Introduction to International Business
Summary.................................................................................................................................3
Chapter 1: Taking Risks and Making Profits within the Dynamic Business Environment...3
1.1: Business and Wealth Building............................................................................... 3
1.2: The Importance of Entrepreneurs to the Creation of Wealth.................................4
1.3: The Business Environment................................................................................... 5
1.4: The Technological Environment............................................................................ 6
1.5: The Competitive Environment............................................................................... 7
1.6: The Social Environment........................................................................................ 7
1.7: The Global Environment........................................................................................7
1.8: The Evolution of U.S. Business.............................................................................7
Chapter 3: Doing Business in Global Markets....................................................................9
3.1: The Dynamic Global Market.................................................................................. 9
3.2: Getting Involved in Global Trade........................................................................... 9
3.3: Strategies for Reaching Global Markets................................................................9
3.4: Forces Affecting Trading in Global Markets........................................................ 10
3.5: Trade Protectionism............................................................................................ 10
3.6: The Future of Global Trade................................................................................. 11
Chapter 7: Management and Leadership......................................................................... 11
7.1: Managers’ Roles Are Evolving.............................................................................11
7.2: The Four Functions of Management....................................................................11
7.3: Planning and Decision Making............................................................................ 12
7.4: Organizing: Creating a Unified System............................................................... 12
7.5: Leading: Providing Continuous Vision and Values.............................................. 13
7.6: Controlling: Making Sure It Works....................................................................... 13
Chapter 8: Structuring Organizations for Today’s Challenges..........................................13
8.1: Organizing for Success....................................................................................... 13
8.2: The Changing Organization................................................................................ 14
8.3: Decisions to Make in Structuring Organizations..................................................15
8.4: Organizational Models.........................................................................................15
8.5: Managing the Interactions among Firms............................................................. 16
8.6: Adapting to Change.............................................................................................16
Chapter 9: Production and Operation Management.........................................................17
9.2: From Production to Operations Management..................................................... 17
9.3: Production Processes......................................................................................... 17
9.4: Operations Management Planning......................................................................18
9.5: Control Procedures: PERT and Gantt Charts......................................................20
Chapter 13: Marketing: Helping Buyers Buy.................................................................... 20
13.1: What is Marketing?............................................................................................20
13.2: The Marketing Mix............................................................................................. 21
13.3: Providing Marketers with Information................................................................ 24
13.4: The Marketing Environment.............................................................................. 24
13.5: The Consumer Market.......................................................................................25
1
, 13.6: The Business-to-Business Market.....................................................................27
Chapter 14: Developing and Pricing Goods and Services............................................... 28
14.1: Product Development and the Total Product Offer............................................ 28
14.2: Product Differentiation....................................................................................... 28
14.3: Packaging Changes the Product.......................................................................29
14.4: Branding and Brand Equity............................................................................... 30
14.5: The New-Product Development Process.......................................................... 31
14.6: The Product Life Cycle...................................................................................... 31
14.7: Competitive Pricing........................................................................................... 33
Chapter 15: Distributing Products.................................................................................... 34
15.1: The Emergence of Marketing Intermediaries.................................................... 34
15.2: The Utilities Created by Intermediaries............................................................... 1
15.3: Wholesale Intermediaries.................................................................................... 1
15.4: Retail Intermediaries........................................................................................... 1
15.5: Online Retailing and Other Nonstore Retailing................................................... 1
15.6: Building Cooperation in Channel Systems.......................................................... 1
15.7: Logistics: Getting Goods to Consumers Efficiently..............................................1
Chapter 17: Understanding Accounting and Financial Information.................................... 1
