FINAL REQUIRED OUTPUT

INTERFERENCE in International Business

1. Is there a need for a government to interfere or intervene in international business affairs? Support
your answer.

Yes, there can be a need for the government to interfere or intervene in international business
affairs. There are a number of reasons as to why government influence is needed. First, is the protection of
national interests. Governments have a responsibility to protect their country's interests, such as national
security, economic stability, and the well-being of its citizens. Sometimes, international businesses can
engage in practices that harm these interests, like unfair competition, exploitation of resources, or
compromising national security. In such cases, government intervention becomes necessary to safeguard
the country's interests. Second, is ensuring fair competitions. Governments can establish regulations and
policies to prevent monopolies or unfair practices that hinder competition. This helps to maintain a level
playing field for both domestic and international businesses, promoting fairness and preventing abuse of
market power. Third, is all about environmental and social concerns. International businesses can have
significant impacts on the environment and local communities. Governments may intervene to enforce
environmental regulations, protect natural resources, and ensure that businesses operate responsibly.
They can also set labor standards to protect workers' rights, prevent exploitation, and promote fair
working conditions. And fourth, which may be the most important reason, is their ability to resolve
disputes and conflicts. Sometimes, conflicts or disputes arise between international businesses and
governments or between different countries. Governments may step in to mediate and find solutions
through diplomatic channels or international organizations. This intervention helps in resolving conflicts
and maintaining stability in international business relations.

2. What methods or strategies are used by the government to intervene in international business affairs?

Governments use various methods or strategies to intervene in international business affairs. Some
of these methods include:

a) Trade policies and tariffs: Governments may impose tariffs or import restrictions to protect domestic
industries or to balance trade. These measures can be used to create barriers for foreign products or
incentivize domestic production.

b) Regulation and legislation: Governments establish regulations and laws to govern international
business activities. These regulations can cover areas such as intellectual property rights, labor standards,
environmental protection, product safety, and consumer protection. By enforcing these regulations,
governments ensure compliance and promote fair and responsible business practices.

c) Diplomatic negotiations and agreements: Governments engage in diplomatic negotiations with other
countries to establish trade agreements, investment treaties, and other international agreements. These
negotiations aim to create favorable conditions for businesses and promote cooperation between
countries.

d) Financial assistance and incentives: Governments may provide financial assistance, subsidies, or tax
incentives to support domestic industries and promote their competitiveness in international markets. This
can include grants, loans, or tax breaks to encourage investment, research and development, or export
activities.

It's important to note that the extent and nature of government intervention can vary among
countries and depend on specific circumstances and priorities.
KINDLY WATCH THIS VIDEO : STRATEGY OF INTERNATIONAL BUSINESS
https://youtu.be/VqeknTYODeA

Output: Write your learning reflection about the discussion in the video.

According to the video, when companies compete globally, they face two types of pressures: the
need to lower costs and the need to meet the specific preferences of different countries. These pressures
can sometimes conflict with each other. Lowering costs means finding ways to make products cheaper, like
producing them in places where it's less expensive. Meeting local preferences means customizing products
and marketing strategies to fit the tastes and needs of people in different countries. This can be expensive
because it may require making different versions of the same product.

The strength of these pressures affects a company's strategy. There are four main strategies that
companies use when they compete internationally:

1. Global Standardization Strategy: This strategy works when there's a strong need to lower costs
and less need for customization. Companies try to make their products as cheap as possible by
producing them in large quantities and using economies of scale. This strategy is common in
industries where products are similar worldwide, like electronics or pharmaceuticals.

2. Localization Strategy: This strategy is used when there are big differences in people's
preferences across countries and lower cost pressures. Companies customize their products and
marketing to fit the specific tastes of each country. They want to make their products more
valuable to local customers. For example, Nestle adapts its products and marketing to different
countries.

3. Transnational Strategy: This strategy is used when there are both strong cost pressures and
strong demands for customization. Companies try to balance cost reduction and meeting local
preferences. They may have global production but also add local features to their products.
Caterpillar is an example of a company that does this.

4. International Strategy: This strategy is used when there are low cost pressures and less need for
customization. Companies sell the same products worldwide with minimal changes. They don't
focus on customization. Procter & Gamble and Microsoft are examples of companies that use this
strategy.

It's important to remember that the competitive landscape can change, so companies need to be
proactive and adapt their strategies over time. By understanding these pressures and choosing the right
strategy, companies can compete successfully in the global market.