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Asian Business Environment Essay

Introduction China falls in the category of the fastest emerging economies in the world. The country’s economic growth from 1949 rested on the government’s commitment to formulate and implement economic development policies (Bramall 2008). During the period ranging from 1953 to 1978, China’s rate of economic growth was 4 per cent (Thomas 2006, p.3). However, from 1978 to present, the government started implementing policies aimed at transforming the domestic economy towards market-oriented (Chow 2004, p.127). As a result, the country’s annual economic growth rate increased by a margin ranging between 8 per cent and 10 per cent. The growth hinged on the adoption of post-Mao economic reforms. In an effort to transform the economy, the Chinese government focused on a number of aspects one of them being undertaking institutional reforms. According to Tisdell (2009, p.271), China has undertaken extraordinary institutional reforms since 1978. These reforms have proved to be highly effective in stimulating the country’s economic growth. However, China faces an enormous task of maintaining the country’s rate of economic growth and development in the future. This paper aims at providing clear evidence that institutional reforms (the transition from a central planning to a market economy) provide sufficient explanation for China’s fast rate of economic growth over the past three decades. The paper also evaluates some of the issues that China has to do in order to maintain the country’s future economic growth and development. Get your 100% original paper on any topic done in as little as 3 hours Learn More Institutional reforms undertaken by China From 1978, China initiated institutional reforms on a number of issues. Some of the main components of reform that the government focused on included agriculture, state-owned enterprises, international investment, the country’s price system, development of non-state sectors, the banking and financial sector, economic and social infrastructure, and social welfare (Tisdell 2009, p.276). Reform on the agriculture sector The Chinese government decided to initiate the institutional reforms by focusing on agriculture. This decision rested on the fact that agriculture was then the foundation of the Chinese economy (Tisdell 2009, p. 276). In implementing agricultural reforms, more emphasis was paid on resource ownership, decentralisation, and the rule of law. The government introduced a system of farming known as the ‘household responsibility system’ to promote agricultural output. The system was a shift from the previous collective farming. Through this system, each household owned land and was required to deliver a fixed amount of output to the government through the national procurement agencies. In return, households would receive rewards for every additional output delivered (Chow 2004, p. 127). Implementing the ‘household responsibility system’ led to the Chinese farmers becoming richer which in turn improved their spending capacity. Reforms within the agricultural sector set the foundation for undertaking reforms in other economic sectors. The reforms stimulated the Communist Party members to start supporting the market economy. The institutional reforms undertaken within the agricultural sector will play a significant role in promoting the country’s economic growth, considering the fact that China has rich agricultural resources. We will write a custom Essay on Asian Business Environment specifically for you! Get your first paper with 15% OFF Learn More China’s agricultural resources have considerably enhanced the country’s competitive advantage with regard to attracting competitive advantage (World Trade Organisation, 2009, p. 41). Transformation of state-owned enterprises The Chinese government appreciated the importance of transforming state-owned enterprises from being state-controlled to being autonomous in a bid to stimulate the country’s economic growth by increasing production (Chow 2004, p. 130). These reforms gave state-owned enterprises the discretion to formulate and implement their marketing, production, and investment decisions. Consequently, the output by state-owned enterprises increased significantly. For example, by June 1990, 45 per cent of the total output from state-industrial enterprises was from state-owned enterprises, which had been granted autonomy in their operation. The second type of reform entailed making the state-owned enterprises financially independent (Tisdell 2009, p. 276). The government achieved this goal by giving the enterprises an opportunity to reserve a certain proportion of their earnings after paying the corporate tax. The enterprises could either use the reserves to motivate their employees by offering them better wages and salaries in addition to undertaking capital investment. According to Gnos and Rochon (2009, p.243), better wages and salaries amongst employees stimulate a country’s rate of economic growth by increasing consumers’ purchasing power. Institutional reforms on state-owned enterprises have also stimulated the country’s economic growth by promoting effective and efficient management and giving up control and ownership of some of the state-owned SMEs. Not sure if you can write a paper on Asian Business Environment by yourself? We can help you for only $16.05 $11/page Learn More Managers and staff of the state-owned SMEs were given an opportunity to purchase shares thus giving