Importance International Business 1s4a2q

International business International business is all business transactions-private and governmental-that involve two or more countries. Why should one be interested in studying international business? The simplest answer is that international business comprises a large and growing portion of the world's total business. Today, almost all companies, large or small, are affected by global events and competition because most sell output to and/or secure suppliers from foreign countries and/or compete against products and services that come from abroad. More companies that engage in some form of international business are involved in exporting and importing than in any other type of business transaction. Many of the international business experts argue that exporting is a logical process with a natural structure, which can be viewed primarily as a method of understanding the target country's environment, using the appropriate marketing mix, developing a marketing plan based upon the use of the mix, implementing a plan through a strategy and finally, using a control method to ensure the strategy is adhered to. This exporting process is reviewed and evaluated regularly and modifications are made to the use of the mix, to take of market changes impacting upon competitiveness. This view seems to suggest that much of the international business theory related to enterprises, which are internationally based and have global ambitions, does often change depending on the special requirements of each country. Another core issue is the company's growth and the importance of networking and interaction. This view looks at the way in which companies and organisations interact and consequently network with each other to gain commercial advantage in world markets. The network can be using similar subcontractors or components, sharing research and development costs or operating within the same governmental framework. Clearly, when businesses formulate a trading block with no internal barriers they are actually creating their own networks. Collaborations in aerospace, vehicle manufactures and engineering have all sponsored the development of a country's or a group of

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countries' outlook based on their own internal market network. This network and interaction approach to internationalisation shows the substance of being able to influence decisions when knowing how the global network players work or interact. For example, a crucial market network is that of the Middle East. Middle East countries are rich, diverse markets, with a vibrant and varied cultural heritage. This means that although there has been a harmonisation process during the past few years, differences still exist. Rather than business being simpler as a result, it should be recognised that because of regulations and the need those countries have to restructure as they enter the global market, performing any kind of business can be highly complex. It should be ed though that the Middle-Eastern countries have a low-income average and like to have their cultural differences recognised. Those firms that will or have recognised these facts have a good chance of developing a successful marketing strategy to meet their needs. Fortunately some firms have realised these important differences and reacted adequately when strategic decisions had to be made regarding their penetration to this kind of markets.

Need for International Business •

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More and more firms around the world are going global, including: •

Manufacturing firms

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Service companies (i.e. banks, insurance, consulting firms)

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Art, film, and music companies

International business: •

causes the flow of ideas, services, and capital across the world

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offers consumers new choices

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permits the acquisition of a wider variety of products

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facilitates the mobility of labor,

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provides challenging employment opportunities

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reallocates resources, makes preferential choices, and shifts activities to a global level

What is International Business? International business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations.

Importance of international business

Every company is trying to expand its business by entering foreign markets. International business helps in the following ways:1. Helps as growth strategy: - Geographic expansion may be used as a business strategy. Even though companies may expand their business at home. 2. Helps in managing product life cycle: - every product has to through different stages of product life cycle-when the product reaches the last stages of life cycle in present market, it may get proper response at other markets. 3. Technology advantages: - some companies have outstanding technology advantages through which they enjoy core competency. This technology helps the company in capturing other markets. 4. New business opportunities: - business opportunities in overseas markets help in expansion of many companies. They might have reached a saturation point in domestic market. 5. Proper use of resources: -Sometimes industrial resources like labor, minerals etc. are available in a country but are not productively utilized.

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6. Availability of quality products: - when markets are open, better quality goods will be available every where. Foreign companies will market latest products at reasonable prices. Good product will be available in the markets. 7. Earning foreign exchange: - international business helps in earning foreign exchange which may be used for strategic imports .India needs foreign exchange to import crude oil, deface equipment, raw material and machinery. 8. Helps in mutual growth: - countries depend upon each other for meeting their requirements. India depends on gulf countries for its crude oil supplies. 9. Investment in infrastructure: - international business necessitates proper development of infrastructure. A company entering international business must invest in roads.

