International business functional strategies? I International marketing: is the process of satisfying consumer¶s needs and wants internationally by supplying the goods and services are desired by them at the right place and right time. The process of international market starts with assessment of international market customers needs and wants and finally its end up with the supply of good and services that involving right marketing mix Steps: I Market analysis: Market size: pop ulation and purchasing power Market segmentation: geographic, psychographic and demographic. Environmental analysis: cultural legal and techonological Economic factors: inflation rate, intereston rate, availab ility of credit, exchange rate, political and legal factors. II product strategies: the organization can either follow a product strategy in which it market the same throughout the world with little or no modification or it can introduce or modified product for markets as per the specific requirements. Eg: same product photo copies Benefit: economies of scale and experience curve effect location of economics. Different products: the important reason for demand of different products in different markets The differences in economic condition, the differences in culture, the differences in product standard, the differences in product life cycle. III pricing strategies: the most important part of pricing strategy in the long seen is that price changed should be low enough to gain market s hare but high enough for generating adequate profit. The pricing strategy is much more complex in international marketing due to following reasons: I regulatory influence on pricing: the govt regulation by firing minimum and maximum price WTO regulation that prohibit practice of dumping allow to impose anti dumping duties. II market diversity: it leads to different customer perception it leads to price discrimination, demand elasticity also influence. III currency fluctuations: it may contribute the currency transition between the countries may contribute unexpected results. IV price escalation: with reference to increase in a products price on account of transportation cost, insurance, tariff longer channels of distribution, large middle man marine and special taxes. The effect of price escalation is that product which appears to be cost competitive at the s tage of production become less competitive or on competitive by the time they reach the target market. V strategic prices: market skimming, penetration, multi point pricing, cost pricing. IV distribution strategies: the different nations follow different distribution system which vary from each other mainly on account off. I retail concentration: fragmented, retail, s ystem, concentrate india fragmented. II channel length: I in some nations like japan, distribution system is very exclusive and the foreign organization find it very difficult to overcome the non tariff barriers. IV selection of distribution: while selecting the distribution organization, they are considering the following factors; I financial strength of distributors, II distributors relationship with customers and govt agency, III the other product line which the distributor carrier. II International human resource mgt IHR M refers to all activities like selection training and development compensation, performance appraisal and loabur relation which an organization carried out in order to efficiency utilized its human resources. Which are special geographically across the nation. IHR M is more complex because of the involvement of different labour market international labour mobility issues and different cutlers. IHR M analysis: I selection: the organization involved in international business have to select people for its d omestic and foreign operations. The organization adopts 3 types of approaches for selecting employees namely I geocentric II ethnocentric III polycentric. Selection of expatriate managers: Another important issue in the selection process is selection of expatriate managers. Those people work for the organization in the nations to which they do not belong. They could either be the citizen of the parent country o forganistion or a third country. Criteria for selecting expatriate manager: I willing ness and motivation, II competence, III cross cultural adoption, IV mental physical skill. II training and development: A training: the org impact training on providing information and and experience related to the customers, culters and work habits of the people in which the expatriate manager has to work so as to ensure the sp ecific efficiency. i cultural training: in org traits to acquate the expatriate mangers with the culture of the host nations by way of the host nation by way of, 1 arranging lectures based by experts 2 handling experts 3 conducting familiarizing program 4 by field experience. ii language training: many org feel that language training guides the expatriate managers success. The language knowledge helps in follow ways. Iii practical training: it helps the expatriates managers and families to easily and quality adopt them in to the daily life of the host nations. B development: the objective of development is to increase the overall skill levels of managers so that they are able to manage the international affairs more successfully. The org arrange the development programs such as lectures, workshops, job rotation, rotation of managers through different nation in order to. 1 develop global mind s et in managers. 2 make expatriate managers realize the importance of domestic and foreign operations. 3 promote a unifing corporate culture. 4 update the expatriate m anagers with the last d evelopment. C companstion: generally while deciding about the expatriate managers compensation packages org consider the following factors, 1 basic salary. 2 allowances: housing allowance, medical allowance, educational allowance, hardship allowance: insome nations nature may not be sue to the expatriate managers because of different climate conditions poor infrastructural development talk of basic entities as compared to home nation. In such cases the org offers allowances that is called. 3 foreign service premium. 4 transation: if the org does not the proper care of it usually expatriate managers responsible to paying two tax bills i host nations ii home nations. IV performance appraisal: herein many org performance appraisal is done by head quarter people who are assisted by either on site local managers or former expatriate managers . they are measuring the performance based on the objective information pertaining to productivity, profitability make share growth rate. Repatriation of expatriate: repatriation refers to the return of expatriate to their home after their completion of their foreign assignment. The most of the repatriate employees feel disturbance sturbance in organizational environment. environment. The environment the reason behind that, 1 the problem related with personal finance, 2 the problem related with new adjustment with home nations social working life, 3 problems the readjustment with home nations working environment. V labour relation: III international production: issued involved in international production: the effective and effective mgt of production of goods and services is an inhabitable for the success of organization those involved in international business. i innovation: the effective of international production strategy is co ncerned ncerned with the development with the new services, new process, a part form the efficient manufacturing and supply. ii costs: the org can handle this issues by adopting new technology or practice or design which results in reduction of cost and also through the location economics org can reduced cost. Eg Philips. iii quality: quality is ess ential for any org for survival in the market. We can use this in benefit through implementation of innovative concept such as TQM,JIT, with long term perspecitive.
