The world has become a "global village". Business has expanded and is no longer confined to the physical boundaries of the country. Even self-sufficient countries now rely on other countries to purchase goods and services. They are also willing to provide goods and services to developing countries. Let's learn about International Business with Giaiphapdonggoi.net!
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1. What is international business?
What is international business?
International business includes all commercial activities that take place to facilitate the transfer of goods, services, resources, people, ideas and technology across national borders.
International business takes place in many different forms:
The movement of goods from one country to another (exports, imports, trade).
Contractual arrangements that allow foreign companies to use products, services and processes from other countries (licensing, franchising).
The formation and operation of sales, production, research and development, and distribution facilities in foreign markets.
The study of international business involves understanding the effects that such activities have on markets, countries, governments, companies and individuals at home and abroad. Successful international businesses recognize the diversity of world markets and are able to cope with the uncertainties and risks of doing business in a constantly changing global market.
Strategic, organizational and/or functional decisions of international business categorize it as:
A multi-domestic company with independent subsidiaries operating as domestic companies.
Global operations with integrated subsidiaries.
Combination of both.
However, the challenging aspect of international business is that many companies combine aspects of multinational and global operations:
Multi-domestic - A strategic business model that involves promoting products and services in various markets around the world and tailoring products/services to cultural norms, preferences and religious customs of different markets.
Multinational - A business strategy that involves selling products and services in different foreign markets without changing the characteristics of the product/service to conform to cultural norms or customs of different markets.
2. The development of international business
The development of international business
The popularity of international business increased dramatically in the last part of the twentieth century, thanks to the liberalization of trade and investment and the development of technology. Some of the key factors that help international business thrive include:
The formation of the World Trade Organization (WTO) in 1995.
The birth of electronic money transfer.
The introduction of the euro into the European Union.
Technological innovation facilitates global transportation and transportation.
The dissolution of some communist markets, thus opening up many economies to private enterprises.
Today, global competition affects almost every company – regardless of size. Many suppliers source from abroad and remain more competitive with products or services sourced from abroad. International business is still a broad concept that includes the smallest companies that can only export or import with another country, as well as the largest global companies with integrated operations and strategic alliances. globally.
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3. Meaning of International Business
The meaning of international business
International business refers to commercial activities that extend beyond the geographical limits of a country.
It therefore includes not only the international movement of goods and services, but also capital, personnel, technology and intellectual property such as patents, trademarks, technical knowledge and copyrights. permission.
It is a business that takes place outside the border, i.e. between two countries. This includes the international movement of goods and services, capital, personnel, technology and intellectual property rights such as patents, trademarks and know-how. It refers to the buying and selling of goods and services that exceed the geographical limits of the country.
It has three types:
Export trade: The sale of goods and services to foreign countries.
Import trade: Buying goods and services from other countries.
Trade Entrepot: Importing goods and services for re-export to other countries.
4. Challenges of International Business
Challenges of international business
Economic environment
The economic environment can vary widely from country to country. The economies of countries can be industrialized (developed), emerging (newly industrialized), or less developed (third world). Furthermore, within each of these economies lies a host of variations, which greatly affect everything from
from education and infrastructure to technology and healthcare. A country's economic structure, such as a free market, a centrally planned market, or a mixed market, also plays a distinct role in the ease of conducting international business endeavors.
Political environment
The political environment of international business refers to the relationship between government and business, as well as the political risks of a country. Therefore, companies engaged in international business must expect to deal with different types of governments, such as multi-party democracies, one-party states, dictatorships and dictatorships. constitutional monarchies.
International companies must also consider the degree of political risk abroad; in other words, the likelihood of major government changes. Just some of the problems of unstable governments that international companies must consider include riots, revolutions, wars and terrorism.
Cultural environment
The cultural environment of a foreign country remains an important component of the international business environment, but it is one of the most confusing. The cultural environment of a foreign country involves shared beliefs and values, shaped by factors such as language, religion, geographical location, government, history, and education. sex
Often, many international companies conduct a cultural analysis of a foreign country to better understand these factors and how they affect international business efforts.
Competitive environment
The competitive environment is constantly changing according to the economic, political and cultural environments. Competition can exist from a variety of sources, and the nature of competition can vary from place to place. It may or may not be encouraged in favor of cooperation, and the relationship between the buyer and the seller may be friendly or hostile. The degree of technological innovation is also an important aspect of the competitive environment as businesses compete for access to the latest technology.
To ensure success in foreign markets, international businesses must understand the many factors that influence the competitive environment and effectively assess their impact.
International business is a bridge that fills the gap between different countries by providing commercial services and reaping benefits. It has an important role in maintaining the balance of power between different states.
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