Complexities involved in international business

International business by multinational so the complexities are also related to their working. Some of these complexities are discussed as follow:1. Controlling the market:- multinational try to control the market of the host country. Whenever they enter a new country, the first strategy is to eliminate the competitors either by taking over their business or forcing them out of market by following price reduction policies. 2. Exhausting natural resources: - multinational corporations set up their production facilities in those countries where natural resources are available in sufficient quantities. 3. Importance to luxuries: - multinational corporations enter those areas where margin of profits is high.

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4. Trade practices:- since multinational corporations have their head office in one country and the trade practices followed there are adhered to. 5. Economic development: - it is generally felt that the entry of businessmen from outside may help in the economic development of that country . The actual practice in many countries is different. 6. Shifting of investment: - international business is related to profitability of its operations. If a business is getting sufficient profits in a particular country then the investment remain there.

SPECIAL FOCUS INITIATIVES With a view to continuously increasing our percentage share of global trade and expanding employment opportunities , 13 special focus initiatives have been identified. Government of India shall make concerted efforts to promote exports in these sectors. These sectors are…

Market Diversification  In this policy, focus is on diversification of Indian exports to other markets, specially those located in Latin America, Africa, parts of Asia and Oceania. The initiatives taken under this policy are..  26 new countries have been included under Focus Market Scheme.

(2) Technological Upgradation Such initiatives include :  EPCG Scheme at zero duty has been introduced for certain engineering, electronic products, plastics, handicrafts, etc.  To encourage value added manufacture export, a minimum 15% value addition on imported inputs has been stipulated. International Business

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 A number of products including automobiles have been included for incentives under Focus Product Scheme.

(3) To Status Holders The Government recognized ‘Status Holders’ contribute approx. 60% of India’s goods exports. To incentivise and encourage the status holders, additional duty credit scrip @ 1 % of the FOB of past export shall be granted for specified product groups.

(4) Agriculture and Village Industry  Vishesh Krishi and Gram Udyog Yojana  Import of inputs such as pesticides are permitted for agro exports.  New towns of export excellence with a threshold limit of Rs 150 crore shall be notified.

(5) Handlooms  Specific funds are earmarked under MAI / MDA Scheme for promoting handloom exports. 

Duty free import of old pieces of hand knotted carpets on for re-export after repair is permitted.

 New towns of export excellence with a threshold limit of Rs 150 crore shall be notified.

(6) Handicrafts  Specific funds are earmarked under MAI / MDA Scheme for promoting handicraft exports.  New towns of export excellence with a threshold limit of Rs 150 crore shall be notified.

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(7) Gems and Jewellery  Import of gold of 8 k and above is allowed subject to import being accompanied by an Assay Certificate specifying purity, weight and alloy content.  Duty free import entitlement of commercial samples shall be Rs. 300,000.  Import of Diamonds for Certification/ Grading & re-export by the authorized offices/agencies of Gemological Institute of America (GIA) in India or other approved agencies will be permitted.

(8) Leather and Footwear  Duty free import entitlement of specified items is 3% of FOB value of exports of leather garments during preceding financial year.  Re-export of unsuitable imported materials such as raw hides & skins and wet blue leathers is permitted.

(9) Marine Sector  Imports for technological upgradation under EPCG in fisheries sector (except fishing trawlers, ships, boats and other similar items) exempted from maintaining average export obligation.

(10) Electronics and IT Hardware Manufacturing Industries  Expeditious clearance of approvals required from DGFT shall be ensured.  Exporters /Associations would be entitled to utilize MAI & MDA Schemes for promoting Electronics and IT Hardware Manufacturing industry exports.

(11) Sports Goods and Toys  Sports goods and toys shall be treated as a Priority sector under MDA / MAI Scheme.

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 Applications relating to Sports Goods and Toys shall be considered for fast track clearance by DGFT.

Conclusion International Business plays a crucial role in the economic development of a nation as it leads to industrialization, employment and reduction of scarcity of consumer goods. Our share of world trade has significantly increased over the years. At present, International Business opportunity in India exists in areas like IT, Telecom, R&D, Infrastructure, Retailing, etc. Sectors like health, education, housing, water resources, SMEs are untapped and offer huge scope.

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