A franchise/ licensing is a type of permit that a party (franchisee) acquires to have

access to a business's (the franchiser) proprietary knowledge, processes and

trademarks so that the party can sell a product / service under the business's name.
A Mergers and acquisitions (M&A) is the area of corporate finances, management and
strategy dealing with purchasing and/or joining with other companies. In a merger, two
organizations join forces to become a new business, usually with a new name

Turnkey project is a type of project that is constructed so that it could be sold to any
buyer as a completed product.
A strategic alliance is an agreement between two or more parties to pursue a set of agreed
upon objectives needed while remaining independent organizations
Counter trade- international trade by exchange of goods rather than by currency

purchase.

Rostow - Five Stages of Economic Growth Model

Traditional society

agricultural economy of mainly subsistence farming

size of the capital stock is limited and of low quality resulting in very low labour
productivity and little surplus output left to sell in domestic and overseas markets

Pre-conditions for take-off

Agriculture becomes more mechanized and more output is traded

Savings and investment grow although they are still a small percentage of national
income

Take of

Urbanization increases,

Industrialization proceeds,

Technological break-through occurs

Drive to maturity

Industry becomes more diverse

Rapid development of transportation infrastructure

Large-scale investment in social infrastructure (schools, universities, hospitals, etc.)

Age of mass consumption

the industrial base dominates the economy

consumers typically (if not universally), have disposable income, beyond all basic needs, for
additional goods

Barriers
4. DIFFERENCES IN THE CURRENCY UNIT The currency unit varies from nation to nation.
This may sometimes cause problems of currency convertibility, besides the problems of
exchange rate fluctuations. The monetary system and regulations may also vary.
5. DIFFERENCES IN THE LANGUAGE An international marketer often encounters problems
arising out of the differences in the language. Even when the same language is used in different
countries, the same words of terms may have different meanings. The language problem,
however, is not something peculiar to the international marketing. For example: the multiplicity
of languages in India.
6. DIFFERENCES IN THE MARKETING INFRASTRUCTURE The availability and nature of
the marketing facilities available in different countries may vary widely. For example, an
advertising medium very effective in one market may not be available or may be underdeveloped
in another market.
7. TRADE RESTRICTIONS A trade restriction, particularly import controls, is a very important
problem, which an international marketer faces
The international business environment includes -

The political environment in a country influences the legislation and government rules and
regulations under which a foreign firm operates. Every country in the world follows its own
system of law and a foreign company operating within it has to abide by these laws for as long as
it continues to operate there.

The technological environment comprises factors related to the materials and machines
used in manufacturing goods and services. The organization's receptivity and willingness to
adopt to new technology, as well as the willingness of its consumers to do likewise, influences
decisions made in an organization.

Economic environment. Economic conditions, economic policies and the economic system are
important factors that constitute the economic environment of a business. These factors exert huge

impacts on firms working in an international business environment.

Portfolio investment VS FDI

1. With FDI, investors are able to exert control over their investments and are typically actively
involved in the management of the companies they invest in. With FPI, investors do not get a
say in how their investments pan out because they're not actively involved in the
management or operations of the companies they're invested in.

2. Investors with an FDI approach are generally willing to be in it for the long haul. Because it
can take time to build up a company, those who go the FDI route typically need to be patient
in order to see a return on the money they put in. With FPI, investors tend to take a shorterterm approach.

3. FPI is generally considered to be a more liquid and less risky investment option than FDI.
Because foreign securities are traded regularly, an investor looking to liquidate a foreign
portfolio can sell off assets like stocks or bonds with relative ease. With FDI, investment
dollars are more intricately tied up in a specific business, which makes it harder for investors
to exit their positions.

'Bond'
A bond is a debt investment in which an investor loans money to an entity (typically
corporate or governmental) which borrows the funds for a defined period of time at a
variable or fixed interest rate

'Bulldog Bond'
A type of bond purchased by buyers interested in earning a revenue stream from the British
pound or sterling. A bulldog bond is traded in the United Kingdom. If the revenue is used to
reduce debt also in British pounds, the exchange rate risk is decreased.

'Samurai Bond'

A samurai bond is a yen-denominated bond issued in Tokyo by a non-Japanese company

and subject to Japanese regulations.

MARKET SELECTION MODEL

1.

Determine Export Marketing Objectives: Before entry in overseas market,

the exporter must list out export marketing objectives. The export marketing
objectives may be as follows:

Increase in market share.

Increase in profits.

Building firms goodwill, etc.

2.
Collection of Information: The exporter must collect relevant information
from the overseas markets. The information may be in respect of the following:

Demand for the product.

Competition.

Nature of consumers.

Political situation.

Import regulations.

Infrastructure facilities, etc.

3.
Analysis of Information: The exporter has to analyze the collected
information in respect of overseas markets. For instance, the exporter has to
analyze the likes and dislikes of the buyers, the purchasing power, buying pattern,
etc.
4.
Short Listing of Markets: After analysis of the overseas markets, the exporter
must shortlist the markets. The main objective of short listing is to arrive at a list of

few markets/ countries, which promise good returns not only in the short term but
also from the long term point of view.
5.
Detailed Investigation of Short Listed Markets: The exporter should
undertake detailed investigation of the short listed markets. The exporter may even
visit the short listed overseas markets to conduct detailed investigation.
6.
Selection of Markets: After detailed investigation of the short listed markets,
the exporter would then proceed to select the overseas markets. The exporter
should eliminate such markets which are subject to high rate of inflation,
government instability, high trade barriers, and so on. The exporter may select only
those markets or countries, which would provide a good return investment not only
in the short run but also from the long term point of view.
7.
Entry in Overseas Markets: The exporter then makes necessary
arrangements to enter in the overseas markets. He-may appoint the required sales
people, and intermediaries. He should complete all other formalities regarding the
entry in overseas markets. He would then produce the goods as per the
requirements of overseas buyers.
8.
Follow-up: The exporter should undertake a review of the performance in the
overseas markets. Such review would enable the exporter to know which markets
are performing well, and which ones are not. He would then find out the reasons
for the same, and if there are problems, he would try to resolve such problems, or
exit from such markets that do not provide good potential.

FACTOR ENDOWMENT THEORY

The factor endowment theory holds that countries are likely to be abundant in different types of
resources. Factor endowment theory is used to determine comparative advantage. The HechsherOlin Theory holds that a country will have a comparative advantage in the good that uses the
factor with which it is heavily endowed. If a country has a comparative advantage in a good that
uses the factor with which it is heavily endowed, it should focus it's production on that good. For
example, a country with a high ration of capital to labor will be more efficient at producing
computers than it would corn.

Leontief Paradox THEORY

From

factor

endowment

theory

we

know

that
But Leontief reached a paradoxical conclusion that the US
the most capital abundant country in the world by any
criterionexported

labor-intensive

commodities

and

imported capital- intensive commodities. This result has

come to be known as the Leontief Paradox.