them company ownership. Transformation of ownership of the state-owned enterprises led to capital infusion within the enterprises. Adoption of the open-door policy As an emerging country, China is increasingly becoming an investment destination with regard to Foreign Direct Investment (FDI) (Wu 2006, p.7). A report by the World Trade Organisation (2009, p.41) revealed that China overtook the United States with regard to its capacity to attract new foreign direct investment. One of the factors that have stimulated the rate of FDI in China relates to the adoption of the open-door policy. The policy aims at stimulating foreign investment and trade. Initially, China operated a closed market economy, which substantially limited contribution of foreign trade to the country’s national income. In 1978, foreign trade in terms of imports and exports accounted for only 7 per cent of the country’s national income. Upon opening the economy, the country managed to promote its exports. By 1987, the contribution of foreign trade on the country’s national income increased to 25 per cent and to 37 per cent of the country’s Gross National Product (GDP) by 1998 (Chow 2004, p. 131). The government provided the various provinces with the independence of promoting their own exports in a bid to stimulate growth in the country’s exports. This move led to the emergence of trading companies, which specifically dealt with production of export products (Chow 2004, p. 131). The Chinese government also opened up the Shen-zhen economic zone to promote FDI. Consequently, Hong-Kong residents were presented with the opportunity of investing in China, which meant they could exploit the available skilled but inexpensive labour. Within a period of one decade, Sheng-zhen metamorphosed to a modern city. After some time, the Chinese government considered opening up other economic zones in order to stimulate economic growth. The adoption of the open-up policy has stimulated three main forms of FDI, viz. establishment of wholly owned FDIs, cooperative ventures, and jointly financed enterprises (Knight
Marketing strategies which can help Cadburys in launching there new product. Cadbury Background In 1824, John Cadbury began selling tea, coffee, and drinking chocolate, which he produced himself, at Bull Street in Birmingham, England. John Cadbury later motivated into the production of a variety of Cocoas and Drinking Chocolates being manufactured from a factory in Bridge Street, supplying mainly to the wealthy due to the high cost of manufacture at this time. At this time the company was known as ‘Cadbury Brothers of Birmingham’. Cadbury is a leading global confectionery company with an outstanding collection of chocolate, gum and candy brands. Cadbury employ around 45,000 people and has direct operation in over 60 countries, selling its products in markets everywhere around the world. Cadbury is nearly 200 years old. In 1969 Cadbury merged with Schweppes to create Cadbury Schweppes. In 2003, Adams Confectionery was acquired including its Trident and Halls brands, now respectively the world’s largest gum and candy brands. On 7 May 2008, Cadbury demerged the Americas Beverages business and created Cadbury plc. In March 2009, they announced a definitive agreement to sell the Australia Beverages business for approximately £550 million. The following few pages which follow help to show overall how and which types of strategies on various things based on Marketing strategies can help Cadburys in launching there new product. Marketing strategy is a plan of action which is used by many businesses around the world, which helps the business meet its aims and objectives, it can also assist a business when launching a new product as it helps to identify which different strategies would be best to use. Marketing strategies can be split into two main categories which are: Short-Term Long-Term Short-term strategies help a business to focus mainly on the four Ps: Product, price, place and promotion which are vital to all businesses, as these four features are the main things which help a business to achieve objectives if they are used correctly. On the other we have long-term strategies which are used to plan the future actions of a business, this can include producing tables such as a Ansoff matrix which helps a business to decide on many things such as, whether to launch a new product or to improve previous products, overall making the right decisions on which type of strategy to use is vital, especially in the case of Cadburys as it helps to decide how to launch a new cereal bar, to ensure that they reach maximum sales. Throughout the next few pages I will discuss possible short-term and long-term strategies which Cadburys could use, indicating which type of strategy in each case would be the most useful to help them achieve success with there new product. Ansoff Matrix An ansoff matrix can be used to identify and show various types of growth strategies, many firms such as Cadburys could benefit from the use of an ansoff matrix as it helps to focus on the firm’s present and possible products as well as the markets. The main thing in ansoff matrix helps to identify is possible ways for a business to grow; this can include improving previous products or producing new products. Diversification Market Penetration: This is when a firm tries to achieve growth using existing products in there current market segment, to try and increase its market share. Product Development: This is when a firm targets a new product