Better utilisation of idle capacity – Local producers in foreign countries also gain as contract manufacturing ensures better utilisation of their production capacity. The trade allows a country to specialize in producing and exporting the most efficient products that can be produced in that country. The fundamental and the largest international business activity in many countries is the foreign trade comprising exports and imports. However, attempting to trade beyond the domestic boundaries is not a walkover. Portfolio investments are financial investments made in foreign countries. The Coca-Cola Company, for example, conducts business in more than 200 foreign countries. Major forms of business operations that constitute international business are as follows. The goods are tangible, like machinery, gold, silver, electronic goods etc. After completion of a two year fulltime program, from a reputed institution, one can expect an initial salary ranging anywhere from 5 lakh to 12 lakh per annum depending on the designation. For example, sale of sweets by Haldiram to WalMart Store in USA. For example, purchase of toys by an Indian toy dealer from a Chinese firm. For example, governments in some so-called socialist countries allow people to own businesses and property and to select their own jobs. 7. Management. Countries also differ in the penalties they may impose on businesses for producing defective products or discriminating against employees. The developing countries get the latest technology, foreign capital, employment opportunities, rapid industrial development, etc. International business conducts business transactions all over the world, it is also known as Global Business. Except for these two differences, franchising is pretty much the same as licensing. Businesses and highly skilled workers generally prefer capitalist countries because there is less government interference. Change ), You are commenting using your Twitter account. Many U.S. firms have recently expanded into smaller foreign markets because they expect that economic growth in these countries will be strong, resulting in a strong demand for their products. It puts the export firms in a disadvantageous position. It is also called invisible trade. Accurate Information 2. Wal-Mart Stores has recently opened stores in numerous countries, including Mexico and Hong Kong. High Cost – As goods physically move from one country to another, it involves heavy additional packaging, transportation and insurance costs (especially in case of heavy items). It includes the international movements of goods and services, capital, personnel, technology and intellectual property rights like patents, trademarks and knowhow. 2. Companies have to practice out-of-the-box business procedures and strategies that help establish their presence in the worldwide market.