International Business

International business refers to commercial activities conducted across national borders.

There are three main Characters
1. Cross-border activities: Business activities take place between two or more countries, such as international trade or investment
2. Distinctive business methods: Companies must use different business practices and adapt their strategies when operating internationally.
3. Different national environments: Companies operate in countries that differ in culture, language, political systems, legal systems, economic conditions and infrastructure.

1. Agricultural Economy – “The Age of the Plow”
2. Industrial Economy – “The Age of the Machine”
3. Service Economy – “The Age of the Computer”
4. Knowledge Economy – “The Age of Information”
5. Fourth Industrial Revolution – “Fusion of Technologies”

• Steam-powered technology increased international trade and manufacturing, mainly through government-supported trading companies.
• Electricity and steel production encouraged the growth of multinational enterprises (MNEs) in manufacturing, agriculture and extractive industries.
• After World War II, GATT and the Marshall Plan helped reduce trade barriers, rebuild
• Digital technologies improved manufacturing efficiency, global communication and international trade, especially digitally enabled services.

1. Financial Contagion: Financial crises can spread quickly between interconnected countries and markets.

2. Job Losses & Offshoring: Companies move production or services abroad to reduce costs, potentially causing job losses in their home countries.

3. Loss of National Sovereignty: International agreements and economic interdependence can limit a country's freedom to make independent decisions.

4. Environmental Degradation & Pollution: ncreased production, transportation and resource consumption can contribute to pollution and environmental damage.

5. Loss of National Culture:  Global brands and lifestyles can influence or replace local traditions and cultural practices.

Positive consequences include economic growth, job creation, lower prices, greater product variety and technology transfer.

1. Duration: Megatrends develop gradually and last for decades or even longer.
2. Ubiquity: They fundamentally change how people live, work and communicate.
3. Globality: They affect countries and societies worldwide, although their impact varies by region.
4. Complexity: They influence multiple industries and sectors simultaneously and are interconnected.

The three main cultural megatrends are convergence, differentiation and divergence.

• Convergence: Cultures become more similar through globalization.

• Differentiation: Global and local cultures combine to create new cultural forms.

• Divergence: Cultures and societies become more divided into distinct groups.

Key takeaway: Globalization can make cultures more similar, create new mixed cultures, or increase cultural differences and divisions.

For International Business: Companies must understand these trends to decide whether to standardize their products globally or adapt them to local markets.

To understand the global business environment, analyze international risks and opportunities, develop internationalization strategies, and improve cross-cultural awareness.

1. International Business Environment (economic, political, technological, ecological and demographic factors).
2. Corporate Response (strategy, organization and market entry).
3. Regional and Emerging Markets (Middle East, Europe, China and Indonesia).

1. Reduction of trade barriers. 2. Market liberalization. 3. Industrialization and economic development. 4. Integration of global financial markets. 5. Technological advances in communication, manufacturing and transportation.

Political: Democracy in crisis and increasing state-based violence. Cultural: Convergence (cultures become similar), hybridization (global and local cultures mix), and divergence (societies become more divided).

Events such as wars, pandemics, trade conflicts and climate change can disrupt supply chains, increase costs, reduce demand and create political and economic uncertainty. Companies must adapt their international strategies.

It combines internal analysis (company resources, capabilities and readiness) with external analysis (market attractiveness, competition and PESTEL factors) to develop a suitable internationalization strategy.

Through exporting, licensing, franchising, joint ventures or foreign direct investment (FDI). The choice depends on resources, market opportunities, investment requirements, desired control and risks.