Business Environment Module 2

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Business Environment Module 2

Business EnvironmentModule 2Eldo Geevarghese Zacharia KayyalathAsst. Professor/ Placement OfficerLEAD College of ManagementPalakkad, Kerala9/27/20131LEAD COLLEGE OF MANAGEMENT, PALAKKAD

19/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD, KERALAELDO GEEVARGHESE ZACHARIA KAYYALATH

Birds Eye ReviewGlobalization Strategies

World Trade Organization implications

Public Sector in India- role in economic devp

Privatization

Intellectual Property Rights (IPR) and related issues.

9/27/20132LEAD COLLEGE OF MANAGEMENT, PALAKKAD

ELDO GEEVARGHESE ZACHARIA KAYYALATH9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD, KERALA2

Globalization Interdependence among countries

Cross border transactions

Goods

Services

Capital flows

Technologies

People

Knowledge 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD3

Globalization IMF Defines:

The growing interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and of international capital flows and also through the more rapid and widespread diffusion of technologies

9/27/20134LEAD COLLEGE OF MANAGEMENT, PALAKKAD

.or elseIt is the closer integration. of the countries and the people of the world ...brought about by the enormous reduction of costs of transportation and communication.., and the breaking down of artificial barriers to the flows of the following across bordersGoodsServicesCapitalKnowledgepeople9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD5

First Echelon1. Buzz FrEedOm:Import / x-potsourcing finance and other factors from abroadFree flow of investments

What do you MEAN?We WANT Economic Liberalization first to achieve the so called globelization 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD6Govt. should lift restrictions

2. Facilities

Where is the facilities?9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD7

Oh I seeee

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD8

3. Resource:s Fin-A-nceTech-o-logy R & D Man-A-gerial e-X-perti-s-eBRA-nd I-mageH Resourse

Note the point: Small firms do excel with their unique advantages.9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD9

4. Competitiveness:Low costProduct qulityProduct differentitionTechnologicl superiorityFter sles servisesMrketing strtegies

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Foreign Market Entry StrategiesExportingLicensing/FranchisingContract ManufacturingAssembly operationsFully owned manufacturing facilitiesJVM&AStrategic allianceThird country location9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD11

ExportingTraditional modeGood when:Volume of foreign buzz is not large enough to justify the production in a foreign destinationCost of production in a foreign destination is highRisks involved in investments in a foreign destination

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD12

Licensing and franchising:Firm in one country (licensor) permits a firm in another country (licensee) to use its IPRPatents Trade marksCopyrightsTechnologyTechnical know howMarketing or any other skills

Monetary benefits is in the form of royalty/fees etc..In many countries, it is regulated by the various governments (say 5% of sales) 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD13

Contract Manufacturing:

Firms doing international marketing contracts with firms in foreign countries to manufacture or assemble the products while retaining the responsibility of marketing the product. 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD14

.for Eg

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD15

.wow.advsNo setting up of production unitsIf ideal production facilities are avail ABLE its easy for the marketer to get startedLow cost high profitNo risk in investing in foreign companies9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD16

Assembly OperationsIdeal when there are economies of scale in the manufacturing of parts and components labour intensive labour is cheap in foreign market Low import duties on import of parts 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD17

Joint Ventures Sharing of ownership and management in an enterprise

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD18

Favoring GlobeHRWide baseGrowing domestic marketTran nationalization of world economiesEconomic liberalizationCompetition 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD19

Obstacles to GlobalizationGovt policies and proceduresHigh costPoor infrastructureObsolescenceResistance to changePoor quality imageSupply problemLimited R & DLack of Growing competition

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD20

Public Sector in India- role in economic devpRailwaysPostal ServicesTelecom ServicesPower Sector Public transportation ServicesEducational InstitutionsBanking SectorOil and Gas SectorAgricultural SectorTourism SectorAir Transportation

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD21

Privatization

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What should the govt do?Public SafetyDefenseJusticeProtect public health/environmentEducationEnsure democracyOther?9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD23

Dont Panic9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD24

X-pl-nation Transfer of ownership and/or management of an enterprise from the public sector to private sector.

Opening up.. of the industries (only and not any other things) that has been reserved for public to the private sector.

sAle of govt -ASS-ets 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD25

y?Rise of the new right

Dominance of economies

International trends & organisations

Financial crisis

Challenges to role, size & scope of public sector

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD26

How govt interest is hand-ledRegulatory regime: new or enhanced Government dividend/ taxes..Government role in governance AppointmentsRepresentation on board etc

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Sweets of pvt-i-zation the fiscal burden of the stateEnable the govt to mop up fundsHelps state to trim the size of A-dm-strat-ve mAc-eryConcentrate more on essential state functionsBtr mgmt of enter-prize

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD28

Black mark!!!Think pls.9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD29

HmmCertain noble objectives of public sector will be hammeredConcentration of economic powers to few handsAcquisition of national firms by foreign firmsForegoing future streams of profit for the govtVested interest behind privatization 9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD30

WTOWTO was formed on 1st Jan,1995.

It took over GATT (General agreement on tariffs & trade) in 8th round of GATT, popularly known as Uruguay Round

member nations of GATT decided to set up a new organization, World Trade Organization in place of GATT.

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD31

WTF enjoys identical legal status , privileges , Immunities that the world bank & IMF get9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD32

The WTO was born out of theGeneral Agreement on Tariffs and Trade (GATT).

Headquarters:Geneva, Switzerland

Formation:1 January 1995

Membership:153 member countries

Budget:163 million USD (Approx).9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD33

9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD34GATTIt was ad hoc & provisional.

It had no provision for creating an organization.

It allowed contradictions in local law & GATT agreements.WTOIt is permanent.

It has legal basis because member nations have verified the WTO agreements.

It doesn't allow any contradictions in local law.

WTO Vs GATTWTO has more authority than GATT

O-b-ject-ivesTo implement the new world trade agreement.

To promote multilateral trade .

To promote free trade by abolishing tariff & non-tariff barriers.

To enhance competitiveness among all trading partners so as to benefit consumers.9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD35

To increase the level of production & productivity with a view to increase the level of employment in the world.

To expand & utilise world resources in the most optimum manner.

To improve the level of living for the global population & speed up economic development of the member nations.

To take special steps for the development of poorest nations9/27/2013LEAD COLLEGE OF MANAGEMENT, PALAKKAD36

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