17.1: The Role of Accounting Information.................................................................... 1
17.2: The Accounting Cycle......................................................................................... 1
17.3: Understanding Key Financial Statements........................................................... 1
17.4: Analyzing Financial Performance Using Ratios.................................................. 1
17.5: Accounting Disciplines........................................................................................ 1
Chapter 18: Financial Management................................................................................... 1
18.1: The Role of Finance and Financial Managers.....................................................1
18.2: Financial Planning............................................................................................... 1
18.3: The Need for Operating Funds............................................................................1
18.4: Obtaining Short-Term Financing..........................................................................1
18.5: Obtaining Long-Term Financing.......................................................................... 1
Key questions.........................................................................................................................1
Chapter 1: Taking Risks and Making Profits within the Dynamic Business Environment...1
Chapter 3: Doing Business in Global Markets....................................................................1
Chapter 7: Management and Leadership...........................................................................1
Chapter 8: Structuring Organizations for Today’s Challenges............................................1
Chapter 9: Production and Operations Management.........................................................1
Chapter 13: Marketing: Helping Buyers Buy...................................................................... 1
Chapter 14: Developing and Pricing Goods and Services................................................. 1
Chapter 15: Distributing Products...................................................................................... 1
Chapter 17: Understanding Accounting and Financial Information.................................... 1
Chapter 18: Financial Management................................................................................... 1
Key Terms............................................................................................................................... 1
Chapter 1: Taking Risks and Making Profits within the Dynamic Business Environment...1
Chapter 3: Doing Business in Global Markets....................................................................1
Chapter 7: Management and Leadership...........................................................................1
2
, Chapter 8: Structuring Organizations for Today’s Challenges............................................1
Chapter 9: Production and Operations Management.........................................................1
Chapter 13: Marketing: Helping Buyers Buy...................................................................... 1
Chapter 14: Developing and Pricing Goods and Services................................................. 1
Chapter 15: Distributing Products...................................................................................... 1
Chapter 17: Understanding Accounting and Financial Information.................................... 1
Chapter 18: Financial Management................................................................................... 1
Summary
Chapter 1: Taking Risks and Making Profits within the Dynamic
Business Environment
1.1: Business and Wealth Building
A business is any activity that seeks to provide goods and services to others while
operating at a profit. Success in business depends on consistently adapting to changes in
the market. To earn that profit, you provide desired goods, jobs, and services to people or
other businesses.
Goods Services
Tangible (products you can touch) Intangible (products you can’t touch)
Transfer Perishable (can’t be transferred)
Ownership
Divisible (you can divide goods) Indivisible (services can’t be divided)
An entrepreneur is a person who risks time and money to start and manage a business.
The revenue is the total amount of money a business takes in during a given period by
selling goods and services. Profit is the amount of money a business earns above or
beyond what it spends for salaries and other expenses needed to run an operation. A loss is
having higher costs than profits. If a business loses money over time, it will most likely have
to close.
Total revenue: price per unit (P) x quantity sold.
Profit: total revenue - total costs = (price (P) x quantity (Q)) - (fixed costs (Fc) + variable
costs (Vc)).
2 types of costs: fixed costs + variable costs.
Fixed costs are costs which are coming back every time (salaries, rent).
Variable costs are costs which change with the production or sales volume (e.g., shipping
costs, commissions).
3
, Risk is the chance an entrepreneur takes of losing time and money on a business that may
not prove profitable. The more risk you take, the higher the profits can be, but also the
losses.
The term standard of living refers to the amount of goods and services people can buy with
the money they have. Prices for goods and services in some locations are higher than in
others, so people in those places can’t buy as much with the same amount of money. Often,
goods cost more in one country than in another because of higher taxes and stricter
government regulations. Finding the right level of taxes and regulation is important in making
a country or city prosperous.
The term quality of life refers to the general wealth-being of a society in terms of its political
freedom, natural environment, education, health care, safety, amount of leisure, and rewards
that add to the satisfaction and joy that other goods and services provide. Maintaining a high
quality of life requires the combined efforts of businesses, nonprofit organizations, and
government agencies.
Stakeholders are all the people who stand to gain or lose by the policies and activities of a
business and whose concerns the business needs to address.
Staying competitive may call for outsourcing. Outsourcing means contracting with other
companies to do some or all of the functions of a firm, like its production or accounting tasks.
The other coin of outsourcing is insourcing. Insourcing means doing the productions in the
home country of the business instead of bringing them to other countries.
