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International Business English国际商务英语Lesson 1 International Business第一课国际商务*International business refers to transaction between parties from different countries. Sometimes business across the borders of different customs areas of the same country is also regarded as import and export, such as business between Hong Kong and Taiwan.*International business involves more factors and thus is more complicated than domestic business. The following are some major differences between the two.1). The countries involved often have different legal systems, and one or more parties will have to adjust themselves to operate in compliance with the foreign law.2). Different counties usually use different currencies and the parties concerned will have to decide which currency to use and do everything necessary as regards conversion etc. Uncertainties and even risks are often involved in the use of a foreign currency.3).Cultural differences including language, customs, traditions, religion, value, behaviour etc. often constitute challenges and even traps for people engaged in international business.4). Countries vary in natural and economic conditions and may have different policies towards foreign trade and investment, making international business more complex than domestic business.*With the development of economic globalisation, few people or companies can completely stay away from international business. Some knowledge in this respect is necessary both for the benefit of enterprises and personal advancement.*International business first took the form of commodity trade, i.e. exporting and importing goods produced or manufactured in one country for consumption or resale in another. This form of trade is also referred to as visible trade. Later a different kind of trade in the form of transportation, communication, banking, insurance, consulting, information etc. gradually became more and more important. This type of trade is called invisible trade. Today, the contribution of service industries of the developed countries constitutes over 60% of their gross domestic products and account for an increasing proportion of world trade. *Another important form of international business is supplying capital by residents of one country to another, known as international investments. Such investments can be classified into two categories. The first kindof investments, foreign direct investments or FDI for short is made for returns through controlling the enterprises or assets invested in in a host country.*The host country is a foreign country where the investor operates, while the country where the headquarters of the investor is located is called the home country. The second kind of investment, portfolio investment, refers to purchases of foreign financial assets for a purpose other than controlling. Such financial assets may be stocks, bonds or certificates of deposit.Stocks are also called capital stocks or bonds. Bonds are papers issued by a government or a firm with promise to pay back the money lent or invested together with interest. The maturity period of a bond is at least one year, often longer, for example five, or even ten years. Certificates of deposit generally involve large amounts, say 25 thousand US dollars *Besides trade and investment, international licensing and franchising are sometimes taken as a means of entering a foreign market. In licensing, a firm leases the right to use its intellectual property to a firm in another country. Such intellectual property may be trademarks, brand names, patents, copyrights or technology. Firms choose licensing because they do not have to make cash payments to start business, and can simply receive income in the form of royaltyBesides, they can benefit from locational advantages of foreign operation without any obligations in ownership or management. The use of licensing is particularly encouraged by high customs duty and non-tariff barriers on the part of the host country. However it is not advisable to use licensing in countries with weak intellectual property protection since the licensor may have difficulty in enforcing licensing agreement.*Franchising can be regarded as a special form of licensing. Under franchising, a firm, called the franchisee, is allowed to operate in the name of another, called the franchiser who provides the former with trademarks, brand names, logos, and operating techniques for royalty. In comparison with the relation between the licenser and the licensee, the franchiser has more control over and provides more support for the franchisee.*The franchiser can develop internationally and gain access to useful information about the local market with little risk and cost, and the franchisee can easily get into a business with established products or services. Franchising is fairly popular especially in hotel and restaurant business.*Other forms for participating in international business are management contract, contract manufacturing, and turnkey project.