Introduction

Question 1

International Business Management

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Meaning of International Business

Question 4

International Business Management refers to the process of overseeing and managing business operations that involve cross-border transactions and activities.

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Aspects of International Business

Question 7

International business includes:

Question 8

(a) Export and import of goods.

Question 9

(b) Export and import of services or intellectual property rights.

Question 10

(c) Licensing and franchising.

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(d) Foreign Investments including both direct investment and portfolio investments.

Question 13

Characteristics of international business

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• Large scale operations

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• Integration of economies

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• Excessive competition

Question 17

• Increased investment opportunities

Question 18

• Earn foreign exchange

Question 19

• Significant role in science and technology

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Factors of International Business

Question 22

• Political factors

Question 23

• Impact on the economy

Question 24

• Political stability

Question 25

• Changes in regulation

Question 26

• Mitigation of risks

Question 27

• Economic factors

Question 28

• Inflation

Question 29

• Predictable

Answer 29

risk free and stable mechanisms

Question 30

• Relative purchasing power parity

Question 31

• Cultural factors

Question 32

• Language

Question 33

• Customs and taboos

Question 34

• Religious beliefs

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• Values

Question 36

• Colours

Question 38

International Trade

Question 39

International trade involves importing and exporting of goods

Question 41

Licensing

Question 42

licensing is a contractual agreement in which one firm grants access to its patents

Answer 42

copyrights

Question 43

E.g is the Pepsi and Coca-Cola licensing system

Question 45

Franchising

Question 46

Franchising is a business model in which a franchisor grants the rights to use its brand

Answer 46

business model

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E.g Mcdonalds

Answer 47

Starbucks

Question 48

Foreign Investments

Question 49

It involves investments of funds abroad in exchange for financial return.

Question 51

Types of foreign investments

Question 52

• Foreign direct investments

Question 53

investment in properties such as plants and machinery in foreign countries to produce and market goods and services in those countries.

Question 54

• Portfolio investments

Question 55

Investments in shares or debentures of foreign companies to earn income by way of dividends or interest.

Question 57

Importance of International Business

Question 58

• Market expansion

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• Non-availability of product in new market

Question 60

• Cost advantage

Question 61

• Product differentiation

Question 63

Imports

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Imports are an inflow of goods into the markets of home country for consumption.

Question 66

Exports

Question 67

export means selling of goods to foreign countries.

Question 69

Outsourcing

Question 70

Outsourcing means giving out contracts to international firms for certain business processes.

Question 71

For example

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many developed countries such as the USA

Question 73

Offshoring

Question 74

Offshoring is similar to outsourcing in the sense that a function is moved away from the home country. However

Answer 74

it is different in the sense that the facility is physically moved to another country

Question 75

For example

Answer 75

Apple Inc. is conducting its manufacturing function in China

Question 76

Apple Inc.