Page 11 - DMGT545_INTERNATIONAL_BUSINESS

International Business

notes (d) Growth of global networks making countries interdependent in particular
industries
(e) More companies becoming globally centered rather than nationally centered
(f) Increased formation of global strategic alliances
5. Other Drivers:
(a) Revolution in information and communication

(b) Globalization of financial markets
(c) Improvements in business travel

self assessment

Fill in the blanks:
1. The countries oriented towards market economies since ................ had severe competition
from other business firms in the home countries.
2. ................ stability does not simply mean that continuation of the same party in power, but
it does mean that continuation of the same policies of the Government for a quite longer
period.
3. History of international business ................ with the evolution of human civilization.
4. International ................ includes any type of business activity that crosses national borders.
5. India, during ................ could create markets for its products, in addition to mere
exporting.

1.3 Influences of International Business

Because most of the countries are not as fortunate as the India in terms of market size, resources,
and opportunities, they must trade with others to survive; Hong Kong, has historically
underscored this point well, for without food and water from china proper, the British colony
would not have survived along. The countries of Europe have had similar experience, since most
European nations are relatively small in size. Without foreign markets, European firms would
not have sufficient economies of scale to allow them to be competitive with US firms. Nestle
mentions in one of its advertisements that its own country, Switzerland, lacks natural resources,
forcing it to depend on trade and adopt the geocentric perspective. International competition
may not be matter of choice when survival is at stake. However, only firms with previously
substantial market share and international experience could expand successfully.

Growth of overseas markets

Developing countries, in spite of economic and marketing problems, are excellent markets.
According to a report prepared for the U.S. CONGRESS by the U.S. trade representative, Latin
America and Asia/Pacific are experiencing the strongest economic growth. American markets
cannot ignore the vast potential of international markets. The world is more than four times
larger than the U.S. market. In the case of Amway corps., a privately held U.S. manufacturer of
cosmetics, soaps and vitamins, Japan represents a larger market than the India.

6 lovely Professional university