International Business

The Product Life Cycle
Introduction
This is the stage of low growth rate of sales as the product in newly launched in the market. Monopoly can be created, depending upon the efficiency and need of the product to the customers. Profits are nonexistence as the expenditure is high at this stage. If the product is the new product class, the users may not know the true potential, so in order to achieve that place in the market extra  Growth
Growth comes with the acceptance of the innovation in the market and profit starts to flow. As the monopoly still exists manufacturer can experiment with its new ideas and innovation in order to maintain the sales growth. It is the best time to introduce new effective product in the market thus creating an image in the product class in the presence of its competitors who tries to copy or improve the product and present it as a substitute me.
 Maturity
In this the end stage of the growth rate, sales slowdown as the product have already achieved it acceptance in the market. So new firms starts experimenting in order to compete by innovating new models of the product. With many companies in the market, competition for customers becomes fierce, even though the increase in the growth rate of sales at the initial part of this stage. Aggressive competition in the market results the profit to acme at the end of the growth stage thus beginning the maturity stage.
 Decline
This is the stage where most of the product class usually dies due to the low growth rate in sales. As number of companies starts dominating the market, makes it difficult for the existing company to maintain its sale. Not only the efficiency of the comapany play an important factor in the decline, but also the product category itself becomes a factor, as market may perceive the product as 'OLD' and may not be in demand.



Economic Factors and How these effect business'
GDP
Interest rates
Inflation rates
Unemployment
CPI & RPI
Exchange rates
Tax

All can create a loss of money and less disposable income.


Uncertainty in the economy- Uncertainty is where unpredictable events which can effect the economy and leave it in shock eg 9/11

CHINA IN THE LAST 30 YEARS
-Changed from a centurally planned system that was largely closed to international trade to a more maret orientated economy that has rapidly growing private sector as a major player in the global economy.

BRIC ECONOMIES
In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development. It is typically rendered as "the BRICs" or "the BRIC countries" or "the BRIC economies" or alternatively as the "Big Four".

FDI (Foreign direct investment) & benefits

Foreign direct investment (FDI) is direct investment into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.

CHINA'S ECONOMIC REFORM
refers to particular economies change over time
- in the late 1970 and early 1980s trade with other countries were allowed
-economic zones were created for attracting the foreign direct investment (fdi)
- A special economic zone (SEZ) is a region that has economic and other laws which are more free market orientated than countries typical or national laws.
- nationwide laws can be suspended inside a sez
The goal of such a structure is to increase fdi by foregin inestors which may include an international business or a multi national corporation.

TRADE AGREEMENTS
A trade pact (also known as trade agreement) is a wide ranging tax, tariff and trade pact that often includes investment guarantees.
ALLIANCES
A union or association formed for mutual benefit, esp. between countries or organizations

HOW DO CUSTOMERS AND PRODUCERS BENEFIT FROM INTERNATIONAL TRADE
-cheaper currency
-larger potential
-make use of international supplies
-increased brand awareness
-increased brand awareness
-increased communication
-globilisation
-extending life cycle of product

WHAT ARE THE DISADVANTAGES OF INTERNATIONAL TRADE?
- TAX - MORE COMPETITION - LAWS LEGISLATIONS - entry barriers - vunrable tp global financial crisis - copyright issues - lack of communication

MERGERS AND TAKKEOVERS
MERGERS
Where two companys come together and join
TAKEOVERS
whete one company takes over the other

VERTICAL AND HORIZONTAL INTEGRATION
Vertical - different stages of production
Horizontal - same level of production


PROTECTIONISM
-Rules enforced by the goverment which helps protect business' in the country and domestic business'
FREE TRADE
where by there are no rules with regards with trading internationally
SINGLE MARKETS
A single market is a type of trade bloc which is composed of a free trade area (for goods) with common policies on product regulation, and freedom of movement of the factors of production (capital and labour) and of enterprise and services.

FACTORS AFFECTING BUSINESS' MOVING INTO INTERNATIONAL MARKETS
- demand - currency - exchange rate - gdp - economic state - culture - fashions - competition - barriers of entry - Buracracy - suppliers - Brand awareness

HOW DOES GLOBILISATION EFFECT CONSUMERS
- employment ? - products cheaper - higher quality for less- allows economy to develop