BISNIS INTERNASIONAL: APA ITUAJI DEDI MULAWARMAN - Pengantar Kuliah Bisnis Internasional Minggu 223 Pebruari 2015
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BISNIS INTERNASIONAL ITU…
Berorientasi pada kinerja aktivitas TRADE dan INVESTMENT perusahaan lintas batas negara
Firms organize, source, manufacture, market, and conduct other value-adding activities on an international scale. They seek foreign customers and engage in collaborative relationships with foreign business partners.
While international business is performed mainly by individual firms, governments and international agencies also undertake international business activities. Firms and nations exchange many physical and intellectual assets, including products, services, capital, technology, know-how, and labor.
PERTUMBUHAN & GLOBALIOSASI
The growth of international business activity coincides with the broader phenomenon of globalization of markets. The globalization of markets refers to the ongoing economic integration and growing interdependency of countries worldwide.
While internationalization of the firm refers to the tendency of companies to systematically increase the international dimension of their business activities, globalization refers to a macro trend of intense economic interconnectedness between countries.
Globalization is associated with the internationalization of countless firms and dramatic growth in the volume and variety of cross-border transactions in goods, services, and capital flows. It has led to widespread diffusion of products, technology, and knowledge worldwide.
GLOBALISASI PASAR
The globalization of markets is evident in several related trends. First is the unprecedented growth of international trade. In 1960, cross-border trade was modest—about $100 billion per year. Today, it accounts for a substantial proportion of the world economy, amounting to some $13 trillion annually—that is, $13,000,000,000,000! Second, trade between nations is accompanied by substantial flows of capital, technology, and knowledge. Third is the development of highly sophisticated global financial systems and mechanisms that facilitate the cross-border flow of products, money, technology, and knowledge. Fourth, globalization has brought about a greater degree of collabo- ration among nations through multilateral regulatory agencies such as the World Trade Organization (WTO; www.wto.org) and the International Monetary Fund (IMF; www.imf.org).
TRADE & INVESTMENT
The most conventional international business transactions are:
International Trade
International Investment.
INTERNATIONAL TRADE
Refers to an exchange of products and services across national borders. Trade involves both products (merchandise) and services (intangibles). Exchange can be through exporting, an entry strategy involving the sale of products or services to customers located abroad, from a base in the home country or a third country.
Exchange can also take the form of importing or global sourcing—the procurement of products or services from suppliers located abroad for consumption in the home country or a third country. While exporting represents the outbound flow of products and services, importing is an inbound activity.
Both finished products and intermediate goods, such as raw materials and components, are subject to importing and exporting.
INTERNATIONAL INVESTMENT
Refers to the transfer of assets to another country or the acquisition of assets in that country. These assets include capital, technology, managerial talent, and manufacturing infrastructure. Economists refer to such assets as factors of production. Trade implies that products and services cross national borders. By contrast, investment implies the firm itself crosses borders to secure ownership of assets located abroad.
The two essential types of cross-border investment are:
international portfolio investment (IPI)
foreign direct investment (FDI)
IPI & FDI
International portfolio investment (IPI) refers to the passive ownership of foreign securities such as stocks and bonds for the purpose of generating financial returns. It does not entail active management or control over these assets. The foreign investor has a relatively short-term interest in the ownership of these assets.
Foreign direct investment (FDI) is an internationalization strategy in which the firm establishes a physical presence abroad through acquisition of produc- tive assets such as capital, technology, labor, land, plant, and equipment. It is a foreign- market entry strategy that gives investors partial or full ownership of a productive enterprise typically dedicated to manufacturing, marketing, or management activities. Investing such resources abroad is generally for the long term and involves extensive planning.
WHO PARTICIPATES?
Individual Firms (MNC’s - SME’s - NGO’s)
Government Firms
International Agencies (WB-IMF-WTO, etc)
14
140
14
4
1
5
15
15
139
2
1
2 26
1
1210
40 12
1
1
17
1
2
9
1
6
3714 68
86
2
12Canada
United States
Mexico
Brazil
Russia
Europe
China Japan
Taiwan
Indonesia
Australia
SouthKorea
India
Exhibit 1.7 Geographic Distribution of the Headquarters of the World's 500 Largest MNEsSOURCE: From Fortune, © 2008 Time Inc. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of the Material without express written permission is prohibited.
