International business can be defined as any business transactions, whether governmental or private, that involve two countries or more. It makes up a large and growing segment of the total business taking place across the world. Nowadays, almost all business organizations, small or large, are affected by global competition and events in one way or another. A reason for this is because most of them get supplies from and/or sell their finished products to foreign nations. They also compete with goods and services coming from abroad. This essay looks at why international business is very important.
A notable importance of international business is that it increases sales. Businessmen get a chance to expand their organizations and build their brands in a way that they expand their markets. Such a situation means that they have access to a larger market than would have been the case if they had restricted business activities to within their country's borders. The home country also benefits in that there is an influx of new products, services, and technologies. Also, since a certain nation allows other nations to import their products, in return it gets a chance to export to them. This way, local businesses and the government get to benefit.
International business creates new employment opportunities in a host country. If foreign companies set up operations in a certain country, they will have to employ local labor and manpower to assist them run their businesses. Once citizens are hired, they are given a chance to share and utilize their skills and knowledge. In return, they get a source of income and a means of earning a living. International trade also helps utilize excess resources. Nations rich in natural resources such as minerals can utilize them by sharing with others. Rather than letting unused resources remain idle or go to waste, they can sell them to foreign countries and thus increasing their revenue.
The other importance of international trade is that it offers access to high quality products. Various countries have their own unique products and services that they get to share with others. Hence, any nation can choose the helpful ones that it does not produce. This means there is a wide variety to choose from in terms of brands, features, designs, and prices. In addition, international business contributes to the earning of foreign exchange. It allows international investors to invest in a given country. Such a situation means that the economic status of that particular country is boosted significantly.
A notable issue related to international business has to do with a business organization's growth as well as the virtues of interaction and networking. Businesses across the world tend to interact and eventually network with each one another in a way that they gain a competitive advantage in the international market. Such networking can involve use of similar components or raw materials, sharing development costs or research findings, or conducting business activities within a joint governmental framework. It is evident that when business organizations put in place a trading block without internal barriers, they actually form their own unique networks. Alliances in sectors such as engineering, vehicle manufacturing and the aerospace have let to the development of the outlook of a certain country or group of countries on a basis of their own local market network.
Forsgren, M., & Johanson, J. (2014). Managing networks in international business. Routledge.
Stahl, G. K., & Tung, R. L. (2015). Towards a more balanced treatment of culture in international business studies: The need for positive cross-cultural scholarship. Journal of International Business Studies, 46(4), 391-414.
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