international business

1. International
Business
Ujjwal Aryal

2. Definition of International Business
Manufacturing or Trade across geographical
boundaries of one’s country is known
as International Business.
International Business or External Business doesn’t
only include international movement of goods and
services but also the movement of capital,
personnel, technology, and intellectual property like
patents, trademarks, and copyrights.
It isn’t limited only to the export and import of
goods but services such as international travel and
tourism, transportation, communication, banking,
warehousing, distribution, and advertising.

3. Scope of
International Business
Merchandise
Exports and
Imports
Service
Exports and
Imports
Licensing
and
Franchising
Foreign
Investments
• International Business allows firms to export and import goods across
different countries.
• With the help of international business, firms can offer services to people
belonging to different countries.
• Firms can enter into international business using licensing and franchising.
Licensing is permitting another party of a foreign country to produce and
sell products under its trademarks, patents, or copyright against some fee.
Franchising is similar to licensing but it terms of service.
• A firm can enter into international business by investing in firms located
abroad in exchange for some financial return.

4. Benefits of International Business
(Nations)
International
Business helps a
country to collect
and earn foreign
currency from the
investment
offered by a
foreign firm in the
domestic market.
Foreign currency
helps in meeting
imports of any
country from
foreign countries.
By setting up new
industries and
businesses in
different
countries, the
international
business helps in
improving the
employment
potential in those
countries.
In the presence of
an international
business, people
of any country
can consume
goods and
services
produced in some
other countries. It
helps in improving
the standard of
living of those
people and the
country.
Increased
Standard of
Living
Improving
Employment
Potential
More Efficient
Use of
Resources
Earning of
Foreign
Exchange
International
business allows
firms to use the
resources present
in different
countries more
efficiently. Firms
can bring the
newest
technologies from
which the
resources can be
utilized more
efficiently.

5. Benefits of International Business
(Firms)
International
business gives
scope to firms a
whole new market
to target. Firms
can sell their
products in
markets where
prices are
relatively high and
earn more profits.
Firms can improve
the prospects of
their growth by
getting into the
international
market. The
demand for a
certain product in
the domestic
market is limited
but in the
international
market, firms can
reach new highs.
Every firm’s vision
is to grow,
become more
competitive,
diversify and gain
strategic
advantage over
its competitors.
The international
business allows
firms to grow and
build themselves
with greater
prospects.
Improved
Business
Visions
Prospects for
Growth
Increased
Capacity
Utilization
Prospects
for Higher
Profits
The products
produced by
a firm more than the
demand in the
domestic market
can be sold to a
foreign market with
the help of
international
business. The
capacity to produce
more can be utilized
with an expansion in
the market.

6. A variety of factors have contributed to the process of globalization.
Some of the most important globalization drivers are outlined below.
Factor causing globalization of business
The move from
telephonic
communication to
cable and satellite
digital
communication have
resulted in
increasing
information flows.
Information Technology
Many economists
believe that there
has been an
increase in the
minimum efficient
scale (MES)
associated with
some industries.
Economic Factors
Creation of unions
such as EU.
SAARC, WTO.
Political Changes
The emergence of
global sporting
events such as The
Olympics , Cricket
and Football all
bring people
together across
boarders.
Cultural Factors

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