International business involves the development of commercial activities between two or more countries.
Business comes from the Latin negotĭum , a word composed of nec and otium that can be translated as "what is not leisure." The term, therefore, allows reference to work or occupation that is carried out for profit .
The adjective international , on the other hand, is linked to that which belongs to or relates to two or more countries , to a nation other than its own or that has transcended national borders.
What is international business?
International business , in short, covers commercial activities that take place in more than one country. The concept includes government transactions and private transactions. For example: "Our company is dedicated to international business: we already have a presence in five countries," "The current exchange rate favors international business," "We would like to participate in international business, but our structure does not allow it."
Specifically, we can establish that when we talk about international business we are referring to both imports and exports, without forgetting financing and investments either.
All of them areas that in order to be carried out and successfully require financial support and competitiveness, among other factors.
International businesses are regulated by various agreements, regulations and laws.
Laws, regulations and agreements
There are various laws and regulations that are responsible for establishing the conditions and forms for the international exchange of goods and services. These regulations establish how the income of products or capital can be realized.
In recent years, due to the global economic crisis , it has been determined by experts that if many companies want to survive the debacle, it is necessary and essential that they bet on international business. That is, by establishing agreements with foreign companies and taking their products outside the country, in order to increase their sales and customer base.
Benefits of international business
And these businesses are determined to bring with them numerous benefits for the entities that carry them out. Specifically, these are some of the most significant:
• These improve their image and make their brand much better known.
• It gives the possibility of developing a wide variety of economies of scale.
• The company that is committed to undertaking international business will see how it manages to obtain a better positioning within its sector and with respect to its competitors.
• That will see how the creation of new segments occurs.
• There is an important upheaval and growth regarding the exchange of goods or products.
• What the entities will also achieve is that their local clients give them more credibility, professionalism and trust. This will mean, therefore, that there will be a notable improvement in relations between both parties.
Factors that contribute to success
Those who participate in international business must also take into account certain cultural and social factors that, although they are not written down, can be as relevant as the laws when it comes to the success of the operation. In Japan , it is very important to maintain a personal connection before closing a deal, something that is not usually necessary in the United States or Europe .
As for other more specific factors linked to the success of international business, there are competitiveness and efficiency .