4
Summary.................................................................................................................................3
Chapter 1: Taking Risks and Making Profits within the Dynamic Business Environment...3
1.1: Business and Wealth Building............................................................................... 3
1.2: The Importance of Entrepreneurs to the Creation of Wealth.................................4
1.3: The Business Environment................................................................................... 5
1.4: The Technological Environment............................................................................ 6
1.5: The Competitive Environment............................................................................... 7
1.6: The Social Environment........................................................................................ 7
1.7: The Global Environment........................................................................................7
1.8: The Evolution of U.S. Business.............................................................................7
Chapter 3: Doing Business in Global Markets....................................................................9
3.1: The Dynamic Global Market.................................................................................. 9
3.2: Getting Involved in Global Trade........................................................................... 9
3.3: Strategies for Reaching Global Markets................................................................9
3.4: Forces Affecting Trading in Global Markets........................................................ 10
3.5: Trade Protectionism............................................................................................ 10
3.6: The Future of Global Trade................................................................................. 11
Chapter 7: Management and Leadership......................................................................... 11
7.1: Managers’ Roles Are Evolving.............................................................................11
7.2: The Four Functions of Management....................................................................11
7.3: Planning and Decision Making............................................................................ 12
7.4: Organizing: Creating a Unified System............................................................... 12
7.5: Leading: Providing Continuous Vision and Values.............................................. 13
7.6: Controlling: Making Sure It Works....................................................................... 13
Chapter 8: Structuring Organizations for Today’s Challenges..........................................13
8.1: Organizing for Success....................................................................................... 13
8.2: The Changing Organization................................................................................ 14
8.3: Decisions to Make in Structuring Organizations..................................................15
8.4: Organizational Models.........................................................................................15
8.5: Managing the Interactions among Firms............................................................. 16
8.6: Adapting to Change.............................................................................................16
Chapter 9: Production and Operation Management.........................................................17
9.2: From Production to Operations Management..................................................... 17
9.3: Production Processes......................................................................................... 17
9.4: Operations Management Planning......................................................................18
9.5: Control Procedures: PERT and Gantt Charts......................................................20
Chapter 13: Marketing: Helping Buyers Buy.................................................................... 20
13.1: What is Marketing?............................................................................................20
13.2: The Marketing Mix............................................................................................. 21
13.3: Providing Marketers with Information................................................................ 24
13.4: The Marketing Environment.............................................................................. 24
13.5: The Consumer Market.......................................................................................25
1
, 13.6: The Business-to-Business Market.....................................................................27
Chapter 14: Developing and Pricing Goods and Services............................................... 28
14.1: Product Development and the Total Product Offer............................................ 28
14.2: Product Differentiation....................................................................................... 28
14.3: Packaging Changes the Product.......................................................................29
14.4: Branding and Brand Equity............................................................................... 30
14.5: The New-Product Development Process.......................................................... 31
14.6: The Product Life Cycle...................................................................................... 31
14.7: Competitive Pricing........................................................................................... 33
Chapter 15: Distributing Products.................................................................................... 34
15.1: The Emergence of Marketing Intermediaries.................................................... 34
15.2: The Utilities Created by Intermediaries............................................................... 1
15.3: Wholesale Intermediaries.................................................................................... 1
15.4: Retail Intermediaries........................................................................................... 1
15.5: Online Retailing and Other Nonstore Retailing................................................... 1
15.6: Building Cooperation in Channel Systems.......................................................... 1
15.7: Logistics: Getting Goods to Consumers Efficiently..............................................1
Chapter 17: Understanding Accounting and Financial Information.................................... 1
