What is international business

Relevance: Understanding international business (IB) is crucial for nearly everyone, even those not planning to leave their home country.
Success Factors: The study explains why some firms are more successful in international markets than others.

International Business (IB): Involves firms engaging in cross-border economic activities and doing business abroad.
- Key Players: Primarily multinational enterprises (MNEs) that perform Foreign Direct Investment (FDI) by managing operations in foreign countries.
- Example: Adidas operates manufacturing in various countries and engages with local markets.

Adidas Case Study:
- Founding member of the Fair Labor Association (FLA).
- Initiatives in developing labor rights in countries like Indonesia.
- Improvement areas from proactive supplier firm engagement include better product quality, reduced accidents, and lower turnover.
Trends in Retail: The shift towards online sales with innovations like a 3D printing plant in Germany.

Domestic vs International: The boundaries between domestic and international markets are increasingly blurred, especially in Europe due to the EU.
Market Dynamics: Companies like Volkswagen and Toyota have suppliers that operate across multiple countries, highlighting the need for international cooperation.
Behavior of MNEs: Many companies, even the largest, primarily conduct business in their home regions, emphasizing the importance of regional knowledge.

Definitions:
- GDP (Gross Domestic Product): Value added by resident firms in an economy.
- GNP (Gross National Product): GDP plus income from non-resident sources.
- GNI (Gross National Income): A newer term that includes GDP plus income from abroad.
- PPP (Purchasing Power Parity): A conversion to equate purchasing power across different countries.
Emerging Economies: Emerging markets exhibit rapid growth but have complex institutional challenges.
- Major emerging markets (BRIC): Brazil, Russia, India, China.

Challenges for Foreign Firms: These firms face a liability of outsidership, hindering their understanding of local contexts.
Resource-Based View: Emphasizes the importance of leveraging unique internal resources to succeed in challenging environments.

Globalization: A multi-faceted concept involving technology and economic exchange.
- Diverse Perspectives: Young people often refer to globalization in the context of instant communication through the internet and digital platforms.
- Economic Impact: Globalization connects production and consumption but also raises concerns about labor standards and corporate power.

Core Questions: Understanding what drives the success or failure of firms globally helps frame the study.
Institution-Based and Resource-Based Views: The dual focus enhances understanding of external environments and internal firm capabilities that contribute to IB outcomes.