INTERNATIONAL & GLOBAL

BUSINESS OPERATIONS

BY: NAINA KARMAKAR

COLLEGE ID: 20273040174
MBA 3rd SEMESTER
CONTENTS:
• INTERNATIONAL BUSINESS
- FEATURES
- IMPORTANCE
• GLOBAL BUSINESS
- GLOBAL BUSINESS STRATEGIES
 INTERNATIONAL BUSINESS
• International business basically means
commercial transactions that involve two or more
countries. These transactions can occur between
private entities as well as government agencies.
The only prerequisite of such transactions is that
they should involve multiple nations.

• International management refers to the practice

of managing these kinds of international
businesses and global practices. This field of
management has gained a lot of prominence
after globalization. Even small and medium-sized
companies these days transact with foreign
entities.
FEATURES OF INTERNATIONAL BUSINESS

• It operates on very large scales and involve multiple

jurisdictions.
• They integrate the economies of multiple countries. Functions
like importing, exporting, financing, hiring, selling and
managing may all happen in separate nations.
• It has the distinction of emerging from only a few developed
countries. Companies from large economies like the USA, UK,
Japan, China, Germany, India, etc. dominate international
trade.
• They face fierce competition. Smaller companies from
developing nations often have to compete with MNCs that
have no shortage of resources.
IMPORTANCE OF INTERNATIONAL
BUSINESS
• They involve the use of foreign exchange.
• It offer businesses the opportunity to earn higher profits.
• Government benefits are provided to attract foreign
businesses.
• Optimum utilization of resources: Companies use natural and
human resources from various countries in their operations.
• Easily diversify and expand their activities. This is because
they earn very high profits and receive many governments
benefits.
GLOBAL BUSINESS
• A global business is a company that operates facilities (such as
factories and distribution centres) in many countries around
the world. This is different from an international business,
which sells products worldwide but has facilities only in its
home country.
 GLOBAL BUSINESS STRATEGIES
• A major concern for managers deciding
on a global business strategy is the
trade-off between global integration
and local responsiveness. Global
integration is the degree to which the
company is able to use the same
products and methods in other
countries. Local responsiveness is the
degree to which the company must
customize their products and methods
to meet conditions in other countries.
The two dimensions result in four basic
global business strategies: export,
standardization, multi-domestic, and
transnational. These are shown in the
figure below.
• Export Strategy: An export strategy is used when a company is
primarily focused on its domestic operations. It does not intend
to expand globally but does export some products to take
advantage of international opportunities. It does not attempt to
customize its products for international markets. It is not
interested in either responding to unique conditions in other
countries or in creating an integrated global strategy.

• Standardization Strategy: A standardization strategy is used

when a company treats the whole world as one market with
little meaningful variation. The assumption is that one product
can meet the needs of people everywhere. Many business-to-
business companies can use a standardization strategy.
Machines tools and equipment or information technologies are
universal and need little customization for local conditions.
• Multi-domestic Strategy: A multi-domestic
strategy customizes products or processes to the specific
conditions in each country. Companies benefit from a multi-
domestic strategy because country managers understand local
laws, customs, and tastes and can decide how to best meet
them.

• Transnational Strategy: A transnational strategy combines a

standardization strategy and a multi-domestic strategy. It is
used when a company faces significant cost pressure from
international competitors but must also offer products that
meet local customer needs. A transnational strategy is very
difficult to maintain because the company needs to achieve
economies of scale through standardization but also be
flexible to respond to local conditions.
 CONCLUSION
• In today’s economy almost all companies must consider the
opportunities presented by globalization, but global
operations also present significant risks. Companies must
research and plan thoroughly before engaging in international
operations. And they must choose a strategy that matches
their capabilities and objectives. The economies of
standardization and the responsiveness of customization are
competing pressures companies must resolve. The
appropriate strategic choice is essential for a company to
make the right choices.