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talks about GTO

1. GLOBAL SUPPLY CHAIN OPERATIONS

2. Global Business Environment Importance of International Business in the National economy: 1. To meet imports of industrial or human needs   2. Raw material of critical nature   3. Oil imports to keep the country on the move   4. Debt Servicing: It is necessary to aim at sufficient export earnings to cover both imports and debt servicing (Debt service is the cash that is required to cover the repayment of interest and principal on a debt for a particular period).   5. Government is keen on reducing the adverse Balance of Payment position  

3. Importance… 6. Profitable use of natural resources 7. Increase in employment opportunities  8. Increase in the standard of living: i.e. by exporting the producer improves the quality of the product by applying the latest technology and it is made available in exporting country. 9. Peace: International collaboration & closer cultural relations help in political peace between the countries. Countries have come closer on account of international marketing. In modern world export marketing is an inevitable part of business activity of a country.

4. https://www.youtube.com/watch?v=8d5d_HXGeMA https://www.youtube.com/watch?v=7_W-SV1jKvU https://www.youtube.com/watch?v=2Yuf_1hXHBg

5. Importance of Int’l Business for Individual firm Product in declining stage of Life Cycle in domestic market or when Product becomes obsolete in domestic market it may be in demand in foreign market or sold in foreign market. 2. High-tech oriented companies enter into less developed countries to skim the market. 3. International Market is vast and internal market is limited hence export volumes help manufacturers.

6. 4. Building-up of image and reputation in International Market as an expansion strategy. 5. Technical know-how for building the industrial base in the country. 6. Restrictions in domestic market force companies to view export as an alternative.

7. Importance… 7. To pay for import bill, Government pressurizes companies to export and earn valuable foreign exchange. Many firms go for overseas market for availing of incentives such as import facilities to modernize their plant. 8. Fulfill export obligation 9. To utilize installed capacity: If the installed capacity of the firm is much more than the level of demand of the product in the domestic market, it can export the surplus production. 10. Insufficiency of domestic demand: If the domestic demand for the product is not sufficient to consume the production, the firm can enter the foreign market and utilize its unutilized capacity.

8. 11.Reduce business risk- a diversified export business helps the exporting firm in minimizing the risk of sharp fluctuations in the domestic business  12. Economies of scale: mass production helps manufacturer to keep the price low in domestic and international markets. 13. With improved business and international business needs, the company spends more money to research and developmental activity. This also helps in improved standard of living.

9. Export Obligation Under the EPCG scheme, capital goods can be imported at 5 per cent duty against export obligation of eight times the duty saved to be fulfilled in eight years, with certain deviations regarding the quantum and period of export obligation in certain cases. It’s a certain period of time under which the exporter has to export the materials made by the goods he/she purchased under Advance Authorization.

10. Scope of International Business Overseas manufacturing   Working with local partners   Foreign Investments   Patents   Licensing/ Franchising agreements- Permitting a new party in a foreign country in order to produce and sell goods under your trademark, patents or copyrights in lieu of some fee is another way of entering IB. Eg. Of Licensing-Pepsi & Coke Eg. Of Franchising- McDonalds   Software / Services   Export & Import of Merchandise (tangible goods)

11. Import Vs Export trade IMPORT EXPORT         Loss of jobs in importing country. Improved job opportunity.         Competition to domestic industry Increased business / profit opportunity.       Drain of valuable foreign exchange Earns valuable foreign exchange         Affects BOP Improves BOP  

12. Problem areas in International Business Business Environment Choosing export product & export market. Identifying reliable buyer or supplier is difficult task. International market research is very expensive and time consuming. Cost of participation in trade fairs is very high. Overseas visits for business promotion are too expensive. Language and cultural barriers. Majority of Indian exporters are SMEs therefore they have very limited finance available for international business promotion. Government of India has taken initiatives to assist SMEs through various trade promotion organizations.

13. Risks in International Business Marine risk (risk during transportation) Non payment by buyer  Exchange rate variation  International contracts and selection of appropriate INCOTERMs Rules & regulations of exporting / importing countries  Political and economic risk Lack of knowledge on Global trade operations and international logistics.