Concepts of globalization and international business; Factors affecting globalization; Reasons for international business expansion; Drivers of market globalization; Domestic vs international business.
Globalization and International business are related terms and sometimes used interchangeably. The globalization refers to the exchange of culture, ideas, knowledge and economic activities among different countries across border whereas international business deals with business and economic aspects to globalization.The international business occurred as a result of advancement in transportation, manufacturing, information technology and communication. The international business refers to the economic activities which involve the transfer of resources, goods, services, knowledge, ideas, and information across national boundaries. Liberalization, free market system, technological advancement, natural resources, multilateral institutions are some of the factors that affect international business and globalization.
Globalization is an ever increasing trend which is affecting international business completely. When we use globalization and international business synonymously the increasing trend of globalization implies the increasing trend of international business. The international business is expanding gradually worldwide. There are certain motives of the company because of which international business is expanding : market motives, economic motives and strategic motives. Market motives deal with the internationalization of unique and specialized products. Economic motives deals with the concept of increasing revenue at lower cost whey the company go international. Similarly, strategic motives deals with capitalizing the products of home country in international markets. The drivers of globalization refers to those factors which leads to market globalization. Market drivers, cost globalization drivers, competitive drivers, government drivers are the major drivers of international business. Domestic and international business have few similarities as well as difference. No matter whether it is international of domestic business, both involve the transaction of goods and services in return of money. The difference between domestic and international market can be explained in terms of interest rates, currency, inflation, government regulations, taxation system, language, and cultural and economic barriers.