Lecture 1

Question 1

What is International Business?

Answer 1

IB consists of transactions carried out across national borders to satisfy the objectives of business organisations

Question 2

What are the objectives of International Expansion?

Answer 2

• Expanding the potential market
• Achieving a satisfactory return on investment
• Counteracting competitor moves
• Obtaining location advantages
• Personal ambition

Question 3

What is globalisation?

Answer 3

• Globalisation refers to the shift toward a more integrated and interdependent world economy.

Question 4

What is driving globalisation?

Answer 4

• The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II
  – since 1950, average tariffs have fallen significantly and are now at 4 percent.
  – countries have opened their markets to FDI.
• Technological change
  – microprocessors and telecommunications
  – the Internet and World Wide Web, cheaper and easier for business.
  – transportation technology, quick.

Question 5

What is a multinational enterprise?

Answer 5

A multinational enterprise (MNE) is any business that has productive activities in two or more countries.