IB 3101 Lecture Notes - Lecture 1: Cultural Imperialism, World Bank, Outsourcing

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Published on 19 Mar 2017
Week 1- Chapter 1- Globalization
International business
o Any firm which does trade as well as foreign direct investment in
other countries
Multinational company
o Any firm which has production activities in more than one country is a
multinational company
International trade
o Occurs when a firm exports goods or services to consumers in another
Foreign direct investment
o When firms invest their resources in business activities in foreign
Foreign subsidiary
o Operation in a host country which gives the local firm to conduct its
business activities in that foreign country
Multinational Enterprises
o Trade- exports and imports
o Foreign direct investment (FDI)
Ways they participate
o Equity modes of international participation (FDI)
Acquisition, wholly owned subsidiaries (start your own)
Joint venture (equity, strategic alliances)
o Non-equity modes (FDI)
Tech transfer
Non-equity strategic alliances
Shift toward greater independence among national institutions and
Trend towards a more integrated global economic system
1. Globalization of markets
Selling all around the world
Merging of historical distinct and separate national markets
into one huge global marketplace
Tastes and preferences of global consumers are converging
upon some global norm
o Ex. Coca-Cola, Apple, Ikea
2. Globalization of production
Making products in different countries
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