How Does International Business Differ from Domestic Business? 11
dimension of culture. In addition to facilitating communication, language is a windowon people’s value systems and living conditions. For example, Inuit (Eskimo) languageshave various words for snow, while the South American Aztecs used the same basicword stem for snow, ice, and cold. When translating from one language to another, it isoften difficult to find words that convey the same meanings. For example, a one-wordequivalent to aftertaste does not exist in many languages. Such challenges impede effec-tive communication and cause misunderstandings. Miscommunication due to culturaldifferences gives rise to inappropriate business strategies and ineffective relations withcustomers. Cross-cultural risk most often occurs in encounters in foreign countries.However, the risk also can occur domestically, as when management meets with cus-tomers or business associates who visit company headquarters from abroad.
Country risk (also known as political risk) refers to the potentially adverse effects oncompany operations and profitability caused by developments in the political, legal, andeconomic environment in a foreign country. Country risk includes the possibility of for-eign government intervention in firms’ business activities. For example, governmentsmay restrict access to markets, impose bureaucratic procedures on business transactions,and limit the amount of income that firms can bring home from foreign operations. Thedegree of government intervention in commercial activities varies from country tocountry. For example, Singapore and Ireland are characterized by substantial economicfreedom—that is, a fairly liberal economic environment. By contrast, the Chinese andRussian governments regularly intervene in business affairs.6 Country risk also includeslaws and regulations that potentially hinder company operations and performance. Crit-ical legal dimensions include property rights, intellectual property protection, product li-ability, and taxation policies. Nations also experience potentially harmful economicconditions, often due to high inflation, national debt, and unbalanced international trade.Indeed, the global financial crisis plunged many nations into a deep recession in 2009.
Currency risk (also known as financial risk) refers to the risk of adverse fluctuationsin exchange rates. Fluctuation is common for exchange rates—the value of one currency
Country risk Exposureto potential loss or adverseeffects on companyoperations and profitabilitycaused by developments ina country’s political and/orlegal environments.
Currency risk Potentialharm that arises from changesin the price of one currencyrelative to another.
CommercialRisk
CountryRisk
Cross-CulturalRisk
Currency(Financial) Risk
Risks inInternational
Business
• Cultural differences• Negotiation patterns• Decision-making styles• Ethical practices
• Weak partner• Operational problems• Timing of entry• Competitive intensity• Poor execution of strategy
• Currency exposure• Asset valuation• Foreign taxation• Inflationary and transfer pricing
• Harmful or unstable political system• Laws and regulations unfavorable to foreign firms• Inadequate or underdeveloped legal system• Bureaucracy and red tape• Corruption and other ethical blunders• Government intervention, protectionism, and barriers to trade and investment• Mismanagement or failure of the national economy
Exhibit 1.6 The FourRisks of InternationalBusiness
1. Cross Cultural RiskCultural differencesNegotiation PartnersDecision Making StylesEthical Practices
2. Country RiskHarmful or unstable political SystemLaws and RegulationInadequate or underdeveloped legal systemCorruption and other ethical blundersGovernment intervention, protection,
and barriers to trade and investmentMismanagement or failure of the national economy
3. Country (Financial) RiskCurrency expossureAsset ValuationForeign TaxationInflationary and Transfer Pricing
4. Commercial RiskWeak PartnerOperational ProblemsTiming of entryCompetitive intensityPoor Execution of strategy
4 RISK OF INTERNATIONAL
BUSINESS
WHY DO FIRMS INTERNATIONALIZE?
Seek opportunities for growth through market diversification.
Earn higher margins and profits.
Gain new ideas about products, services, and business methods.
Better serve key customers that have relocated abroad.
Be closer to supply sources, benefit from global sourcing advantages, or gain flexibility in product sourcing.
Gain access to lower-cost or better-value factors of production.
Develop economies of scale in sourcing, production, marketing, and R&D
Confront international competitors more effectively or thwart the growth of competition in the home market.
Invest in a potentially rewarding relationship with a foreign partner.
WHY DO FIRMS INTERNATIONALIZE?
At the broadest level, companies internationalize to enhance competitive advantage and to seek growth and profit opportunities.
