21-12-2012, 12:22 PM
OVERVIEW OF INTERNATIONAL BUSINESS
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What is International Business ?
International business is the process of focusing on the resources of the globe and objective of the organizations on global business opportunities and threats, in order to produce, buy, sell or exchange of goods/services world-wide
Evolution of International Business
The concept of international business a broader concept relating to the integration of economies societies.
The term International business has emerged from the term ”international Marketing”, Which in turn emerged from the “International Trade”
International Trade
Originally the Produces used to export their products to the near by countries & gradually extended the export to far off countries
International Marketing-
For increasing more export to foreign countries, their were marketing efforts started which include arranging for distribution channel, demand for many products like tea, coffee, packaging & pricing
Globalization
Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.
The efforts of International Monetary Fund(IMF),World Bank & World Trade Organization (WTO) along with the efforts of individual countries due to economic limitations of the closed economies led to the globalization of business, which then gave fill up to international business
Features of International Business
Accurate Information - International business houses need accurate information to make an appropriate decision
Timely Information – International business houses need not only accurate but timely information
Size of the Business – The size of International business should be large in order to have an impact on the foreign economies
Market Segmentation – Most of the international business houses segment their markets based on the geographic market segmentation
International Business Approaches
Ethnocentric Approach – Under this approach, the domestic companies view foreign markets as an extension to domestic markets
Polycentric Approach – Under this approach, companies establish foreign subsidiary and empowers its executives
Regiocentric Approach – Under this approach, subsidiaries consider regional environment for policy strategy formulation
Geocentric Approach – Under this approach, companies view the entire world as a single country
Goals of International Business
To achieve Higher Rate of Profits- As firms search for foreign markets that holds promise for higher rate of profits
Expanding the production Capacities beyond the demand of the domestic Country
Availability of Technology & Competent Human resources in the foreign countries
Limited Home Market – As the domestic market is limited firms seek for foreign countries
To achieve higher rate of Economic development
Advantages of International Business
Enhances the Living standard of the people through enhanced purchasing power
International business widens the market and increases the market size
It provides the chance of exploring the potential market which are untapped so far
International business not only provide economical & commercial benefits but also Social & Cultural
Knitting the world into a closely interactive Traditional Village