What is international business discuss its nature & scope?
Answers
Definition: International Business is the process of focusing on the resources of the globe andobjectives of the organisations on global business opportunities and threats.International business defined as global trade of goods/services or investment. Morecomprehensive view does not focus on the “firm” but on the exchange processFree Trade occurs when a government does not attempt to influence, through quotas or duties,what its citizens can buy from another country or what they can produce and sell to another country.The Benefits of Trade allow a country to specialize in the manufacture and export of products that can be produced most efficiently in that country.The Pattern of International Tradedisplays patterns that are are easy to understand (Saudi Arabia/oil or Mexico/labor intensivegoods). Others are not so easy to understand (Japan and cars).Nature of International Business1. Accurate Information2. Information not only accurate but should be timely3. The size of the international business should be large4. Market segmentation based on geographic segmentation5. International markets have more potential than domestic marketsScope of International Business1. International Marketing2. International Finance and Investments3. Global HR4. Foreign ExchangeNeed for International Business1. To achieve higher rate of profits2. Expanding the production capacity beyond the demand of the domestic country3. Severe competition in the home country4. Limited home market5. Political conditions6. Availability of technology and managerial competence7. Cost of manpower, transportation8. Nearness to raw material9. Liberalisation, Privatisation and Globalisation (LPG)10. To increase market share11. Increase in cross border business is due to falling trade barriers (WTO), decreasing costs intelecommunications and transportation; and freer capital marketsReasons for Recent International Business Growth