Intellectual property (IP) refers to the creations of the mind such as inventions, artistic and literary works, symbols, designs, names, and images that are used in commerce. IP is protected by law through patents, trademarks, and copyrights which enable people to earn recognition or derive financial gains from what they have created. By striking a balance between the interests of the inventors and the general public, the IP system aims to create an environment where creativity and innovation can flourish. Copyright is the term that is applied to describe the rights of the creators over their artistic and literary works. It covers items such as books, music, films, sculptures, computer programs, paintings, advertisements, maps, and technical drawings. The patent refers to the exclusive rights that are given to an invention. It gives the inventor the right to decide if their work can be used by others or not. Lastly, a Continue reading
International Business Management
Franchising – Definition, Types, Advantages and Disadvantages
Meaning and Definitions of Franchising In a sense, franchising is very much similar to branching. Franchising is a system for selectively distributing goods or services through outlets owned by the retailer or dealer. Basically, a franchise is a patent or trademark license, entitling the holder to market particular products or services under a brand name or trademark according the different terms and conditions. The origins of franchising as it is now defined can be clearly traced to one man: Isaac Singer. After the US Civil War in the 1860s, Singer had achieved the ability to mass-produce his famous sewing machines, but had no economically viable way of repairing and maintaining them across a country as geographically vast as the US. He began to license out servicing and repairs to local merchants around the country, who were later permitted to become regional salesmen for the machines too. Singer’s use of a Continue reading
Concept of Export Diversification in International Business
Earlier a country’s economic development was based either on the degree of specialization or diversification of a country’s production and trade structure. Based on Adam Smith’s concept towards the division of labor and specialization for economic growth and development to Heckscher-Ohlin Samuelson (HOS) model of international trade, countries should specialize in producing and specializing in the goods in which they have a comparative advantage. However, after the Second World War, the idea was that economic growth and development may be achieved by export diversification (not specialization). There were active efforts by the government to promote industrialization and economic growth. Export diversification is often the primary objective of many developed countries. Export diversification is also equally important for many developing countries. Some of the developing countries are dependent on a relatively small range of products, generally agricultural commodities. In other words, primary products constitute a large percentage of their overall export Continue reading
Cultural Sensitivity is Crucial Factor in Company’s International Business Success
Due to progress in communication, transformation and technologies which have performed in development of world’s economy, people from different nations, cultures, languages and backgrounds are now communicating, meeting and doing business with each other more than ever. As there is increase in business activities between people from different nations, cultures, languages and backgrounds, companies who are operating internationally or which are going to be a global they have to concentrate on many factors to be a successful in international market. One of the significant factors among them is a culture. For the success of any business in variety of countries or regions it requires to have understanding of how cultural differences across and within nations can affect the way business is practiced. The main determinants of culture are religion, political philosophy, economical philosophy, education, language, social structure etc. Businesses have to understand and match with all this cultural determinants, as Continue reading
Indian Depository Receipts (IDRs)
Indian Depository Receipts (IDRs) are transferable securities to be listed on Indian stock exchanges in the form of depository receipts created by a Domestic Depository in India against the underlying equity shares of the issuing company which is incorporated outside India. As per the definition given in the Companies (Issue of Indian Depository Receipts) Rules, 2004, Indian Depository Receipt is an instrument in the form of a Depository Receipt created by the Indian depository in India against the underlying equity shares of the issuing company. In an IDR, foreign companies would issue shares, to an Indian Depository (say National Security Depository Limited — NSDL), which would in turn issue depository receipts to investors in India. The actual shares underlying the IDRs would be held by an Overseas Custodian, which shall authorize the Indian Depository to issue the IDRs. The Indian Depository Receipts would have following features: Overseas Custodian: Foreign bank Continue reading
Sources of Attaining Competitive Advantage by a Business Firm
When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Competitive advantages are capabilities that are difficult to replicate or imitate and are non-tradable. Pitts and Snow define a competitive advantage as “any feature of a business firm that enables it to earn a high return on investment despite counter pressure from competitors.” A competitive advantage exists when the firm is able to deliver the same benefits as the competitors are but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables a firm to create superior value for its customers and superior Continue reading