WHY DO FIRMS INTERNATIONALIZE?
FORTUNE 2012 LIST TOP 10 COMPANIES PER 31 MARET 2012
Fortune Global 500 1
Fortune Global 500The Fortune Global 500, also known as Global 500, is an annual ranking of the top 500 corporations worldwide as
measured by revenue. The list is compiled and published annually by Fortune magazine.
Until 1989 it listed only non-US industrial corporations under the title "International 500", while the Fortune 500
contained and still contains exclusively US corporations. In 1990, US companies were added to compile a truly
global list of top industrial corporations as ranked by sales. Since 1995, the list has had its current form, listing also
top financial corporations and service providers by revenue.
From 2001 to 2011, there has been significant change in the geographical distribution of the companies in the Global
500 rankings. The number of North American based companies have reduced from 215 in 2001 to 146 in 2011,
whereas the contribution of Asian based companies have increased rapidly from 116 in 2001 to 172 in 2011. The
share of European based companies have increased marginally from 158 to 161 over the decade.[1]
ControversyIt has been reported that several inconsistencies exist in Fortune's ranking of cities with "the most Fortune 500
headquarters." On June 3, 2011, the Atlanta Business Chronicle stated examples of Fortune including regional
headquarters for some cities, not including regional headquarters for other cities, and in some cases, not including
headquarters that are physically located inside a city limit.[2]
Fortune 2012 listThe rankings, which have been released by the magazine at its website, appear in the July 23, 2012, issue of the
magazine.
The following is the list of top 10 companies, as published on 9 July 2012. It is based on the companies' fiscal year
ended on or before 31 March 2012.[3]
Rank Company Country Industry 2011 revenue in USD
1 Royal Dutch Shell Netherlands† Petroleum $484.4 billion
2 ExxonMobil United States Petroleum $452.9 billion
3 Walmart United States Retail $446.9 billion
4 BP United Kingdom Petroleum $386.4 billion
5 Sinopec China Petroleum $375.2 billion
6 China National Petroleum Corporation China Petroleum $352.3 billion
7 State Grid Corporation of China China Power $259.1 billion
8 Chevron United States Petroleum $245.6 billion
9 ConocoPhillips United States Petroleum $237.2 billion
10 Toyota Japan Automobiles $235.3 billion
† While Fortune lists Shell as a Dutch company, the company itself asserts that it is both Dutch and British.[4]
TOP 10 PROFITABLE COMPANIES PER 31 MARET 2012
Fortune Global 500 2
Breakdown by countryThis is the list of the top 17 countries, with the most Global 500 companies.[5]
Rank Country Companies
1 United States 132
2 China 73
3 Japan 68
4 France 32
Germany 32
6 United Kingdom 26
7 Switzerland 15
8 South Korea 13
9 Netherlands 12
10 Canada 11
11 Italy 9
Australia 9
13 Brazil 8
India 8
Spain 8
16 Russia 7
17 Taiwan 6
148 companies are located in the European Union.
ProfitabilityThis is the list of top 10 most profitable corporations in the world as published on 9 July 2012. It is based on thecompanies' fiscal year ended on or before 31 March 2012.[6]
Rank Company Country 2011 profit in USD
1 Gazprom Russia $44.4 billion
2 ExxonMobil United States $41.6 billion
3 Industrial and Commercial Bank of China China $41.6 billion
4 Royal Dutch Shell Netherlands† $30.9 billion
5 Chevron United States $26.9 billion
6 China Construction Bank China $26.1 billion
7 Apple United States $25.9 billion
8 BP United Kingdom $25.7 billion
9 BHP Billiton Australia †† $23.6 billion
10 Microsoft United States $23.2 billion
† While Fortune lists Shell as a Dutch company, the company itself asserts that it is both Dutch and British.[4] †† While Fortune lists BHP Billiton as an Australian company, the company is a Dual Listed Company (DLC)
TOP 10 CORPORATE EMPLOYERS PER 31 MARET 2012
Fortune Global 500 3