at there current market segment. Market Development: This is when a firm seeks growth by targeting there existing products at a new market. Diversification: This is when a firm tries to diversify into new businesses by producing new products to aim at a new market. Best marketing strategy for Cadburys: The following list helps to show which marketing strategy from the ansoff matrix would be best for Cadburys to use: If Cadburys was to use market penetration for there product, I feel this would not help at all as the current product they have out in the market which is the Brunchbar, is not doing very well and people would not buy it, so I feel this would be the worst option to choose. If Cadburys was to use product development for there product, I feel this could possibly be successful, although after the failure of there previous product people may not buy there new product. If Cadburys was to use market development, I feel that again there could possibly be a chance of success, as they may have aimed there previous product at the wrong market, although people from the new market may also not be keen to buy there product. It is clear that if Cadburys was to use diversification and aim a new product at a new market, there would be a high chance of success as long as the new product was to meet customer needs, which can be done through extensive market research to help gather an idea of people who would regularly purchase there product. Marketing Objectives Before a business such as Cadburys can decide on which market strategy they will be using, they must take into consideration that correct and precise marketing objectives are set to help the business to become as successful as possible in the future. The best way for a business to ensure that they set realistic and achievable objectives would be by following the acronym of SMART, this helps identify points which need to be checked by a business to make sure high-quality objectives are being set to maintain high sales for the product. The acronym SMART is short for the following which all need to be checked over by businesses when setting its marketing strategy: Specific Measurable Achievable Realistic Timed For a business such as Cadburys to be successful within such a competitive market, good quality objectives must be set. The following is a list of objectives Cadburys could set themselves to ensure that they are successful with the launch of there new product: Principles of Marketing There are many different features to be looked at when marketing your product to ensure there are no hiccups when releasing a new product. The following are a list of different things which need to be looked at by businesses such as Cadburys to ensure success for the new product: Understanding customer needs: This can be found through extensive market research to help the business determine the customers outlook on products and also the new tendency within the market. Through my market research which I have conducted, I have now found the correct segment for me to aim my product at helping to almost ensure success with the new product as I have covered the needs of my chosen segment. Understand and keep ahead of competitors: This again can be done through market research to help a business stay above competitors. I have used secondary research here to help me see the biggest rivalries within the market, therefore enabling me to stay above them. Communicate effectively with customers: This can be done through varieties of places; the most affective would be through promotional techniques used by the business. To ensure I have done this, I listed the possible promotion techniques and chose the ones which I felt would be best to use. Organize functions to achieve objectives: To ensure correct objective have been set, a business must look at the four Ps around the product to make certain that the correct marketing objectives have been set. To help me do this I ran through the four Ps of my product, and then checked to see that I had stated most of the possible strategies for the product. Aware of constraints: All businesses must be aware of the constraints they face on there marketing activities, to ensure that they are then able to work there way around it. To ensure I was aware of the possible constraints from many different factors, I produced both a SWOT and PEST analysis to help me identify these. The above principles of marketing must all be looked and analyzed by businesses, to ensure that the launch of the new product runs as smooth as possible. Cadbury plan their production process by using a time series method as this helps Cadbury to accurately produce the needed amount of chocolate at the correct period of time. A time series shows historical data that can be used and analyzed to predict future trends. Christmas and Easter are peak selling times for all chocolate manufactures including Cadbury; this is obviously because chocolate products make good gifts for these occasions. The disadvantages of this type of forecast are: – Cadbury needs to have a lot of past data in order for the time series method to be used accurately to predict sales figures. – If the external environment doesn’t stay stable then there will be problems with the forecast for example if the prices of the raw materials used to produce Cadbury products increases then the price of the product has to increase in order for Cadbury to make a profit from the product produced. This may affect the customers purchasing trends. – The data may be biased