IBN 311 (PAU)
SAMPLE OUTLINE
- Ideally, you will integrate your class notes, vocabulary/terminology & definitions, case
summaries, etc. into this one outline.
- This is a tool to help you digest the material, consolidate/organize it and review.
CHAPTER ONE: INTRODUCTION TO INTERNATIONAL BUSINESS
I. Economic Interdependence
America in International Markets
A Lack of Commitment
- Historically, only large companies in the U.S. engaged in
international trade. Small and medium firms stayed within the
domestic market.
- When they entered the market, the smaller firms lacked
commitment and only pursued external markets when domestic
sales declined.
- They didn’t think through what it meant to truly compete in that
market and therefore their international ventures failed
- Commitment can include time, $, other resources, proper
personnel, sensitivity to foreign cultures (marketing), research,
having plan for servicing/customer support, etc.
The Education of American Managers
* [INSERT NOTES FROM CLASS: points emphasized/discussed/additional
materials – can be set apart or integrated throughout the outline]
II. Forms of International Business
3 Forms: Trade, Licensing (IPRs), FDI (foreign direct investment)
These are also methods of entering markets and they define legal relationships
Trade
1
Theory of why we trade: Comparative Advantage (explain, see pp. 6-7)
Recent Trends in U.S. Trade
Trade in Goods: Etc.
Trade in Services: Etc.
Exporting
Having an Export Plan is important – Components of an Export Plan (p.9):
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Assessing firm’s readiness for export
Marking a long-term commitment to foreign customers and identifying
long-term potential
Identifying risks involved
Evaluating legal aspects of export plan for compliance with government
regulations & controls
Etc.
Direct Exporting
Use of foreign sales reps vs. distributors (p.10)
Sales reps do NOT take ownership of the goods (lower risk for them)
Usually, they are independent sales agents & take orders
They may have industry and/or local knowledge & relationships
Distributors are independent firms that purchase goods for resale to the
local market
Often, they service and provide parts & repair
Assume risks of buying and warehousing
Responsible for local advertising and promotion of product
Indirect Exporting (pp. 10-11)
Use of Export Trading Companies
vs.
2
Export Management Companies
Importing and Global Sourcing
Government Controls Over Trade: Tariffs and Non-Tariff Barriers
Tariffs & Non-tariff barriers (definitions at p.11)
- Tariffs = taxes on goods coming in
- Non-tariff Barriers to Trade
Laws and regulations that restrict access
Ex: labeling or quality/safety standards
“Technical Barriers to Trade” (p.12)
Quotas, Embargoes, and Boycotts
Export Controls
Trade Liberalization and the WTO
IPRs and Int’l Licensing Agreements
Foreign Direct Investment
Multinational Corporations
U.S. FDI
III. Conducting Business in Developing Nations
The Developed Countries
The Developing Countries
The Economic Environment in Developing Countries
3
Controls on Investment in Developing Countries
The Road to Free Markets, Consumer-Based Economics, and Private Ownership
The Newly Industrialized Countries
The Least Developed Countries
Countries in Transition: Russian, and the Newly Independent Republics of the Former
Soviet Union
IV. Managing the Risks of International Business
Risk Assessment and the Firm’s Foreign Market Entry Strategy
Transaction Risks in Contracts for the Sale of Goods
Managing Currency and Exchange Rate Risks
Managing Distance and Communications
Language and Cultural Differences
Managing Political Risk
Causes of Political Risk
Risks of Exposure to Foreign Laws and Courts
Receiving Professional Assistance in Going International
4