International Business

If an organization wants to go international, they may have a lot of methods, such as outsource, exporting, importing, licensing, etc. International trade is a kind of international business. In this blog, I would mainly focus on international trade and globalization.

Firstly, let me talk about the ways to conduct business internationally. Outsource is the practice of contracting out defined functions or activities to companies in other countries that can do the work more cost- effectively, such as manufacturing. Companies in some developing countries now outsource some work to emerging economies where staffs are cheaper or more plentiful.

As for the exporting and importing, it means dealing with overseas customers and suppliers is by transporting physical products or delivering services across national boundaries.

Licensing is when one firm gives another firm the right to use assets such as patents or technology in exchange for a fee. When a business grants the right to a firm in another country to produce and sell its products for a specified period.

Franchising, which is the practice of extending a business by giving other organisations, in return for a fee, the right to use your brand name, technology or product specifications, is similar as licensing.

On the other hand, let me focus on the context of international business. When people managing international operations pay attention to the international aspects of the general business environment, they also can analyze through the PESTEL. Political risk is the risk of losing assets, earning power or managerial control due to political events or the actions of host governments.

Economic states that by specializing in the production of those goods which they can produce more cheaply than other countries, and trade them with others, nations will increase their economic well- being.

Sociology- cultural context is distinct from human nature and from an individual’s personality. It is a collective phenomenon, shared with people in the common social environment in which it was learned.

As for the technological context, some physical facilities support economic activities- ports, airports, surface transport and, increasingly, telecommunications facilities. That is also important for companies operating abroad.

Lastly, environmental context is a further aspect for business. One important aspect is the resources available in an economy, such as oil, coal, agricultural land, etc. These considerations affect the kind of businesses that people create in different countries, and on the pattern of world trade.