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Answers of MB0053 –International Business Management Q1. Write down the difference between international Vs global business? And what are the benefits of globalization?

Answer: Globalisation is a process where businesses are dealt in markets around the world, apart from the local and national markets. Most of us assume that international and global business are the same and that any company that deals with another country for its
business is an international or global company. In fact, there is a considerable difference between the two terms.

International companies – Companies that deal with foreign countries for their business are considered as international companies. They can be exporters or importers who may not have any investments in any other country, apart from their home country.

Global companies – Companies, which invest in other countries for business and also operate from other countries, are considered as global companies. They have multiple manufacturing plants across the globe, catering to multiple markets.  

International strategy – Companies adopt this strategy when each country’s market needs to be treated as self contained. It can be for the following reasons:
 Customers from different countries have different preferences and expectations about a product or a service.
 Competition in each national market is essentially independent of competition in other national markets, and the set of competitors also differ from country to country.
 A company’s reputation, customer base, and competitive position in one nation have little or no bearing on its ability to successfully compete in another nation. 

Global competitive strategy – Companies adopt this strategy when prices and competitive conditions across the different country markets are strongly linked and have common synergies. In a globally competitive industry, a company’s business gets affected by the changing environments in different countries. The same set of competitors may compete against each other in several countries  

Benefits of globalisation    
The merits and demerits of globalisation are highly debatable. While globalisation creates employment opportunities in the host countries, it also exploits labour at a very low cost compared to the home country. Let us consider the benefits and ill-effects of globalisation. Some of the benefits of globalisation are as follows:   

  1. Promotes foreign trade and liberalisation of economies.
  2. Increases the living standards of people in several developing countries through capital investments in developing countries by developed countries.  
  3. Promotes better education and jobs.  
  4. Leads to free flow of information and wide acceptance of foreign products, ideas, ethics, best practices, and culture.  
  5. Provides better quality of products, customer services, and standardised delivery models across countries.  
  6. Gives better access to finance for corporate and sovereign borrowers.  
  7. Increases business travel, which in turn leads to a flourishing travel and hospitality industry across the world.  
  8. Increases sales as the availability of cutting edge technologies and production techniques decrease the cost of production.  
  9. Provides several platforms for international dispute resolutions in business, which facilitates international trade.      


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