International Business

Case Study 1

International business in the wake of a crisis-Looking for the bright side of life in Chapter 1 Sitkin and Bowen, p.3

1.Which social, political and economic events have had the strongest influences on international business confidence levels in recent years?

• The European sovereign debts
• The Japanese tsunami
• Arab Springs
• Sustainability problems such as the rising world population
• Political problems such as the American Congress problems of budgeting

2.Looking ahead, what scenarios are likeliest to affect confidence in the future?

• Higher level of debts in mature markets expected to impede companies from establishing the types of investments the firms require to consolidate a future especially development and research
• Companies fear to invest in mature markets because most of them have large and unpaid debts.
• Poor ICT infrastructure and transportation in the emerging economies. Poor transportation hamper movement to various sites that could be of interest. This discourages investors’ confidence. Additionally, poor ICT infrastructure like poor network and internet connectivity make it difficult to communicate and access information in different areas of the emerging markets.

Case Study 2

1.What are the arguments in favor of an international business graduate seeking employment in different parts of the world?

The field of international business is always changing and experiencing new trends thus creating new opportunities. These new opening attract international business graduates who wish to be employed in the various areas.

The change is more in countries initially sidelined from international trade systems. Countries which were initially not participants in the world economy are rising and slowly becoming areas of interest regarding investment and employment opportunities.

International parts of the world like Asia are emerging thus creating newer opportunities and are welcoming to the international business graduates.

2.How certain is it that China will continue to emerge at its current pace?

There is an increasing number of middle class families who have sufficient spending ability to buy the luxury forms which traditionally the French Companies specialized.

Exports is no longer the main driver of the country’s development, the role is taken by domestic consumption both in the public and private sectors.

The disposable income of the Chinese household is rising along with the demand for many items from various sectors.

China is also experiencing rapid industrialization especially the water sector which has annually grown at 20% in the last decade.

These factors are likely to maintain Chinas pace or even speed up its entry as a giant world market.

3.To what extent will local or foreign companies take advantage of Chinese households’ rising power?

The country is getting industrialized accompanied by numerous environmental problems.

The problems have led to the consumption of bottled water because of health concerns because a majority of their water resources are contaminated.

The sector is thus expected to grow by at least 80% in the coming years.

International brands like Perrier and Evan is expected to take advantage of the situation.

Local companies like Tibet 5100 Water Resource Holding Ltd is also expected to gain some of the country’s market share.

It’s uncertain however, that the Chinese people will continue trusting the countries domestic products even if they are cheaper compared to foreign variety products.

Example of the uncertainty or less trust in Chinese local products is the 43% highway casualties and accidents that took place in 2010 blamed on local factories for manufacturing low quality tires (Nan, 2011).

Also, at least 64% of car owners found in Shanghai prefer tires made by Japanese, US and European manufactures.

This has made foreign companies to continue taking advantage of the Chinese growing power.

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