Benefits of International Business to Nations

What is 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....

Scope of International Business

Merchandise Exports and Imports: International Business allows firms to export and import goods across different countries. Service Exports and Imports: With the help of international business, firms can offer services to people belonging to different countries. Licensing and Franchising: 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. Foreign Investments: A firm can enter into international business by investing in firms located abroad in exchange for some financial return....

Benefits of International Business to Nations

Earning of Foreign Exchange: 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. More Efficient Use of Resources: 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.  Improving Growth Prospects and Employment Potentials: By setting up new industries and businesses in different countries, the international business helps in improving the economic growth and employment potential in those countries. Larger scale production contributes to the GDP as well as generates employment. Increased Standard of Living: 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 in general....

Benefits of International Business to Firms

Prospects for Higher Profits: 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. Increased Capacity Utilization: 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. Prospects for Growth: 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. Way Out to Intense Competition in Domestic Market: When the competition in the domestic market increases, firms can move out of the domestic boundaries to find a new market. By this, they can counter the intense competition in the domestic market. Improved Business Visions: 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....

Modes of Entry into International Business

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