Why International Business

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Complete Video Transcript

English (Automatic Captions)
0:01if you’re a business student you might ask
0:03why would I need to take a class in international business
0:07isn’t doing business pretty much the same regardless of where it is conducted
0:10sure I may have to get someone to translate for me or change money at the
0:14bank
0:14but a transaction is a transaction and people have been transacting across
0:18borders for centuries
0:19moreover you may have a cation done volunteer work or even been an exchange
0:24student in another country
0:25you recognize that there are differences but how does that really hinder me from
0:29doing business
0:30after all we’re all human and for the most part
0:34we all must produce and consume to stay alive besides how different can
0:38international business be from domestic business
0:40well it turns out that international business is often quite different from
0:44doing business
0:45in your home country
0:47international businesses technically defined as all commercial transactions
0:51including sales investments and transportation
0:55take place between two or more countries in other words
0:58it is the active doing business across national borders
1:01the reality is that when you cross national borders
1:05many of the taken for granted assumptions about the way the business
1:08world works
1:08need to be reexamined take opening up a restaurant in the United States for
1:13example
1:14when you do business in the US there are many external factors that are fairly
1:18consistent across companies
1:20and even industries you assume that you can pay your employees which you want
1:24as long as you don’t go below the minimum wage and meet other basic
1:28work requirements all of which are readily available
1:31you can assume that these requirements will not change much over time
1:35you can also assume that the government will not mind if you open up another
1:38restaurant
1:39as long as you get a business permit and food license
1:42you’re good to go you also quickly assume it you’ll be able to either buy
1:46or rent a building for your restaurant and that you can choose the location
1:50you can search on your own or through a realtor and you’ll be able to negotiate
1:53the price
1:54you are also fairly familiar with the local tastes and preferences
1:58so you have an idea of what foods people will like essentially
2:01they like what you like you assume that the US dollar will hold its value
2:05and that people will be able to pay with cash or credit cards
2:08you assume that you will not be asked for bribes to opener continue with your
2:12business and that you will not need to pay protection money to organize crime
2:16leaders in your area
2:17finally you assume that you’ll be able to use social media
2:20and the internet advertising offer online reservations
2:23most that these assumptions may sound pretty silly
2:27of course I’ll be able to choose the location in my restaurant of course the
2:30US dollar will be an acceptable form of currency
2:33but when you do business internationally all of these assumptions need to be
2:37questioned and modified to address the realities of the global environment
2:41in an international setting things that were just assumptions can no longer be
2:45taken for granted
2:46and become paramount to your success these differences across nations could
2:50be as stark as the difference is one might find in doing business across
2:53planets
2:55while you may have thought about international business before you’ve
2:58probably never thought about
2:59interplanetary business yet believe it or not
3:02some people have and they are not all jet ir trekkies Pay Pal for example has
3:07a galactic initiative
3:08figure out what future space travelers with use as cash
3:12they admit that this would not be a reality anytime soon
3:15but nonetheless they want to be ready when space tourism another
3:18outta this world opportunities began a car
3:22well we still haven’t found intelligent life on other planets you can imagine
3:25that if we did
3:26there would be plenty of people wanting to do business with them these foreign
3:30planets would represent
3:31untapped markets for your products and services for instance
3:34let’s say you were successful watchmaker and that your watchers are sold all over
3:38planet earth
3:39if it were a possibility there are three main reasons why you might want to start
3:43selling the under
3:44first you have been doing well but because there are no new areas to expand
3:50your business is not growing however Wendy
3:53in your intergalactic travel she find a planet whose Inhabitat life forms are as
3:57you like to call them
3:58aliens they tell time using pocket watches
4:01but no one uses wristwatches are the reason could be that they don’t really
4:05have risks that are smaller than their hands
4:06the idea putting something on the wrist only to fall off every time they put
4:10their arm down seems rather absurd
4:12however you see a potential growth opportunity on the exact watches you
4:16produce may not be suitable for this population
4:18you realize it was some slight modifications using the incredibly
4:21advanced technology its spandex that you already use in some other watches on
4:25earth
