOR MAKETS FOR THEIR NEW PRODUCTOSS (KODAK, WESTINGHOUSE, SONY, APPLE, ETC.)

HOW DO YOU DO INTERNATIONAL BUSINESS?

Forms of International Business
Exports-Imports

Direct Investment...