Summary IBA Y1-Q1
----------------------------- Summary IB Awareness -----------------------------
What is international Business?
1. Products are offered across borders
2. Business is done through abroad subsidiaries
Multinational company:
o Operates in other countries through foreign direct investment
Benefits & Downsides of IB
Benefits:
1. Access more markets
2. Cheaper labor
3. Access new resources
Downsides:
1. Small local companies can get pushed out
2. Human rights can be at risk
Globalization
A process leading to greater interdependence and mutual awareness among economic, political, and
social units in the world among actors in general
Drivers:
o Falling barriers -> remove barriers to trade and invest
GATT, WTO, Regional trade agreements
o Technological innovations
Improved communication & management
E-mail & video conferencing
Internet
Better coordination and control
Transportation advancements and global supply chain
Threats
o Global recession
A significant decline in general economic activity in a designated region.
o Protectionism
Government policies that restrict international trade to help domestic
industries.
o Anti-Globalization protests
NGO’s
o Risk of disruptions
,How to be successful in IB
Institution-based view:
Doing business around the globe requires intimate knowledge about the formal and informal
rules of doing business in various countries
o Liability of outsidership
- Lack familiarity in a new environment
Resource-based view:
Focusses on a firms internal resources and capabilities. Possesses specific resources that
enabled them to attain leadership positions around the globe
o Primary resources
a. Tangible resources
i. Financial (money)
ii. Physical (factory)
b. Intangible
i. Technological
ii. Reputations
c. Human resources
i. Skills and knowledge
ii. Communication & collaboration abilities
iii. Organizational culture
o Capabilities:
A unique set of firm specific abilities to use resources and to reach goals
a. Innovation
i. Research & development (product, service, management)
b. Operations
i. Manufacturing process
c. Marketing
d. Sales and distribution
i. Management process
ii. IT systems
e. Corporate functions
i. Planning
ii. Control systems
iii. Control structures
iv. Risk management
Key mistakes in IB
Ethnocentric perspective:
o a view of the world through the lens of one’s own culture
Not-Invented-Here syndrome:
o distrust new ideas coming from outside of ones own organization, community, or
culture
, Value chain:
a chain of activities that are ‘vertically’ related in the production of goods and services that
add value
o upstream: anything coming to the company (Supplies)
o downstream: products leaving the company (f.e. to retail stores)
Analyse resources:
The VRIO framework
o Value creation
Does the company create value by having many very special step
o Rarity
the more special a product is, the higher the price you can charge
o Imitability
when it is very difficult to imitate
o Organization
when you very well organized (cut unnecessary costs)
----------------------------- Summary IB Awareness -----------------------------
What is international Business?
1. Products are offered across borders
2. Business is done through abroad subsidiaries
Multinational company:
o Operates in other countries through foreign direct investment
Benefits & Downsides of IB
Benefits:
1. Access more markets
2. Cheaper labor
3. Access new resources
Downsides:
1. Small local companies can get pushed out
2. Human rights can be at risk
Globalization
A process leading to greater interdependence and mutual awareness among economic, political, and
social units in the world among actors in general
Drivers:
o Falling barriers -> remove barriers to trade and invest
GATT, WTO, Regional trade agreements
o Technological innovations
Improved communication & management
E-mail & video conferencing
Internet
Better coordination and control
Transportation advancements and global supply chain
Threats
o Global recession
A significant decline in general economic activity in a designated region.
o Protectionism
Government policies that restrict international trade to help domestic
industries.
o Anti-Globalization protests
NGO’s
o Risk of disruptions
,How to be successful in IB
Institution-based view:
Doing business around the globe requires intimate knowledge about the formal and informal
rules of doing business in various countries
o Liability of outsidership
- Lack familiarity in a new environment
Resource-based view:
Focusses on a firms internal resources and capabilities. Possesses specific resources that
enabled them to attain leadership positions around the globe
o Primary resources
a. Tangible resources
i. Financial (money)
ii. Physical (factory)
b. Intangible
i. Technological
ii. Reputations
c. Human resources
i. Skills and knowledge
ii. Communication & collaboration abilities
iii. Organizational culture
o Capabilities:
A unique set of firm specific abilities to use resources and to reach goals
a. Innovation
i. Research & development (product, service, management)
b. Operations
i. Manufacturing process
c. Marketing
d. Sales and distribution
i. Management process
ii. IT systems
e. Corporate functions
i. Planning
ii. Control systems
iii. Control structures
iv. Risk management
Key mistakes in IB
Ethnocentric perspective:
o a view of the world through the lens of one’s own culture
Not-Invented-Here syndrome:
o distrust new ideas coming from outside of ones own organization, community, or
culture
, Value chain:
a chain of activities that are ‘vertically’ related in the production of goods and services that
add value
o upstream: anything coming to the company (Supplies)
o downstream: products leaving the company (f.e. to retail stores)
Analyse resources:
The VRIO framework
o Value creation
Does the company create value by having many very special step
o Rarity
the more special a product is, the higher the price you can charge
o Imitability
when it is very difficult to imitate
o Organization
when you very well organized (cut unnecessary costs)
