Exploring the business globally

Taslim Ahammad :
The world is fast becoming a global village where there are no boundaries to stop free trade and communication. With the globalization of the world economy, there connected rise in the number of companies that operate globally. The competition in the global marketplace is at its peak where all companies want to sell their goods to everyone, everywhere in the globe.
International business refers to the trade of goods, services, technology, capital and/or knowledge across national borders and at a global or transnational level. It involves cross-border transactions of goods and services between two or more countries. International business management requires knowledge and skills above and beyond normal business expertise, such as familiarity with the business regulations of the nations in which the organization operates understanding of local customs and laws, and the capability to conduct transactions that may involve multiple currencies. Hence, “international business management” is the science and art of getting people together to accomplish desired goals and objectives by coordinating and integrating all available resources efficiently and effectively within the globe.
Globalization – Although globalization and internationalization are used in the same context, there are some major differences. Globalization is much larger process and often includes the assimilation of the markets as a whole. Moreover, when people talk about globalization, they take up the cultural context as well. Globalization is an intensified process of internationalizing a business. In general terms, global companies are larger and more widespread than the low-lying international business organizations. Globalization means the intensification of cross-country political, cultural, social, economic, and technological interactions that result in the formation of transnational business organization. It also refers to the assimilation of economic, political, and social initiatives on a global scale. Globalization also refers to the costless cross-border transition of goods and services, capital, knowledge, and labour.
Let’s try to explore the reasons why a business would like to go global, reasons are: First-mover advantage – It refers to getting into a new market and enjoys the advantages of being first. It is easy to quickly start doing business and get early adopters by being first. Opportunity for growth – Potential for growth is a very common reason of internationalization. Your market may saturate in your home country and therefore you may set out on exploring new markets. Small local markets – Start-ups in Finland and Nordics have always looked at internationalization as a major strategy from the very beginning because their local market is small. Increase of customers – If customers are in short supply, it may hit a company’s potential for growth. In such a case, companies may look for internationalization. Discourage Local Competitors – Acquiring a new market may mean discouraging other players from getting into the same business-space as one company is in.
There are multiple advantages of going international. However, the most striking and impactful ones are the following four. Product flexibility -International businesses having products that don’t really sell well enough in their local or regional market may find a much better customer base in international markets. Hence, a business house having global presence need not dump the unsold stock of products at deep discounts in the local market. It can search for some new markets where the products sell at a higher price. Less competition – Competition can be a local phenomenon. International markets can have less competition where the businesses can capture a market share quickly. This factor is particularly advantageous when high-quality and superior products are available. Local companies may have the same quality products, but the international businesses may have little competition in a market where an inferior product is available. Learning new methods -Doing business in more than one country offers great insights to learn new ways of accomplishing things. This new knowledge and experience can pave ways to success in other markets as well.
Protection from national trends and events: Marketing in several countries reduces the vulnerability to events of one country. For example, the political, social, geographical and religious factors that negatively affect a country may be offset by marketing the same product in a different country. Moreover, risks that can disrupt business can be minimized by marketing internationally.
Operations -All firms that want to go international have one goal in common; the desire to increase their respective economic values when engaging in international trade transactions. To accomplish this goal, each firm must develop its individual strategy and approach to maximize value, lower costs, and increase profits. A firm’s value creation is the difference between V (the value of the product being sold) and C (the cost of production per each product sold).
Value creation can be categorized as: primary activities (research, development, production, marketing and sales and customer service) and as support activities (information systems, logistics and human resources). All of these activities must be managed effectively and be consistent with the firm strategy. However, the success of firms that extend internationally depends on the goods or services sold and on the firm’s core competencies (skills within the firm that competitors cannot easily match or imitate). For a firm to be successful, the firm’s strategy must be consistent with the environment in which the firm operates.
International businesses have to ensure that they have a set of operating procedures and norms that are sensitive to the local culture and customs and at the same time, they stick to their brand that has been developed for global markets.
In conclusion, international businesses are facing the best of times and the worst of times at the same time and hence, the knowledge and intelligence among them would succeed in this “Swing Era”. Increasingly, companies are sourcing their human resource requirement globally. Person with the knowledge in international business had a significantly higher chance to go/work under the international operations of a firm.

(Taslim Ahammad, Assistant Professor, Bangabandhu Sheikh Mujibur Rahman Science and Technology University)