International Business –Today’s Need for a Better Tomorrow

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In today’s scenario, some of the common terms we come across in daily life are ‘globalization’, ‘global warming’, ‘animal conservation’, ‘and going green ’and‘ waste management.’ Another such term which has gained popularity today is ‘International business.’ Let’s delve deeper into this topic to gain a better understanding.

What is international business? 

It refers to the business activities and profitable transactions that take place between two or more regions, nations and countries beyond political boundaries. It includes markets which have a worldwide approach or businesses with operations in numerous countries. The motive of the transactions differs from one sector to the other. For instance, private companies get involved in international business for increasing their profit margin and governmental organizations do so for both profit and political reasons. In simple terms, it involves cross-border transactions of goods, resources, products and services between different nations. These include capital, skills, people, construction, banking, insurance and much more.

International business- An exciting phenomenon

In today’s world, we are surrounded by goods/ products which are sourced from other countries. This has indeed become a necessity due to the international standards attached with them which make them more sought-after. Having said this, let’s look at the importance of global business and its role in shaping the economy.

  • Foreign exchange

Goods and services are exported to every nook and corner of the world.  This in turn helps in expanding the business horizons. This helps earn foreign exchange which aids in payment of imports. It helps in strengthening the economy and help a business earn the maximum profit. This in turn helps in making use of the facilities, concessions and many financial and tax benefits from the government.

  • Optimum utilization of resources 

This involves producing goods on a large scale for the international market. For this, resources from all over the world are utilized. The resources that are needed are sourced from various countries. For example, developing countries contribute raw materials and labour whereas the highly developed countries provide finance and technology.

  • Reduced business risks 

Global business involves spreading of business risks thereby reducing them. Business is carried out all over the world. So, if the business incurs a loss in one country, it can be compensated by the profit share it receives from another country. The surplus goods and resources from one country can be transferred to the others.

  • Increased competitive capacity

In global businesses, high quality goods are produced at less cost. It makes use of superior technology, is in tune with technological advancements, uses state-of-the-art management techniques and marketing strategies. Needless to say, a lot of the profits are also spent on advertising to expand their business and make themselves known. These makes them more competitive which aids in facing and overcoming competition from other major business players in the market, be it from either local or foreign waters.

  • Organizational efficiency 

Efficiency is very important when it comes to doing business across seas. It helps to face the cut-throat competition from other international competitors. Modern management techniques are used for this purpose. Employees with the best qualifications and experience are hired and exposed to the best training schedules on a regular basis. The employees are motivated by way of high salaries and other incentives and benefits such as international, transfers, promotions, etc. All this helps increase the organization’s efficiency through low costs and high returns.

International business- Its role for a better tomorrow

  • It makes economic boundaries disappear
  • It makes the world globalized thereby reducing business costs
  • It allows instantaneous transfer of information for various fields such as outsourcing, sales, marketing and manufacturing
  • It helps in simplification of movement of products such as supply chains, distribution networks and transportation hubs
  • It aids business professionals in connecting to customers across the globe
  • Networking with financial companies and institutions all over the world helps minimize currency issues
  • It helps businesses expand their market share, reduce costs and become more competitive

We now live in a world where international trade is expanding, technology is advancing at a rapid pace and increasing number of businesses are into sale of products and services to foreign markets. Gone are the days when businesses where confined just to regional, local or national markets.International business benefits all types of countries such as the developed, developing and under-developed. Foreign trade started gaining momentum over the last half of the twentieth century due to liberalization of trade and investment. Now, there is no turning back. It is good news that international business is here to stay!

Picture Courtesy: www.freepik.com

 

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