Internationl Business Report.docx

INTERNATIONL BUSINESS

INTRODUCTION International business consists of trades and transactions at a global level. These include the trade of goods, services, technology, capital and/or knowledge. It involves cross-border transactions of goods and services between two or more countries. Transactions of economic resources include capital, skills, and people for the purpose of the international production of physical goods and services such as finance, banking, insurance, and construction. International Business also known as globalization. Globalization refers to the international trade between countries, which in turn refers to the tendency of international trade, investments, information technology and outsourced manufacturing to weave the economies of diverse countries together. To conduct business overseas, multinational companies need to separate national markets into one global marketplace. In essence, two macro factors underline the trend of greater globalization. The first macro-factor consists of eliminating barriers to make cross-border trade easier, such as the free flow of goods and services, and capital. The second macro-factor is technological change, particularly developments in communication, information processing, and transportation technologies. "International business" is define as the study of the internationalization process of multinational enterprises. Some consumer-electronics producers such as Samsung, LG and Sony, and energy companies such as Exxon Mobil, and British Petroleum. Multinational enterprises range from any kind of business activity or market, from consumer goods to machinery manufacture; a company can become an international business. Therefore, to conduct business overseas, companies should be aware of all the factors that might affect any business activities, including, but not limited to: difference in legal

systems, political systems, economic policy, language, accounting standards, labor standards, living standards, environmental standards, local cultures, foreign-exchange markets, tariffs, import and export regulations, trade agreements, climate, education. Each of these factors may require changes in how companies operate from one country to the next. One of the first scholars to engage in developing a theory of multinational companies was Stephen Hymer. Throughout his academic life, he developed theories that sought to explain foreign direct investment and why firms become multinational. There were three phases according to Hymer's work. The first phase of Hymer's work was his dissertation in 1960 called the International Operations of National Firms. In this thesis, the author departs from neoclassical theory and opens up a new area of international production. At first, Hymer started analyzing neoclassical theory and the financial investment, where the main reason for capital movement is the difference in interest rates. Then, he started analyzing the characteristics of foreign investment by large companies for production and direct business purposes, calling this Foreign Direct Investment. By analyzing the two types of investments, Hymer distinguished financial investment from direct investment. The main distinguishing feature was control. Portfolio investment is a more passive approach, and the main purpose is financial gain, whereas foreign direct investment a firm has control over the operations abroad. Therefore, . His OLI paradigm, in particular, remains as the predominant theoretical contribution to study the traditional theory of investment based on differential interest rates does not explain the motivations for foreign direct investment (FDI). According to hymer, there are two main determinants of Foreign Direct Investment (FDI) where an imperfect market structure is the key element.

The first is the firm-specific advantages, which are developed at the specific companies, home country and, profitably, used in the foreign country. The second determinant is the removal of control where Hymer wrote: "When firms are interconnected, they compete in selling in the same market or one of the firms may sell to the other," and because of this "it may be profitable to substitute centralized decision-making for decentralized decision-making". The second phase is his neoclassical article in 1968 that includes a theory of internationalization and explains the direction of growth of the international expansion of firms. In a later stage, Hymer went to a more Marxist approach where he explains that MNC as agents of an international capitalist system causing conflict and contradictions, causing between other inequality and poverty in the world. Hymer is the father of the theory of MNE", and explains the motivations for companies doing direct business abroad. Among modern economic theories of multinationals and foreign direct investment are internalization theory and John Dunning's OLI paradigm. Dunning was widely known for his research in economics of international direct investment and the multinational enterprise international business topics. Hymer and Dunning are considered founders of international business as a specialist field of study. 1.3 ADVATAGES OF INTERNATIONAL BUSINESS 1. A Country can Consume those Goods which it cannot Produce: Commodities produced in India can be found in England and vice-versa. This helps England to enjoy those goods, which he cannot produce in his country. 2. The Productive Resources of the World are Utilized to the Best Advantage of the Country: Every country expects highest return from its resources and this lead to fall in price and better goods for consumption. 3. International Business Promotes Peace and Friendship:

No country however big it may be can claim to be self-sufficient. It will have to depend on other country for something. Free international business is essential for goodwill, peace and to meet any requirements of the nation. 4. Heavy Price Fluctuations are Controlled: If the price of any commodity goes up, the goods can be imported from abroad and its price can be brought down. 5. Countries Economically Backward but Rich in Resources may Develop their Industries: Indian people are opening industries with the idea of sending produced goods to foreign countries.

