CONTROL SYSTEMS OF
INTERNATIONAL
BUSINESS
BY
SREEJITH VM
INTRODUCTION
International
business
consists
of
all
commercial
transactionsincluding
sales,
investments,
and
transportationthat take place between two or more
countries
CONTROL SYSTEMS OF IB
Global business organizing system
Information system
Global business control system
Integration of international business
1.
GLOBAL BUSINESS
ORGANIZING SYSTEM
Logistic management
Logistics is the process of planning, implementing and
controlling the efficient, cost-effective flow and storage
of raw materials, in- process inventory, finished goods
and related information from point of origin to point of
consumption for the purpose of conforming to customer
requirements
The mission of logistics is to get the right goods or
services to the right place, at he right time, and in the
desired condition and quantity in relation to customers
order
MAIN LOGISTICS ACTIVITIES AND
DECISIONS:
cooperate with marketing to set customer service
levels, facility location decisions,
transportation activities (eg. transportation mode
selection, vehicle scheduling, carrier routing)
inventory
management
(inventory
short
-term
forecasting, planning and control, cooperate with
production to calculate EOQ, sequence and time
production )
Information
collection
and
flows
and
order
processing,
warehousing and materials handling,
packaging and packing
7 PRINCIPLES OF SUPPLY
CHIAN MANAGEMENT
Principle 1: Segment Customers Based on Service Needs
segments customers based on logistics and supply chain needs
Principle 2: Customize the Logistics Network
stresses the need to develop supply chain approaches that are
responsive to the needs of individual customer segments
Principle 3: Listen to Signals of Demand and Plan Accordingly
see that demand planning is responsive to and aligned with market
signals such as point-of-sale information
Principle 4: Differentiate Products Closer to the Customer
postponing product differentiation and gaining greater understanding and
control of cycle times, supply chain efficiency and effectiveness will be
positively impacted
Principle 5: Source Strategically
excellent supply chain management requires customers and suppliers to
work together to meet overall supply chain objectives
Principle 6: Develop a Supply Chainwide Technology Strategy
replace inflexible, poorly integrated transactional systems with enterprisewide systems
Principle 7: Adopt Channel-Spanning Performance Measures
the realization of supply chain objectives will be essential to the long-term
success of the individual participants
2. INTERNATIONAL
CHANNEL SYSTEM
The international channel system consist of 2 sub
systems , namely
Domestic system
Foreign system
There are two types of exporting, namely
Direct exporting
Indirect exporting
DIRECT EXPORTING
It refers to the sale in the foreign market directly by the
manufacturer. Firms with considerable export business
usually resort to direct exporting
Types of foreign intermediaries
Importers
Distributors
Wholesalers
Retailers
Joint ventures/franchisees
INDIRECT EXPORTING
The indirect method is more popular with firms which are just
beginning their exporting activities and with those whose export
business is not considerable. 2 alternative channel for indirect
exporting
International middleman
Export merchants
Trading companies
Agents or brokers
Co operative organizations
the co operative exporting organizations which represents a
cross between a direct and indirect export carries on exporting
activities on behalf of several producers and is partially under the
administrative control of the manufacturer
FACTORS INFLUENCING
CHANNEL SELECTION
Product characteristics
Market and customer characteristics
Middleman characteristics
Company characteristics and objectives
Competitors characteristics
Environmental characteristics
DEVELOPING LOGISTICS
STRATEGY
Integrating logistics with marketing into the strategic planning
process can be a means to improve customer service and increase
sales.
Two strategic orientations:
Process orientation:
creating a system of only value-adding
logistics activities
Information / channel orientation: focus on coordination and
control within supply chain by synchronizing logistics activities
with related information
Important questions to ask: who are our customers how do we
segment them; what do our customers need; what are our
customer service goals for the upcoming year; what are our
current capabilities
Logistics vision includes what the organization hopes to
accomplish in the future
Each option to achieve the vision should be weighed and compared
using a cost/benefit analysis
Logistics value proposition is a unique commitment of a firm to an
individual or selected customer groups.
3.
INFORMATION
SYSTEM
Large firms have been running internal global information
system
The business use of internet can be in the form of internet
support service, sales of goods and service and marketing.
Access to the internet may promote an international
strategy as it provides an easy access to an export market.
The use of electronic data interchange increase the speed
with which businesses can respond to their customers. The
use of email promotes the personal service provided by the
business
eg
logistic company use internet to support customer in
tracking consignments across the globe from thei.r origin
to final destination
4. GLOBAL BUSINESS
CONTROL SYSTEM
Global business control system are the metrics that are
used to measure the perfomance of sub units and make
judgements on how well international firms are running
them.
In todays globalized world, the market legislation and
business control take different forms and varieties in all
countries. Every country has to determine the level of
market liberty adequate to promote sustainable growth
INTEGRATION OF
INTERNATIONAL BUSINESS
The term economic integration is a procedure in which
countries work together with one other in order to trim down
or get rid of obstruction to the world wide flow of goods,
labor, resources
The most important advantage associated with economic
integration is trade creation, i.e., the member countries have
broader choice of product, service and provisions not
available earlier obtainable at a comparatively lesser price
subsequent to trade barriers as reduced tariffs or elimination
of tariff to motivate more trade
An economic integration motivates trade emancipation and
result in market place growth , extra savings to the country
and larger dissemination of know-how generates additional
job prospects
