BUSINESS PRACTICE EXPLORED

Nguyen Thi Quynh Nga

nguyenthiquynhnga.cs2@ftu.edu.vn
 Textbook and readings
1. Daniels, J., Radebaugh, L. and Sullivan, D. (2011) International
Business: Global Edition, 13th edition, Prentice Hall.
2. Hill, C.L.W. (2010) International Business: Competing in the
global marketplace 4th Ed. McGraw-Hill Irwin, Boston et al ii
3. Marios. I.K, International business: A Global Perspective
4. Business across culture: Fons Trompenaars
5. Giáo trình kinh doanh quốc tế: TS. Phạm Thị Hồng Yến
6. Giáo trình kinh doanh quốc tế: PGS.TS. Nguyễn Thị Hường – Đại
học kinh tế quốc dân
7. TT hỗ trợ hội nhập QT: https://trungtamwto.vn/
8. TT hỗ trợ hội nhập QT TPHCM: https://www.hoinhap.org.vn/
 Learning requirements
 Before class you have to:
• Answer all the review questions which teacher mentioned in the
previous chapter
• Complete the activity and case studies

 In class:
 Grading

Attendance: 0%
Mid-term assignment: 0%
Final exam: 100%
Note:
- You have to meet two following
requirements:
- Attendance not less than 75%
(25 minutes late equal to absence)
 Final term assignment
• A student will consider the viability of starting
or expanding business internationally in a
particular business sector of a selected
country
• A student should provide and integrated
international business plan that both makes
recommendation as to the preferred type of
international business strategies, country
evaluation, entry modes and the structure of
organization.
 Final-term assignment
• Step 1: Select a country for analysis and the
business as well.
• Step 2: Obtain as much relevant information about
the country as possible. This may involve research
in the library, reference to relevant Internet sites
and/or discussion with those having relevant
experience and information
• Step 3: Identify the strategies; tactics and
implementation plan which provide the road map
to success for your business.
 Final-term assignment
• https://globaledge.msu.edu/mpi/data/2020
• https://globaledge.msu.edu/
• https://www.doingbusiness.org/en/rankings
• https://www.coface-usa.com/Economic-studies
• https://www.coface-usa.com/Economic-studies/Viet
nam
• https://www.doingbusiness.org/
https://www.coface-usa.com/Economic-studies/Vietnam
 https://www.coface-usa.com/Economic-studies

• 160 country assessments, drawn up on the basis of

macroeconomic, financial and political data, are
made freely available.
• Regularly updated, they provide an estimate of the
average credit risk on a country’s businesses.
• This is an invaluable tool, giving an indication of a
country’s potential influence on businesses’ financial
commitments.
• Our analyses use a eight-level ranking. In ascending
order of risk, these are: A1, A2, A3, A4, B, C, D and E.
 Dimensions and Measures of Market Potential for 2020
Dimension Weight Measures Used
•Electricity Consumption
Market Size 25/100 (2017)1
•Urban Population (2018)1
•GNI per Capita Estimates
Using PPP (2018)1
Market Intensity 15/100
•Private Consumption as a
percentage of GDP (2018)1
•Compound Annual Growth
Rate (CAGR) of Primary Energy
Use (2012-2017)2
Market Growth Rate 12.5/100
•Compound Annual Growth
Rate (CAGR) of GDP (constant
2005 US$) (2013-2018)1
•Consumer Expenditure
(2019)4
Market Consumption Capacity 12.5/100 •Income Share of Middle-Class
(2018)1
•Median Disposable Income
per Household (2019)4
•Airport Connectivity (2019)11
•Cellular Mobile Subscribers
(2018)3
•Fixed Broadband
Subscriptions (2018)3
Commercial Infrastructure 10/100 •Fixed Broadband Internet
Speed (2020)13
•Logistics Performance Index
(LPI) (2018)12
•Paved Road Density (2019)4
•Population per Retail Outlet
(2019)4
•Per Capita Imports from US
 International Business
Fiteenth Edition, Global Edition

Chapter 1
International Business
and Globalization

Copyright © 2018 Pearson Education Limited. All Rights Reserved.

Learning Objectives (1 of 2)

1-1 Relate globalization and international

business (IB) to each other and explain why
their study is important

1-2 Grasp the forces driving globalization and IB

1-3 Discuss the major criticisms of globalization

1-4 Assess the major reasons companies seek to

create value by engaging in IB

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Globalization and IB
Objective 1-1

• What is Globalization?
• Why Globalization?
• The connection between Globalization and IB.
• Why study IB?

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Backgrounds of International Trade

Concept
• Narrow meaning: selling the goods or providing the services
through nations border
• Classic:
– Exchange of goods, services
– Between nations
– Through monetary
– Principle of parity
– For the benefits of all.

