International business refers to the trade of goods, services, technology and capital at a global level, as well as cross-border transactions between countries. These transactions can include anything from capital, skills, and people for the purpose of the production of physical goods and services, such as finance, banking, insurance, and construction. This is commonly referred to as globalisation.
Conducting business overseas, companies need to separate national markets into one, single global marketplace. There are two factors that allow globalisation to function as well is it does – the elimination of barriers which allows trade to flow easier and technology which allows countries to easily communicate with one another.
International business also comes under the study of the internationalisation process of multinational enterprises (MNE). An MNE is a company that is available on a global scale, and well-known ones include McDonald’s, Starbucks and Microsoft. MNE’s can range greatly in terms of the goods they produce, from consumer goods to machinery manufacturing.
In order to operate overseas many factors must be considered. These consist of differing legal systems and political systems, environmental standards and local cultures, corporate cultures, foreign-exchange markets, tariffs, trade agreements and many more. These factors will determine how a particular country operates from one country to another, as one country might allow them to do something another may not.
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