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IB means carrying of business activities beyond national boundaries. It is an extension of domestic business, which includes the transactions of economic resources such as goods, capital and services comprising of technology, skilled labour, transportation etc. It includes not only international trade of goods and services, but also foreign investment.
Why to study IB?
IB has gained wide popularity, because of the growing rate of multinational enterprises. During the last-three decades, the field of modern International business began to develop. Today, it has become a separate field of study in the management courses. The Reasons to study IB are –
Almost all of the large enterprises in developed countries are international in character.
Due to economic liberalisation and globalisation, immense international Business opportunities have been created.
The manager needs to have knowledge about IB for managing complexities and understanding the various facets of carrying IB.
Public policy issues are very often related to international trade, investment and finance.
No country, today, can neglect the foreign trade sector, when drawing up its economic policies.
Perfect and prior knowledge of IB, keeps the young minds prepared to accept jobs in MNCs.
Competitive environment are typically industry specific and industries today are very often competitive internationally.
Similarities between Domestic Business and IB:
IB is an extension of Domestic business. Today, all types of business enterprises are inspired to carry on business across the globe. Both IB & DB are similar in some ways. Such as –
Business whether domestic or international, involves buying and selling of goods and services.
Profit is the main objective of every business, whether domestic or international.
Both in domestic as well as IB success depends upon satisfying the customers.
Building goodwill is another common objective of both the business.
Research and development for product improvement and adaption is necessary in both businesses.
Business concepts, processes and principles are universally applicable, and the marketer’s task is same in both.
Difference between DB and IB:
Business rules are standardised and matured. Business rules are highly diverse and unclear.
One language and culture. Many languages and differences in culture.
Uniform financial climate. Varied financial climate.
Patriotism helps Patriotism hinders.
Single currency and taxation system. Multiple currencies and taxation system.
Descriptive approach to study. Integrative approach to study.
Product planning and development according to domestic markets. Product Planning
& development according to foreign markets.
Relatively stable marketing environment. Multiple & unstable marketing environment.
Control of business activities is easy. Control of business activities is difficult.
It is carried within the nation’s boundaries. It is carried across the nation’s boundaries.
Driving forces of International Business:
IB is not a new phenomenon, trade across the globe is as old as business itself. Today, every nation and an increasing number of companies buy and sell goods in the international market place. A number of developments around the world have helped to fuel this activity. Some of the major forces driving IB are –
LPG Movement – The World wide movement towards literalization, privatization and globalization is one important force that drives global integration.
MNCs – With the advent of MNCs culture, new opportunities have been accelerated for going global and taking the whole world as one big platform.
Technology – Technology is a universal factor that crosses national and cultural boundaries. It is truly stateless and has been a powerful driving force for IB.
World Economic trends – WET have been a major driving force for IB. Fast growth of developing economics has created new marketing opportunities and has helped major companies to expand globally.
Regional Economic Integration – Economic integration schemes acts as an important driving force of IB, as it encourages free trade between the participating countries.
Transportation and Communication Improvements – Revolution in the field of transportation and communication has been the major drivingforce of IB. The revolution has reduced both the time and cost barriers, making global business easier.
Product development Costs – Certain industries like IT & pharmaceuticals, requires high investments, such investments can be recovered by placing the product in varied markets.
Competition – This becomes a driving force for IB, as the pressure of foreign competition persuades a company to expand its business into international markets.
Forces restricting International Business:
There are several forces that restricts international business crossing the borders of
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Texte: RITTIK CHANDRA
Bildmaterialien: RITTIK CHANDRA
Lektorat/Korrektorat: RITTIK CHANDRA
Tag der Veröffentlichung: 07.07.2013
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TO THE YOUTH OF THE WORLD