15
 . Backgrounds of International Trade
Concept
• Law on Commerce 2005, Vietnam
– Commercial activity is activity for the purpose of profit,
– Includes: selling and buying the goods,
providing the service, investment,
promotion and other profitable activites

• WTO: includes all transactions in trading nature such as:

selling goods, providing services, transportation, investment,
banking, franchising, promotion, communication…
16
 International business
• International business consists of all
commercial transactions between two or
more countries.
• The goal of private business is to make profits.
• Government business may or may not be
motivated by profit.
 The four modes of supply are as follows:

• Mode 1:Cross-border.
• Mode 2:Consumption abroad.
• Mode 3:Commercial presence.
• Mode 4:Presence of natural persons
Global Value Chain of Textiles

19
McDonald’s menu

20
Suggest a
product that
McDonalds can
add to the menu
in the
Vietnamese
market in the
near future!

21
 Activity
• Advantages / disadvantages of a business
providing a product for the global market?
• In which areas can a product homogenization
policy be applied?
Globalization and IB
Objective 1-1

• What is Globalization?

Globalization is the widening and deepening of interdependent relationships among

people from different nations.

The term sometimes refers to the elimination of barriers to international movements of

goods, services, capital, technology, and people that influence the integration of world
economies.

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Globalization refers to the shift toward a more
integrated and interdependent world economy
(Charles. W. Hill)
 What is
Globalization ?

nc e Int
e erc
e nd on
e p ne
Integration
e rd cti
Int on
 Globalization and IB
Objective 1-1

• Why Globalization?
Globalization enables us to get more variety, better quality, or lower prices.
• The connection between Globalization and IB.
The global connections between supplies and markets result from the activities of IB, which
are all commercial transactions.

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 Globalization of Markets

…refers to the merging of

historically distinct and separate
national markets into one huge
global marketplace

- Falling trade barriers  easier to sell

internationally
-The tastes and preferences of consumers
are converging on some global norms
- Same basic products worldwide

- “German market” or the “American

market”, only the global market
 Globalization of
Production

…refers to the sourcing of goods and

services from locations around the
globe to take advantage of national
differences in the cost and quality of
factors of production like land, labor,
energy and capital

- Companies compete more

effectively by lowering their overall
cost structure or improving the
quality or functionality of their
product offering
The Forces Driving Globalization and IB
Objective 1-2

• Although hard to measure, Globalization:

− Has been growing.
−Is less pervasive than generally thought <=>
(unwelcome effects are less than what was
thought)
− Has economic and noneconomic dimensions.
− Is stimulated by several factors.

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The Forces Driving Globalization and IB
Objective 1-2: Grasp the forces driving globalization and IB.

• Currently, about a quarter of world production is

sold outside its country of origin, compared to
about 7 percent in 1950.
• Studies beyond economic factors for the driving
force of globalization state  studies’ results:
o Size of countries—Smaller countries tend to be more globalized than larger
ones, mainly because their smaller land masses and populations permit a lower
variety of production.
o Per capita incomes—Countries with higher per capita incomes tend to be more
globalized than those with lower ones because their citizens can better afford
foreign products, travel, and communications.
o Variance among globalization aspects—Although a country may rank as highly
globalized on one dimension, it may be low on another, such as the United
States being high on technological scales but low on economic ones.
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Factors in increased Globalization
Objective 1-2

• The Forces Driving Globalization and IB

− Rise in and application of technology
− Liberalization of cross-border trade and resource
movements
− Development of services that support IB
− Growth of consumer pressures
− Increase in global competition
− Changes in political situations and government
policies
− Expansion of cross-national cooperation

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 Drivers of Globalization
-The decline in barriers  free flow of goods, services, and capital. (GATT, WTO)

- The technological changes (productions, telecom, transportation..)

Criticisms of Globalization and IB
Objective 1-3

• Sovereignty
• Environment
• Some people may lose
• Increase to personal stress

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Why engage in IB?
Objective 1-4 Assess the major reasons companies seek to create value by engaging
in IB.

• Sales expansion
• Resource acquisition
• Risk reduction

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Activity
In your point of view, you choose anti or support
the globalization. Explain.
 … Anti
- Firms collapse, job losses
- Wealth - Poverty gap
- Child, women labor
- Environmental degradation
- The cultural imperialism of global
media and MNEs
- Financial crisis
- Country sovereignty
Support…
- New production and
business opportunities
- New markets, new
production sources
- Lower prices for goods
and services.
- Greater economic growth
- Higher consumer income,
and more jobs
Factors in IB Operations

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