International business involves the transacting of goods, services, people, knowledge & IPR between two countries.
Most corporations strive for international markets because they face stagnating sales in the domestic market.
International Business provides a wonderful opportunity for newer markets in other countries because people embrace a superior technology product.
All MNCs do international business because they promote their products in many counties owing to economies of labour & cost.
International business also includes sourcing raw materials from a low-cost nation & producing finished products where labour costs are less like China.
Likewise, outsourcing your customer service to nations like the Philippines, also comes under International Business because the parent company reduces cost by hiring cheap labour.
India selling its agricultural products overseas comes under International business because we sell them in other countries.
MacDonald’s operates 38,000 restaurants in over 120 countries because it customized its products according to local taste & customs.
India selling its handicrafts internationally because our artisans produce hand knit products that have a huge international demand.
International Business examples
Some examples of international business are:-
Apple
Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple in 1970 & is one of the most revered International brand with presence in many countries.
Further, Apple sources its raw material from 43 counties for its production facility in China because China provides cheap labor further reducing costs.
MacDonald’s
As stated earlier, MacDonald’s outlets are a fad everywhere because there Burgers taste the same & users admire them a lot.
Coca Cola
The popular drink Coca Cola, is available in almost all counties & is one of the most successful companies doing business internationally.
Coca Cola is now sold almost everywhere except in Cuba & North Korea owing to political compulsions.
Scope of International Business
Mercedes Benz
The car for the elite is a status symbol in many countries because Mercedes sells its car internationally. They produce the cars in India because of the presence of a qualified workforce.
Samsung
Samsung sells its high-technology products in many counties because of people endorsing superior products.
It manufactures smart phones in India under the Make in India initiative because India is one of the largest markets in the world.
LG
Another South Korean giant is a household name because people use their home appliances owing to superior technology. LG fridges & washing machines are their brand ambassadors, as many use them.
Bajaj
Indian automobile giant Bajaj sells to many countries in Africa & South America because their bikes are durable & give value for money.
Bajaj is a market leader in Africa, as their bikes are part of the bike taxi industry.
TVS
TVS vehicles are finding acceptance in most of Africa & South America by adopting a superior technology that gives a value for money.
It has reclaimed a lost market internationally because it faced saturation in the domestic market owing to stiff competition.
Scope of International Business
There is a tremendous scope of IB because it provides companies with newer markets for overcoming saturation in domestic markets.
Most MNCs survive by introducing their products in multiple geographies because newer markets balance the revenue loss in saturated markets.
International business also provides opportunities to collaborate with local businesses because they are better placed to address local challenges.
Many Indian manufacturers source raw materials from China because of discounted rates, making them cheaper for international markets.
Without venturing into international markets, companies cannot sustain because businesses are volatile & saturate with time.
Innovation, customization & diversification is vital for businesses to survive because every country has its own tastes, customs & likings.
Benefits of International Business
Like people in India prefer fuel-efficient cars because of dearer fuel whereas the Americans like SUV’s because of cheaper fuel.
With rapid economic growth, the SUV sales are spiking because the rich customers prefer bigger cars that make them proud.
If businesses cannot diversify into new countries, then they suffer revenue loss because they offset saturation in one market through better sales in the new market.
Companies introduce new model of cars into multiple geographies because this guarantees success as more markets mean better sales.
Benefits of International Business
Benefits to countries
· Foreign Exchange: It assists a country in earning foreign exchange, which is used to buy capital goods, technology, and other products from foreign countries.
· More Efficient Resource Utilization: It is based on the comparative cost advantage theory.
It entails producing what your country can produce more efficiently and trading the surplus production with other countries to purchase what they produce more efficiently. In this way, countries can make better use of their resources.
· Growth Possibilities and Job Opportunities: Countries can enhance their manufacturing capacity to supply commodities to other countries through external trade.
If external trade holds, the production will rise, increasing the GDP level of the country, resulting in economic growth.
With more production, the demand for more labor also rises. Therefore, the international business also creates job opportunities.
· Improved Standard of Living: International business allows individuals to consume goods and services from other countries. Consumption of a variety of goods and services improves the standard of living of the people.
Benefits to firms
· Profit Opportunities: When compared to local business, international business is more profitable. When domestic prices are lower, businesses can make more money by selling their products in other countries.
Benefits to firms
· Increased Resource Utilization: Many enterprises forecast international growth and get orders from foreign clients to set up production capabilities for their products that are more in demand in the local market. It enables them to better use their excess resources.
· Growth Prospects: When demand falls or the domestic market reaches saturation point, business enterprises become irritated. By expanding internationally, such businesses can increase their growth potential significantly.
· Decrease Competition: When domestic competition is fierce, internationalization appears to be the only option to achieve success and required growth.
This motivates many businesses to expand into overseas markets because of the fierce competition in the domestic markets.
· Improved Business Vision: Many firms’ existence and goodwill depend on their ability to expand their worldwide business.
The desire to expand ,as well as to take advantage of the strategic advantages of internationalization, influences them to become international.
How to kick start a career in International Business
The ideal way to kick start an international business career is to pursue an MBA in IB because business comes from distant places.
Companies hire candidates who forge alliances with overseas companies so that they exploit newer markets.
Businesses are all about mergers & acquisitions because every company lacks expertise in all domains. Hence, they collaborate so that they never compromise revenue owing to saturation.
Those who love to meet new people are best suited for IB roles because your tact & communication skills fetches orders. The tech giant Infosys hires Regional Managers in European countries as they win orders from international clients.
IB managers enrich the sales funnel so that companies are never short of orders because repeat orders are vital for survival.
Export Managers, EXIM Managers, and Regional Managers are the profiles available to IB candidates because they nurture foreign markets for their company.
With India struggling to ramp up its manufacturing sector, an MBA in IB is opportune because it trains to find newer markets for boosting exports.
Even the finance Minister Ms. Nirmala Sitharaman has advocated the need for ramping up manufacturing because it fosters employment & GDP both.
Once we produce good quality products, we should find markets where we sell them because people of different cultures have varied tastes.
Hence, we need IB specialists who explore untapped markets vital for boosting the economy.
