INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

CONTENT

1.0

2.0

PAGE

INTRODUCTION

1.1

What Is International Business

1.2

The International Business Organization Redbull

2.0 WHY COMPANIES ENGAGE IN INTERNATIONAL

4-5

BUSINESS - Amerseal Industrial Sdn Bhd

3.0

4.0

2.1 Expand Sales

2.2 Acquire Resources

2.3 Diversify Sources of Sales and Supplies

2.4 Minimize Competitive Risk

CONCLUSION

3.1 Advantages
3.1.1 Offer a wider range of products globally than you may
be able to offer locally.
3.1.2 Sales There is less competition in the global
marketplace than at home.
3.1.3 There are different trends and events all over the
world.
3.2 Disadvantages
3.2.1 Need to visit any country where you plan to do business
and possibly live there for a few months.
3.2.2 Have a clear understanding of what international
business involves.
3.2.3 International business involves currency exchange.
3.3 Summary

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REFERENCE

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INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

1.0 INTRODUCTION
1.1 What Is International Business

Today, business is acknowledged to be international and there is a general expectation that

this will continue for the foreseeable future. International business may be defined simply as
business transactions that take place across national borders. This broad definition includes the
very small firm that exports (or imports) a small quantity to only one country, as well as the very
large global firm with integrated operations and strategic alliances around the world. Within this
broad array, distinctions are often made among different types of international firms, and these
distinctions are helpful in understanding a firm's strategy, organization, and functional decisions
(for example, its financial, administrative, marketing, human resource, or operations decisions).
One distinction that can be helpful is the distinction between multi-domestic operations, with
independent subsidiaries which act essentially as domestic firms, and global operations, with
integrated subsidiaries which are closely related and interconnected. These may be thought of as
the two ends of a continuum, with many possibilities in between. Firms are unlikely to be at one
end of the continuum, though, as they often combine aspects of multi-domestic operations with
aspects of global operations.

INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

1.2 The International Business Organization Redbull

Austrian company Red Bull does such a great job with global marketing that many
Americans assume its a local brand. How? One of its most successful tactics is to host extreme
sports events all over the world. From the Red Bull Indianapolis Grand Prix to the Red Bull Air
Race in the United Kingdom to the Red Bull Soapbox Race in Jordan, the brand's powerful event
marketing strategy takes them here, there, and everywhere. Aside from events, Red Bull's
packaging also plays a part in its global appeal. "Red Bull really looks like a product from a
global economy. It doesn't look like a traditional American soft drink -- it's not in a 12-ounce can,
it's not sold in a bottle, and it doesn't have script lettering like Pepsi or Coke. It looks European.
That matters," explains Harvard Business School professor Nancy F. Koehn in a 2001 article.
Though it's since diversified its product selection since that article was published, the fact
remains that Red Bull's consistent packaging has helped this brand go global.

INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

2.0 WHY COMPANIES ENGAGE IN INTERNATIONAL BUSINESS - AMERSEAL

INDUSTRIAL SDN BHD

When operating internationally, a company should consider its mission, its objectives, and
strategy. Four main operating objectives that may influence companies to engage in international
business. They are:
1. To expand sales
2. To acquire resources
3. To diversify sources of sales and supplies
4. To minimize competitive risk

For example AMERSEAL INDUSTRIAL SDN BHD is a leading manufacturer for a wide range
of industrial and household adhesives, premium grade silicone and sealants, cleaning products,
oil & fuel treatment products, lubricants for both industrial and automotive usage. All the
products are marketed under the brand name HARDEX, through various sectors such,
automotive repair & maintenance, construction, hardware, furniture and many others light and
heavy industrial.
HARDEX brand distribution network is spread over the globe into more than 50 countries
worldwide, across South East Asia, Asia, India, African Continent, Middle East, Canada, USA,
Central and South America.
The companys manufacturing plants in Bandar Indera Mahkota and Gambang, Pahang in
Malaysia are equipped with the latest state-of-the-art technology and new generation production
facilities. The chemical engineers and designers worked closely with the customer in an effort to
continuously refine and optimize product packaging, quality and standards to enhance their
competitiveness in an ever changing market environment.

INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

2.1 Expand Sales: Companies sales are dependent on two factors: the consumers interest in
their products or services and the consumers willingness and ability to buy them. The number of
people and the amount of their purchasing power are higher for the world as a whole than for a
single country, so companies may increase their sales by reaching international business. For
example, HARDEX brand distribution network is spread over the globe into more than 50
countries worldwide, across South East Asia, Asia, India, African Continent, Middle East,
Canada, USA, Central and South America.

