Managing International Business Relations: Strategies and Negotiations

1. OKBIT22 Managing International Relations 1. Introduction to the topic

2. Course topics • International business • Business to business • Network thinking • Relationship marketing • International business negotiations • Personal selling (in B-2-B)

3. What exactly does it mean, Managing International Relations? • 1. What are company’s relations? • 2. What about INTERNATIONAL relations? • 3. How do we manage them?

4. 1. What are company’s relations/relationships? • Let’s consider the interest groups of a company

5. 1. Networks • Network thinking is based on the thought that “No company is an island” • Each company has a network, big or small • For example, consider Ikea with its thousands of suppliers, customers and shops all over the world, designers etc.

6. 1. What are company’s relations? • So companies develop ties with customers, shareholders, subcontractors, partners, suppliers, competitors etc. • Therefore companies have many relationships to manage, according to Gummesson (1999) there are 30 • We are going to concentrate on Company-Customer relationships, even though this is not the only important relationship that a company has

7. 2. What are international relations? • When we talk about INTERNATIONAL relations, we assume that the company has international operations of some kind • When we talk about companies going international or doing international business, there are different ways of doing this • Not all international companies are global players like Nokia

8. 2. Internationalization • The company could, for example, embark on • Export • Direct or indirect • Licenses • Joint ventures • Investments

9. 2. International business & Business to business • Internationalization has become more and more popular also in Finland • International companies share many problems that domestic companies lack • That is why we need to study international business relations and how to manage them

10. 2. Why do we need to know about INTERNATIONAL relations? • When it comes to international relations, you need to deal with problems, which arise from: • Cultural differences • Which affect differences in doing business • Language • Habits • Etc. • A specific culture or culture in general?

11. 3. How do we manage international business relations? • Business negotiations! • Relationship marketing • Personal selling • (PR)

12. 3. Relationship Marketing • B-2-B customers are different than B-2-C customers • They require more time, money, effort • Mass marketing is for independent consumers, it doesn’t work with B-2-B customers • There is no real relationship with a person buying consumer goods and the company selling them • But you need a relationship between a company selling their product and the company buying it!!!

13. 3. Difference between consumer and business markets • Market structure • Buyer behaviour • Decision-making • Products • Channels • Promotion • Price

14. 3. Business Negotiations • Negotiations are an essential part of business, especially in B-2-B • The company should negotiate with customers, suppliers, subcontractors, partners et. • Business agreements are never as simple as in B-2-C • Complex, time-consuming, expensive • BUT we are talking about larger sums and bigger contracts

15. 3. Personal selling • An important part in business to business marketing • Personal contact is needed for company customers • Expensive, but is used, when the customer is worth a lot

16. Introduction case • Read the case, discuss it in your groups and try to find a solution to the problem (with justification)