*Under a management contract, one company offers managerial or other specialized services to another within a particular period for a flat payment or a percentage of the relevant business volume. Sometimes bonusesbased on profitability or sales growth are also specified in management contracts.Government policies often have a lot to do with management contracts. When a government forbids foreign ownership in certain industries it considers to be of strategic importance but lacks the expertise for operation, management contracts may be a practical choice enabling a foreign company to operate in the industry without owning the assets*By contract manufacturing, a firm can concentrate on their strongest part in the value chain, e.g. marketing, while contracting with foreign companies for the manufacture of their products. Such firms can reduce the amount of their resources devoted to manufacture and benefit from location advantages from production in host countries. However, loss of control over the production process may give rise to problems in respect of quality and time of delivery.*For an international turnkey project, a firm signs a contract with a foreign purchaser and undertakes all the designing, contracting and facility equipping before handing it over to the latter upon completion. Such projects are often large and complex and take a long period to complete. Payment for a turnkey project may be made at fixed total price or on a cost plus basis. The latter way of payment shifts the burden of possible additional cost over the original budget onto the purchaser *BOT is a popular variant of the turnkey project where B stands for Build, O for operate and T for transfer. For a BOT project, a firm operate a facility for a period of time after building it up before finally transferring it to a foreign company. Making profit from operating the project for a period is the major difference between BOT and the common turnkey project. Needless to say, the contractor has to bear the financial and other risks that may occur in the period of operation.*Some Words and Expressionscustoms area 关税区in compliance with 遵从，遵照conversion n.货币兑换visible trade 有形贸易resale n.转售invisible trade 无形贸易gross domestic product 国内生产总值for short 缩写为account for 占……比例headquarters n.总部trap n.陷阱，圈套portfolio investment 证券投资stocks n.股票bonds n.债券maturity n.（票据等）到期，到期日certificate of deposit 大额存单other than 而不是licensing n.许可经营franchising n.特许经营n.商标advisable adj.可行的，适当的patent n.专利royalty n.专利使用费，许可使用费，版税copyright n.版权licensor n.给予许可的人licensee n.接受许可的人franchiser n.给予特许的人franchisee n.接受特许的人logo n.标识，标记management contract 管理合同expertise n.专门知识bonus n.红利，奖金，津贴flat adj.一律的，无变动的contract manufacturing 承包生产value chain 价值链turnkey project 交钥匙工程BOT(Build, Operate, Transfer）建设，经营，移交Stand for 表示，代表variant n.变形，变体Lesson twoIncome Level and the World Market第二课收入水平和世界市场This lesson discusses the relation between the income level and the market potential, and the features of high income, middle income and low income markets.Special analyses are made on Triad, i.e. the markets of North America,European Union and Japan, as well as other markets that are closely related with China.The first two paragraphs mainly deal with GNP and GDP, two important concepts usedto indicate the total size of an economy. GDP, Gross Domestic Product, stresses the place of production while GNP, Gross National Product, on the ownership of production factors.GDP is used by most countries now where as GNP was more popular before the 1990s. The actual figures of a country’s GNP and GDP are, however, quite similar in most cases and we can use whichever figure that is available.TEXT:In assessing the potential of a market, people often look at its income level since it provides clues about the purchasing power of its residents. The concepts national income and national product have roughly the same value and can be used interchangeably if our interest is in their sum total which is measured as the market value of the total output of goods and services of an economy in a given period, usually a year. The differenceis only in their emphasis. The former stresses the income generated by turning out the products while the latter, the value of the product s themselves. Gross National Product, GNP, and Gross Domestic Product, GDP, are two important concepts used to indicate a country’s total income. GNP refers to the market value of goods and services produced by the property and labor owned by the residents of an economy. This term was used by most governments before the 1990s国民生产总值(GNP)是最重要的宏观经济指标,它是指一个国家地区的国民经济在一定时期（一般1年）内以货币表现的全部最终产品（含货物和服务）价值的总和。
战略业务单元(重定向自战略事业单元)战略业务单元（Strategic Business Unit，SBU）战略业务单元的涵义一般管理着相当多的不同的业务范围，它的每项业务都要有自己的战略。
通用电气公司把它所经营的范围划分为49种，并称为战略业务单元(亦称战略性事业单位、策略性事业单位。
即SBU，Strategic Business Units）。
战略业务单元是公司中的一个单位，或者职能单元，它是以企业所服务的独立的产品、行业或市场为基础，由企业若干事业部或事业部的某些部分组成的战略组织。
战略业务单位必须在公司总体目标和战略的约束下，执行自己的战略管理过程。
在这个执行过程中其经营能力不是持续稳定的，而是在不断变化的，可能会得到加强，也可能会被削弱，这取决于公司的资源分配状况。
[编辑]战略业务单位的特征一个理想的战略业务单位应该具备以下特征。