or representative. The advantages of this type of forecast are: – The data helps Cadbury to reduce wastage and produce the amount of products that customers would purchase. – The data is reliable if collected properly/accurately. – The forecast helps Cadbury to make products efficiently as it helps Cadbury to set a target of the amount of products needed; there are always enough products to supply to customers. However precise information about this is not available to the public. Therefore I am going to use the information that I have produced about an imaginary firm I have used in E4 of my assignment. The most profitable product that the imaginary firm produces is the mugs, making a profit of £10,500 for the first quarter of the year. I think that this is excellent as this firm is selling the mugs well and making a reasonable amount of profits from them; the mugs are batch produced and are everyday household objects. – The firm does some research and find out what types of designs the customers are interested in purchasing. This would help to increase the sales, as customers like to have mugs with designs that they like and match with the rest of their kitchen accessories/items. If the firm shows that they are interested in giving the customers what they want then customers are very likely to purchase mugs from the firm. But a problem that would arise is that customers don’t need too much mugs as they can be reused again and again so at some point the firm will need to stop producing mugs and withdraw it from the market as the demand will decrease. – The firm could sell the mugs in multi packs as a set as well as individually and this will help to increase the sales of the mugs as most customers prefer to have a set of mugs the same design. From the figures of wastage and production I suggested that the saucer department of this firm should be closed down as it was costing the firm too much to continue to produce saucers to sell to the customers as it was not making its potential profit. The department that I suggested should have an increase in production was the teapot department this was due to the fact that it was the second most profitable product that this firm produced (along with the saucers but I have explained why it wasn’t possible for the firm to continue to produce them). I think that if the firm improved the strength of the teapots then they would be more successful in the market as customers would realize this and want a teapot that is strong so it lasts longer. How the production process is monitored The quality assurance system that Cadbury use is total quality management (TQM). For Cadbury’s TQM is a method of ensuring that their products are of a high standard of quality and a method to monitor the production of products. To monitor the production process Cadbury employs supervisors to inspect the product at each stage of production. Marketing strategy In order to increase sales Cadburys needs to undertake a range of marketing activities before deciding upon the best way to encourage the purchase of its product. When identifying the basic principals which Cadburys must apply to its marketing will be its basic objectives because all business must have objectives it allows them to increase sales and make profit. Corporate aims are the long term intentions of a business, whereas corporate objectives are the specific targets required to achieve the aims. The common aim and objectives of the corporation such as Cadbury includes the following: Survival Profit maximization- which is often taken to be the reason why firms exists and to be the primary objectives in practices most firms have a hierarchy of objectives when a firms survival is threaten it may profit maximize in order to restore its financial health. Growth- which includes Cadbury selling new products or expanding overseas. Diversification- which is the spreading of business risks by reducing dependence on one product. Sales maximization- which is the increasing of sales Improving the product image-which includes creating a new logo or launching a new brand of product and creating more attractive packaging. For example, Cadbury set out two objectives for the development of their chocolate, Fuse. These were: To grow the market for chocolate confectionery To increase Cadbury’s share of the snacking sector when launching a product the company Cadbury’s had to make sure that any new product in the snaking sector must establish points of difference, creating a unique selling proposition (USP) i.e. a product with unique appeal which is not shared by any of its competitors. Referring back to the example of Fuse, Cadbury lost a lot of money testing out the combination of various ingredients and more than 250 were combined before the recipe of the chocolate was finalized. As the products are developed, Cadbury tests them to ensure that consumers are willing to buy them. Cadbury then promotes its products in various ways such as the use of above the line promotion, which is where a product is advertised through consumer media such as television, magazines, newspapers and radio. 