2. Definition
According to Daniel, “ International business
includes all commercial transactions, private or
government between two or more countries.
These transactions includes sales, investment
, & transportation. International business is
significant at both micro & macro development
of a country”.
3. Features
1. Transaction in more than one country.
2. Purpose is to satisfy needs of the county.
3. Carried out by individuals, organizations , or
government.
4. Scope is very vast.
5. It includes exchange of goods and services
as well as knowledge, skill, people,
technology, information, & other recourses.
5. Nature
Need accurate & and timely information to make
appropriate decision.
Size of international business should be large in order to
have impact on foreign economies.
International business present more potential then the
domestic market.
International business firms should consider consumer
willingness to buy and also ability to buy the product.
It studies business opportunities, threats, consumer
preferences, behavior, culture of societies etc.. In
various countries.
6. Trends
1. International trade has been growing at a very
fast rate especially services.
2. Tariffs and trade barriers are being gradually
dismantled.
3. Role of WTO and other such bodies in
international business has being growing.
4. Exchange rates are now being determined by
market forces then by government or banks.
5. Countries are increasingly competing with each
other for FDI and capital flow.
6. Production is being globalised by powerful TNCs
with help of technological development .
7. Opportunities
1. Policies , laws& regulations of national government are
increasingly liberal to cross border transactions.
2. Nations particularly are offering to attract FDI.
3. Income &demand in developing countries are rising
their by offers a large market potential.
4. Potential rate of returns in foreign countries are
increasing.
5. Competition on domestic countries are increasing.
6. Political stability is increasing in many countries.
7. Good quality material and labor on lower cost in
developing countries.
8. Challenges
1. Different currencies
2. Varying trade policies
3. Different market conditions
4. Diversity of culture
5. Long distance transportation & regulation
9. Advantages
Growth opportunity
Higher ROI
Expanding production beyond demand of
domestic market
Competition in domestic market
Political stability
Availability of technology
Liberalization and globalization
10. Domestic vs international
business
Domestic International
Limited business activities Unlimited business opportunities
Only economic, political, social cultural
environment
Wide range of environment
Less risk higher risk
Not effected by exchange rates Highly affected by exchange rates
Old technology Latest technology
No delusion of control Delusion of control
Law, tax and regulations of single country Law, tax and regulations of many
countries
Limited scope Wide scope
