Chapter 1

• Global Dependency in terms of goods and services
• Domestic Business is limited geographically within a country
• International Business is also known as Global Business, International Trade, and Foreign Trade
• Different types of International Business:

  • Exporting: selling abroad directly to customers or indirectly through foreign sales agents or distributors
  • Licensing: granting a foreign firm the right to use intangible property for a specific period in return for a royalty
  • Franchising: granting another firm the right to do business in a prescribed manner
  • Foreign Direct Investment (FDI): operations in one country controlled by entities in a foreign country
• Global Dependency occurs when customers in one country demand items created in another country
• Importance of International Business:

  • People can enjoy goods from other countries
  • Provides a source of raw materials, parts, and demand for foreign products
  • Allows businesses to expand market share and investment opportunities
  • Promotes good political relationships among countries
• International Business is not a recent event
• Barter System has been used for centuries before money was invented, where people exchanged services and goods for other services and goods in return
• Philippine total external trade in goods was 13.66 Billion USD as of December 2020
• Basic International Business Activities include:

  • Imports: products bought from businesses in other countries
  • Exports: products sold in other countries
  • Trade Barriers: restrictions that reduce free trade among countries, such as import taxes, quotas, and laws preventing certain products from entering a country
• International Business Environment factors:

  • Climate
  • Terrain, seaways
  • Seaports
  • Natural resources
  • Agricultural products
  • Language
  • Education
  • Religion
  • Values, customs
  • Social relationships
  • Type of government
  • Political stability
  • Government policies toward business
  • Economic conditions
  • Type of economic system
  • Education level
  • Types of industries
  • Technology
• International Business Skills:

  • History: understanding the past helps in current international business relations
  • Geography: knowledge of geography affects transportation and housing in a country
  • Foreign Language: effective communication with people from other societies
  • Cultural Awareness: understanding cultural differences
  • Study Skills: asking questions, taking notes, and doing research
• As a global citizen, worker, and consumer:

  • Consumer choices increase, not limited to items produced in one country
  • Career opportunities expand for workers
  • Increased awareness of the world is necessary for citizens