University of Finance & Administration
INTERNATIONAL BUSINESS
[N_IB]
Ing. Pavla Břečková, Ph.D.
pavla.breckova@vsfs.cz
INTERNATIONAL BUSINESS
Part-time course = 4 guided consultations á 90 mins.
•
INTERNATIONAL BUSINESS [IB], characteristics, indicators.
•
WORLD BUSINESS TERRITORIES, challenges, integration,
main trading blocks [TRIAD, BRIC]
•
GLOBAL BUSINESS ENVIRONMENT.
•
EMERGING MARKETS, characteristics, features, selected
markets in detail
•
BRICS in detail
•
Doing business in Asia
•
Foreign market analysis
•
PREDISPOSITIONS for working in IB, expatriation and HR in IB
2.
COMPLETION terms N_IB
4 lectures / guided consultations [GC] (per 90 mins)
Completion: credit
Completion CONDITIONS:
 Active participation (presence) in GC min. 75%
 Active involvement in the guided consultations
[active listening, discussing, reading, analyzing & interpreting of
economic articles or case study results]
If unfulfilled => written TEST to prove the knowledge
3.
LITERATURE SOURCES
Povinná literatura / Mandatory reading:
Charles W. L. Hill: Global Business Today, McGraw-Hill/Irwin, 7th edition,
2011
Doporučená literatura / Recommended reading:
Allan Sitkin, Nick Bowen: International Business, January 2010.
Stuart Wall, Dr. Bronwen Rees: International Business: A First Course,
September 2009.
Wild, J., Wild, K., Han, J.: International business: the challenges of
globalization. 4th ed. – Pearson, Upper Saddle River, 2008. ISBN: 978-013-174743-6.
Woods, M.: International business. Basingstoke, Palgrave, 2001. ISBN: 0333-75979-6.
Griffin, R.W., Pustay, M.W.: International business: a managerial
perspective. 5th int. ed. - Upper Saddle River, Prentice Hall, 2007. ISBN:
0-13-233532-8
EXPORT
What is?
–
when you trade something out of the country. In
economics, an export is any good or commodity,
transported from one country to another country in a
legitimate fashion, typically for use in trade.
Why to aim to
world
business
territories?
Why export is
good
for economy /
country?
EMERGING MARKETS
What is an emerging market?
–
–
–
–
–
Emerging markets are nations with social or business activity
in the process of rapid GROW and INDURSTRALIZATION.
Currently, there are 28 emerging markets in the world, with the
economies of CHINA and INDIA considered to be by far the two
largest.
The ASEAN–China Free Trade Area, launched on January 1,
2010, is the largest regional emerging market in the world.
An emerging market economy (EME) is defined as an
economy with low to middle per capita income.
• Such countries constitute approximately 80% of the global
population, and represent about 20% of the world's
economies. The term was coined in 1981 by the World Bank.
One key characteristic of the EME is an increase in both local
and foreign investment (portfolio and direct). A growth in
investment in a country often indicates that the country has
been able to build confidence in the local economy
EMERGING MARKETS [EM]
entering
Special problems related to entering EM
–
Lack of information (problematic data
collection)
EM’s market-potential analysis:
–
–
–
–
–
–
–
–
Market SIZE
Market INTENSITY – estimates wealth, buying
power
Market GROWTH rate – GDP, energy
consumption etc.
Market CONSUMPTION CAPACITY – spending
capacity (% of middle class, core of buying power)
Commercial INFRASTRUCTURE – chanels for
com./distrib.
Economic FREEDOM – free market principles
domination
Market RECEPTIVITY – market ‘openness’
Country RISK – of doing business
VIETNAM
•
•
•
•
•
•
•
80 million people
est. 1945
division into 2 parts (Hanoi /
Saigon – Ho Chi Minh City)
Vietnam war 1963 – 73
Member of ASEAN
Elements of free trade
principles
Dynamically developing
VIETNAM
VIETNAM
+
• competitive advantage:
persistence, hardworking, humility
• education – better avg.in
south Asia (no illiteracy)
• not developed country
but growing rapidly (7-8%)
• relations (1/4 million of
V.studied in CZ –
backbone of V.economy)
10.
• bad infrastructure
• no history and exp. in
industry / engineering
• corruption
• QM missing => low VA
industries, no experience
• business culture (no longterm relations / businesses)
• very low law enforcement
• not fully liberalised envi
VIETNAM
Business doing
– Patience, long meetings / negotiations
– No long contracts – chaos: changing mind,
no reliability in European understanding (effort
to satisfy)
– No business drive in Euro perception
(enq./offers – lengthy via email)
– Personal contacts necessary / local
– No win-win (‘loss of face’ danger)
– Business cards handling
– ‘YES’ even if meant NO
– No patience to build – interest in quick money
– Atmosphere of ‘small business’
VIETNAM
Business doing
CHINA
CHINA
+
• hard-working
• education – in towns and
industry areas
• no-VA parts (or
normalised) very cheap
• massive gov. investments
in infrastructure
• railways net / HSR (but
due to industrialization too
busy)
14.
• rising prices
• only large series /
payments in advance
• control (necessity of
Chinese citizen in the
business) - not fully
liberalised envi
• quality instability (no
sustainable Q)
• fractionalism
• no ENVI issues / labour
conditions
CHINA
Business doing
–
–
–
–
–
Smiles not usual in business
Nepotism
Patience – time to succeed
Seniority respect
Double check of mutual understanding /
samples precision etc.