1.4 Dis-Advantages of International Business: 1. Dependence on Foreign Business Creates Difficulties in Times of Need: In the past, India had to face great trouble and difficulty in getting ordinary and simple articles like medicine and tools during need or during the war. 2. The Extreme Specialization that makes a Country Depend on One or Two Industries is bad Because if at any time the industry suffer, the economic life of the people would be endangered. 3. Countries which Sell Raw Materials and Buy Manufactured Goods in Return are always Loser and cannot improve the Country Economy: The standard of living of the people cannot improve. International business under such conditions leads more to discontent and unrest than to peace and goodwill. 4. International Business may Completely Exhaust a Country’s Natural Resources like Coal and Oil, which are Irreplaceable:

These goods are exported just for the sake of earning money and profit. However, the country will have to suffer in the long run when their source will be dried up completely. 5. Imports of Harmful Drugs and Luxuries Goods ruin the Health of the Nation: For this, people blame international business, which is not correct.

RISK IN INTRERNATIONAL BUSINESS • OPERATIONAL RISK A company has to be conscious about the production costs to not waste time and money. If the expenditures and costs are controlled, it will create an efficient production and help the internationalization. Operational risk is the prospect of loss resulting from inadequate or failed procedures, systems or policies. Employee errors. Systems failures. Fraud or other criminal activity. Any event that disrupts business processes. • POLITICAL RISK How a government governs, a country can affect the operations of a firm. The government might be corrupt, hostile, totalitarian, etc., and has a negative image around the globe. A firm’s reputation can change if it operates in a country controlled by that type of government. In addition, an unstable political situation can be a risk for multinational firms. Elections or any political event that is unexpected can change a country's situation and put a firm in an awkward position. Political risks are the likelihood that political forces will cause drastic changes in a country's business environment that hurt the profit and other goals of a business enterprise. Political risk tends to be greater in countries experiencing social unrest. When political risk is high, there is a high probability that a change will occur in the country's political environment that will endanger foreign firms there. Corrupt foreign governments may also take over the company without warning as seen in Venezuela. • TECHNOLOGICAL RISK

Technological progress brings many benefits, but some disadvantages, including "lack of security in electronic transactions, the cost of developing new technology ... the fact that this new technology may fail, and, when all of these are coupled with the outdated existing technology, [the fact that] the result may create a dangerous effect in doing business in the international arena. • ENVIRONMENTAL RISK Companies that establish a subsidiary or factory abroad need to be conscious about the externalizations they will produce, as some may have negative effects such as noise or pollution. This may cause aggravation to the people living there, which in turn can lead to a conflict. People want to live in a clean and quiet environment, without pollution or unnecessary noise. If a conflict arises, this may lead to a negative change in customer's perception of the company. Actual or potential threat of adverse effects on living organisms and environment by effluents, emissions, wastes, resource depletion, etc., arising out of an organization's activities is considered risks of the environment. As new business leaders come to fruition in their careers, it will be increasingly important to curb business activities and externalizations that may hurt the environment. • ECONOMIC RISK These are the economic risks explained by Professor Okolo, "This comes from the inability of a country to meet its financial obligations. The changing of foreign-investment or/and domestic fiscal or monetary policies. The effect of exchange rate and interest rate make it difficult to conduct international business. Moreover, it can be a risk for a company to operate in a country and they may experience an unexpected economic crisis after establishing the subsidiary. Economic risks is the likelihood that economic management will cause drastic changes in a country's business environment that hurt the profit and other goals of a business enterprise. In practice, the biggest problem arising from economic mismanagement has been inflation. Historically many governments have expanded their domestic money supplying misguided attempts to stimulate economic activity. • FINANCIAL RISK

