Understanding of International Business

Understanding International Business is a business whose activities pass through national borders. This definition includes not only international trade and manufacturing abroad but also the growing service industries in fields such as transportation, tourism, banking, advertising, construction, retail trade, wholesale trade, and mass communications.


Other:
a. Extrajudicial Business means domestic operations within a foreign country.
b. Multidomestic company is an organization with branches in many countries, formulating its own business tactics according to basic differences that are understood.
c. A Global Company is an organization that strives to standardize and integrate operations around the world in all functional areas
d. The international company refers to both global and multi-domestic companies.

Understanding International Business according to Ball, McCulloch, Frantz, Geringer, Minor (2006) = Businesses whose activities exceed national borders. This definition includes international trade. overseas manufacturing as well as service industries in various fields such as transportation, tourism, banking, advertising, construction, retail trade, wholesale trade, and mass communication.

Read also : 10 Easy-to-Try Business Opportunities for Beginners


Understanding International Business according to Charles WH Hill (2008) = Companies involved in international trade and investment.
Definition of International Business according to Daniels, Radebaugh & Sullivan (2004) = All commercial transactions, both private and public, between 2 or more countries


The characteristic that distinguishes international and domestic business is that international business involves activities that cross borders. Difficult this means doing international business is more complex because
Countries have their own characteristics
Suppose that the face is more complex
International business should be able to work with various trade and investment constraints set by a government


International transactions involve currency changes.

The Nature of International Business


As mentioned above, international business is a business activity carried out across national borders. Business transactions like this are international business transactions (International Trade). Business transactions carried out by a company in a country with other companies or individuals in other countries are called International Marketing. International marketing is different from international business, namely:

International Trade (International Trade)

With the existence of these export and import transactions, a trade balance between countries will emerge (balance of tread).

A country can have a trade balance surplus or trade balance deficit. A surplus trade balance shows the conditions in which the country has a greater export score than the score of imports carried out from its trading partner countries. With the trade balance experiencing a surplus, therefore, if other conditions are constant, the cash flow into that country will be greater with the outflow of cash to the trading partner country. Conversely, if the country experiences a deficit in its trade balance, it means that its import score exceeds the export score it can carry out with other countries. So, the country experiences a foreign exchange balance of payments and faces a reduction in the State’s foreign exchange.

International Marketing

International marketing, which is a condition where a company can be involved in a business transaction with other countries, other companies, and the general public abroad. This international business transaction is usually an attempt to market products abroad.

All these things, therefore, entrepreneurs will be free from trade barriers and import duty fees because there are no export-import transactions. By carrying out production and marketing activities in a foreign country, therefore, there is no export-import activity. Products sold can be in the form of goods and/or services. This transaction can be done with the following system:

  • Licensing
  • Franchising
  • Management Contracting
  • Marketing in Home Country by Host Country
  • Joint Venturing
  • Multinational Corporation (MNC)
    The country (Home Country) should pay, while the sender (Host Country) receives the fee. Understanding of international trade with this company