International Business – Take Transactions on a Global Scale
An international business is one that conducts business transactions throughout the world. Such transactions include transfer of services, goods, managerial knowledge, capital, and technology to other countries. An international business involves both imports and exports.
International business is also called, referred to, or known as international marketing or global business.
There are several options available as to how an international business can do business, which include the following:
- Export services and goods
- Give license for production of goods in its host country
- Open a branch for production and distribution of goods in its host country
- Start a venture with another company
- Provide managerial services to other companies to its host country
- Large scale operations – All operations in an international business are conducted on an extremely large scale. Marketing and production activities are done on large scale. This first sells the goods in local markets, and surplus goods are being exported.
- Dominated by MNCs and developed countries – International business is being dominated by developed countries and MNCs or multinational corporations. Right now, MNCs from Japan, USA, and Europe completely control and dominate foreign trade, thanks to their large finances and other resources, such as research and development and technology.
- Integration of economies – An international business can integrate the economies of most countries. It is because it makes use of finance from a different country, labor from another, and infrastructure from yet another country.
- Keen competition – An international business needs to face a big competition in the global market. This competition is between unequal partners, namely developing and developed countries.
- Benefits to the participating countries – An international business offers benefits to every participating country. But, the most benefits are enjoyed by the developed countries although the developing countries can get benefits as well. This is in terms of foreign technology and capital, rapid industrial development, and more employment opportunities.
- International restrictions – An international business can face a lot of restrictions on the outflow and inflow of goods, technology, and capital. Most governments don’t let international businesses to enter their countries. They implement tariff barriers, trade blocks, foreign exchange restrictions, and others, all of which can be dangerous to international business.
- Special role of technology and science – International business can give lots of important to technology and science. Science and technology can help businesses in having large scale production. Developed nations use high technology, letting them dominate international business. Global business helps them in transferring these high end technologies to developing countries.
- Sensitive nature – The international businesses tend to be very sensitive in nature. Even the smallest changes in technology, economic policies, political environment, and others can have a big effect on them. This is the reason why all international businesses should perform marketing research in order to know and study such changes. They need to adjust the activities of their businesses and adapt accordingly in order to make it through the changes.