Brief History Of International Business Commerce Essay

Brief History Of Inter guinea pig patronage Commerce seeexternal line of assembly line is defined as the transactions that atomic number 18 carried place across national borders to fulfill the objectives of individuals, companies and organizations. The different modes by which unconnected personal credit line is being d single atomic number 18 import-export trade, contradictory direct investment, licensing, franchising and management slenderizes. ein truthwhere the last five decades transnational trade and investment hold up braggy faster than the domestic economies. transnational worry facilitates f diminished of idea, serve and jacket crown across the globe. The result is high levels of innovation, faster dissemination of goods and information worldwide, more(prenominal) efficacious use of human capital and im proved access to backing (Czinkota, Ronkainen and Moffett, 2009).Brief History of International phone lineInternational pedigree is non a new phen omenon that has been practiced around the world for thousands of years. through the routes established in the Mediterranean, the Phoenicians, Mesopotamians, and Greeks did trading. As sophisticated credit line techniques emerged, facilitating the flow of goods, re quotations and funds surrounded by countries flourished. This harvest-tide was shape up stimulated by colonization activities. The industrial Revolution further stimulated the growth of international business by providing methods of production for dope , food markets and efficient methods for utilizing raw materials. The inventions and technological developments from Industrial innovation further accelerated the smooth flow of goods, services and capital between the countries. The production grew at unprecedented levels by 1880s as the industrial revolution was in full swing in Europe and the unite States. Growth continued in an upward spiral as mass production was realized and the manufactures were pushed to see k foreign markets for their products. This marked the emergence of international corporations. (Ajami,Cool, Goddard and Khambata, 2006)Factors leading to Growth in International business sectorDevelopment and refinement of technologyThe introduction of telegraph in 1837, the telephone in 1876, the radio receiver in 1895, the aero plane in 1903, the television in 1926, the liquid fuelled garden rocket in 1927, the coaxial cable in 1930s and digital computing machine in 1946 were all the key events that triggered the growth of international business. Next to institutionalise transport, electronic communication, digital information processing has been the other principal region of technological innovation. All these technological advancements go forthd the platform for companies to set off increase number of international business activities. (Marios Katsioloudes, Spyros Hadjidakis, )Liberalization of cross border activitiesThe g everywherenmental barriers for international bus iness have been lowered after the Second field War. The European Union, NAFTA, ASEAN and other regional frugal blocs by means ofout the world provide fewer restrictions on cross border movements. The European Union was awarded the Nobel hold for peace 2012 in recognition for its constructive handling of peace, improving relations between nations through trade, reconciliation and human rights in Europe over the bypast six decades. (Europa.eu, 2012) The European commission president Jose Manuel Barrosa at the fountain of receiving prize said that, we honor this prize and leave behind preserve what had been achieved. This skill will propel the quest for shaping a better organise world with the values of freedom, democracy and human rights.(Guardian.co.uk, 2012)Development of supporting servicesGovernments and companies have unquestionable services that facilitate further international business. For fount Mail, which is a government monopoly, could be transferred by an airlin e other than that of the ground of origin could go through many different countries in front hit the final destination with the stamp of the country of origin. Also banking institutions have developed effective and efficient means for companies to receive payment for their foreign gross sales. The banks freighter assist in the payment of any up-to-dateness through motley international transactions upon the receipt of goods /services. (Marios Katsioloudes, Spyros Hadjidakis, )Distinctive elements of international businessThe cardinal explicitive elements of international business argon planetaryisationInternational Business EnvironmentUnique CultureInternational Business ManagementGlobalization People around the globe are more connected than ever before. Goods and services produced in one part of the world is increasingly useable in other parts of the world. This phenomenon is termed as globalization. Globalization refers to the shift toward a more integrated and interdepe ndent world preservation. Globalization has two components which are globalization of production and globalization of markets. (Aswathappa)Globalization of markets refers to the merging of separate and distinct market place into a single market. (Subba Rao, 2009). The global acceptance of consumer products much(prenominal) as Sony Walkmans, Coca-Cola, Levis Jeans, Citicorp Credit Cards, MCDonald Hamburgers are all considered as prototypical examples of this trend. By offering a standardized product worldwide they are percentage to create a global market. (Marios Katsioloudes, Spyros Hadjidakis, )Globalization of production refers to the tendency among firms to source goods and services from locations around the world to take global profit of national differences in the cost and quality of factors of production. (Labor, land, energy and capital) Companies hope to lower planetary cost structure by doing