2.2 Acquire Resources: Manufacturers and distributors seek out products, services and
components produced in foreign countries. They also look for foreign capital, technologies, and
information they can use at home. Acquiring resources may enable a company to improve its
product quality and differentiate itself from competitors in both cases, potentially increasing
market share and profits. Although a company may initially use domestic resources to
expand abroad, once the foreign operations are in place, the foreign earnings may the serve as
resources for domestic operations. For example, Amerseal Industrial is proud of their
achievement and accomplishment of being a local Malaysian name that has made its presence
globally. The company continued to innovate and improve upon on its products and distribution
network to further strengthen the brand name.
2.3 Diversify Sources of Sales and Supplies: To minimize swings in sales and profits,
companies may seek out foreign markets to take advantage of business cyclerecessions and
expansionsdifferences among countries. Sales decrease in a country that is in a recession and
increase in one that is expanding economically. By obtaining supplies of the same product or
component from different countries, companies may be able to avoid the full impact of
price swings or shortages in any one country. So, all Amerseal Industrial products are
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INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

manufactured under stringent standard operating procedures, in line with good manufacturing
practices and subject to rigorous monitoring for quality control. Customers can be assured that
all products meet international standards and are capable of withstanding all mechanical demand
required.
2.4 Minimize Competitive Risk: Many companies enter into international business for
defensive reasons. They want to counter advantages competitors might gain in foreign markets
that, in turn, could hurt them domestically. For example, Amerseal Industrial and Xtraseal
Industrial compete in the same domestic market. Amerseal Industrial may fear that Xtraseal
Industrial will generate large profits from a foreign market if left alone to serve that market.
Xtraseal Industrial may then use those profits in various ways (such as additional advertising or
development of improved products) to improve its competitive position in the domestic market.
Companies harboring such a fear may enter foreign markets primarily to prevent a competitor
from gaining advantages

INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

3.0 CONCLUSION
The Advantages And Disadvantages Of International Business
3.1 Advantages
3.1.1. You can offer a wider range of products globally than you may be able to offer
locally.
Even if one or more of your products fail to sell well locally, you can look for new markets
where it is in demand. When you are open globally, you wont need to dump unsold
inventory for a loss.
3.1.2. Sales There is less competition in the global marketplace than at home.
Youll have a chance to capture a larger market share. You may also have an advantage if
your product is of a much higher quality that the local version. Even if the local competition
has access to a superior product, they may have been selling a cheaper, inferior product.

3.1.3. There are different trends and events all over the world.
When you market to several countries, you are not vulnerable to any one trend or event. For
example, your product may not we welcome in one country but in high demand in another.
Also, if there is a huge natural disaster in one place, it wont totally disrupt your business
because you have sales efforts in other places.

INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

3.2 Disadvantages
3.2.1. Need to visit any country where you plan to do business and possibly live there
for a few months.
Emails are easily misunderstood, so it will be to your advantage to work with your business
partners face to face. It will be invaluable to learn how your partner works and thinks and
develop a personal rapport. Spending time with partners will also help you select the people
with whom you want to wor1k and avoid any dodgy people.
3.2.2. Have a clear understanding of what international business involves.
This is where professional help is essential. The laws of other countries are different, and you
need to know your new legal frameworks. This is extremely important, because it can cost
you a lot of time and money if you make a mistake at the beginning.
3.2.3. International business involves currency exchange.
This will always be a risk, but with the proper attention and advice, youll be able to weather
any great fluctuations in currency exchange.

3.3 Summary
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INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

In summary, companies engage in international business to expand sales, acquire

resources, diversify sales and supplies, and minimize competitive risk. International
business transactions have been growing rapidly because of technological improvements
and government policies. A company can engage in international business through
exports, imports, foreign investment. There is gradual evolution of international business
strategies.

4.0 REFERENCE

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INTERNATIONAL BUSINESS

CHUNG YAU LEONG

08DIBA15-0337

1. Allen, D., and M.E. Raynor. "Preparing for a New Global Business Environment:
Divided and Disorderly or Integrated and Harmonious?" Journal of Business Strategy 25,
no. 5 (September 2004): 1625.
2. Buckley, P.J., ed. What is International Business? Basingstoke, Hampshire; New York,
NY: Palgrave Macmillan, 2005.
3. Daniels, J.D., and L.H. Radebaugh. International Business: Environments and
Operations. Reading, MA: Addison-Wesley, 1997.
4. "Exploiting Opportunity." Business Mexico 15, no. 2 (February 2005): 5457.
5. Hofstede, G. Culture's Consequences: Individual Differences in Work Related
Values. Beverly Hills, CA: Sage Publications, 1980.
6. Kauser, S. and V. Shaw. "The Influence of Behavioural and Organisational
Characteristics on the Success of International Strategic Alliances." International
Marketing Review 21, no. 1 (2004): 1752.
7. Innovating for the environment
http://www.matrade.gov.my/en/malaysian-exporters/going-global/exporters-successstories/amerseal-industrial-sdn-bhd
8. http://www.xtraseal.com/product.php?cid=6

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