International business (IB) is a stream for commerce that includes all trade activities which can take place for promoting the transportation of goods, resources, services, workforce, technologies, and ideas crossing the countrywide boundaries. IB also includes business-related transactions that can be private, sales, government, logistics, and investments which will occur between two or more countries.
As a startup, you as an entrepreneur should also grow your profit by extending such transactions across different countries. In this chapter, you will learn about different international marketing and the importance of International Business and its modes and risks.
Participating in International Marketing
- Service companies
- Multi-National companies(MNCs)
There are a lot of companies who try to grow and realize that their sales will become limited if they concentrate on selling on their home ground. So, to grow the enterprise and become an international player in the competitive market, they increase their market-share and look for opportunities across the world.
The significance of International Business
Some of the significance and advantages of implementing international business as growth for existing entrepreneurs are listed below:
- To gain profit utilization from natural resources.
- To gain swift economic growth.
- Also helps in fulfilling imports of industrial needs.
- Debt servicing which means for granting loan for their industrial development.
- For the production of successfully-better quality goods and competing with lower or moderate prices.
- Add to the employment opportunities.
- For increasing national income.
There are some other added advantages from international business as business as well as industrial firms/exporting firms on major points like:
- Lack of domestic demand.
- Make use of Installed capacity.
- Minimize business risk.
- Amplify productivity.
- Bring technological improvements.
Another dimension or angle of seeing the importance of International Business:
- International collaboration, new employees with new ideas and mindset.
- International business also helps in bringing 2 or more nations together.
- The collaboration also helps in balancing a good political relation.
As an entrepreneur, you can grab several advantages through International Business, but you have to take hold of this via knowledge and use of native language. If you're fluent in their local language(s) it helps in bringing a few added advantages:
- This will help you achieve the respect of your employees as well as target consumers.
- If you can make them understand in their local language, it will connect your words and ideas with their need which is directly proportional to the increase in total productivity.
- You don't have to communicate through interpreters with employees as well as customers. This also helps you get to know about their buying habits and requirements.
There are a few techniques that IB needs and uses to tailor and target the local market. Their culture and trend can also help you grow the enterprise on international grounds.
A business is a game of taking risks where your idea is on one end of your court, and the finance and resources are on the other end. It is you as an entrepreneur should maintain the balance and take risks to earn a profit.
Different types of risks regarding national as well as international business are:
- Operational Risk: An enterprise needs to admit the cost of production and make sure that there is no wastage of money and time.
- Strategic Risk: A venture needs to be prepared for new competition and ready for facing it on the international market and at large scale.
- Technological Risk: Development in technology brings a lot of advantage, along with some disadvantages like poor security measures while performing e-transactions, cost in developing or implementing new technology, etc.
- Environmental Risk: Factories that emit additional pollution and industries outside the inhabited country are likely to be aware of the externalities they produce.
Some other common forms of risks which the name itself explains us are:
- Terrorism risks.
- Political risks.
- Financial risks.
- Bribery risks.