When you have such production potential, utilizing that potential is important. Debt Servicing: This means to grant loan for […] One reason for large companies to look towards international business is to utilize the excess production capacity of their manufacturing plants. A Competitive Edge in the Job Market. An MBA in International Business can lead to a variety of positions within businesses and organizations that operate on an international scale. The Importance of International business is fourfold if a company is afraid of the recession in their own country. As demand rises in new markets, the growth in demand automatically attracts new companies. Longer product lifespan. I chose this course for many reasons. Reasons to Major in International Business 1. Many great businesses fail to succeed due to poor … Example businesses targeting china as it is a market where labour cots are low and better productivity. This trend is set to continue, with Indonesia, Brazil, Russia and Mexico expected to join the top ten by 2050 (The World in 2050, PwC). Good international business communication practices help maintain these intricate business dealings. Operating internationally can also help a company lower expenses through direct access to cheaper materials and labor. Functions Of International Business : Global competition has made the businesses to change their way of perspective. The business world is very internationally focused today, with most major corporations having plants and facilities all over the world. Product Differentiation. One of the main reasons why you should study International Business, is that you will delve into the details of data analysis. Sales can dip for certain products domestically as Americans stop buying … This is what is known as a country’s comparative advantage and it is based on a nation’s ample factors of production, such as land, labour, … Furthermore, if a company is capable of product design and implementation as well as establishing new products and services, then this company has various benefits of International business already available. The Chance to Travel the World (For Free). Just like diversification of products is important, diversification of markets can also benefit the company. An international business concentration prepares you to conduct business across borders in a variety of situations. Thanks for sharing this useful information. As a result, it is one of the benefits of the International business that the firm can establish a monopoly or a duopoly in the target market, thereby generating a lot of revenue. Accounting and budgeting: Don’t fall short. It’s a small world, and with ever-evolving technology, it’s only getting... 2. As businesses around the world become increasingly connected, an understanding of international business operations is vital for graduates wanting to work in the sector. ADVERTISEMENTS: The following points highlight the three importance of International business. Graduates of the MSc International Business at the University of Stirling have gone on to work for employers such as RBS, Proctor and Gamble, EY and Accenture. More Career Options. Your email address will not be published. The International business is the purchasing and selling of the goods, commodities and services outside its national borders. One of the major contributors is their low Labour cost due to which Chinese equipments are able to match any rates in the International market. Naturally, when we are talking of operations and growth, one factor which helps the profitability of the company to a great extent is Economies of scale. 'In an ever-changing global business and economic environment, studying business from an international perspective is vital for graduates who are ambitious to work across international boundaries and cultures,' explains Dr Robert Webb, associate dean global engagement and recruitment and director of MSc programmes at Stirling Management School. Let’s suppose there are two countries – Country A and Country B. They choose that option because it is cheaper… When South Africa belonged to the primitives and native tribes, there was no business being conducted. Unfortunately, International Business Machines's EBIT flopped 19% over the last four quarters. International business is a term used to describe any business transaction (buying or selling) that takes place across international borders. Let us discuss the same. Expanding to international market sounds logical if you can differentiate your products from existing market products. Role of Supply chain in distribution, Top 8 Barriers to International Trade and their Types, Reverse Auction: Meaning, Types, Steps, Benefits, and Disadvantages, 4 reasons that explain the Importance of Goals to any organization, What are Inventory Management Systems? This concerns not only senior managers, but employees at all levels that have to interact with international customers and suppliers, partners, or international colleagues,' says Angelika Zimmermann, senior lecturer in international business and strategy at Loughborough University. The growth of these cities and the flourishing commerce is another proof of the importance of International business. If your company is the one to reach there on time, it will automatically grow its market share – which is what all companies want. Postgraduate study can facilitate the entry or the advancement of careers in areas such as accounting, banking and finance, HR and marketing. This benefits the company because the company gets a cost advantage over competitors. Why did you choose this course? Find out about MBA International Business … This is one of the most important reasons for companies to expand internationally. Studying international business allows you to see how globalisation has brought about an increasing 'connectedness' of businesses, markets, people and information across countries. In a nutshell, students need to develop a global perspective in order to be successful in business. 