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Topic 1 A. What Is International Business?. Business transactions between parties from more than one country Parties may include Private individuals Individual companies Groups of companies Governmental agencies. How Does International Business Differ from Domestic?. Currency conversion
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What Is International Business? • Business transactions between parties from more than one country • Parties may include • Private individuals • Individual companies • Groups of companies • Governmental agencies 1-2
How Does International BusinessDiffer from Domestic? • Currency conversion • Legal systems • Culture • Availability of resources 1-3
Why Study International Business? • Large organizations • Foreign-owned subsidiaries • Small businesses • Competitors • Business techniques and tools • Cultural literacy 1-4
International Business Activities • Exporting and Importing • International Investments • Licensing, Franchising, and Management Contracts 1-5
Exporting and Importing • Exporting: selling of products made in one’s own country for use or resale in other countries • Importing: buying of products made in other countries for use or resale in one’s own country 1-6
Visible and Invisible Trade • Trade in Goods • Merchandise exports and imports • Visible trade • Trade in Services • Service exports and imports • Invisible trade 1-8
International Investments • Capital supplied by residents of one country to residents of another • Two categories: • Foreign direct investments • Portfolio investments 1-10
Other Forms of International Business Activity Management contracts Franchising Licensing 1-11
Variations of Organizations Multinational Corporation Multinational Enterprise Multinational Organization 1-12