According to Professor Okolo: "This area is affected by the currency exchange rate, government flexibility in allowing the firms to repatriate profits or funds outside the country. The devaluation and inflation will also affect the firm's ability to operate at an efficient capacity and still be stable. Furthermore, the taxes that a company has to pay might be advantageous or not. It might be higher or lower in the host countries. Then "the risk that a government will indiscriminately change the laws, regulations, or contracts governing an investment—or will fail to enforce them—in a way that reduces an investor’s financial returns is what we call 'policy risk.' TERRORISM Terrorism is a voluntary act of violence towards a group(s) of people. In most cases, acts of terrorism is derived from hatred or ignorance of religious, political and cultural beliefs. An example was the infamous 9/11 attacks were labeled as terrorism due to the unacceptable of western culture by the radical Islamic groups. Terrorism not only affects civilians, but it also has a negative impact towards corporations and other businesses. These impacts may include physical vandalism or destruction of property, sales declining due to frightened consumers and governments issuing public safety restrictions. Firms engaging in international business will find it difficult to operate in a country that has an uncertain assurance of safety from these attacks. • BRIBERY Bribery is the act of receiving or soliciting of any items or services of value to influence the actions of a party with public or legal obligations. This is considered to an unethical form of practicing business and can have legal repercussions. Firm that want to operate legally should instruct employees to not involve themselves or the company in such activities. Companies should avoid doing business in countries where unstable forms of government exist as it could bring unfair advantages against domestic business and/or harm the social fabric of the citizens.

3.1

SOCIAL MEDIA

INTRODUCTION Social media marketing is the use of social media platforms and websites to promote a product or services. Most of these social medial platforms have their own built-in data analytics tools, which enable companies to track the progress, success and engagement of ad campaigns. companies address a range of stakeholders through social media marketing including current and potential customers current and potential employees, journalists, bloggers and the general public, On a strategic level, social media marketing includes the managements of the implementation of a marketing campaign, governance, setting the scopes (e.g. more active or passive use) and the establishment of firm’s desired social media “culture and tone”. To use social media effectively, firms should allow customers and internet users to post user-generated content (e.g., online comments, products view etc.)

PURPOSE AND TACTICS One of the main purpose of employing social media in marketing as communication tool that makes the companies accessible to those interested in their product and makes them visible to those who have no knowledge of their products. These companies use social media to create buzz, and learn from target customers. It`s the only form of marketing that can finger customers at each and every stage of the customer decision. International Business through social media has other benefits as well of top 10 factors that correlate with strong organic search, seven are social media dependent. This mean that if brand are less or non- active on social media, they tend to show up less on Google searches. While the platforms such as Twitter, Facebook, and Google+ have a larger amount of monthly users, the visual media sharing based mobile platforms,

however, garner a higher interaction rate in comparison and have registered the fastest growth and have changed the ways in which customers engage with brand content. Instagram has an interaction rate of 1.46% with an average of 130 million users monthly as opposed to twitter, which has a .03% interaction with an average of 210 million monthly users. Unlike traditional media that are often cost- prohibitive to many companies. To this end, companies make use of platforms such as Facebook, Twitter, You tube and Instagram to reach audience much wider than the through the use of traditional print, TV or radio advertisement alone at the fraction of cost, as most social networking sites can be use at little or no cost (however, some websites charge companies for premium services). This has changed the ways that companies approach to interact with customers, as a substantial percentage of customer interaction are now being carried out over online platforms with media platforms with much higher visibility. Customers can now post reviews of products and services, rate customer services, and ask question or voice concern direct with the companies through social media platforms. Thus social media marketing used by business in other to build the relationship of trust with customers. To aim these companies may also hire personal to specifically handle these social media interactions, who usually report under the title of online community managers.

Google analytics on social media

While it is not technically a “social media analytics tool,” Google Analytics (GA) is one of the best ways to track social media campaigns and even help you measure social ROI. You likely already have GA setup on your website to monitor and analyze your traffic. However, did you know you can access and create reports specifically for social media tracking? For instance, you can see how much traffic comes to your website from each social network, or use UTM parameters to track specific social media campaigns. • Networks: All • Price: Free • Recommended for: Any brand with a website. Google Analytics Alternatives While Google Analytics is the standard for analytics (and our personal recommendation), there are some alternatives: • Adobe analytics: Adobe analytics is an enterprise solution, primarily for brands that need advanced segmentation and very specific sets of data. • Stat Counter: Stat Counter is on the other end of the spectrum. It is a very simplified website analytics tool that will show you information on your traffic including basic info on social media traffic.