4ps Product My product is a re-launch of Cadbury dairy milk. Cadbury dairy milk is made from real chocolate. Its ingredients include cocoa butter and there is a glass and half full cream dairy milk in every 200 grams of Cadbury dairy milk chocolate, Cadbury buys 65 million litres of fresh milk each year to make Cadbury dairy milk chocolate. Price Price is an important element of the marketing mix. The price charged for a chocolate bar can determine whether a consumer will buy it and the level of sales achieved can determine whether or not Cadbury Schweppes will make a profit. Price is also affected by factors such as the state of the economy, what competitors are charging, the stage reached in the products life cycle and above all what price the market will bear. From the marketing point of view this is what matters. Place Cadbury dairy milk is produced at the chocolate factory in Bourneville in Birmingham. After the chocolate is produced and has undergone all the quality checks it is transported to the stockrooms. After this Cadbury sells it products to shops that deal with beverages and confectionery e.g. corner shops, super stores such as Iceland, Sainsbury, Kwik save, Tesco, Asda, Safeway and petrol station. These businesses are usually visited by customers on a daily basis. They then sell it to the general public. Cadbury produces chocolate for more than 200 countries so that they have a chance to enjoy it as well and make profit. This gives them a wide range of consumers around the world. Cadbury Schweppes therefore makes sure that the cultures of these different people are kept. They can do this by producing products, which are eaten in that particular country without upsetting religious or cultural practices. Promotion The purpose of promotion is to communicate directly with potential or existing customers, in order to encourage them to purchase dairy milk and recommend it to others. The main promotional tools are sales promotions, public relations and advertising. Production representation Cadbury monitor the production process by using total quality management to ensure that the chocolate/products that are produced are of a high quality and meet the needs of the customers, this is vital for Cadbury because they produce chocolate products mainly which has a lot of substitutes, this means that customers could loose interest in Cadbury products if their demands are not met or thought about. To enforce total quality management Cadburys have supervisors that monitor the machines, the other workers and the products that are made. Cadbury also monitor the quality of their products by using a quality assurance system, (mentioned above) total quality management TQM. TQM ensures that the products that Cadbury produces tastes good to the customers, is appealing to the customers, customer complaints are solved, listening to customers and Cadbury make continuous improvements to their products. Those are all the benefits for Cadbury monitoring the quality of their products and using a quality assurance method. At the moment Cadburys use TQM to monitor the quality of their products and as a quality assurance method. I think that this could be improved if other methods of quality assurance and monitoring production were used; I think that this would help to improve them. An alternative quality assurance method that Cadbury could use is benchmarking. Benchmarking is a method for comparing the performance of one business against another, this would of an advantage to Cadbury because they could compare their sales figures, production figures etc against a major competitor (Nestle for example), the comparisons would help Cadbury to set aims and goals for the business itself and once the aims have been met it may almost be certain that Cadbury is outperforming its competitor. However the competitor that Cadbury choose has to be near enough the same size business as Cadbury, this is to make the benchmarking fair. As well as the above benchmarking will help Cadbury to do better than their competitor(s). To improve the monitoring method that Cadbury could use to monitor their products, Cadburys could continue to use total quality management ? TQM and also give all the other workers more responsibilities by enforcing self-checking and inspection on the products produced at Cadbury. Self- checking is traditionally the main method of a business to achieve quality control, to ensure that the workers inspect the products professionally, correctly and properly Cadbury should make a list of things that the workers should check. In 1895, an innovation in the provision of model housing by manufacturers occurred with the development by George Cadbury of Bournville Model Village. This was the first model settlement to provide low-density housing not restricted to factory employees. This paper uses the Bournville archives to explore the accepted history of this settlement. It is argued that the accepted history is a particular reading of this planning experiment. The paper explores the construction of the ‘accepted history’, identifies some of the authors behind the history and uses the minute books and secretary reports of Bournville Village Trust to construct an alternative historical narrative. The alternative history is one in which Bournville begins as a building estate rather than as a model village. The building estate was provided with no community facilities, and the houses were targeted at the lower- and upper- middle classes. Cadbury repackaged the building estate by appropriating the garden city movement; in return the garden city movement also appropriated Bournville by using it as a working example of a model garden village. The paper makes a contribution to theoretical debate by linking a literature from organizational studies concerned with story-telling and construction to historical geography. Marketing strategies which can help Cadburys in launching there new product

