International Business And Trade PDF

INTERNATIONAL BUSINESS AND TRADE LESSON 1 LEARNING OBJECTIVES Understand how the concept of international business evolved. Discuss the nature of international business. Describe the influences and goals of international business. Identify and strategize on how to...

INTERNATIONAL BUSINESS AND TRADE LESSON 1 LEARNING OBJECTIVES Understand how the concept of international business evolved. Discuss the nature of international business. Describe the influences and goals of international business. Identify and strategize on how to solve problems relating to international business especially in the pandemic situation of our country.  INTERNATIONAL BUSINESS International business relates to any situation where the production or distribution of goods or services goes beyond the country borders. Saylor. org  INTERNATIONAL BUSINESS All commercial negotiations, may it be private or within the government of two or more countries. Sinha, 2012  WHY DO WE NEED TO STUDY INTERNATIONAL BUSINESS? It comprises a large growing portion of the world’s total business. All companies are affected by global events and competition Mittal, V, 2012 MULTINATIONAL COMPANY More focused on adapting their products and service to each individual local market.  GLOBAL COMPANY Have a niche in multiple countries, but the product or service offerings and processes are the same in each country.  TRANSNATIONAL COMPANY Invested in foreign operations, have a central corporate facility but they give the decision-making, R&D and marketing powers to each individual foreign market  INTERNATIONAL RESTRICTION Restrictions which are imposed by the government of different countries may arise in international business. Such restrictions are relating to foreign exchange, trade blocs, trade barriers and so on.  BENEFITS TO PARTICIPATING COUNTRIES International business can grant tons of benefits for those countries allowing it  LARGE SCALE OPERATION International business contains many operations at a time to fulfill the demand at a large scale globally.  INTEGRATION OF ECONOMIES Most of the time, the companies utilize the labor, resources, finance and establishments of other countries which is a win-win situation for both.  DOMINATED BY DEVELOPED COUNTRIES Developed countries like the USA, Japan and Europe have large financial capacity, best technologies, large research and development centers which help them dominate the international business.  MARKET SEGMENTATION One of the natures of international business is it produces goods according to the demand of consumers of different market segmentations.  SENSITIVE NATURE It is highly affected by political environment, changes in economic policies, upgrade in technologies, etc.  SENSITIVE NATURE It is highly affected by political environment, changes in economic policies, upgrade in technologies, etc. EXPAND SALES Compared to one country, the number of people and the level of their purchasing powers are higher for the international level. ACQUIRE RESOURCES Businesses look for foreign resources such as capital, technologies and information because those are either not available in their country or those can reduce the costs of the company. MINIMIZE RISK Companies who seek out foreign markets minimize swings in sales and profits arising out of business cycle recessions and expansions which occur differently in different countries. POLITICAL AND LEGAL DIFFERENCES Aaron Loeb The complexity generally increases as the number of countries in which a company does business increases. ECONOMIC DIFFERENCES Aaron Loeb The economic environment may vary from country to country. DIFFERENCES IN THE CURRENCY UNIT This may sometimes cause problems of Aaron Loeb currency convertibility, besides the problems of exchange rate fluctuations. DIFFERENCES IN THE LANGUAGE Aaron Loeb Even when the same language is used in different countries, the same words of terms may have different meanings. DIFFERENCES IN THE MARKETING INFRASTRUCTURE Aaron Loeb The availability and nature of the marketing facilities available in different countries may vary widely. TRADE RESTRICTION Aaron Loeb Particularly import controls, is a very important problem, which an international marketer faces. HIGH COSTS OF DISTANCE When the markets are far removed by Aaron Loeb distance, the transport cost becomes high and the time required for affecting the delivery tends to become longer. DIFFERENCES IN TRADE PRACTICES Aaron Loeb Trade practices and customs may differ between two countries. INTERNATIONAL BUSINESS AND TRADE