Different Approach of International Business

Topics: International trade, Investment, Foreign direct investment Pages: 24 (6459 words) Published: March 27, 2010
Different approach of International Business

In truth, we have become part of a global village and have a global economy where no organization is insulted from the effects foreign markets and competition. Indeed, more and more firm are reshaping themselves for international competition and discovering new ways to exploit markets in every corner of the world. Failure to take a global perspective in one of the biggest mistakes managers can make. Thus we start laying the foundation for our discussion by introducing and describing the basic of international business.

International Business:
An international business is one that is based primarily in a single country but acquires some meaningful share of its resources or revenues (or both) from other countries. Sears fits this description. Most of its stores are in the United States. For example, and the retailer earns around 90 percent of its revenues from its U. S. operation with the remaining 10 percent coming sears stores in Canada. At the same time however, many of the products it sells, such as tools and clothing are made abroad from any perspective. Then it is clear that we live in a truly global economy. Virtually all business today must be concerned with the competitive situations they face in lands for from home and with how companies from distant lands are competing in their homelands.

Difference approaches of international business are given below: • Importing and Exporting
• Franchising
• Licensing
• Joint Venture
• Foreign Direct Investment
• Management contact

Importing and Exporting:


Imports" consist of transactions in goods and services (sales, barter, gifts or grants) from non-residents residents to residents. The exact definition of imports in national accounts includes and excludes specific "borderline" cases. A general delimitation of imports in national accounts is given below:

• An import of a good occurs when there is a change of ownership from a non-resident to a resident; this does not necessarily imply that the good in question physically crosses the frontier. However, in specific cases national accounts impute changes of ownership even though in legal terms no change of ownership takes place (e.g. cross border financial leasing, cross border deliveries between affiliates of the same enterprise, goods crossing the border for significant processing to order or repair). Also smuggled goods must be included in the import measurement. • Imports of services consist of all services rendered by non-residents to residents. In national accounts any direct purchases by residents outside the economic territory of a country are recorded as imports of services; therefore all expenditure by tourists in the economic territory of another country are considered as part of the imports of services. Also international flows of illegal services must be included. Basic trade statistics often differ in terms of definition and coverage from the requirements in the national accounts: • Data on international trade in goods are mostly obtained through declarations to custom services. If a country applies the general trade system, all goods entering the country are recorded as imports. If the special trade system (e.g. extra-EU trade statistics) is applied goods which are received into customs warehouses are not recorded in external trade statistics unless they subsequently go into free circulation of the importing country. • A special case is the intra-EU trade statistics. Since goods move freely between the member states of the EU without customs controls, statistics on trade in goods between the member states must be obtained through surveys. To reduce the statistical burden on the respondents small scale traders are excluded from the reporting obligation. • Statistical recording of trade in services is based on declarations by banks to their central banks or by surveys of the main operators. In a...
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