Florida Southwestern State College Module 4 Vertical Shifting Algebra Discussion

Florida Southwestern State College Module 4 Vertical Shifting Algebra Discussion.

Module 4 Discussion2121 unread replies.2121 replies.DirectionsPlease read other students response after you reply your own.You can reply again your post (one more time) within due date if you feel you need to correct your answer.You won’t get credit if your first response is irrelevant to the questions. If you reply it again, please mention a reason why do you need to reply it again.QuestionsWatch the Video (Links to an external site.) (Flash) to answer following questions. Please listen carefully.2 points for each question.1. What are the order of transformations for a function that involve multiple transformations? Write your answer in order (Step 2)? 2. To graph, which transformation is used (Step 3)?3. What is the shrinking factor by which the previous graph is shrunk by (Step 4)?4. Which transformation is used in Step 5?5. Which transformation is used in Step 6?
Florida Southwestern State College Module 4 Vertical Shifting Algebra Discussion

EST 2701 Identify Population Parameters from Sample Statistics

java assignment help EST 2701 Identify Population Parameters from Sample Statistics. I’m studying for my Statistics class and don’t understand how to answer this. Can you help me study?

Identify Population Parameters From Sample Statistics
Prompt: The owners of a small mail order business want to estimate their average annual sales. They randomly select 100 sales from their first quarter to analyze. For the samples, the average amount spent was $235.12 with a standard error of $12.41.
USE INFORMATION FROM SAMPLING DISTRIBUTIONS to answer the following 5 questions.
Response Parameters
What conditions, or assumptions, should be verified before using the sample values to estimate the population mean?
If these conditions are satisfied, what is the probability that you would get a sample with a sample mean of $230.00 or less?
If they expect to have 50,000 sales this year, what is their expected value of the total sales for the year?
What do the following two values represent, in terms of the sampling distribution?

What do these values mean in terms of the expected total sales for the year?
EST 2701 Identify Population Parameters from Sample Statistics

BIO 1100-18I-3A20-S4, Non-Majors Biology What is animal structure and function

BIO 1100-18I-3A20-S4, Non-Majors Biology What is animal structure and function. I’m studying and need help with a Biology question to help me learn.

Unit VI Assessment

Unit VI PowerPoint Presentation

Instructions

In the mid-1950s, the first study linking cigarette smoking to lung cancer was published. In the decades that followed, many other studies supported this finding and a host of other health-related effects attributed to smoking were uncovered.
Over the last few decades, cities and states have created local regulations prohibiting smoking in certain public places. In 2009, the U.S. Food and Drug Administration was given regulatory authority of all tobacco products.
Because E-cigarettes are a relatively new technology, less is known about the long-term effects of the firsthand and secondhand inhalation of vaping products. However, in recent years they have been treated and regulated similarly to traditional cigarettes. Your assignment for this unit is to create a 10- to 12-slide PowerPoint presentation that covers the following elements:

the anatomy and physiology of respiration (e.g., explain how breathing works);
the effects of the inhalation of smoke and E-cigarette vapor on gas exchange in the lungs;
specific diseases associated with smoking, both pulmonary and cardiovascular; and
lastly, based on what you know about E-cigarettes from the reading and your own research, defend or oppose the regulation of vaping products as traditional cigarettes.

You will need to cite and reference at least one article from the CSU Library databases as one of your sources of information.

Discuss what you learned from your chosen articles in 1-2 slides in your presentation. Cite the article according to APA guidelines, and list it on your references slide.

PowerPoint slides should not contain a lot of text; use speaker notes to provide the details of your presentation. The general practice is to use no more than 5-6 bullet points per slide. The quality and depth of your speaker’s notes will be significantly factored into your grade. Title and reference slides should be included. These do not count toward the 10- to 12-slide requirement. In addition to providing references on a reference slide, you need to cite your material in the slides as appropriate; use APA format for your references and citations.
Suggestions for Searching for Illustrations
Use at least 3 images in the presentation. When looking for illustrations to use, it is suggested that you type the subject into a search engine and click “images.” For your presentation, you are allowed to copy and paste images (being sure to cite and reference them). However, you are NOT allowed to copy and paste content, such as text, tables, and the like. As much as possible, your presentation needs to be in your own words.
PowerPoint Guidance
Do you need to refresh your knowledge concerning PowerPoint? Review this tutorial on PowerPoint Basics.