17.1: The Role of Accounting Information.................................................................... 1
17.2: The Accounting Cycle......................................................................................... 1
17.3: Understanding Key Financial Statements........................................................... 1
17.4: Analyzing Financial Performance Using Ratios.................................................. 1
17.5: Accounting Disciplines........................................................................................ 1
Chapter 18: Financial Management................................................................................... 1
18.1: The Role of Finance and Financial Managers.....................................................1
18.2: Financial Planning............................................................................................... 1
18.3: The Need for Operating Funds............................................................................1
18.4: Obtaining Short-Term Financing..........................................................................1
18.5: Obtaining Long-Term Financing.......................................................................... 1
Key questions.........................................................................................................................1
Chapter 1: Taking Risks and Making Profits within the Dynamic Business Environment...1
Chapter 3: Doing Business in Global Markets....................................................................1
Chapter 7: Management and Leadership...........................................................................1
Chapter 8: Structuring Organizations for Today’s Challenges............................................1
Chapter 9: Production and Operations Management.........................................................1
Chapter 13: Marketing: Helping Buyers Buy...................................................................... 1
Chapter 14: Developing and Pricing Goods and Services................................................. 1
Chapter 15: Distributing Products...................................................................................... 1
Chapter 17: Understanding Accounting and Financial Information.................................... 1
Chapter 18: Financial Management................................................................................... 1
Key Terms............................................................................................................................... 1
Chapter 1: Taking Risks and Making Profits within the Dynamic Business Environment...1
Chapter 3: Doing Business in Global Markets....................................................................1
Chapter 7: Management and Leadership...........................................................................1
2
, Chapter 8: Structuring Organizations for Today’s Challenges............................................1
Chapter 9: Production and Operations Management.........................................................1
Chapter 13: Marketing: Helping Buyers Buy...................................................................... 1
Chapter 14: Developing and Pricing Goods and Services................................................. 1
Chapter 15: Distributing Products...................................................................................... 1
Chapter 17: Understanding Accounting and Financial Information.................................... 1
Chapter 18: Financial Management................................................................................... 1
Summary
Chapter 1: Taking Risks and Making Profits within the Dynamic
Business Environment
1.1: Business and Wealth Building
A business is any activity that seeks to provide goods and services to others while
operating at a profit. Success in business depends on consistently adapting to changes in
the market. To earn that profit, you provide desired goods, jobs, and services to people or
other businesses.
Goods Services
Tangible (products you can touch) Intangible (products you can’t touch)
Transfer Perishable (can’t be transferred)
Ownership
Divisible (you can divide goods) Indivisible (services can’t be divided)
An entrepreneur is a person who risks time and money to start and manage a business.
The revenue is the total amount of money a business takes in during a given period by
selling goods and services. Profit is the amount of money a business earns above or
beyond what it spends for salaries and other expenses needed to run an operation. A loss is
having higher costs than profits. If a business loses money over time, it will most likely have
to close.
Total revenue: price per unit (P) x quantity sold.
Profit: total revenue - total costs = (price (P) x quantity (Q)) - (fixed costs (Fc) + variable
costs (Vc)).
2 types of costs: fixed costs + variable costs.
Fixed costs are costs which are coming back every time (salaries, rent).
Variable costs are costs which change with the production or sales volume (e.g., shipping
costs, commissions).
3
, Risk is the chance an entrepreneur takes of losing time and money on a business that may
not prove profitable. The more risk you take, the higher the profits can be, but also the
losses.
The term standard of living refers to the amount of goods and services people can buy with
the money they have. Prices for goods and services in some locations are higher than in
others, so people in those places can’t buy as much with the same amount of money. Often,
goods cost more in one country than in another because of higher taxes and stricter
government regulations. Finding the right level of taxes and regulation is important in making
a country or city prosperous.
The term quality of life refers to the general wealth-being of a society in terms of its political
freedom, natural environment, education, health care, safety, amount of leisure, and rewards
that add to the satisfaction and joy that other goods and services provide. Maintaining a high
quality of life requires the combined efforts of businesses, nonprofit organizations, and
government agencies.
Stakeholders are all the people who stand to gain or lose by the policies and activities of a
business and whose concerns the business needs to address.
Staying competitive may call for outsourcing. Outsourcing means contracting with other
companies to do some or all of the functions of a firm, like its production or accounting tasks.
The other coin of outsourcing is insourcing. Insourcing means doing the productions in the
home country of the business instead of bringing them to other countries.
4
