Every business flourishes when they go beyond its limit. It is that risk-taking urge that lies within them that strives them to the success they dream of. International business is one of the most significant ways a business flourishes and expands its business beyond the borders of domestic trade. As there are more opportunities there are more employment opportunities in international business.
International business can comprise contacting the sources of operations that take part in the organisation. The main types of business carried out by contracting are contract manufacturing, contract management and turnkey contracting. Under contract manufacturing, the procedure of manufacturing a foreign product is outsourced to the local market. Management contract as the name suggests means the operational functions will be performed by an expert team for a basic fee. The most important of all turnkey contracts is where the entire production process is carried out by a foreign company but is operated by a domestic company. here there is a build and transfer transaction taking place.
The most commonly used international business type is where one or two well-established brands are involved in licensing, franchising and strategic alliance. Licensing means the brand name of an established company can be used by another company for a licensing contract between the parties. On the contrary, under franchising, the entire operations of the branded firm are carried out by others under their name in a new location. Using Disney's logo for marketing kinder joy is a form of licensing and opening a Mcdonald's store in different parts is franchising. A strategic alliance is when both the branded companies join hands to open an alliance in different parts of the world according to their credibility just like Starbucks opened in India as a part of the TATA Alliance.
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