iv speed to market: it is necessary in today fast changing international environment because most of the companies are expert in introducing innovative products. v inventory: the issue of inventory control has at treated the attention of org on amount of capital that get located up in it. vi location of production activity: an org c an look out 3 important factors while taking the decisions regarding the locations of the production activity. IFM as the process that covers the following activity, 1 investment, 2 financing decision, 3 mgt of global cash flow, 4 mgt of foreign exchange risk, i investment decision: in order to decide about where to invest and where not invest, the org looks at environmental factors and base on that they develop an idea about tha benefits cost risk associated with the investment. ii capital budgeting: it is a technique to measure the lead of benefits cost or risk and it helps to mgt ot compare the different projects and selection of feasible projects. Org developed this base on the co ncept cash flows such as cash flow, inflation rate, discount rate, in order to find out the NPV while doing international business capital budgeting should considered some factors such as; 1 the cash flows occurring form the project must be analysed form the perceptive of present org. 2 restriction on repatriation o f fund. 3 political risk. 4 economic risk. iii financing decision: the org has to decide the source of financing and structure of financing. 1 source of financing: in case of source of financing the org has to divide that whether it will be using internal sources or external sources or generating the required fund. In case of internal source of financing org have the following options, 1 subsidiary rise the fund, 2 subsidiary can gave the funds from parent organization. 3 subsidiaries can get the funds from some other subsidiaries in same nations or some another nations. Reason for using internal sources: 1 to minimize the cost of funding, 2 to make use of org blocked funds, 3 out of convenience. Reason for using external fund sources: 1 lack of fund in org internal sources, 2 legal requirements or restrictions o f the host or home nations. 3 strategic move of org. 2 financial structures: the org has developed structure of financing b deciding about the mix of debt equity. The org can raise the capital in the debt form either by taking low from bank or b y getting the finance from the euro currency market. International bond mark can be divided foreign bond and euro bond.equity market: org involved internal business can rise the capital from to equity market by following reasons; 1 venture capital, 2 by listing their stock on domestic and foreign exchange. 3 rising the capital through the depositary receipts. 3 mgt of global cash flows: in try to achieve the efficiency objectives. The org mainly concentrated on reducing cash balances, reducing transaction cost and reduces taxes globally. Reducing cash balances: it refers the amount of cash balances that an org whole for meeting normal can org. invest the excess fund which ae over and above the required cash balance in money market with relatively low rate of interest by ensuring its liquidity. Reducing transaction cost: it is related to the issue of inter org transaction cost. This consist of two elements (A) commission which is paid by the org to the foreign exchange dealers for the conversion of currency. (B) transfer fee which is paid to the bank for moving the cash from one location for another. The org can reduce the transaction cost by setting up a central clearing account. Reducing taxes globally: corporate tax is difference in different nations and varies from industry to industry so the org are different approaches to minimize the total tax while the transferring the fund globally. This is the major approaches are; Dividend remittance: transferring the fund by way of payment of dividends. This approach becomes less attractive if the host nation govt impose high tax on dividend payment or there is an upper dividend on the total amount that could be remitted by way of dividend in years. Royalty payments and fees: the royalty payment is the money paid to the owners of technology patents, brand name for the use of same by org fee the providing managerial and technical expertise. Transfer pricing: it is the internal price at which the goods and services are transferred between different units of the same org. normally it is assumed that the transfer pricing will be the market base price or it will be slightly less than the market price on account of the fact that certain discount will be given to intra organizational dealing. Fronting loans: a loan which is given by the parent org to the subsidiary in th ebost nation, indirectly through the co mmercial bank is known as fronting loan. Tax havens: A tax haven is a nation or jurisdiction with no or very low rate of income tax. Eg switerzerland. 4 mgt of foreign exchange risk: 1 transation exportion: it is extending to which an org paying bills and collecting receivables from individual transaction get affected due to fluctuation in the exchange rate.2 transaction exposure. 3 economic explosure.