1 .有独立的业务；它是一项独立业务或相关业务的集合体，但在计划工作中能与公司其他业务分开而单独作业.2 .有不同的任务；它有区别于其他业务单位的具体任务，大目标相同，从不同的方向去努力.3 .有自己的竞争者；在各自的领域都有现实的或潜在的对手.4 .掌握一定的资源；掌握公司分配的资源的控制权，以创造新的资源.5. 有自己的管理班子;它往往有一位经理，负责战略计划、利润业绩，并且控制影响利润的大多数因素.6 .能从战略计划中得到好处;它有相对的独立权，能按贡献分得应有的利润和其他好处.7 .可以独立计划其他业务.可以扩展相关业务或新的业业务.[编辑]战略业务单元的特点很明显，用策略经营单位组织的主要好处是保证在大公司中某一产品不致被销售量大、利润高的其他产品挤掉，还可以使负责指导与推销某一产品或产品系列的经理和职工集中注意力并倾注其全部力量。
因此它也是一种组织技巧，可以保护企业家的注意力和精力，这一点是小型公司的特点。
实际上，这是一种提高大公司或许很缺乏的“企业家经营之道”的好方法。
Case 6 – Bank of America Corporation (BAC) – 2018 –Teachers’ Note by Forest R. DavidCase AbstractHeadquartered in Charlotte, North Carolina, Bank of America Corporation serves individuals, businesses, institutional investors, and large corporations and governments worldwide on a variety of financial needs. Having over 209 thousand employees, Bank of America reported 2017 revenues in excess of $87 billion. The company operates in over 40 countries and all 50 US states with a footprint that includes 80 percent of the US population. The company has over 16,000 ATMs and 34 million accounts with 25 million mobile users and 5,500 branches. The company serves over three million small business owners and is considered the global leader in investment banking and trading. By some metrics, Bank of America is the second largest bank in the United States.The organization is made up of Bank of America, Merrill Lynch, US Trust, and Bank of America Merrill Lynch and offers eight lines of businesses. These include retail, preferred and small business, Merrill Lynch Wealth Management, and US Trust for individual consumers. The company offers commercial, corporate, and investment banking to businesses. For institutional investors, Bank of America offers brokerage, banking, trust, and retirement products.Vision Statement AnalysisEffective vision statements exhibit five characteristics that can be used as guidelines for writing or evaluating vision statements. Any vision statement that scores a 5 out of 5 on these characteristics is exemplary. In Chapter 2, this vision statement assessment technique is referred to as “The 5 out of 5 Test.”1.Clear: reveals type of industry and what firm strives to become2.Futuristic: reveals what the firm strives to become or accomplish within 5 years3.Concise: one sentence in length4.Unique: reveals the firm’s competitive advantage5.Inspiring: motivates readers to support the firmAs presented in the case, Bank of America’s vision statement is “to build meaningful connections that help make your financial life better.” The statement arguably does not meet any of the five characteristics listed above for an exemplary vision statement. An improved vision statement for Bank of America could read as follows:Mission Statement AnalysisThe 10 desired characteristics of an effective mission statement are as follows:1. Broad in scope; does not include monetary amounts, numbers, percentages, ratios, or objectives2. Concise; fewer than one hundred words in length3. Inspiring4. Identifies the utility of a firm’s products5. Reveals that the firm is socially responsible6. Reveals that the firm is environmentally responsible7. Includes nine components: customers, products or services, markets, technology, concern forsurvival/growth/profits, philosophy, distinctive competence, concern for public image,concern for employees8. Reconciliatory; resolves divergent views among stakeholders9. Enduring but never cast in stone10. Attracts customers; is written from a customer perspectiveThe 9 desired components of an effective mission statement are as follows:1. Customers—Who are the firm’s present and potential customers?2. Products or services—What are the firm’s major products or services?3. Markets—Geographically, where does the firm compete?4. Technology—Is the firm technologically current?5. Concern for survival, growth, and profitability—Is the firm committed to growth and financialsoundness?6. Philosophy—What are the basic beliefs, values, aspirations, and ethical priorities of the firm?7. Distinctive competence—What is the firm’s major competitive advantage?8. Concern for public image—Is the firm responsive to social, community, and environmentalconcerns?9. C oncern for employees—Are employees a valuable asset of the firm?As indicated in the case, Bank of America’s mission statement (paraphrased) is given as follows (and critiqued by the authors with #’s insid e parentheses):“We are here to help make financial lives better by connecting clients and communities to the resources they need to be successful (7). We are focused on responsible growth, environmental, social, and governance (ESG) leadership, helping to create jobs, developing communities, fostering economic mobility, and addressing society’s biggest challenges (8). We manage risk and provide a return to our clients and shareholders (5). We recognize that we can only be successful when the individuals, companies, communities, and employees we serve are successful (1).”The author critique reveals that the existing statement lacks five components: # 2, 3, 4, 6, and 9. A proposed mission statement for Bank of America that includes the nine components and meets the ten characteristics is given