what is a form of international business course hero

What is international business and its types?

International business encompasses all commercial activities that take place to promote the transfer of goods, services, resources, people, ideas, and technologies across national boundaries. International business occurs in many different formats: The movement of goods from country to another (exporting, importing, trade)

What is the study of international business?

The formation and operations of sales, manufacturing, research and development, and distribution facilities in foreign markets The study of international business involves understanding the effects that the above activities have on domestic and foreign markets, countries, governments, companies, and individuals.

What is international business and international relations?

International business encompasses all commercial activities that take place to promote the transfer of goods, services, resources, people, ideas, and technologies across national boundaries. Featured Program: Online International Relations Master’s Programs.

What are the benefits of international business?

This has the benefit of increasing the variety of goods and services available in the marketplace. International business also increases competition in domestic markets and introduces new opportunities to foreign markets. Global competition encourages companies to become more innovative and efficient in their use of resources.

Who bears the costs and risks of establishing foreign operations?

The franchisee bears almost all the costs and risks in establishing foreign operations. The franchiser’s contribution is limited to providing the concept, technology and training the franchisee in the already established model. Maintaining quality poses the biggest challenge to the franchiser.

What is joint venture in business?

A joint venture is a binding contract between two venture partners to set up a project either in the home country or host country or a third country. In this case, both parties are committed to joint risk-taking and joint profit sharing. This is a very popular mode of entry into foreign markets, as it minimizes business risk and investment. It is owned by one or more firms in proportion to their investment. For the success of a joint venture, it is absolutely necessary for the venture partners to understand all the aspects of management, investment, and regulations of the countries where they operate. The business units should have clear guidelines and operation manuals wherein the role of everyone should be clearly defined.

What is franchising in business?

Franchising is basically a specialized form of licensing in which the franchiser not only sells the intangible property to the franchisee but also insists that the franchisee agrees to abide by strict rules as to how it does business. The franchiser supplies the main part of the product and provides the following services to the franchisee: trade Marks, Operating Systems, Product and Brand Name. Company support systems like advertising, training of employees, quality assurance are also involved in franchising Licensing works well for manufacturing companies but franchising is a better option for international expansion efforts of service or retailing companies. Franchising has the same advantages as licensing. The franchisee bears almost all the costs and risks in establishing foreign operations. The franchiser’s contribution is limited to providing the concept, technology and training the franchisee in the already established model. Maintaining quality poses the biggest challenge to the franchiser. McDonald’s, Domino’s, KFC use franchising model.

What is the flow of funds from one destination to another called?

The flow of funds from one destination to another is called investment . Companies, which are constantly involved in international business, invest their money in manufacturing and marketing bases through ownership and control. FDI is an investment made by a company in a foreign country to start its operations. Various options available for an FDI are as follows. Developing countries are formulating strategies by offering ample amount of incentives to attract FDI.

Can a domestic company license a foreign company?

A domestic company can license foreign firms to use the company’s technology or products and distribute the company’s product. By licensing, the domestic company need not bear any costs and risks of entering foreign markets on its own, yet it is able to generate income from royalties.

What are the factors that influence international business?

The prevalence of international business has increased significantly during the last part of the twentieth century, thanks to the liberalization of trade and investment and the development of technology. Some of the significant elements that have advanced international business include: 1 The formation of the World Trade Organization (WTO) in 1995 2 The inception of electronic funds transfers 3 The introduction of the euro to the European Union 4 Technological innovation that facilitates global communication and transportation 5 The dissolution of a number of communist markets, thus opening up many economies to private business

What is the political environment of international business?

The political environment of international business refers to the relationship between government and business, as well as the political risk of a nation. Therefore, companies involved in international business must expect to deal with different types of governments, such as multi-party democracies, one-party states, dictatorships, and constitutional monarchies.

What is multinational business?

Multinational – A business strategy that involves selling products and services in different foreign markets without changing the characteristics of the product/service to accommodate the cultural norms or customs of the various markets.

What is multi domestic business?

A multi-domestic company with independent subsidiaries that act as domestic firms; OR. Global operations with integrated subsidiaries; OR. A combination of the two. The challenging aspect of international business, however, is that many firms combine aspects of both multi-domestic and global operations:

Why is global competition important?

Global competition encourages companies to become more innovative and efficient in their use of resources.

What is the cultural environment of a foreign country?

The cultural environment of a foreign nation involves commonly shared beliefs and values, formed by factors such as language, religion, geographic location, government, history, and education.

Why do governments view foreign businesses as positive?

Because international companies rely on the goodwill of the government, international business must take the political structure of the foreign government into consideration .