International Financial Management
International Financial Management
International Financial Management
Management
Why do nations trade?
What is the basis of such trade?
What are the benefits/gains derived
from such trade?
Is there any pattern of such trade?
What should the nation import and
export?
1
International trade
“International trade consists of transactions between
residents of different countries.”
-Wasserman and Haltman
“ Regions and nations specialize and trade with each
other for the same reason that individuals specialize
and trade. Some are better fitted by temperament
for one work rather than another; one is a better
gardener, the other better teacher, while the third
proves an excellent doctor. The gardener would
prove a poor doctor and so on. Thus the gain from
specialization is clear.”
-Bertil Omlin
2
Why go International?
3
2). Growth opportunities.
3). Domestic market constraints.
4). Competition.
5). Government policies and regulations.
6). Monopoly power.
“Exclusive market information is another proactive
stimulus.”
-- Czinkota and Ronkainen
7). Spin-off benefit ‘white-skin advantage’- Mr. B.K
Khaitan.
8). Strategic vision.
4
International Orientations
6
Internationalization stages.
International Company
Multinational Company
Entry and
Operating decisions
1). International
Business Decisions. Promotion Product
2). Market Selection
Decisions Marketing Mix
3). Entry and Decisions
Operating Decisions. Price
4). Marketing Mix Distribution
Decisions. Marketing
5). International Organization
9
Organization Decision Case 1. The Cola Impact
Decisions.