Globalization is a theme in International Business for many local organization who wish to expand overseas whether regionwise or worldwide.
Below explains what is International business, its purposes and some of the major challenges:
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International Business:
- Defined as a transaction across international borders, where business is conducted between countries.
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Purposes of International Business:
- Firms and governments conduct international business in order to:
· expand market share
· increase profits
· enhance cooperation between countries
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Challenges In International Business:
Three major types of challenges that firms may encounter when entering international business:
- Physical challenges-natural resources, terrorism, climate, location and regional epidemics
- Social challenges-culture, legal/law, nationalization and different political systems
- Competitive challenges-firm’s strategy, price, cost-effectiveness, firm’s size, market size and competitors.
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Salient Point:
- International business has created new trends for companies to expand their business markets overseas hence creates the development of international organizations
- However, international business is fraught with unexpected risks/challenges that can upset a company’s operation.
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