ROLES RELATED TO INTERNATIONAL BUSINESS

Group members:

Hira Mehwish Safia Anees Anum Ansari Sidra Idrees Sidra Masroor

ROLES RELATED TO INTERNATIONAL BUSINESS

There are various roles that relates to international business. Like information technology & commercial banks plays vital role in international business.

We will discuss role of commercial banks in international business.

ROLE OF COMMERCIAL BANKS IN INTERNATIONAL BUSINESS:

Bank offer services:

for individually bank offer services like; 1.Foreign exchange. 2.Travellers check. 3.Electronic transfer.

For business bank plays a role of TRUSTY AGENT by offering services like ;
1. Documentary collection. 2. Letter of credit.

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DOCUMENTARY COLLECTION

A documentary collection is a process, in which the seller instructs his bank to forward documents related to the export of goods to the buyer's bank with a request to present these documents to the buyer for payment, indicating when and on what conditions these documents can be released to the buyer.

ADVANTAGES AND DISADVANTAGES OF DOCUMENTARY COLLECTION

LETTER OF CREDIT:

A letter of credit is a document issued by a financial institution, or a similar party, assuring payment to a seller of goods and/or services provided certain documents have been presented to the bank.

HELP OF FINANCIAL DEVICES IN INTERNATIONAL BUSINESS

FOREIGN EXCHANGE MARKET:

The foreign exchange market or currency market is a form of exchange for the global decentralized trading of international currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers .

FOREIGN EXCHANGE BANKS

-These banks act as a broker between commercial customer

and foreign exchanges around the world -International businesses receive payments in foreign currencies for their export, the income it receives from foreign investments and income received from licensing agreements with foreign firms. -International business use foreign exchange market to pay foreign firms for its products and services and when it makes direct investment in foreign country. International banks play major roles in these transactions.

FOREIGN BRANCH BANKING

- Some small commercial banks limit their reach to the local business community; but as business has gone global, so have commercial banks.
-Large banks such as Citigroup, Bank of America and Chase are retail (consumer) banks that also maintain full commercial banking activities in the United States with branches in many countries. - These larger banks may act as affiliates of smaller banks that do not have branch presences in other countries. -These banks also arrange deals between their customers globally, including strategic partnerships and project fulfillment agreements

LOAN FINANCING TO INTERNATIONAL BUSINESS

.

- Many commercial banks offers short as well as long term loan financing to international businesses. Many countries have form banks backed by government funding to provide funding for exporters and importers. -Banking sector plays vital role of catalysts in international market. Due to technology advances in banking sector, communication gap and delays in international business have really narrow down a lot.

SIGNIFICANCE:
-Without commercial banks, the international finance and import-export industry would not exist. -Commercial banks make possible the reliable transfer of funds and translation of business practices between different countries and different customs all over the world. -The global nature of commercial banking also makes possible the distribution of valuable economic and business information among customers and the capital markets of all countries. -Commercial banking also serves as a worldwide barometer of economic health and business trends

CORPORATE FINANCING
- Companies always need to borrow money to cover purchases of raw materials, machinery parts, inventory and/or payroll. - Banks with overseas branches or affiliates can simplify the process of corporate finance throughout a company's organization by consolidating the transaction procedures, reporting and record keeping. - International commercial bank can also provide referrals to professional service firms in other countries, as well as arrange introductions to other companies appropriate as customers or for strategic partnerships.

TRADE FINANCE
-Commercial banks doing international business are also called merchant banks because they finance trade between companies and customers located in different countries. - Done by issuing LOCs. - The LOC may also be used by the company to guarantee a manufacturer's loan, allowing it to finance the manufacture of the goods to be delivered.

INFORMATION TECHNOLOGY

Information technology (IT) is a field concerned with the use of technology in managing and processing information

Information technology can allow departments to more efficiently and successfully perform their business operations. Information technology is an important enabler of business success and innovation.

INFORMATION TECHNOLOGYS ROLE IN INTERNATIONAL BUSINESS

Information technology is everywhere in business Anyone involved in business must understand technology Business functions receiving the huge benefits from the information technology Customer service: click-to-talk, call scripting, auto answering, call centers

INFORMATION TECHNOLOGYS
IMPACTS ON BUSINESS
OPERATIONS

Reduce cost and improve productivity = supply chain management, enterprise resource planning Improve customer satisfaction and loyalty = customer relationship management, loyalty programs Create competitive advantage = business intelligence/data warehousing Generate growth = sales management systems Global expansion = e-business.

IMPACT ON INTERNATIONAL
BUSINESS OPERATIONS
. Accounting - provides quantitative information about the finances of the business including recording, measuring, and describing financial information.

Finance - deals with the strategic financial issues associated with increasing the value of the business, while observing applicable laws and social responsibilities

WHY INFORMATION TECHNOLOGY BECOMING A STRATEGIC RESOURCE?

1.

INTENSE COMPETITION: intense competition is forcing the organization to become more effective and efficient. GLOBALIZATION OF BUSINESS OPERATIONS: As the industry become more global it reduces time and space barriers in production , marketing and manufacturing operations. ORGANIZATIONAL CHANGES: with constant reorganization mergers and acquisitions top management realizes the need for flexibility through information technologies.

2.

3.

4.

TECHNOLOGY REVOLUTION: the performance-price ratio of a new generation of information technologies is making them more affordable amd useful to organization.

EFFICIENCY AND EFFECTIVENESS OF IT

Internet make the world smaller, large companies can now contact with employees and partners around the globe. IT also shrink the distance and time, simplified the complex business processes For example: JP Morgan is investing over 24 billion in over 1000 companies around the world

GROWTH OF E-COMMERCE
Number of letters, voice calls and faxes around the globe have reduced. 30% of internet users say it has resulted in new business.

Physical meetings and relationships are becoming less.

Electronic commerce spells the end of geography and borders as industrial organization constructs.

CONCLUSION:

In summary, advances in information technology have changed the way we live and have changed how people, businesses. We are living in a knowledge-driven era, where everyone has access to information thanks to internet and a variety of other sources of information. However, the market is dominated by those, who translate information into knowledge and use the knowledge to improve productivity and efficiency of their enterprises.

THANK YOU.