INTRODUCTION

Definition: International Finance It is an extension of corporate finance to a global context and fundamentally involves t e management of international business related financial functions! IF means international trade of goods and services" FDI and contractual collaborations

INTRODUCTION
Definition: International #usiness It is essentially carrying on t e international trade of goods and services and international production of goods and provision of services! Definition: International Trade IT involves export and Import of goods and services! Firms export to penetrate t e mar$et and import to obtain supplies at a lo%er cost!

INDI& : 'xports ())*

+a,or commodities exported %ere petroleum products" +ac inery" Iron and steel" c emicals" automobiles" apparel" % ite goods and precious stones and metals!

INDI& : I+-ORT. ())*

India: Imports 2009
in % 12 10 8 6 4 2 0 China Saudi USA UAE Arabia Iran 6.9 6.7 6.7 4.2 10.8

+a,or commodities imported %ere precious stones" fertili/er" iron and steel" gold and silver" electronic goods" mac inery" organic and inorganic c emicals" metalliferous ores and products" coal and transport e0uipment!

I+-ORT. '1-ORT. ()23

Direct and Indirect 'xports

Definition: Direct 4Indirect 'xports Direct export means t at a firm ta$es direct responsibility for ma$ing its goods available in t e target mar$et by selling directly or t roug its agents! Indirect export means % en t e enterprise sells its product to t e end users t roug its intermediaries!

#ilateral Trade
#ilateral trade also $no%n as counter trade is bartering of goods and services! 5lobal Trade Ratio: 6alue of a country7s overall trade 4 5D &bout 238 as compared to C inas 3)8

.cope of IF+
.cope of International financial management can be outlined as follo%s: IF+ fundamentally is involved %it t e management of international business related financial functions IF+ deals %it multiple currencies and ence as to manage t e fluctuations in t e forex mar$et including t e mar$et for derivatives IF+ as to design and manage t e exc ange rate ris$" interest rate ris$" inflation rate ris$" credit ris$ and t e political ris$ IF+ as to address t e issues pertaining to t e foreign direct investment and t e foreign portfolio investment

.cope of IF+
T e scope of IF+ also covers t e international securities mar$et" international exc anges and bourses Cross border financing and investment en ances t e scope of IF+ to international accounting practices and set global accounting standards .imilarly IF+ en ances t e scope of tax la%s and taxation strategy of not only t e ome but also t e ost country .cope of IF+ also covers t e diverse %or$ing capital management of +NCs IF+ is concerned %it t e balance of payments in international transactions of a country IF+ addresses t e multiplicity of regulatory environment and aids in t e decision ma$ing process of bourgeoning and increased complexities of international business

.cope of IF+
Case .tudy 2!2
9al:+art is t e largest retail store in t e U.! It operates over ;"))) retail facilities globally! &lso" t e company is t e dominant retail store in Canada" +exico" and t e United <ingdom! &ccording to t e Fortune =)) index of t e %ealt iest and most po%erful corporations in t e %orld" 9al:+art olds t e number one spot" ran$ed by its total sales! T e company>s competitive strategy is to dominate every sector % ere it does business! It measures success in terms of sales and dominance over competitors! Its strategy is to sell goods at lo% prices" outsell its competitors" and to expand! & typical 9al:+art model is to build more stores" ma$e existing stores bigger" and to expand into ot er sectors of retail! T e company is proud of its strategy and even incorporates it %it in its moni$er ?&l%ays @o% prices" &l%ays!? 'very step of t e %ay" it strives to ma$e money and dominate its competitors" to t e point of putting some of t em out of business!

.cope of IF+
Case .tudy 2!2 T e year ())A mar$ed t e most significant retrenc ment for 9al:+art since it undertoo$ its international expansion in t e early 2**)s" in an effort to re,uvenate sales gro%t ! 9al: +art" t e %orld>s largest retailer" admitted defeat in its long: standing effort to penetrate successfully t e 5erman retail mar$et! On Buly 3)" ())A" t e company announced t at it %as selling its operations in 5ermany to 5erman retailer +etro &5! 9al:+art ad been trying to ma$e its 5erman stores profitable for eig t years! 9al:+art announced a pretax loss on t e sale of C2 billion!

.cope of IF+
Duestions: 9 at %ere t e reasons for t e failure of 9al:+art in its ambitious plans to capture t e 5erman mar$etE 9al:+art also experienced a loss of seasoned executives % en it ac0uired several 5erman retailers! 9 y did t e executives leave rat er t an relocateE 9al:+art>s 5erman operations ad four presidents in eig t years! 9as it a uman failure t at 9al:+art found t e going toug in 5ermanyE