Understand the importance of international business
International business is all commercial, private and government transactions involving two or more countries. Why should one be interested in studying international business? The simplest answer is that international business comprises a large and growing portion of the world’s total business. Today, almost all companies, large or small, are affected by global events and competition because most sell products and/or obtain suppliers from foreign countries and/or compete with products and services that come from abroad.
More companies involved in some type of international business are involved in exporting and importing than in any other type of business transaction. Many of the international business experts argue that exporting is a logical process with a natural structure, which can be seen primarily as a method of understanding the environment of the destination country, using the right marketing mix, developing a marketing plan based on in the use of the mix, implementing a plan through a strategy, and finally using a control method to ensure that the strategy is met. This export process is reviewed and evaluated periodically and the use of the mix is modified to take into account market changes that impact competitiveness. This point of view seems to suggest that much of the international business theory related to companies, which have an international base and global ambitions, often changes according to the special requirements of each country.
Another central theme is the growth of the company and the importance of networking and interaction. This vision looks at how companies and organizations interact and consequently connect with each other to gain business advantage in global markets. The network may use subcontractors or similar components, share research and development costs, or operate within the same government framework. Clearly, when companies formulate a trade bloc without internal barriers, they are actually creating their own networks. Collaborations in aerospace, vehicle manufacturing, and engineering have sponsored the development of a country’s or group of countries’ perspective based on their own internal market network. This network and interaction approach to internationalization shows the essence of being able to influence decisions when one knows how the actors of the global network work or interact.
For example, a crucial market network is that of the Middle East. The countries of the Middle East are rich and diverse markets, with a vibrant and varied cultural heritage. This means that although there has been a process of harmonization over the last few years, there are still differences. Rather than business being simpler as a result, it should be recognized that due to regulations and the need for these countries to restructure as they enter the global marketplace, conducting any type of business can be highly complex. However, it should be remembered that Middle Eastern countries have low average incomes and like to have their cultural differences recognized. Those companies that recognize or have recognized these facts have a good chance of developing a successful marketing strategy to meet their needs. Fortunately, some firms have become aware of these important differences and have reacted appropriately when making strategic decisions regarding their penetration in this type of market.