comprising BHP Billiton Limited and BHP Billiton Plc. BHP Billiton was created through the DLC merger of BHPLimited (now BHP Billiton Limited) and Billiton Plc (now BHP Billiton Plc), which was concluded on 29 June2001. The headquarters of BHP Billiton Limited, and the global headquarters of the combined BHP Billiton Group,are located in Melbourne, Australia. BHP Billiton Plc is located in London, United Kingdom. Both companies haveidentical Boards of Directors and are run by a single management team. Shareholders in each company haveequivalent economic and voting rights in both companies. Hence, it has been referred to as an Anglo-Australiancompany in many places. [7]
Employee strengthThis is the list of top 10 corporate employers in the world as published on 9 July 2012. It is based on the companies'fiscal year ended on or before 31 March 2012.[8]
Rank Company Country 2011 Number of Employees
1 Walmart United States 2,200,000
2 China National Petroleum Corporation China 1,668,072
3 State Grid Corporation of China China 1,583,000
4 Sinopec China 1,021,979
5 Hon Hai Precision Industry Taiwan 961,000
6 China Post Group China 889,307
7 U.S. Postal Service United States 601,601
8 Volkswagen Germany 501,956
9 China Telecommunications China 491,447
10 Aviation Industry Corp. of China China 480,147
Fortune 2011 list- Breakdown by city and metropolitan areaThis is a breakdown by cities and metropolitan areas as determined by Fortune in the 2011 list.[9] Metropolitan areaswith at least three Global 500 companies are listed. The 2011 list does not include a list of cities sorted by Fortune500 companies. The list is instead counted from the country listings.
Rank City Country Number ofGlobal 500
companies (City)
Global 500revenues
$ millions (City)
Number ofGlobal 500
companies (Metro)
Global 500revenues
$ millions (Metro)
1 Tokyo Japan 47 $2,268,640 49 $2,430,053
2 Beijing China 41 $2,222,366 41 $2,222,366
3 Paris France 23 $1,285,432 31 $1,952,812
4 London United Kingdom 18 $1,170,270 22 $1,366,389[10]
5 New York United States 18 $955,291 27 $1,535,321[11]
6 Seoul South Korea 12 $640,586 13 $660,149
7 Osaka Japan 8 $376,607 10 $422,112
8 Toronto Canada 7 $197,294 9 $241,303[12]
9 Houston United States 6 $377,702 6 $377,702
9 Moscow Russia 6 $348,084 6 $348,084
Fortune Global 500 3
comprising BHP Billiton Limited and BHP Billiton Plc. BHP Billiton was created through the DLC merger of BHPLimited (now BHP Billiton Limited) and Billiton Plc (now BHP Billiton Plc), which was concluded on 29 June2001. The headquarters of BHP Billiton Limited, and the global headquarters of the combined BHP Billiton Group,are located in Melbourne, Australia. BHP Billiton Plc is located in London, United Kingdom. Both companies haveidentical Boards of Directors and are run by a single management team. Shareholders in each company haveequivalent economic and voting rights in both companies. Hence, it has been referred to as an Anglo-Australiancompany in many places. [7]
Employee strengthThis is the list of top 10 corporate employers in the world as published on 9 July 2012. It is based on the companies'fiscal year ended on or before 31 March 2012.[8]
Rank Company Country 2011 Number of Employees
1 Walmart United States 2,200,000
2 China National Petroleum Corporation China 1,668,072
3 State Grid Corporation of China China 1,583,000
4 Sinopec China 1,021,979
5 Hon Hai Precision Industry Taiwan 961,000
6 China Post Group China 889,307
7 U.S. Postal Service United States 601,601
8 Volkswagen Germany 501,956
9 China Telecommunications China 491,447
10 Aviation Industry Corp. of China China 480,147
Fortune 2011 list- Breakdown by city and metropolitan areaThis is a breakdown by cities and metropolitan areas as determined by Fortune in the 2011 list.[9] Metropolitan areaswith at least three Global 500 companies are listed. The 2011 list does not include a list of cities sorted by Fortune500 companies. The list is instead counted from the country listings.
