Define International Business

It is the age of globalization. More and more firms are engaged in international business. Globalization is a process by which the world economy is becoming a single interdependent system. International business is the performance of business activities across national boundaries. Every nation in the world participates in international business to some extent. All countries are not endowed with the same type of natural resources. A country specializes in the production of those goods for which it has maximum advantage. It can produce those goods at lower cost and export the same to other countries. It imports those goods which it cannot produce or for which it has no specific advantage. This is the basis of international trade.

international-business The study of transactions taking place across national borders for the purpose of satisfying the needs of individuals and organizations. An international business is a business that not only earns revenue or capitalizes on local or domestic products and services. It uses and provides products and services to and from other countries as well. International business deals with business activities (both production and services) that crosses the national boundaries. This activity includes movement of goods, services capital or personnel, transfer of technology, etc.

Difference between international business and domestic business:

An international business is a business whose activities are carried out across national borders. This differs from a domestic business because a domestic business is a business whose activities are carried out within the borders of its geographical location.

A domestic company is one that confines its activities to the local market, be it city, state, or the country it is in. It deals, generally, with one currency, local customs and cultures, business laws of commerce, taxes and products and services of a local nature. S.No 1. 2. International Business It is extension of Domestic Business and Marketing Principles remain same. Difference is customs, cultural factors Domestic Business The Domestic Business Follow the marketing Principles No such difference. In a large countries languages likeIndia, bangladesh we have many languages. Conduct and selling procedure changes Selling Procedures remain unaltered Working environment and management No such changes are necessary practices change to suit local conditions. Will have to face restrictions in trade These have little or no impact on practices, licenses and government rules. Domestic trade. Long Distances and hence more Short Distances, quick business is transaction time. possible. Currency, interest rates, taxation, Currency, interest rates, taxation, inflation and economy have impact on inflation and economy have little or no trade. impact on Domestic Trade. MNCs have perfected principles, No such experience or exposure. procedures and practices at international level MNCs take advantage of location No such advantage once plant is built it economies wherever cheaper resources cannot be easily shifted. available. Large companies enjoy benefits of It is possible to get this benefit through experience curve collaborators. High Volume cost advantage. Cost Advantage by automation, new methods etc. Global Standardization No such advantage Global business seeks to create new No such advantage values and global brand image. Can Shift production bases to different No such advantage and get competition countries whenever there are problems in from some spurious or SSI Unit who get taxes or markets patronage of Government.

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Before going to start an International business, people must be well-informed about cultures, legal, political and social differences among countries. They must choose the countries in which to sell their goods and from which to buy inputs with assurance and hoping that a good business is waiting ahead for them.