3.2

Literature Review Do not Waste Your Time: six (6) Ways to Be More Efficient on Social Media Most marketing strategies begin with a few things: content, products… and social media. While using social media is not required to grow a business, it can certainly help in most cases. An overwhelming 92% of marketers in 2014 reported that they place high value on social media. In the modern marketing landscape, social media allows you to reach almost anyone no matter what niche your business is. However, just because marketers recognize the importance of social media does not mean they know how to use it effectively. Many spend several hours a week on it to get just a little return on investment (ROI). Statista sent out a survey to find out how much time per week marketers spend on social media:

As you can see, more and more marketers are spending large amounts of time on social media (16+ hours per week) each year. It is not just marketers either—CEOs do it as well. Another survey found that 43% of CEOs spend more than 6 hours per week on social media. CEOs and marketers would not spend this much time on social media, week after week, year after year, unless it produced results. However, don’t you think that a CEO might have better things to do than send out Tweets and “like” posts on Facebook? I do. I cannot justify spending more than 6 hours a week on social media—the ROI just is not good enough. Yet, I still utilize social media to drive traffic to my blog posts and guest posts. I just do not spend more time than necessary.

In this post, I am going to share with you six different ways you can save time on social media so that you can focus on more important parts of your business. Here we go… 1. Batching always wins The best marketers, SEOs, entrepreneurs, and writers that I know all work in batches. Batching is a “productivity hack” that has been used for many years by businesses to improve efficiency in a variety of ways. The premise is simple: It helps because of these three main reasons: 1. It reduces transition time – Whenever you begin a task, it takes you a few seconds or minutes to figure out where you stand, what you need to do, and how you will start. When batching, you only focus on doing one task, so you eliminate all subsequent transition time wastage. 2. It simplifies things – Switching among many tasks throughout the day is exhausting. When you know you only have a few main tasks to do in a day (in larger batches, of course), it is less intimidating. 3. You can work faster – Switching among many tasks means you have to change your focus multiple times. Every time you switch your focus, you lose any momentum you have built up. You can never get “in the zone.” The one final benefit of batching is that it makes it more difficult to miss things. Batching allows you to schedule ahead so that you will not forget to do something important. In this case, it is a social media or blog post. There are a few ways that you can use batching to save time when it comes to social media. Your goal is to build a massive reservoir of social media post ideas that you can draw from as necessary. How do you come up with ideas? Well, it will depend on which social networks you want to focus your time on (more on that shortly).

2. Narrow your focus and save time

Marketers and entrepreneurs see opportunity If you see the potential in everything, that is a great trait to have. The problem that most of these people face (possibly you) is that they bite off more than they can chew. They try to tackle every problem and take advantage of every opportunity but soon find they are burnt out and making no real progress. If you spread yourself too thin, you cannot fully take advantage of any single opportunity. Start with one network, maybe two, and then add another after a few months if all is well. 4. Create a calendar or face the consequences Social media is incredibly easy to ignore. If you miss a few posts here and there, there will not be any immediate consequence. However, as I said before, consistency is the most important factor when it comes to social media success. A social media calendar (or schedule) is a necessity if you want to use social media to grow your business. The calendar will allow you to be consistent, keep on track, and track your results. Tracking your results is needed if you want to determine your progress and ROI. A social media calendar/schedule can be set up in any way you wish—it is up to you. However, I will show you a few different options to help you decide what you want yours to look like. Option 1 – Use a spreadsheet: Spreadsheets are incredibly versatile, which is why they can work for just about any business. I have seen some incredibly complicated social media calendar spreadsheets… Option 2 – Use Buffer: Buffer is an extremely popular social media tool that allows you to schedule posts with minimal effort. Once you have set up an account and are logged in, click on “Schedule.” Option 3 – Use Hootsuite: Another option is to use Hootsuite, which used to be the leader in social media tools until Buffer came along.

5. Monitor mentions with tools Instead of messing around with each individual network, you can use tools to find when a reader or customer mentions you. Usually, these are important messages to reply to, so it is a good idea to monitor them and then address them all in your scheduled sessions for social media. Option 1 – Search your brand with Mention.com: This tool is similar to Google Alerts but focuses on social media. Once you create an account, you enter a keyword (such as your brand name), and it will automatically monitor social media sites for any mentions. You can set it to send you a daily email of the results: Option 2 – Have mentions monitored automatically with Hootsuite: One thing that Hootsuite is still well known for is monitoring mentions. You can then see a live stream of all your mentions for keywords or your username in your main Hootsuite dashboard: 6. Templates are the cornerstone of efficiency A lot of social media work is repetitive. You will start to see that most top posts look the same and that most of your posts fall under only a few categories. A lot of tedious work can be avoided by using templates. Automate reports with a social media report template: If you have a boss to report to or regular meetings where you examine social media results, it is a good idea to create a social media report template.