so. For example, Boeing companys jet airliner 777 has 132,500 component part s which are produced around the world by 545 suppliers. (Marios Katsioloudes, Spyros Hadjidakis, )International Business EnvironmentThe international business environment is highly characterized and fermentd byInternational governingInternational CultureInternational TradeInternational financial markets and InstitutionsInternational PoliticsInternational politics is a primary concern for Multi National Enterprises. (MNEs) The past two decades have witnessed dramatic change in their political systems. just about of the countries in the Eastern Europe, in the Americas are building market economies in varying degrees. MNEs feel more confident in projecting up their operations in market driven economy as they are endowed with more freedom to fix prices and more liberty in carrying out their business operations. Until MNEs feel that the government is willing to take the stairs necessary to ensure that promises are kept and they are able to deport their funds, they are leaving to pr oceed very cautiously with their investment plans. (Rugman and Collinson, 2006)International CultureDespite the various patterns and processes of globalization, Cultural wittingness is a very alpha aspect for MNEs when it operates in international arena. As an example, the culture, beliefs and etiquettes which are followed in the India is entirely different from that of the western world and the companies and persons who are involved in business in India should comprehend the Indian culture to its full extent. When going to a business meeting in India , bring family photos. Indians enjoy talk of the town about each others families, which is seen as building trust and rapport before doing business. (Czinkota,Ronkainen and Moffet, )Real Business carapace Saudi-Arabian-Arabian Arabia Many organizations from foreign countries entered into the Saudi Arabian market following the crisis it faced in 1970s. But non all were successful as they failed to understand the Saudi Arabian cult ure. A study U.S security company won a large contract to install security system for a client in Saudi Arabia. The troubles started when the shipments from the U.S. which landed in Saudi Arabia were not released by the custom officials. The dry land behind the detainment of the shipments was that the security devices were wrapped in newspapers which contained fashion photographs of scantly claded women. This offended the pagan sensitivities of the officials of a nation in which majority of the women wear a desire garment called Abayah. (Misra and Yadav, )International TradeInternational trade is a capacious term, which includes all commercial transactions that take place between nations. multinational companies are major players in international trade and account for the major proportion of International trade. Some classic examples for international trade are, crossing which makes gear box in its factory in Bordeaux and exports it to assembly plants in different EU countries . Spain depends upon Nigeria, Algeria and Libya for 99% of its natural gas requirements. (Misra and Yadav, )International pecuniary Markets and InstitutionsIrrespective of whether a company or bank engages in international trade, it is important that its managers understand some key aspects of international financial markets. The euro currency market, international monetary system, the foreign exchange market all influence the functioning of markets for goods and services. The euro currency market whitethorn offer a low cost borrowing opportunity the international monetary system may set a framework that may affect many firms and the foreign exchange market determines the cost and availability of foreign currencies used in business by many firms.Unique CultureInternational business and its by product globalization will ensure and enforce a unique culture around the globe. For example, Pizza which has had its origin in Italy is direct widely accepted and consumed all around the wor ld thus integration the culture and bringing about a unique food culture. likewise Indian costumes are in high demand these days in the U.S and Europe. So international business is bringing forth a gross culture which brushes out all national and cultural barriers.International Business ManagementInternational business management is all about development business operations on an international scale. (Coade,1997). The key features of international business management areThe elements of market analysis which are required to start business operations overseas.Guidance on how to influence the international scheme on businessConstruct a dynamic market inlet strategyEasy ways to search for a agonistical emolumentWhy do companies go international?The desire to expand sales and revenue to acquire inputs at least cost and to minimize business and financial risk through geographic diversification has led to the growth of MNCs. The factors that led the companies accelerate their busine ss activities worldwide are minimise competitive riskExpand salesAcquire resourcesCostMinimize agonistic RiskCompanies seek to have global presence for defensive reasons. The pictorial competition between companies in the domestic market incites companies to have global operations.Real Business Case Tata Motors Since early 1990s India have been witnessing hearty waves of liberalization, privatization, and globalization. The automobile giant in India, Tata motors realized that if it wants to grow then it cannot throw to have business solely to the fortunes of one country as automotive business is highly competitive and the competitiveness depends on the quality, economies of scale and aptitude which could be improved if the organization enters foreign market. The senior management of Tata Motors where leftfield with the question whether