'An international business degree opens up a variety of careers and students can also use their knowledge to internationalise their own business or family business,' says Angelika. Multinational corporations operate in two or more countries while domestic companies restrict their operations to a single country. A good place to start painting a picture of international business is to have a general conception of why business takes place beyond national borders. So the question which pops up is – What is the importance of international business and what are the benefits of International business? The international business program orients our future leaders with an appreciation of other cultures, a sophisticated understanding of what constitutes good corporate citizenship in host countries, and a strong desire and ability to develop international business strategies and policies that protect and enhance all peoples and their environments. International business relates to any situation where the production or distribution of goods or services crosses country borders. In a … If you opt to study the one-year International Business MSc at the University of Stirling you’ll cover core areas such as accounting, people management and strategy, as well as ethical and environmental sustainability issues. Have you always dreamed of traveling the world? January 15, 2018 By Hitesh Bhasin Tagged With: Sales management articles. These are the important facts every business owner should know. Discover what you can do with a degree in international business. An international business degree, or global business degree as it is sometimes known, is an academic degree with a focus on international business markets. China, Japan and India's economies are among the world's top ten (second, third and fifth, respectively), reflecting the fact that the majority of gross domestic product (GDP) is now generated outside of the USA and Europe. On a scale where 1 is dislike and 5 is like. Availability of Low Cost Labor. You'll need a 2:1, and for 2020 entry, home and European Union (EU) tuition fees are £8,500. All students have the opportunity to work on a real-life consultancy project within a business. International business refers to the trade of goods, services, technology, capital and/or knowledge across national borders and at a global or transnational scale. 'In an ever-changing global business and economic environment, studying business from an international perspective is vital for graduates who are ambitious to work across international boundaries and cultures,' explains Dr Robert Webb, associate dean global engagement and recruitment and director of MSc programmes at Stirling Management School. © Copyright 2020 Jisc.All rights reserved. Importance, Types & Uses, What is a Sales Contract? In a highly competitive world, companies seek to reduce their costs as much as possible. Business activities done across national borders is International Business. International Business Concentration Preparing Students for Global Careers Why International Business? If your products are differentiated and the differentiation is possible only in one’s own country, then a company should definitely expand to International markets. One last reason for the Importance of doing International business is the purchasing power rising in target markets. International business programmes give students an understanding of the different business management practices found all over the world, and prepare them for graduate careers working abroad or in organisations that are engaged in business on a global scale. The best example of this is Dubai which as a country has grown exponentially in the last several years and today is a huge tourist market. Importance to Exporting Firm 3. 8. National Economy: 1. I am a serial entrepreneur & I created Marketing91 because i wanted my readers to stay ahead in this hectic business world. Everyone wants to expand their market share and to sell more and more products. International Business Is The New Norm There are many people who believe they may do business locally without a focus on anyone outside their community. This is the reason why many international businesses operate in Africa and South Asia where the humungous deposits of minerals and metals are attractive for the profits that these multinationals can make. Overall, there are many benefits to international business expansion and all the above points prove that if you have the capital and the potential to expand, then you should do so because there are many benefits associated with it. One of my friends had taken an asset protection service from “Abaco Ltd” but I got to know some new points from your article and how it works. Due to the product of the company becoming obsolete in current market but being attractive in a new market (developed vs underdeveloped economy). Why Earn a Master’s In International Business? 2. Well know examples of international business like McDonald’s, Coca Cola, Toyota and LG. Even if the external business environment is not down, there are other worse things that can happen to the company which increases the importance of International business. 'Taught by world class scholars and informed by cutting-edge research, students develop sought-after intercultural skills and a global mind-set, and are prepared to work confidently and effectively with global partners.'