Rank City Country Number ofGlobal 500
companies (City)
Global 500revenues
$ millions (City)
Number ofGlobal 500
companies (Metro)
Global 500revenues
$ millions (Metro)
1 Tokyo Japan 47 $2,268,640 49 $2,430,053
2 Beijing China 41 $2,222,366 41 $2,222,366
3 Paris France 23 $1,285,432 31 $1,952,812
4 London United Kingdom 18 $1,170,270 22 $1,366,389[10]
5 New York United States 18 $955,291 27 $1,535,321[11]
6 Seoul South Korea 12 $640,586 13 $660,149
7 Osaka Japan 8 $376,607 10 $422,112
8 Toronto Canada 7 $197,294 9 $241,303[12]
9 Houston United States 6 $377,702 6 $377,702
9 Moscow Russia 6 $348,084 6 $348,084
Fortune Global 500 4
9 Madrid Spain 6 $323,345 6 $323,345
9 Zurich Switzerland 6 $221,818 10 $438,811
9 Mumbai India 6 $207,156 6 $207,156
14 Amsterdam Netherlands 5 $261,933 12 $885,156[13]
14 Shanghai China 5 $165,751 5 $165,751
16 Munich Germany 4 $386,355 4 $386,355
16 Rome Italy 4 $283,454 4 $283,454
16 Atlanta United States 4 $184,416 4 $184,416
16 Essen (Rhine-Ruhr) Germany 4 $173,644 12 $680,567[14]
16 Brussels Belgium 4 $144,833 5 $181,130
16 Hong Kong HKG 4 $141,495 7 $252,227[15]
16 Frankfurt Germany 4 $140,929 6 $191,255
16 São Paulo Brazil 4 $135,406 4 $135,406
24 Stuttgart Germany 3 $213,108 3 $213,108
24 Mexico City Mexico 3 $169,776 3 $169,776
24 Milan Italy 3 $109,943 3 $109,943
24 Philadelphia United States 3 $94,643 5 $205,330
24 Taipei Taiwan 3 $90,537 7 $260,966
Notes[1] "A New Perspective on the Corporate World" (http:/ / money. cnn. com/ magazines/ fortune/ global500/ 2012/ global-company-growth/
?iid=smlrr). CNN Money, Fortune Magzine. . Retrieved 9 July 2012.[2] "Some cities rankings are overstated" (http:/ / www. bizjournals. com/ atlanta/ print-edition/ 2011/ 06/ 03/ fortune-500-list-overstates-atlantas.
html?page=all). Atlanta Business Chronicle. . Retrieved 28 October 2012.[3] "Global 500" (http:/ / money. cnn. com/ magazines/ fortune/ global500/ 2012/ full_list/ ). Fortune. . Retrieved July 9, 2012.[4] "Shell at a glance" (http:/ / www. shell. com/ home/ content/ aboutshell/ at_a_glance/ ). Royal Dutch Shell. . Retrieved 27 September 2011.[5] "Global 500 2012: Countries - Australia" (http:/ / money. cnn. com/ magazines/ fortune/ global500/ 2012/ countries/ Australia. html).
Fortune. . Retrieved July 9, 2012. Number of companies data taken from the "Pick a country" box.[6] "Top companies: Most profitable" (http:/ / money. cnn. com/ magazines/ fortune/ global500/ 2012/ performers/ companies/ profits/ ). .
Retrieved July 9, 2012.[7] "BHP" (http:/ / www. bhpbilliton. com/ home/ aboutus/ ourcompany/ Pages/ ourStructure. aspx). BHP Billiton. . Retrieved 10 July 2012.[8] "Top companies: Biggest employers" (http:/ / money. cnn. com/ magazines/ fortune/ global500/ 2012/ performers/ companies/ biggest/ ). .
Retrieved July 9, 2012.[9] "Global 500 2010" (http:/ / money. cnn. com/ magazines/ fortune/ global500/ 2010/ ). Fortune. . Retrieved July 10, 2010.[10][10] London refers to Greater London.[11][11] New York includes Bridgeport as part of New York-Newark-Bridgeport New York-New Jersey-Connecticut-Pennsylvania Combined
Statistical Area (CSA).[12][12] Toronto includes Waterloo as part of Greater Golden Horseshoe.[13][13] Amsterdam refers to Randstad.[14][14] Rhine-Ruhr refers to Rhine-Ruhr area.[15][15] Hong Kong includes Shenzhen and Guangzhou as part of Pearl River Delta
BREAKDOWN BY CITY AND METROPOLITAN AREA Metropolitan areas with at least three Global 500 Companies are Listed (Based on Fortune 2011 List)
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