• University Of Arizona

• BUSINESS 449  international business cheat sheet

CH 1: Foundation concepts
-International Business (also known as cross
border business) refers to the performance of trade
and investment activities b firms across national
borders referred to as cross border business
categorized by six things 1. Globalization of markets
2. Foreign market entry strategies 3. Participants ex
firms facilitators governments 4. International
business risks 5. International investment- the trade
of assets with another country 6. International trade.
has been in the world for centuries.
-Internationalization- refers to the tendency of
companies to systematically increase the
international dimension of their business activities.
Four risks of internationalization
1.cross cultural risk culture differences, negotiation
patterns decisions making styles, ethical practice
2.Country-risk harmful or unstable political systems,
law and regulation unfavorable to foreign firms,
inadequate or underdeveloped legal system,
bureaucracy/red tape gov. intervention
protectionism and barriers 3. Commercial risk-weak
partner, operational problems, timing of entry,
competitive intensity, poor execution of strategy
4.Currency (financial risk)-currency exposure, asset
valuation, foreign taxation inflationary and transfer
pricing
-international trade –describes the exchange of
products and services across national borders trade
is both products and services.
-Importing global sourcing- the procurement of
products or services from suppliers located
abroad for consumption in the home country
or a third country.
-International investment –refers to the
transfer of assets to another country or the
acquisition of assets in that county
International portfolio investment- refers to the
passive ownership of foreign securities such as
stocks and bonds for the purpose of generating
financial….pg 6
Foreign Direct investment-is an
internationalization strategy in which the firm
establishes a physical presence abroad through
acquisition of productive assets such as land plants
equipment capital and technology.
GDP is the total value of products and services
produced in a country in the course of a year.
Multinational enterprise-is a large company with
substantial resources that perform various business
activities through a net work of subsidiaries and
affiliates in multiple countries
-Why firms internaltionze: 1. Seek opportunities
for growth through market diversification substation
market potential exits abroad. 2. Earn higher
margins and profits 3. Gain new ideas about
products, services and business models 4. Better
serve key customers that have relocated abroad 5.
Be closer to supply sources benefit from global
sourcing advantages or gain flexibility in product
sourcing. 6.Gain access to lower cost or better value
factors of production. 7. Develop economics of scale
in sourcing production marketing and R&D- EOS
reduce per unit cost of manufacturing due to
operating at a high volume. 8.confront international
competitors more effectively the growth of
competition in the home market 9,invest in a
potentially rewarding relationship with foreign
partner
Chapter 2
Phases of globalization:1. Began about 1830
and peaked in 1880 wide spread business
because of railroads. And ocean transport
2.Began in 1900 and reached eight before
WW2 downturn began in 1929 rise of
electricity 3.began after WW2 at the end of
war. Formation of general agreement on tariff
and trade 4.1980 to now privatization of state
enterprise in transition economics; revolution
in information/communiticaion/ transportation
1.Drivers of market globalization worldwide
reduction of barriers to trade investment, market
liberalization and adoption of free markets,
industrialization economic development and
modernization improve in tech. integration of world
financial markets 2.Dimensions of market
globalization-integration and interdependence of
national economies, rise of regional economic
integration blocs, growth of global investment
financial flows, convergence of buyer lifestyles and