Business & Investments

Write-up by Shashank Gupta

 What is International Business Domestic Vs International Business Relevance of the Study of International Business Evolution of International Business Nature of International Business Causes for going international

What is International Organization? International company: all commercial transactions among parties in two or much more countries- Private firms are profit-oriented.- Government organizations may possibly or could not be profit-oriented.

Defination: “International Business consists of transactions taking spot across national borders for the purpose of satisfying the objectives of people and organizations.”

What is International Organization?u The international business environment is a lot more complex and diverse than the domestic enterprise atmosphere.u International Organization also contains a expanding service industry in places such as Data technologies, transportation, tourism, advertising, construction, retailing, wholesaling, and mass communication.

Similarity In between Domestic &amp international Business Generating income – Either by developing opportunities or optimizing strengths Creating a corporate image Focusing on client satisfaction and creating loyalty as patronage buyers Carrying out their operations while respecting and adhering to neighborhood regulations Producing employment opportunities Both are subject to a set code of conduct and ethics that included corporate governance Mass Production by way of price reduction and achieving economies of scale. Constructing a strong network in order to make products and services obtainable in any portion of the nation or the globe. Adapting new standards and modifications in style and function.

Aspects on which Domestic and International Business can be compared.  Dimensions Strategy &amp Strategy Competitive Forces Currencies  Enterprise Risks Research Human Resource Item &amp Usage Organisational Vision and objectives Legal Aspects Investment &amp Sourcing Pricing Strategy Distribution Channels Promotion Logistics

The Relevance of the study of International Organization?Academic: For students to gain understanding, and greater understanding of how trade is completed.Functional: For members of society, and traders in distinct to know how they can use international trade to their benefit.Evolution of International Business Cross-nation trade has been taking spot since pre-historic occasions. Post world war-II, the growth of international &amp multinational firms took place International trade to International marketing International advertising to International Business

Nature of International Business Variations in political, social, cultural and economic components in countries Accurate and timely information requirement Bigger size of Business Geographical market segmentation Increased potential for enterprise because of broader market place perspective. Wider scope for organization activities Inter-country comparative study

Reasons for Engaging in International Business1. To expand salesF Volkswagen [Germany]F Ericsson [Sweden]F Michelin [France]F Nestlé [Switzerland]F IBM [USA]F Seagram [Canada]F Sony [Japan]2. To acquire resourcesF Products, components, servicesF Foreign capitalF TechnologiesF Information3.To reduce threat- Take benefit of business cycle differences amongst countriesF Diversify suppliers across countriesF Counter competitors’ benefits

Factors to Enter International Business(From an Individual Company’s Angle) Managing the Item Life Cycle Geographic expansion as a growth strategy Adventurous spirit of younger generation Technological Advantage Building corporate image Incentives and Organization Impact Labour advantage New Organization Opportunities Emergence of SEZs, EPZs, and EOUs

Causes to Enter International Organization(From the Government’s Angle)u Earning valuable foreign exchangeu Interdependency of Nationsu Trade theories and their impactu Diplomatic relationsu Core competency of nations• Investment for infrastructure• National Image• Foreign trade policy and targets• WTO and international agencies

Stages of InternationalizationStage-1 omestic CompanyStage 2 : International CompanyStage 3 : Multinational CompanyStage 4 : International CompanyStage five : Transnational Business

International Organization Approaches1. Ethnocentric approach- Sales of domestic goods in int. markets. – Domestic orientation – International Market place secondary – Firm seeks markets related to domestic. – Small adaptation of product or advertising mix. – Typically produced domestically 2. Polycentric method- Recognition of distinction in overseas markets- Decentralization of operations- Nation by nation basis- Neighborhood marketing input and control3. Regiocentric method- Different regions as various markets- Methods formulated for a region4. Geocentric method- Create item and marketing techniques for planet markets. – Standardize as far as possible, adapt exactly where required. – Economies of scale transfer of understanding and technology, global image, and better competitive position.- The world is viewed as the market place

Stages of domestic to global evolution

Management emphasis Stage 1 Domestic Stage two Domestic Stage three Multinational Stage four GlobalFocus Domestic Ethnocentric Polycentric GeocentricMarketing technique Domestic Extension Adaptation ExtensionManagement style Domestic Centralised top down Decentralised bottom up IntegratedManufacturing stance Primarily domestic Primarily domestic Host country Lowest cost worldwideInvestment policy Domestic Domestic utilized worldwide Mainly in every single host country Cross subsidizationPerformance evaluation Domestic market place share Against residence country market place share Each and every host country marketplace share Worldwide

Advantages1. Higher living standards2. Elevated socio-economic welfare3. Wider market4. Reduced effects of organization cycles5. Reduced risks6. Big scale economies7. Potential untapped markets8. Offers opportunities for challenges to domestic market9. Division of labor and specialization10. Economic growth of the world11. Optimum and suitable utilization of Globe resources12. Cultural transformations13. Knitting the planet into a closely 14. interactive standard villagesProblems1. Political factors2. Huge foreign indebtedness3. Exchange instability4. Entry requirements5. Tariff, quotas and trade barriers6. Corruption7. Bureaucratic practices of government8. Technological pirating9. High cost10. Cultural sensitivities

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