they should remain as an exporter of vehicles which they were doing since 1961 or to enter into the international market which can compete wi th the best in the business. The answer they have zeroed in was to widen its business operations than just exports (Misra and Yadav, 2009).Acquire ResourcesAnother important motive of companies to set for international business is to acquire resources much(prenominal) as raw materials, capital, products, technology, products or services. The reasons for it would beNon-Availability of resources in the home country.High prices of resources in the home country.To seek resources of better quality/standard.Real Business Case Philips Cheap labor in China brought Philips to China. In 2002 Philips had 23 factories in china which were either wholly owned or joint ventures. two third of the companys export products were from these plants. According to Gerard Kleiterlee, the president and CEO of Philips Electronics, China is the routine largest market for Philips Surpassing Germany in the last quarter of 2009. We are one of the largest multinationals in the country operating in 600 Chines e cities and employ 15000 people. (Philips.com, 2010)Minimize RiskOrganizations always want to minimize the risk by minimizing the swings in sales and profit. Companies try to mitigate the vulnerability to a single economy by having a broader base in multiple geographies.Real Business Case Nestle In 2001, Nestle witnessed slower growth in Western Europe and in the U.S. but this was offset by higher growth in Eastern Europe, Latin America and Asia. According to rooster Brabeck , Vice chairman and CEO of Nestle, Nestle has delivered a good procedure by any measure in the first half of 2002 demonstrating its capability for growth and performance improvement even in a nasty global environment (Nestle, 2002).CostCost aspect is a real motivation for organizations to have inclination towards global business. Many organizations go in for international business to become more competitive internationally by reducing their costs.Real Business Case Toshiba The manufacturing of Toshiba l aptop is dispersed geographically where the mix of factor costs and skills are most favorable. The manufacturing of laptop components such as memory chips and display screens take place in Japan, microprocessors and tricky drives made in the U.S. and finally assembly takes place in capital of Singapore from where it is shipped to the U.S, Western Europe and Japan.Global Trends shaping International Business rising markets increase their global powerEmerging markets are viewed as the worlds scotch growth engine. The emerging markets where once seen as home for natural resources, brasslike labor and low manufacturing cost. But now these emerging markets are seen as promising markets as they are having rapid population growth, sustained economic development and growing middle class. It is expected that BRIC nations ( brazil-nut tree,Russia,India and China) would account for 50% of global GDP growth by 2020. (Ernst and Young, 2012)Cleantech become a competitive advantageMost of the g overnments and organizations around the world are very well aware about the carbon emissions and its repercussions. The cleantech enabled turnation to a low carbon, resource efficient economy will be the source for next industrial revolution. China, India, Brazil and Germany are gaining advantage in solar, wind, biofuels for its energy requirements. (Ernst and Young, 2012)Global Banking sees recovery through transformationThe financial institutions all around the world are compel to have regulatory changes following the global economic slowdown. (Ernst and Young, 2012)The final baffle of global regulatory framework is still not clear but the international banking will change tremendously in following positive waysHeightened corporate governanceMore restrictions on priority trading, investments in hedge funds and private equity funds.Executive pay will be limited.More focus on consumer protection.Demographic shifts will transform global workforceEven though the global population is on a rise, the availability of skilled workforce is shrinking. The data suggests that the demographic assign will arise between countries with younger skilled population and develop shrinking workforce. The war for talent will be intense in areas which require higher skill levels and education. (Ernst and Young, 2012)Rapid technology innovation creates a smart, mobile worldLast twenty five years have been marked by digital revolution and it has changed the way we work and communicate. in time the consumers want more powerful devices and applications, meanwhile businesses are looking for cost-efficient technology. Still there is room for greater innovation in the areas of business intelligence, smart devices and cloud computing which would revolutionize the whole process by which international business is being carried out. (Ernst and Young, 2012)ConclusionFrom daily bread to fuel, cosmetics to cars, amusement to essentials, it is hard to see a product without having the labe l of a foreign brand. In fact international business has transformed our lifestyle, culture and tastes. It has to be noted that the positives of international business is overarching the negatives of it. International business has served as a bridge for the developing nations to attain the status of developed nation, for underdeveloped nations it is a ray of hope and for the developed world it is a means to further extend their business operations and supremacy. The good international business has done to the human kind can never be estimated and the history has proved that the international business activities were blossomed when peace existed between nations. Thus international business can be viewed as symbol of prevailing peace, prosperity and general well being of mankind.