below:Bank of America aspires to be the global leader in delivering financial and investment solutions (2, 3) for individuals, small businesses, corporations, and municipalities (1). We incorporate the latest technology (4), act responsibly (6, 7), appreciate our dedicated employees (9), strive to enhance the communities we serve (8), and seek to grow and prosper for our shareholders (5). (49 words)External Factor Evaluation (EFE) MatrixCompetitive Profile MatrixFinancial Ratio AnalysisInternal Factor Evaluation (IFE) MatrixStrength-Weakness-Opportunity-Threat (SWOT) MatrixSO Strategies1.Invest $800 million in underwriting activities in Germany (S2, S4, S9, O1).2.Form contracts with 30 new athletic teams to provide credit cards with the athletic team’slogo present on the card (S3, S7, S10, O5, O8).3.Invest $200 million advertising to customers the benefits of switching all assets to Bankof America due to the equity-trading platform of Merrill Edge and other savings benefits when the two accounts are combined (S1, S3, S6, S7, O4, O5, O6, O7).4.Expand the underwriting business in the USA by $600 million as the stock market is at anall-time high (S4, O2).WO Strategies1.Increase capital to mergers and acquisitions by $600 million (W8, O2).2.Invest $800 million in underwriting activities in Germany (W1, W2, W3, O1).3.Divest the poorest performing assets in the Global Wealth & Investment Managementdivision (W3, O5, O8).ST Strategies1.Invest $1,200 million in the Global Markets division with focus on clients in the currencybusiness to better take advantage of wild currency swings (S3, S8, T1, T2, T3).2.Continue to divest all underperforming businesses (S3, S5, S7, T3, T4, T6, T10).3.Invest $500 million to help prevent cybercrime (S1, S2, S3, S5, T7).4.Institute a small annual fee on most credit cards (S10, T8, T9).WT Strategies1.Divest the poorest performing assets in the Global Wealth & Investment Managementdivision (W3, T1, T2, T10).2.Increase presence in Eastern Europe by $500 million (W4, W5, T1, T2, T6).3.Increase capital to mergers and acquisitions by $600 million (W8, T1, T2).4.Hire 50 new experts and devote increased capital to producing the single best bankingmobile platform on the planet (W1, W2, W10, T4, T5, T9, T10).Strategic Position and Action Evaluation (SPACE) AnalysisBoston Consulting Group (BCG) Matrix Analysis1.Consumer Banking2.Global Wealth & Investment Management3.Global Banking4.Global MarketsNote: Regarding BOA’s RMSP, JP Morgan is the leader in Division 1 and 2. For purposes of this note, the division names BOA uses were used. There may be slight differences in how the two rival firms allocate businesses across similar division names.Internal-External (IE) Matrix Analysis1. Consumer Banking2. Global Wealth & Investment Management3. Global Banking4. Global MarketsGrand Strategy Matrix AnalysisQuantitative Strategic Planning Matrix (QSPM) Analysis1.Strategy 1: Increase capital to mergers and acquisitions by $600 million.2.Strategy 2: Invest $800 million in underwriting activities in Germany. Recommendations with Associated Costs1. Increase capital to mergers and acquisitions by $600 million.2. Invest $800 million in underwriting activities in Germany.3. Divest the poorest performing assets in the Global Wealth & Investment Managementdivision.4. Invest $1,200 million in the Global Markets division with focus on clients in thecurrency business to better take advantage of wild currency swings.5. Invest $500 million to help prevent cybercrime.6. Hire 50 new experts and devote increased capital to producing the single best bankingmobile platform on the planet for an investment of $500 million.Total Investment = $3,600 millionOrganizational Chart AnalysisChapter 7 presents 15 guidelines for developing an effective organizational chart, as follows:1.Instead of chairman of the board, make it chairperson of the board.2.Make sure the board of directors reveals diversity in race, ethnicity, gender, and age.3.Make sure the chair of the board is not also the CEO or president of the company.4.Make sure the CEO of the firm does not also carry the title president.5.Reserve the title president for the division heads of the firm.6.Include a COO if divisions are large or geographically dispersed.7.Make sure only presidents of divisions report to the COO.8.Make sure functional executives such as CFO, CIO, CMO, CSO, R&D, CLO, CTO, andHRM report to the CEO, not the COO.9.Make sure every executive has one boss, so lines in the chart should be drawn accordingly,assuring unity of command.10.Make sure span of control is reasonable, probably no more than 10 persons reporting to anyother person.11.Make sure diversity in race, ethnicity, gender, and age is well represented among corporateexecutives.12.Avoid a functional type structure for all but the smallest firms.13.Decentralize, using some form of divisional structure, whenever possible.e an SBU type structure for large firms with more than 10 divisions.15.Make sure executive titles match product names as best possible in division-by-product andSBU-designated