International Business Questions and Answers 100% Solved

International Business Questions and Answers 100% Solved 6 Elements of International Business 1. International Trade ̈ 2. International Investment 3. International business risks 4. Participants: Governments,Firms intermediaries 5. Foreign Markets entry strategies 6. Globalization of markets Why do Companies internationalize? 1. Seek opportunities for growth through market diversification 2. Earning higher margins and profits 3. Gaining new ideas about products, services and business methods 4. To better serve key customers that have relocated abroad 5. Being closer to supply sources, benefit from global sources advantages, or gain flexibility in product sourcing 4 Risks in international Business 1. Cross-Cultural Risk 2. Country Risk 3. Currency Risks 4. Commercial Risk 1. Cross-Cultural Risk Cultural differences Negotiation patterns Decision making styles Ethical practices 2. Country Risk Harmful or unstable system Regulations to foreign Firms inadequate or underdeveloped legal system Bureaucracy and red tape Etc. 3. Currency Risks Currency exposure Asset valuation Inflation and transfer pricing Foreign taxation 4. Commercial Risk Weak Partner Operational problems Timing of entry Competitive intensity Poor execution of strategy Internationalization Theories of the Firm name 4 1. Uppsala Model 2. Network Model 3. Born Global Model 4. Springboard Perspective The key features of the Uppsala Model name 4 1. firms first gain experience from the domestic market 2. firms start their foreign operations from culturally and/or geographically close countries 3. and move gradually to culturally and geographically more distant countries 4. firms start their foreign operations by using traditional exports and gradually move to using more intensive and demanding operation modes. Uppsala Model name the 4 steps 1. Irregular export activities 2. Export via independent sales representative 3. Establishment of overseas sales subsidiary 4. Establishment of foreign manufacturing subsidiaries. The key features of the Network Model 1. The network model draws attention to a firm's changing internationalizationsituation as a result of its position in a network ( of firms). 2. The question is how internationalizet the Firm and The Market is! The four Stages in the Network Model 1. Early Starter 2. Late Starter 3. Lonely International 4. International among Others