International Business - Lesson Summary
International Business is defined as the expansion of business functions from domestic to any foreign country with the objective of fulfilling the needs and wants of international customers.
According to the International Business Journal, international business refers to a commercial enterprise that performs economical activity beyond the bounds of its location, with branches in two or more foreign countries making use of economic, cultural, political, legal, and other differences between countries.
International Marketing refers to the application of marketing principles to satisfy the varied needs and wants of different people residing across the national borders.
The term direct exporters refer to organizations that produce their products in their home market and then sell them to customers overseas.
International finance is a section of financial economics that deals with the monitory interactions that occur between two or more countries.
The term indirect exporters refer to organizations that sell their products to a third party who then sells it in the foreign markets.
The term countertrade refers to the process of exchanging goods or services which are paid for in whole or part using other goods or services, rather than paying using money.
The main requirement for piggybacking is to produce quality goods and then finding firms that are willing to carry them for you. Piggybacking is a viable alternative for firms with limited exporting capabilities, limited resources and a lack of foreign market knowledge.
Licensing refers to an agreement between the licensor and the licensee over a certain period of time for the use of a brand name, marketing, know-how, copyright, work methods and trademark by paying a license fee.
Franchising refers to an agreement where one party grant another party the right to use its trademark or trade-name as well as certain business systems and processes to produce and market a good or service according to certain specifications.
Business Process Outsourcing refers to the outsourcing of peripheral activities of the organization to an external organization to minimize costs and increase efficiency.
Knowledge Process Outsourcing refers to the outsourcing of functions related to knowledge and information to third party service providers.
The degree of control in a licensing arrangement is such that the licensor has control over the use of intellectual property by the licensee, but has no control on the licensee’s business, whilst under the franchising arrangement, the franchisor exerts considerable control over the franchisee’s business and process.
A firm that possesses technical skills or management know-how can expand overseas by providing its managerial and technical expertise on a contractual basis.