. There are 2 main reasons that such loss can happen in domestic market share. A company could be losing its domestic market share and it could find solace in a new international market. However, with globalization, we can see the growth and development of Ghana and Nigeria as well as other African cities. International trade is an exchange of capital, goods and services across the world which could include individuals and government. But the high interest coverage of 7.6 suggests it can easily service that debt. Thanks. The programme is assessed through seminars, lectures, tutorials, workshops, group work and independent study and home and EU fees stand at £13,800. Importance and Process of Sales Control, Sales closing: Techniques, Importance, and Terms. Importance, Advantages & Disadvantages, The Importance of Negotiation and the Reasons to Learn it, What is Sales Control? Companies like Ultratech, Blue Star, Garment manufacturers, Chocolate manufacturers have huge production capacity. In 1991, the Indian economy was opened up for globalisation under the leadership of then Prime MInister P. V. Narasimha Rao and Formfper Finance Minister Manmohan … An international business degree can also launch your career in exciting, global locations such as Canada, China, France, India, Singapore and the USA. If you are a current business major or aspiring business major and are interested in international business, you should carefully research the potential job market, as well as the school's reputation in the field prior to enrolling in an international business … Communication is intricately blended with … Students might expect their day-to-day work to revolve around international trade, global business operations and planning, or industrial development, for example. international business is decidedly more complex that business that operates exclusively in domestic markets.The major task of international business involves understanding the sheer size of the global marketplace. What's more, the skills that you develop on a course of this nature are highly sought after by employers. Studying for a Masters in international business is becoming increasingly popular and courses are available at a vast number of universities across the UK. As a result, many companies take the benefits of International business by utilizing their manufacturing potential and starting the sale of their brand in International markets. Introduction to International Business. National Economy 2. 7. International business is important to individual companies and the US economy generally. Specifically, what happens if the two countries trade?Producers in Country A will subsequently lose out because consumers will buy the Country B option. This video discusses how international business differs from domestic business. With local markets being saturated, many companies think of expansion via international business. International Business Administration focuses on key business disciplines within an international context. The importance are: 1. Many e… It includes all the commercial activities like sales, investment, logistics, etc., in which two or more countries are involved. Your email address will not be published. Access to capital, material, low labour costs and new technologies. Because nation-states have unique government systems, laws and regulations, taxes, duties, currencies, cultures, practices, etc. Let's stay in touch :). Gain access to lower-cost or better value factors of production. World Market Place is full of Diversity: ADVERTISEMENTS: The nations are diverse in terms of … With your business growing and you increasing your fixed costs, the concept of economies of scale sets in. It also improves its own scale of operations. Search for postgraduate courses in international business, what you can do with a degree in international business, Search business, consulting and management jobs, business, consulting and management sector, Overview of the business sector in the UK, 7 skills for a successful management career. Many times, there is a cost advantage of exporting products to a different country. International Business programs offered by schools range from a associate's to a research/scholarship based doctorate, which is the highest international business degree you can get. What happens if it costs more for Country A producers to make something than for Country B producers? Search for postgraduate courses in international business and learn more about funding postgraduate study. International Business is one whose manufacturing and trade occur beyond the borders of the home country. I would love to read more of these. Importance and Types, What is Sales Compensation? The benefits of International business are huge to Chinese companies because their cost of production is very low. A good business person knows that the foundation of a successful trading or material goods exchange process, are numbers. Opportunities Abroad: Just as students are stealing their educational studies to different countries … Meanwhile, at Loughborough University you'll learn about 'International Business Environments', 'International and Cross-Cultural Management', and 'Innovation and Entrepreneurship' in semester one. Required fields are marked *, Copyright © 2020 Marketing91 All Rights Reserved, Importance of International Business – Benefits of International Business, What is Sales Growth? Often combining some training in language and in other business areas, graduates will be able to manage business relationships that are central to the global Sales growth Explained in Detail, What is a Supply chain? For Thailand, there are many reasons why international business is important as follow: First of all, it increases employment rates. This is so that they can mitigate the effects of a slow economy in their home country. 2) Non-availability of product in new market, 5) Economic recession in one’s own country. Introducing the foundations of finance, marketing, supply chains, human resources and operations, International Business Administration covers the needs of all businesses. You can follow me on Facebook. A major advantage the company can have is that the product it produces is not available in the international market which the company is targeting. Because the developing and emerging countries have large deposits of minerals, metals and land for agricultural production, the western multinationals eye these markets in order to get access to the resources. The purchasing power in Dubai is great and you will find showrooms of all top brands present in Dubai markets. The major reason was the flexibility: as someone who is interested in many aspects of international business, including Law, Finance, Ethics and Human Resources, this course was able to … International Business Importance # 1. It is important to meet imports of industrial needs. Basically, the fixed cost goes down when the manufacturing goes up from the same assets. 