Click on the Notes tab on the right side of the tutorial screen to see a transcript of the PowerPoint webinar.
You can also search online for information concerning best practices about what should and should not be done when creating a PowerPoint presentation.

Notes:

As directed in the tutorial above, pay attention to the background and font colors in your presentation—try to avoid using plain black text on a white background, but also avoid using colors that are visually difficult to see (such as yellow text on a light background) or that are unpleasant (such as red text on a yellow background). Strive for a pleasing, visually appealing appearance.
Reminder: The speaker notes should provide the detail and discussion of your presentation, and everything in the presentation should be in your own words, not copied and pasted from a source

BIO 1100-18I-3A20-S4, Non-Majors Biology What is animal structure and function

Risks Associated With International Business Transactions Economics Essay

International business has appeared in the history to satisfy the need of merchandises from long distance nations , it was an international trade . It begins in the 19th century BC where it has appeared in Assyrian merchant colony in Cappadocia . Camels allows Arab to move spices and silk from far east and trade it , establishing the silk road which make a connection to trade Chinese and Indian goods with the Romanian empire goods .Vasco de gamma ( Portuguese explorer ) has established a sea route between Europe and India . As international trade extent to reach all nations , the necessity of regulations or an international business law has been raised . The main convention for international trade was the united nations convention on contracts for international sale of good (CISG) which established by UNCITRAL (United nations commission on international trade law) . International Business Law involves two parts , private and public law , the private law related to international business transaction like international trade , finance trade , licensing and distributing agreements . the public law related to agreements that help to create a legal framework which international business takes place ( e.g. Treaties , Customs , Tariff.. ) International Business Transactions A business transactions begins when a buyer and a seller agree the terms and conditions to purchase a specific goods with a detailed quantity and price ( contract of sale ). In this contract , from the buyer point of view what is essential is to gain the ownership of the goods , for the seller what is important is to have the legal terms that provide receiving money . An International business transactions differ from domestic business transaction , because it’s usually include long distance which means higher risk in goods transiting , which mean higher insurance , how money will be transferred and who is responsible of the goods delivery , all that should be included and clearly in international business transaction contract . import – Export trade Imports are goods or services that are made or grown abroad then purchased or receipt by the importer and distributed domestically . Exports are goods or services that are made or grown inside the nation then sold or rendered by the exporter to be distributed abroad The need of export – import trade generally is because on country has an advantage over others in specific items , some countries have comparative advantages like manufacturing (ex. Germany , japan .. ) others have comparative advantage in natural resources like oil or gas ( ex. Saudi Arabia , Russia ) . Exporting can be direct or indirect .Direct exporting is when the manufacturer take the responsibility of most of the export processes , usually they use Foreign sales representative or foreign distributer in the exported country .Indirect exporting is when a company use intermediaries ( export trade company , export management company ) to enter the foreign market , usually happen because lack of capital or because the company do not have the needed experience to enter this foreign country . Trades usually governed by the laws and regulations of the trade countries , they use tariffs and non-tariffs barriers , this reflect the way that companies trade with each country . In 1947 nations accept General Agreement on Tariffs and Trade , this movement occurred to liberalize trade by reducing tariffs and non-tariffs barriers . in 1995 WTO (World Trade Organization ) has been created to manage the rules and assist settling the trade disputes between WTO nations . foreign Direct Investment Foreign Direct Investment is when a company invest its workforces and resources to purchase or to build an operation in another country . those company called MNC (Multinational Corporation) . Countries usually welcome FDI because MNCs has many impacts over hosts country economics and political system . FDI is a major decision for any company because its full of costs and risks . MNCs companies has many ways to enter the market of a foreign country considering of many factors like capitalization , legal considerations and market condition, MNCs decide to enter foreign market as Joint Venture , Mergers , Subsidiaries or Acquisitions . When a firm owned 100% by a foreigner , it’s a wholly owned subsidiary . A joint venture is an organization that is created by two or more companies or with the foreign government they share risk and assets , companies use joint venture to reduce the risk of entering foreign market . ( e.g. Peugeot “France” has a joint venture with Dongfeng Motor “China”) A strategic alliance is an agreement between competitors to achieve common goal .