International Business Basics

Questions and Answers

All commercial transactions that take place between two or more countries

A company investing in a business or establishing a subsidiary in another country

The increasing integration of the world's economies

Increased market size and diversified markets Signup and view all the answers

Cultural differences between countries Signup and view all the answers

Adapting products and services to local markets Signup and view all the answers

Standardizing products and services worldwide Signup and view all the answers

All of the above Signup and view all the answers

Study Notes

International business refers to all commercial transactions that take place between two or more countries.
It involves the exchange of goods, services, or something of value across national borders.

Exporting: Selling goods or services to another country.
Importing: Buying goods or services from another country.
Foreign Direct Investment (FDI): Investing in a business or establishing a subsidiary in another country.
Licensing: Granting permission to a foreign company to use a firm's intellectual property.
Franchising: Allowing a foreign company to use a firm's business model.

Globalization: The increasing integration of the world's economies.
Technological advancements: Improved communication, transportation, and information technologies.
Government policies: Trade agreements, tariffs, and investment incentives.
Market imperfections: Differences in factor costs, government policies, and market structures.

Increased market size: Access to new customers and markets.
Diversification: Reduced dependence on a single market.
Economies of scale: Lower costs through mass production.
Improved competitiveness: Exposure to new management practices and technologies.

Cultural differences: Different languages, customs, and values.
Political and economic risks: Instability, corruption, and trade barriers.
Logistical challenges: Managing supply chains and distribution across borders.
Currency exchange risks: Fluctuations in exchange rates.

Multidomestic strategy: Adapting products and services to local markets.
Global strategy: Standardizing products and services worldwide.
Transnational strategy: Balancing global efficiency with local responsiveness.
International strategy: Focusing on a single product or service globally.

Political environment: Government policies, laws, and regulations.
Economic environment: Economic systems, trade policies, and market conditions.
Cultural environment: Social attitudes, values, and customs.
Technological environment: Advances in technology and their impact on business.

International business involves commercial transactions between two or more countries, exchanging goods, services, or value across national borders.

Exporting: selling goods or services to another country
Importing: buying goods or services from another country
Foreign Direct Investment (FDI): investing in a business or establishing a subsidiary in another country
Licensing: granting permission to a foreign company to use a firm's intellectual property
Franchising: allowing a foreign company to use a firm's business model

Globalization: increasing integration of the world's economies
Technological advancements: improved communication, transportation, and information technologies
Government policies: trade agreements, tariffs, and investment incentives
Market imperfections: differences in factor costs, government policies, and market structures