Student id 000579740.

Q2

INTRODUTION

In the early 21st century there was a huge outlook towards the technological
development. The developing countries and other countries have started
launching collaborations with foreign partners for various purposes.

As we can look to the steel industries there were many foreign collaborations
taken place like Mittal & Arcelor steel, JSW. & Nippon steel etc. and many
other.

TYPES OF FOREIGN COLLABORATION

Mostly there are two type of foreign collaboration.

1). Financial collaboration.

2). Technological collaboration.

In financial collaboration the foreign company should hold the stake of equity
in the merge ring company and in the technological collaboration there
would be transfer of technology through licensing and transferring by the
foreign collaborator on due compensation.

There is a systematic process for launch collaboration with foreign partners

as this process is flexible; it varies from companies to companies. But as the
contract between two companies can be signed and go through the formal or
basic process.

STEP OF SUCCESSFULLY LAUNCHING COLLABORATION WITH THE FOREIGN

PARTNERS

The organizations should under take following step for collaborations with
foreign partners. The further explanation of this point is with two companies
cases

1).Both companies should have knowledge about nature and size of business
units.

2). Awareness of technical knows how.

3). Awareness of managerial knows how.

4).Considering political and economical factor.

5). Extension of resources in emerging markets.

1
 Student id 000579740.

6). Evaluating internal and external environment of foreign company

7). Over viewing world market.

8). It enlarge brand portfolio.

9). Valuing of companies on market basis.

10).decreasing competition and increasing market share.

The step is dynamic as well as relevant to example given here of company cases

COMPANY CASE: 1

MITTAL STEEL PARTNERSHIP WITH ARCELOR STEEL

The purpose of this partnership was to enlarge the steel manufacturing capacity
and being one of leading producers in the world in the steel industries. They had
financial collaboration as Mittal steel offer the 25% cash and 75%mittal shares to
Arcelor share holders and Mittal steel take over Arcelor steel so now it is none as
Arcelor-Mittal steel.(www.arcelormittal.com) Here as we seen the points or steps
that is covered by this example Mittal steel is one of leading steel co’s of Europe as
well as Arcelor steel second largest producer of steel. The level of competition is not
there between this two companies and the had brought economies of scale.
(www.scribd.com/doc/8165199/mainpresentation.) They higher there brand
portfolio. The cost of managerial was first high in Arcelor steel now it would reduce
because the managerial cost of Mittal steel is low as it managerial policy are very
effective.

There was huge controversies going on the political and economical factor not
supporting this merger of two big player the CEO of Arcelor steel was against the
merger of both the companies as well as French and Luxembourg government were
against this deal But European government approved this deal and lastly the two
giant player become one while taking all positive impacts.(www.businesstimes.com)
This enhances to understand the new international venture and also advance
performance in present, although motivating in future.

The R&D intensity and advertising intensity of the companies would also help for
successful collaboration with foreign partners. As any big unit wants to moderate
there relationships.(www.jstororg/pss/3069336)

The other example is of JSW steel and Nippon steel this company is gone through
technological collaborations as purpose of this collaboration was to take all
technical advantages from most technovative market to emerging market where
the cheap labours and large resources are available.

2
 Student id 000579740.

These companies were targeted to sell premium products to markets were it should
be first time innovated by them that is NICHE Product. So the partnership with
these was held and it had to maintain a low- cost product so due to high techniques
the cost would be saving. As well as JSW groups launch initial public offer (IPO) of
JSW energy mention by chief financial officer seshagiri rao when media exploit this
news as not the technical collaborations but the financial collaborations the had
provided minority of stake to Nippon steel which is Japanese company.
(www.economictimes.com)

As we had gone though detail study of companies cases so it is very important for
the companies to discuss and decide on the bases on factors which are in favors
and against of it the huge controversies are taking place when two big units do
collaboration because the whole set of market is disturb the demand and supply
factor is affected the relevant consumer, suppliers manufacturer and government
as whole is been affected. The step are very volatile it changes with changes in
market conditions as each every company do detailed study of relevant step and
then enter into foreign collaboration.

REFERENCE:

1).www.arcelormittal.com

2).www.scribd.com/doc/8165199/mainpresentation

3).www.businesstimes.com

4).www.jstororg/pss/3069336

5).www.economictimes.com

Q4

DIFFERENCE BETWEEN INTERNATIONAL BUSINESS AND

DOMESTIC BUSINESS
Approach:
Domestic business’s approach is ethnocentric as it does mean that
domestic companies cannot have tendency to formulate strategies,
product design etc. towards the markets, customers and competitors.