(e.g. Airlines Coding share ) Licensing , Franchising Licensing is an agreement where the Licensor (Firm) grants a Licensee (Foreign Firm) the right to use its intellectual property ( patent , logo, formula , etc.) .Licensing can be completely within one country , but it’s a way that companies use to distribute its products with minimum risk taken , where there is a percentage of profit paid by the licensee to the licensor . Franchising is a form of licensing which the Franchisor (parent firm) offers equipment , material , trademarks , technology … to the Franchisee (investor) , in the other hand the franchisee should pay a fee or a percentage of the profit to the franchisor .(e.g. McDonald’s) Franchising is a good way to inter the foreign market because the franchisee will provide the capital for investment and the management and franchisee will deal with customer and labor problems , franchising usually associated with many legal requirements , it depends on the country , un US the federal trade commission is regulating the franchising . in other hand in china they eliminated most of the restriction on franchising . rISK aSSOCIATED WITH INTERNTIONAL BUSINESS TRANSACTIONS sTRATEGIC rISK Strategic risk means the risk of weak or bad strategic decision concerning the competitiveness the firm in the foreign country , it’s the risk of misanalysing of the porters five forces which are the threat of new entrants , threat of substitute products or services , Bargaining power of customer , Bargaining power of suppliers and the intensity of competitive rivalry . Usually MNCs companies is more concerned about this risk , where a well done study of the market is required before entering the foreign country . An example of a company which failed In the strategic risk consideration . Political risk International managers should understand the substantial effects of political decision making in country before beginning its business , and understand how political decision making can influence its business . Political movements and instability can make it difficult to the company to operate well . International manager should be aware of the ideology of the host country , the economic system ( communism , socialism ,capitalism ) and the political system ( democratic , totalitarianism ) and the structure of the host government , a risk of embargos and sanction of trades which usually used for political pressure rather that economic issues .Understanding the stability of host country political system can avoid many risks , a new and hostile government may replace the friendly relationships and hence expropriate foreign assets .The firm most understand the regional stability and international affairs of the host country . The firm can do political risk analysis to assist in firm decision making . operational risk Operational Risk is the risk concerning operational activities , machineries breakdown , supply of resources, logistics and inventory problems .By establishing a good operational risk analysis and evaluation , companies will be able to reduce operational loss, pre-detecting of illegal activities , reducing auditing costs and reduce exposures to future risks , and that well lead to reduce waste and improve processes , it will develop lead-time and add to efficiency in international business . In export – Import international transaction , a delivery risk is an operational risk , where a buyer didn’t receive ordered goods , it can happen because of workers strike , or delay in the shipment . One form of delivery risk is property risk , and it’s a loss or damage to the goods before they arrive. The risk of Pilferage can affect all types of trade transaction , specially import – export one, this has been a problem for many years , a new way of boxing (cargo) and new technologies entered this sector to minimize the risk of pilferage . country risk When the firm decided to do business broad , it should consider the basic infrastructure needed for the firm operation , that what country risk means . Roads , Bridges and telecommunication, crime rate and corruption , internal conflicts or civil unrest and the economic condition ( unemployment rate , unskilled labor force etc. ) , terrorism , in the host country all that can make it difficult to enter or do business safely ,effectively , efficiently in that country . Country risk can be the Language and Cultural differences and the risk of exposure to foreign law and courts , a Lack of language differences awareness can cause many problems that will end in courts , an example of that , what happened in1975 , United states district court , between Gaskin (US citizen) and Stumm Handel GMBH (German company ) , an employment contract written in German has been signed by Gaskin ,who has no knowledge about German language . technological risk Lack of security in electronic transaction , absence of information technology infrastructure and the cost of rapidly developed technology , all that will result creating problems that will affect doing business in the host country . environmental risk Environmental risk may lead to damage the reputation of the Firm if firms function resulted pollution ( Air , water , environment .etc.) and that will cause risk to the firm .And vice versa if the host country has pollution , that may cause health problem to firms employees . economic