International Business

International Business - INTERNATIONAL BUSINESS...

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INTERNATIONAL BUSINESS International Business is a term used to collectively describe topics relating to the operations of firms with interests in several countries. International trade occurs because no single country has the resources to produce everything well. Nations specialize in the production of certain goods and trade with other nations for those they do not produce. More and more companies are recognizing that pursuing opportunities in the global marketplace is the key to their present and future success. There are many advantages of going global such as, new markets, new sources of capital abroad, swifter technological advancement, and more choices for consumers, just to name a few. One of the results on the increasing success of international business ventures is Globalization. Globalization can be described as an increased connectivity among societies and their elements due to the explosive evolution of transport and communication technologies to facilitate international cultural and economic exchange. There are several countries that participate in international trade, as well as several forms of international business activities. Any company can become involved in world trade through a range of activities. Many companies first expand into international trade through importing and exporting. Importing is buying goods or services from a supplier in another country. Exporting is selling products outside the country in which they are produced. At any given time, a country may be importing more of one type of product and exporting more of another. The relationship between the value of a country’s imports and the value of its exports determines its balance of trade. The level of a country’s imports and exports forms an important part of international business economics. When a country exports more goods than it imports, its balance of trade is favorable, creating a trade surplus. However, when a country imports more than it exports, its balance of trade is unfavorable, creating a trade deficit. The top three of the world’s major trading economies are Europe, United States, and Japan. The top ten trading economies of the world include both industrialized and developing nations. Although companies may first expand globally through importing and exporting, there are other forms of international business activities. License Agreements entitle one company to produce or market another company’s product or to utilize its technology in return for a royalty or fee. Another way to expand into foreign markets is by franchising. With a franchise agreement, the franchisee obtains the rights to duplicate a specific
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International Business - INTERNATIONAL BUSINESS...

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