INTERNATIONAL BUSINESS

1
INTERNATIONAL BUSINESS

• Ilan Bijaoui
• 2007
• ibii_at_netvision.net.il

2
THE POLITICAL SPECTRUM
Rule people
Authoritarian Facist Communist
Authoritarian
Reactionary Conservative Liberal
Radical
Islam
Control souls
DEMOCRACY
TOTALITARISM
EconomyPolitics
3
COMPARATIVE MEASURES OF FREEDOM
POLITICAL RIGHTS
Fair elections, representatives with power,
political parties, rights of minorities
CIVIL RIGHTS
Freedom of press, equality under law, social
freedom, government-corruption
4
ECONOMIC SYSTEMS
   Market Allocation
Consumers allocate resources. Competition
Consumer Protection (USA)    Command Allocation
State Planners.    Mixed Systems Governmental
Expenditures/GDP 32 USA, 64 Sweden
5
POLITICS AND MANAGEMENT DECISIONS

• Political risks Micro (population) and Macro
  (government)
• Government intervention Individual-communitarian
  paradigm

6
INDEX OF ECONOMIC FREEDOM 
Source Heritage foundation www.heritage.org
7
(No Transcript)
8
(No Transcript)
9
(No Transcript)
10
(No Transcript)
11
(No Transcript)
12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
(No Transcript)
16
(No Transcript)
17
(No Transcript)
18
(No Transcript)
19
(No Transcript)
20
(No Transcript)
21
(No Transcript)
22
(No Transcript)
23
(No Transcript)
24
(No Transcript)
25
(No Transcript)
26
Map of countries by GDP (PPP) per capita, based
on the 2005 IMF data.
27
WTO
28
(No Transcript)
29
(No Transcript)
30
WTO
31
Trade with China 2000-6 NOTE All figures are
in millions of U.S. dollars.
2000

2004
2005
2006
SOURCE U.S. Census Bureau, Foreign Trade
Division, Data Dissemination Branch, Washington,
D.C. 20233
32
Trade with China 2007 NOTE All figures are in
millions of U.S. dollars.
SOURCE U.S. Census Bureau, Foreign Trade
Division, Data Dissemination Branch, Washington,
D.C. 20233
33
Source PRC General Administration of Customs,
China's Customs Statistics
34
(No Transcript)
35
(No Transcript)
36
(No Transcript)
37
Income Gini coefficients in the world
38
MOTIVATION PUSHES AND PULLS TO
INTERNATIONALIZE 
TRADITIONAL MOTIVATIONS(Bartlett)   Expand
sales, acquire resources, minimize risk . Secure
Key Supplies   Access Low Cost Factors   Local
Market Saturation-Competition   Market Seeking
Behavior   Technology Vernon Product Life
Cycle
39
EMERGING MOTIVATIONS   Economic,
Technological, Social Developments   Amortization
of RD Expenditures(public telephone switching
systems)   Shortening Product Life
Cycle   Scanning Learning Capabilities   Compe
titive Positioning (Cross Subsidization)
40
NATURAL ENVIRONMENT
Raw materials
Energy costs
Geography
Pollution
Know how
Infrastructure
Change
TECHNOLOGICAL ENVIRONMENT
Regulation
Improvement
PM 4.4 Natural and technological environments
41
DEMOGRAPHIC ENVIRONMENT
Age
Population
Family
Education
ECONOMIC ENVIRONMENT
Spending patterns
Economic
PM 4.3 Demographic and economic environments
42
POLITICAL ENVIRONMENT
Interest groups
Enforcement
Legislation
CULTURAL ENVIRONMENT
Subcultures
Values
Shifts
PM 4.5 Political and cultural environments
43
LEGAL ENVIRONMENT

• Public International Law International
  conventions, custom
• International Court of Justice (ICJ)
• Private International Law
  Common Law-tradition-precedent (English) US,
  India, Singapore- detailed contracts
• Civil law(Codified) (Napoleonic Code)
  Thailand, Japan China. US Uniform Commercial
  Code.
• Theocratic law Islamic law Shariah

44
(No Transcript)
45
ORIENTATION OF MANAGEMENT COMPANIES

Ethnocentric Home Country
Superior, Similarities
Regiocentric
Geocentric Similarities
Differences Similarities
Differences In a world region
In home host
Countries
Polycentric
Each Host Country is Unique,
Differences
46
(No Transcript)
47
(No Transcript)
48
INTERNATIONAL STRATEGY-EXPORTS

• Local Distinctive Competence
• Raw Material
• Know how
• Manpower
• International risks
• Knowledge protection
• Investment protection

49
(No Transcript)
50
(No Transcript)
51
?
52
(No Transcript)
53
(No Transcript)
54
(No Transcript)
55
(No Transcript)
56
(No Transcript)
57
(No Transcript)
58
STAGES OF DEVELOPMENT
59
INTERNATIONAL STRATEGY OF SELECTED FIRMS
60
(Source Michael E. Porter, Competitive Advantage
(New York Free Press, 1985), p.37.)
PM 11.2 The generic value chain
61
ILLUSTRATIVE CONFIGURATION
62
ILLUSTRATIVE CONFIGURATION
63
ILLUSTRATIVE COORDINATION
64
CONFIGURATION OF ACTIVITIES
High
Simple Global Strategy
Extensive Coordination among subsidiaries
Coordination of Activities
Country-centered strategy by multinationals
operating in one country
Export-based strategy, decentralized marketing
Low
Geographic Dispersed Geographic
Concentrated
65
PORTERS DIAMOND
Chance Firm Strategy
Structure
Rivalry
Factor
Demand
Conditions
Conditions
Related Supporting
Government
Industries
66
PORTERS DIAMOND DISCUSSION
67
ITALIAN SUPPLIER INDUSTRIES TO FOOTWEAR
Leather Footwear
Parts of Design
Footwear Services
Leather Processed
working Leather
Machinery
68
ITALIAN INDUSTRIES RELATED TO FOOTWEAR

Leather Leather
Leather Athletic Clothing
Handbags Footwear
Footwear
Parts of
Footwear

Design Services
Leather
Processed working
Leather Machinery
69
PARTIAL CLUSTURING IN DANISH ECONOMY
Barley, Malt Food
Processing Refrigeration
Yeast Equipment
Equipment
Pork Beer
Dairy Industry
Trypsin
Fermentation Purification (Enzyme)
Insulin Equipment
Technology
Fermented Insulin
Fermented Enzymes