– Contract – precision (parameters, samples
– signed etc.)
CHINA – business doing
Guanxi (connectinos)
CHINA – maintaining harmony
• One should never do anything to cause a
moment of public embarrassment.
• Chinese to use intermediaries to carry
unpleasant news.
• Chinese society is highly hierarchical –
respect that.
• Relatives, friends, neighbors, classmates,
and co-workers are all people to whom one
bears some form of obligation.
• BUT No obligation is felt to others outside of
one's circle.
CHINA – introducing / business cards handling
•
•
•
•
•
Hand business cards with both hands.
Examine business card.
Put it into your jacket slowly.
Chinese surnames come first, not last.
Drop the “deputy” in any official's title.
CHINA – civilized behaviour?
• Chinese habits some Westerners
experience as offensive include:
– belching and spitting on the street,
– smoking cigarettes indiscriminately,
– staring at foreigners,
– laughing at mishaps.
Ignore that!
CHINA – during meeting
•
•
•
•
Only leaders speak.
Foreigners introduce ideas, Chinese react.
Nodding is NOT agreeing.
Find a good interpreter and use him well:
– Pause frequently
– Avoid slang and colloquialism
– Make sure he understands technical terms
– But always talk to host, not interpreter
– Always restate what was agreed on
CHINA – saying NO
Chinese dont say NO
• When negotiating with Chinese:
– “inconvenient”
– “under consideration” or
– “being discussed”.
= in reality means NO
CHINA – giving gifts
• There are many reasons why Chinese give
gifts (ask for favor) and you can even refuse
a gift.
• When you are visiting Chinese, always give
gifts.
• Chinese may make several refusal gestures.
• Never wrap gifts in white.
• Give gifts with both hands.
• What would be a good gift? Something
traditional, and BIG.
TAIWAN
TAIWAN
– Republic of China
– Capital: Taipei
– Population: 23
million
- Density: 668 /km2
TAIWAN
+
• extremely hard-working
• good knowledge of English
(EU/USA education)
• industrial tradition (cca 30
years)
• no-VA parts (or normalised)
very cheap
• flexibility & professional
approach (enq./ sampling /
quality)
• ISO norms not a formality
• good infrastructure: airport /
HSR
• fully free market
25.
• raw materials import –
dependence on China
• changing EUR / USD
• status manipulation +
pretending “made in
Taiwan” (PRC reality)
• frequent typhoons
(supplies postponing)
TAIWAN
Business doing
–
–
–
–
–
–
Professional, very polite
Business cards handling
Quick response / sticking on agreed
Willingness to sort out the claims
No need to double-check understanding
In machine production – taking shoes off in
offices
– Strong green teas at business meetings
TAIWAN
Business doing
INDIA
INDIA
– Capital: New Delhi /
largest: Mumbai
– Language: Hindi,
English
– Population:
1,118,521,000
- Density: 361 /km2
- GDP per capita:
3,100 USD
INDIA
+
-
• good education, English
• distinctive ability
• bank sector highly
developed
• secluded economy
(extremely high import
taxes)
• large market with over
1mld. people / growing
purchasing power
• changing EUR / USD
• productivity
30.
INDIA
Business doing
– English
– Demanding negotiations, long
(several hours)
– Half-truths common
– Compromise necessary (Indian bargaining) + keep the positions
(manipulation resistance)
– Agreements – sticking on
State IB policy INSTRUMENTS
AUTONOMOUS (independent, one-sided)
• state decides about their imposition
• TARIFF x NON-TARIFF
• state’s intention:
•
either reduce IMPORT
•
or support EXPORT
CONTRACTUAL
• result of negotiations
• BILATERAL (business agreements, credit / loan agreements etc.)
• MULTILATERAL (integration unions) bilaterální (dvoustranné):
32.
Summary of basic IB BARRIERS
Prohibitive
TARIFFS
Nationalization
Dual use /
‘use
conditional’
QUOTAS
WEAK
IB
IMPORT
DUTIES
Other
Sanctions &
Embargo
PROTECTIONIST
measures
33.
Tariff & Non-tariff measures
 have important effects on consumption, production & structure of
a domestic economy
 reason for imposing = e.g. protect infant industries
TARIFF
- Fiscal
- Protective
- Retributive
- Prohibitive
34.
NON-TARIFF
Quota = qty restriction
Summary of basic IB BARRIERS
Prohibitive
TARIFFS
Nationalization
Dual use /
‘use
conditional’
QUOTAS
WEAK
IB
IMPORT
DUTIES
Other
Sanctions &
Embargo
PROTECTIONIST
measures
35.
QUESTIONS to prove knowledge in IB – part
2+3
What is EXPORT?
Why export is good for economy?
Why to aim to world business territories?
What is emerging market / emerging market economy (EME)? Typical features,
examples…
Why the EME might be interesting for investors from Europe?
What do you know about Vietnam? What are the business practices?
What do you know about China? What are the business practices?
What do you know about India? What are the business practices?
What do you know about Taiwan? What are the business practices?
What are the trade BARRIERS?
What Non-tariff restrains to trade do you know?
What is Quota? What is Tariff (duty)?
What is Nationalization? What forms it may hold?
What is Dual-use in IB?
What is SANCTION, what is EMBARGO?
INTERNATIONAL BUSINESS
Thank you for your attention
Ing. Pavla Břečková, Ph.D.
pavla.breckova@vsfs.cz