International business’s approach can be polycentric or heliocentric or

geocentric. I.B. under polycentric approach enters foreign markets by
establishing foreign subsidiaries. Under the heliocentric, they export
the product to the neighbouring countries of the host country. Under

3
 Student id 000579740.

the geocentric approach, they treat the entire world as a single market
for production, marketing, investment and drawing various inputs.

Geographic scope:
Domestic business’s geographic scope is inside the boundaries of the
country

International business’s varies from the national boundaries of a

minimum of two countries up to a most of the entire globe.

Operating style:
Domestic business’s operating style counting production marketing
selling etc. as it has limited production capacity.

International business can be spread to the entire globe.

Environment:
Domestic business mostly analyses and scans the micro and national
environment.

International business analyses and scans the relevant international

environment.

Quotas:
The quotas forced by various countries on their exports and imports
not directly and considerably influence domestic business.

The international business has to function within the quotas imposed

by various countries on their exports and imports.

Tariffs:
The tariff rates of various countries do not directly and significantly
influence the domestic business.

The tariff rates of various countries directly and significantly influence

the international business.

4
 Student id 000579740.

Foreign exchange rates:

F.E.R & their fluctuations do not uncontrollably and drastically affect
the domestic business.

Foreign exchange rates and their fluctuations directly and significantly

have an effect on the international business.

Culture:
Mostly domestic culture of the country affects the business operations
including product design.

Mostly culture of various countries affects the business operations

including product design of international business

Export-import procedures:
Domestic business is not usually influenced by including products
devise.

International business is significantly subjective by export –import

measures of various countries and they need to follow those measures.
(www.associatiedcontent.com/article/1003404/internationaltradeoppor
unity)

Human resources:
Domestic business normally employs the people from the same
country; therefore the task of human resource management is much
simple and flexible.

International business normally employees the people from other

countries Therefore, the task of human resource management is much
complex and rigid.

Markets and customers:

Domestic companies meet the needs of the domestic markets and
customers.as such, it would be appropriate for them to understand the
domestic markets and customers.

5
 Student id 000579740.

International business is essential to understand markets and

customers of various countries

(P.Subba rao., 2009, Himalaya’s publications 2nd edition.)

OPPROUNITY AND THREATS OF INTERNATIONAL BUSIINESS

The detail case will be given of two multi national companies like Toyota and
Tata motors

Toyota

Toyota Industries Corporation is a Japanese manufacture of auto parts. The

company has strong engineering capabilities which help in the new enter
into market and develop new product.

Opportunity

1.Global material equipment market

The company provides customised vehicles for each and every market. The
growing material equipment market would help the company to improve its
business operations.

2.Growing opportunity in emerging markets

The company has focus in on emerging markets like Russia China India etc.
These markets are expected witness strong growth in the coming future.

THREATS

1.Economic slum down

Due to recession in major countries like US, Europe Japan etc. The revenue of
companies is reducing as well as growth is declining in rapid way.

2.Exchange rate fluctuations’

Toyota industries corporation “businesses encompasses the production and

sales of product and the provision worldwide. So the currency problem and
high fluctuations is big threats of Toyota as it has yen as it core currency.
(www.toyotaindustriescorproation.com)

6
 Student id 000579740.

TATA MOTORS

OPPORUNITY

1.New cheap car for world

Nano is cheapest car producer by Tata so this kind of cars also makes it
place in the world market level and add value to its brand.
(www.marketingteacher.com/swot/tatammotors.)

2.Mass production

Tata motors merely look towards the emerging market and manufactures
according while use the economics of scale concept.

THREATS

1.Lack of quality

For Tata motors have lack of quality where as other competitors’ gives
importance to this factor this would have negative impacts on international
business as brands conscious customer are also available.

2.Low cost.

For Tata motors sustainability and environmentalism factor take extra cost
but it is one of low cost producers so it will affect in future profit. Tata
globalised by buying other brands so this problem could be alleviated.
(www.tatamotors.com)

REFERNCES:

1).www.tatamotors.com

2).www.marketingteacher.com/swot/tatammotors

3).www.toyotaindustriescorproation.com

4). (P.Subba rao., 2009, Himalaya’s publications 2nd edition.)

7
 Student id 000579740.

5).www.associatiedcontent.com/article/1003404/internationaltradeopporunit
y