Culture & Strategy - Alphabet Games Essay

2717 Words Oct 21st, 2014 11 Pages
International Business
Chapter 1
What is international Business

Key Concepts In International Business * International Trade - describes the exchange of products and services across national borders * Exchanges can be made through exporting or can also take the form of: * Importing or Global Sourcing - the procurement of products or services from suppliers located abroad for consumption in the home country or a third country. * International Investment - refers to the transfer of assets to another country or the acquisition of assets in that country. Economists refer to such assets as factors of production and they include capital, technology, managerial talent and manufacturing infrastructure. * Foreign
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* Country Risk - refers to the potentially adverse effects on company operations and profitability caused by developments in the political, legal and economic environment in a foreign country. It includes the possibility of foreign government intervention in firms, business activities e.g. Governments may restrict access to markets, impose bureaucratic procedures on business transactions and limit the amount of income that firms can bring home from foreign operations. * Currency Risk - refers to the risk of adverse fluctuations in exchange rates. They arise because international transactions are often conducted in more than one national currency. (fluctuations can cause the value of a firms earnings to reduce) * Commercial Risk - refers to the firms potential loss or failure from poorly developed or executed business strategies, tactics or procedures. Managers may make poor choices in such areas as selection of business partners, timing of market entry, pricing, creation of product features and promotional themes.

Although risks cannot be avoided, it can be anticipated and managed. This can be done by constantly assessing environments and conducting research to anticipate potential risks, understanding their implications and taking proactive action to reduce their effects.

Who Participates In International Business

Among the most important are focal firms, the companies that directly initiate

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