6. For semester two, you have the choice of studying for further core and optional modules or taking a study abroad placement. Hence, there is a growing need for business and management graduates with an international perspective, who are capable of operating effectively in a globalised world. According to Dr Webb, international business graduates are well prepared for careers in consultancy, international finance, non-profit organisations and entrepreneurial ventures. Importance from Other Points of View. Globalization—the shift toward a more interdependent and integrated global economy—creates greater opportunities for international business. International business is important because it gives domestic companies access to new markets, potentially increasing sales and profitability. International business has many advantages and benefits for a Production or manufacturing company. We have an excellent article on Economies of scale explained with examples. You’ll also be able to choose between two degree pathways - you could specialise in either International Business and Marketing or International Business and Entrepreneurship. The factors such as technological advancements, high-speed communication, and shorter product life cycle contributed much to … Studying international business can prepare students for positions across the public, private, and non-profit sectors, for example in business, government, and international agencies. It involves cross-border transactions of goods and services between two or more countries. No matter what was your position in the old market, the new market is a new playing field for any company. After reading your post I got lots of information about international business companies which I have no idea before. Not every single entity, however, gains from international trade. When we compare labor cost in developed countries with respect to … The focus of a small business may have been the community, and the community is only one part of the company that must be addressed. Thus, if there is purchasing power of customers in a market, it makes logical sense that the brands will target that market as well. The importance of International business lies in the fact that you get a new market to enter and to expand in. Additionally, international business studies can be … 'Working across countries is a necessity for most firms today. What jobs can I do with an international business degree? To stand out to employers, Dr Webb has this advice. Really nice thanks , cause it’s my department and it’s really useful information. Why choose international business? This demand translates into varied opportunities in a range of settings and job sectors. The firm, therefore, has a “production advantage” which it can use to maximum benefit. We can examine trade and investment as an expression of the comparative advantage of nations. In the field of... 3. This cost advantage is apparent in the way China is operating in today’s business environment. The international business targets low cost operation and value of factors of productions. Some companies do it to seek new markets, others to find resources, yet others to reduce costs. The type of international business degree you choose will determine how long it takes to get your diploma. The reasons companies expand to other countries vary. I love writing about the latest in marketing & advertising. Know Why International Business Is Important. An international business company has many advantages and benefits for the business owner. There are currently more than 200 national markets in the world, presenting a seemingly endless supply of international business opportunities. If your products are differentiated and the differentiation is possible only in … Elements, Importance and Advantages, What is Sales cadence? Bad communication practices can cause loss of business and even international tension among countries. All the economic activities indulged in cross-border transactions comes under international or external business. Choosing an International Business Program There are a growing number of schools that offer programs in international business. 'Take advantage of all the opportunities your institution offers, from careers services, to attending business events, volunteering as a student ambassador, and taking up opportunities for international experience.'. Such trade modes might be owned by the state or privately owned organization. Due to Competition increasing and market becoming saturated. Why International Trade is Important for Growing Your Business What is International Trade? 'The MSc is designed to equip students with the essential knowledge and skills required for working effectively across different national contexts, in a range of business and management roles,' explains Angelika. This will revive the company in a big way and give fresh revenue to the company which can help it fight in the local market as well. Hence, one reason International business is considered important is because of the safety it provides to the company lest an economic downturn happens. Companies like Mitsubishi, Daikin, Blue Star and others have presence across multiple countries and regions. That is, to suggest that every nation will usually be exceptionally excellent at producing some sort of goods or services or both. With net debt to EBITDA of 3.2 International Business Machines has a fairly noticeable amount of debt. This helps the brand generate revenue and also push huge volumes out of their large factories. You could also continue your studies with a PhD, before seeking a career in academia. Mitsubishi, Daikin, Blue Star, Garment manufacturers, Chocolate manufacturers have huge production capacity of their large.. A course of this nature are highly sought after by employers huge to Chinese companies because their of! Interest coverage of 7.6 why international business it can easily service that debt the UK degree you choose will determine how it... And better productivity search for postgraduate courses in international business differs from domestic.. 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