firms.Bank of America (BOA) appears to operate from a divisional-by-product type structure with two divisional Presidents and a Head of Global Wealth and Investment Management reporting to a Chief Administrative Officer.Exhibit 1 - BOA’s Top Executives and Organizational Structure1. Brian Moynihan, Chairman of the Board and CEO2. Dean Athanasia, President, Preferred and Small Business Banking, andCo-head, Consumer Banking3. Catherine Bessant, Chief Operations and Technology Officer4. Sheri Bronstein, Global HR Executive5. Paul Donofrio, CFO6. Anne Finucane, Vice Chairman7. Geoffrey Greener, Chief Risk Officer8. Christine Katziff, Corporate General Auditor9. Terry Laughlin, Vice Chairman, Head of Global Wealth and InvestmentManagement10. David Leitch, Global General Counsel11. Thomas Montag, Chief Operating Officer12. Thong Nguyen, President of Retail Banking and Co-head of ConsumerBanking13. Andrea Smith, Chief Administrative Officer14. Bruce Thompson, Vice Chairman13 4 5 6 7 8 10 11 13 142 9 12Note: #2, #9, and #12 report to #13.Author Suggestions to Improve the Organizational Chart Presented in the Case1.#2, #9, #12, and #13 should all become Presidents of regions, such as President NortheastUSA, President Southeast USA, President Western USA, President Outside USA and all report to the COO (#11). There is need to monitor and maximize each branch office as a separate profit center, headed by a branch manager. This whole structure should be astrategic business unit, (SBU) with the units being by-region, and numerous state regional managers reporting to their respective SBU President.2.Brian Moynihan should be either CEO or Chair of the Board, not both, so appoint areplacement for the position he relinquishes. We suggest that he be Chair of the Board and let #6 or #14 be CEO.3.Change Chairman to Chair or Chairperson.4.Clarify in the titles of #6 and #14 what responsibilities do the Vice Chairman positionshave.5.In #2, delete the idea of Co-Heads.6.The new chart should look something like the following:12 3 4 5 6 7 8 9 108 9 10 11Numbers 8 through 11 are regional Presidents reporting to the COO that could be #6. Perceptual Map AnalysisCorporate Valuation Analysis (in millions)EPS/EBIT Analysis (in millions)Projected Financial Statements1.Adjustment to Plant Property and Equipment of $500 million in projected year 1 and$500 million in projected year 2.2.All $3,600 million will be raised in in projected year 1, 100% through debt.3.Increase dividends over all 3 projected years, as revealed in the retained earnings table.Retained Earnings TableProjected Financial Ratio AnalysisEpilogueBank of America has become the first Wall Street bank to pick Dublin to be its new base for its European Union (EU).The move is because Britain is planning to officially leave the European Union in March 2019. Numerous international banks are planning to set up subsidiaries in the European Union to ensure they can continue to serve clients in case their London operations lose the ability to operate in the bloc after Britain leaves the Union. Similarly, Citigroup Inc. and Morgan Stanley have picked Frankfurt, Germany as bases for the EU hubs post Brexit.Unlike nearly all other large banks, Bank of America is planning to open as many as 500 branches in new markets, many of them in areas where JPMorgan Chase has ceased operations or is competing as the only really large bank. Specifically, Bank of America has outlined plans toexpand in nine markets, five of which are JPMorgan Chase strongholds where the company has historically had the benefit of being the only megabank in town. For example, in Ohio, Bank of America is opening new offices in Cincinnati, Columbus, and Cleveland. Likely to follow are Lexington, Kentucky and Indianapolis, Indiana. The nation's largest banks have started looking inland for growth.Adding branches is the only way for America's megabanks to grow since a law prohibits banks from acquiring others when they control more than 10 percent of the nation's deposits. So, as smaller banks are rapidly acquiring and merging with one another to scale their operations, Bank of America has to grow the old-fashioned way by opening new branches in new markets.On September 8, 2018, Bank of America surpassed 36 million digital banking clients across its online and mobile banking offerings, including more than 25 million clients using the bank’s mobile app, which continues to add thousands of new users every day. Also on that day, the company revealed that its artificial intelligence-driven, virtual financial assistant named Erica, surpassed 3 million users. Since its full launch in June 2018, Erica users have nearly doubled every month. The bank’s customers are most often engaging Erica to search transactions, view upcoming bills and account balances, and get their credit scores and account numbers.Bank of America’s clients increasingly turn to Zelle to pay friends and family. There are now more than 4 million active Zelle P2P users – an increase of more than 80 percent through September 2018 year-over-year.。
