8 Characteristics of International Business

International Business Meaning and Definition

Business which is conducted internationally in more than one country is termed as International business. It involves transactions of goods & services between the two countries. These transactions are conducted at the global level & across national borders. International businesses are very large in size as they are performed at a global level.

Their scales of operation are vast in size. International businesses provide employment to a large number of peoples. It is served as an important source for earning foreign exchange for the country. All payments in these businesses are done in foreign currencies of different countries.

These businesses help in improving the standard of living of people in different countries by supplying high-quality goods. International business is of different types like imports & exports, franchising, licensing, foreign direct investment etc.

International businesses provide employment to a large number of peoples. It is served as an important source for earning foreign exchange for the country. All payments in these businesses are done in foreign currencies of different countries.

Characteristics of International Business
Characteristics of International Business

Characteristics of International business

Large scale operations

International businesses are conducted on a very large scale. They perform their operations in different countries globally. Their business activities are very large in size ranging from production, marketing & selling of their products. These businesses serve the demands of local markets also where they are present & also demands of different countries globally. That’s why they produce large amount of goods & services to cater to the large demands.

Earns foreign exchange

International businesses are served as an important source for earning foreign exchange. Foreign Currencies of different countries are involved in transactions in these businesses. This helps in getting enough foreign exchange reserve for the country.

Integrates economies

Another important feature of international business is that it integrates the economies of different countries worldwide. It takes advantage of different economies & aims at providing its services economically. It takes labour from one country, technology from one country & finance from another country. Also, it designs, produces, assembles its products not only in one country but in different-different countries. This help in taking advantage of different economies & becoming economical.

Large number of middlemen

International businesses are very large in size. Their scale of operations is not limited to one country but performs in different countries globally. There is a large number of middlemen involved in international businesses. These all person renders their services properly for the efficiency of the business. Their services help the business in easy expansion & growth.

High risk

The degree of risk associated with international business is very high. These businesses require a large amount of resources both in terms of money & manpower for carrying out its operations. These need to carry out trade in different countries at large distances. It requires huge cost & time to carry these goods & services. Also, sometimes different economies face unfavourable conditions which affect the business conditions.

Intense competition

International business faces a large number of risks internationally. These businesses invest large amount in advertising their products. There are a large number of competitors in international market. There is tough competition in terms of price, quality, design, packing etc. Business needs to focus on these things to face the tough competition going on.

International restrictions

International businesses face large restrictions while carrying out there operations in different countries. Sometimes they are not allowed to inflow & outflow goods, technology & different resources. There are restricted by the government of different countries to not enter into their countries. They face several foreign exchange barriers, trade barriers & trade blocks which are harmful for international business.

Highly sensitive nature

International businesses are highly sensitive in nature. A proper market research is very essential for carrying out these businesses effectively. Any unfavourable economic conditions in one country will adversely affect the business. If there is any economic, political or technological change will directly influence the functioning of the business. Therefore, these businesses should change their activities from time to time to survive the change.


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