This template should summarize your activity on social media as well as the results for a certain time. If you like, the one above, Buffer has generously shared it free.

4.1 METHOLOGY The quality and reliability of research study is dependent on the information collected in a scientific and methodological manner. Scientific planning of designing of research method is a blue print for any research study. Therefore, proper time and attention should be given in designing the plan of research. While proper definition of problem tells the researcher where he has to go, proper design tells him how he should go. Selection of methodology for a particular project was made easy by sorting out a number of alternative approaches, each of them having its own advantage and disadvantages. Efficient design is that which ensure that the relevant data were collected accurately. The researcher has to think about what procedure and techniques should be adopted in the study. He should arrive at the final choice by seeing that the methodology chosen for project is indeed the best one, when compared with others. RESEARCH DESIGN Research design is the first and foremost step in methodology adopted and undertaking research study. It is overall plan for the collection and analysis of data in the research project. Thus, it is an organized, systematic approach to be the formulation, implementation and control of research project. In fact, a well-planned and well-balanced research design guards against collection of irrelevant data and achieves the result in the best possible way. SAMPLE DESIGN The universe of study being large, researcher has to resort to sampling method of data collection. On the basis of a section of the universe selected in a prescribed manner, one is able to deduce for the universe. For the sample results to be applicable on the universe, sample should be adequately chosen so to make it representative and reliable

4.2 DATA COLLECTION METHOD Data are the bricks with which the researcher has to make a house. While the quality of research findings depend on data, the adequacy of appropriate data in turn depends upon proper method of data collection. A number of methods are at the disposal of the researcher of which one has to select the most appropriate one for visualizing the research objective. Thus, he has to see that the method adopted is compatible with the resources and research study. Primary Data: Data, which are collected fresh and for the first time and thus happens to be original in character. Primary data are gathered for specific purpose. Secondary data: Data that collected from primary data i.e., they are already exit somewhere. For the purpose of our study, we collected both the data. For the purpose of this study, we collected: Primary data through (a) Questionnaire method (b) Interview method. FACEBOOK Facebook pages are for more detailed than twitter account. They allow a product to provide videos, photos, and longer description as other followers can comment on the product pages for other to see. Facebook can link back to the product’s twitter pages as well as send out events reminder. As of May 2015, 93% of business marketers use Facebook advertising. INSTAGRAM In May 2014, Instagram has over 200 million users. The user engagement rate of Instagram as was 15 times higher than of Facebook and 25 times higher than Twitter. According to Scott Galloway, the founder of L2 and professor marketing at New York University’s stern school of business, latest studies estimate that 93% of prestige brand have an active presence on Instagram and include their marketing mix.

When it comes to brand and business, Instagram’s goals is to help the companies to reach their respective audience through captivating imagery in a rich, visual environment. Moreover, Instagram provides platforms where user and company can communicate publicly and directly, making itself an ideal platform for companies to connect with their current and potential customers.

5.1 QUESTIONAIRE The survey is been conducted for the research regarding international business through social media (your participation will greatly help to obtain the result) Name_______________________________

Gender: male

Female

1. How long have you been using social media?

o 1-2 years o 2-3 years o 3-4 years o 4-5 years o 5 years +

2. Which of the following social media platform do you use? o Facebook o Twitter

o YouTube o LinkedIn o Myspace o Instagram Other (please specify)

3. For what purpose do you use social media? (Select as many choices as you like) o To advertise products or services o To gain feedback from customers o To increase brand awareness o To analyze the competition o For business to business purpose e.g. LinkedIn o To engage (in conversation) Other (please specify)

4. How useful do you think that social media has been for you? o Very useful o Kind of useful o Don’t know o Not very useful o useless 5. How many times has social media helped you to make a market specific product or service? o0 o1 o2 o3

o4 o5 o 5+