4:26the watches could stay attached to the aliens rests if you are successful
4:30entering this plan its market
4:32as well as atmosphere that you might be able to grow your cells
4:35this would be much easier than trying to get the humans on Earth to switch from
4:38their existing watch brands to yours
4:40so increase sales is a major motive for expanding into interplanetary markets
4:47second while spandex is super cool and super advanced
4:51you may find that the foreign plan in which you’re trying to expand his
4:54technological advances that not only allow them to make spandex much more
4:57cheaply
4:58but to do so in a way that creates less environmental waste
5:01this is good news to you for two reasons one
5:05you will now be less of a contributor to the pleading your own planet ozone layer
5:08and subject to lower carbon taxes to you will now be able to decrease the overall
5:13cost to producing watches
5:15both for the new plan and for the planter in addition
5:19you may find that by interacting in working with the aliens you are able to
5:22glean some new insights on spandex pants for the earth market
5:26so the ability to acquire resources and knowledge from the foreign planet would
5:30act as a second major motive for expanding into interplanetary
5:33markets third you may feel that by selling your wrist watches in a foreign
5:37planet it reduces risks
5:39that you are facing by limiting yourself to her for example
5:42it is no secret that the cling ons aliens from the planet cling on
5:46have had their eyes on capturing and taking over planet earth for quite some
5:49time
5:50as far as you can tell from Ewing the many episodes of Star Trek
5:54the cling ons are not reflect people they seem to care less about telling
5:57time and more about telling civilizations what to do
6:00of people have made effort to learn their language
6:03and understand their culture relations are indeed strain
6:06so by setting up manufacturing operations and selling your product on a
6:11separate planet
6:12it yourself decline on earth then you can always count on your cells on the
6:15other planet
6:16to help you pay your bills and absorb the cling on attack everyone
6:20at least everyone in your Galaxy knows that if you hadn’t started selling to
6:24your selected for implant first
6:26it would be difficult for you to compete against Rolex and intergalactic level
6:30like Switzerland Rolex never seems to get involved in any the intergalactic
6:34turmoil that goes around
6:36and they seem to be well respected by most fun once you’ve decided that you
6:40want to sell your watches to this porn planet
6:42you need to consider how you will set up shop first
6:46consider what you will need to do business across planets you probably
6:50need a spaceship to take a good back and forth
6:52the planet you’re doing business on his billions of light-years away
6:55do you use Federation X or do you purchase the spaceships yourself
6:59with watches handle going through a wormhole or do you have to risk going
7:02too slow way by traveling at the speed of light
7:05risking that your customers will be dead by the time the product reaches them
7:08do you have to be concerned about intergalactic Pirates
7:11will you sell directly to retail shops on the alien planet
7:15or will you have a local partner who has your best interest at heart
7:18and understands the Italian market and culture better yet
7:21will you set up your own operations there so you have a local presence and
7:24can control more the production and sales process
7:27if you do set up your own operations how do you go about doing this
7:31will you buy facilities from someone else or will you build your own
7:35there are many factors to consider in making this decision
7:38these factors relate to the alien planets economy
7:41you think aliens are more likely to follow a socialistic system
7:45where government exerts more control over the major factors a production
7:48or do you think they would prefer a more capitalistic system
7:51for private owners decide on the terms of the transaction well their loss be
7:55the same as the laws you see on earth
7:57what if they are at war with another plan the language culture and norms be
8:02the same
8:02will you need to make modifications based on the socio-cultural factors
8:06and finally will they have similar technologies and processes to the ones
8:10you use
8:11is there something you can learn from their technological environment all
8:15these factors influence the form your company takes
8:18and how you manage your operations like interplanetary business
8:21international business must similarly consider these factors
8:24the differences require you to modify existing business principles and
8:28practices
8:29making international business something quite different from domestic business
8:33those who recognize that these potential differences exist
8:36are more likely to ask the right questions allowing them to find the
8:39right answers
8:40and out-compete their rivals those who ignore differences
8:44won’t even be aware that they should be asking questions at all
8:47given the increasing degree in international trade and business the
8:50question is
8:51are you going to engage in international business with your eyes open
8:54or with them closed are you willing to understand and adapt
8:57or are you likely to be left wishing the world
9:00gap freedom