Types of international of business


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Types of international of business

  1. 1. TYPES OF INTERNATIONAL OF BUSINESS There are number of ways for internationalization / globalization of business. These are referred as foreign market entry strategies. Each of these ways has certain advantages and disadvantages. One strategy for a particular business may not be very suitable for another business with different environment. Therefore it is quite common that a company employs different strategies for different markets. The different strategies of internationalization are: 1. Importation: Imports is defined as goods and services produced by host country and purchased by parent country. It is reverse process of Exports. 2. Exportation: Exports is defined as goods and services produced in one country then get marketed to other country. 3. Foreign Direct Investment (FDI): FDI are funds invested in equity from parent country to a host country. Rich countries invest funds in growth industries and geographic areas of economic development. 4. Licensing: Licensing involve minimal commitment of resources and effort on the part of the international marketer, are easy ways of entering the foreign markets. Under international licensing, a firm in one country (the licensor) permits a firm in another country to use the intellectual property (patents, trademarks, copyrights, technology, technical know – how, or specific skills). The monetary benefits to the licensor are the royalties, which the licensee pays. 5. Franchising : Franchising is when a parent company (Franchiser) giving right to another company (Franchisee) to use her name, sell her products and do business in a prescribed manner. Franchisee gives the Franchiser royalties in return. 6. Joint Venture: It is a mutual agreement of two or more partners across the globe to collectively own a company. 7. Manufacturing in a Foreign Country: A company manufactures in host country due to lower costs of materials and labor or to be closer to the raw material sources (among other reasons). 8. Management Contracts: The country calls for an international management expertise for a national firm. Under a management contract, the service provided is paid through fees or shares of the company. The contract is for a specific period. 9. Consultancy Services 10. Strategic Partnerships: Two companies in different countries join their resources to complete a given project. The resources are pooled together to produce new marketable products. 11. Mergers: A Corporate Merger is a combining of corporations in which one of two or more corporations survives and works for common objectives.
  2. 2. 12. Counter Trades: Counter trade is a form of international trade in which imports of goods are paid for by exports of goods, instead of money payments. http://www.projects4mba.com/types-of-international-business/137/