Considering the fact that when people talk about International Trading, the usual perception is, would this be appropriate for small businesses? Of course YES!, a business has no limit of up to what extent can a businessmen do to his business strategically. According to the U.S. Department of Commerce, there are big companies that are making up of about 4 % of U.S. exports. This eventually means that 96% of exporters around the globe are small companies. Another question could be why is international trade so important to starting small businesses?
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It is like doing a business with that of either products or services you may wish to market are not available or made in your home country. Just for instance, selling a product that you know has no sufficient supply and that you think you are capable of exporting or even do the importation. You may need to become an exporter or even importer in order to compete with and the same time can supply the existing market. It is therefore, beneficial for entrepreneurs and that enables for the producers of goods and services to move beyond. According to the data taken from My Own Business article, the U.S. market counted to 280 million people while the world market has 6.2 billion people. Whereas in the international trade counted to 5% of U.S. economic growth during the year 1950. Today it has become an essential part of business, and for 2002, it has more than 25%. Well, looking at the benefits in business world from small companies or small business operations it contributed in making the business successful in the end. Hence, importing and exporting is becoming a necessary basis in achieving success, yet it requires knowledge of business disciplines far beyond the basic do’s and don’ts of operating a domestic business.
Advantages & Disadvantages of International Business
This allows countries to countries exchanging of goods and services with the use of money as a medium of exchange. There are few advantages which can actually be identified with reference to international trading. Though talking of this matter it has its limitations, too. Let us consider both advantages and disadvantages of international trading.
â€¢ Availability of goods for consumption: there can be sufficient supply when international trading brings into the country with different varieties of food, eventually to the different destinations. In fact, it is beneficial to the consumers because it gives them a wider selection of choices. Thus, it will not only improve their quality of life but as a whole it will help the country exist and become successful.
â€¢ Competent allocation and appropriate utilization of resources when countries tend to produce goods. When countries produce goods and services they are selling to other countries through a comparative advantage, a possible repetitive wastage of resources can be prevented. In this manner, it can help save the environment from harmful gases being leaked into the atmosphere and also provides countries with a better marketing power.
â€¢ Through international trading, this helps promote efficiency in production as the origin country will try to adopt improved methods of production. In this purpose, to keep be cost-effective and at the same time in order to remain competitive. With countries that can produce products at its lowest possible cost can possibly gain an increase of market share. Therefore an incentive to produce efficiently arises. This will help standards of the product to increase and consumers will have a good quality product to consume.
â€¢ There will be more employment to generate as well. This will help the countries decrease its unemployment rates.
â€¢ Nevertheless, international trading leads to a more rapid reduction of exhaustible natural resources. As countries start up their production levels, natural resources tend to get be lessen, too.
A good instance for this is, Starbucks has been smart to expand internationally when in fact they have already saturated the US market. By then, the have stores that are too close from each other at the expense of average store sales.
Again, looking at its importance, international business is all about business transactions with private sectors. With that of the government sector unless they transact two or more countries then it is considered an international business, too. What makes interesting in studying international business? In one way or another, the simplest answer is that international business encompasses a large and fast growing portion of the total business around the world.
In today’s business life, large or small businesses are much affected by global events. It might as well in the competition side, why? Because most sellers disposed their respective output or even secure number of suppliers from foreign countries, then compete to those products and services that have been imported too.
Automatically, when we say international business it is the involvement in exporting and importing of products and services worldwide. According to some experts in international business ( Articlebase 2006) argued that exporting has been a kind of a logical process with a natural structure, which has been considered as a method of understanding the target market of selected countries to where business may developing a marketing plan using the appropriate marketing mix
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But of course, as it based on the use of the marketing mix, the said implementation of plans must be through a strategically formulated approach. The use of a control method is of great help to ensure that the strategies being used will also adhere. The said exporting process should be reviewed and evaluated in a regular basis. At the same time, modifications are also made for the use of it marketing mix and to take into the account of market changes that impact competitiveness.
Citing another important issue is that, the company’s development and the importance of online and interaction business. In this illustrative picture, organisations do interact and be able to build network with each other, can gain commercial advantage in the world markets. Hence, the said network can use definitely use comparable subcontractors, sharing research and development, and identity the costs within the governmental framework. Evidently, when number of businesses commences to formulate a trading block with no internal barriers they are actually creating their own networks. There is collaboration with vehicle manufactures and engineering processes, to which they have all sponsored the development the countries’ viewpoint based on their internal market network. In this kind of network and interaction approach to international business shows the substance of being able to manipulate the decisions when knowing how the global network players work or interact with each other.
A good example is a ‘crucial market network’ with that of the Middle East. We all know that this countries are rich, having diverse markets, as well as with a vibrant and varied cultural heritage. Differences are still in existence even though there has been a harmonious relationship. Then, it should be renowned that because of regulations and the need for restructuring must be counted as they enter the global market. Performing any kind of business transactions can be highly composite in any sense. To bear in mind that Middle-Eastern countries have a low-income average and also liking to be recognized in terms of their cultural differences.
Actually by recognizing this in effect of a firm’s business involvement can have a good chance of developing a successful marketing strategy for the purpose of meeting their needs. Auspiciously, with the presence of different organizations around the globe, they have realised these said essential differences. So much so, they even reacted passably when such strategic decisions had to be made regarding their market dispersion.
To have known for a fact that international trade is called the backbone of the modern business world as producers in various nations try to profit from an expanded market, meaning rather than just limiting to sell within their own borders. There are many reasons that trading across national borders can happen in any form of business transactions which specifically includes the lowering of production costs in one country to another and specialized industries.
Practically been into the business aspect, many customers do prefer buying products that are less expensive and some international trading may also encouraged by a specialized industry. Now, looking to Swiss watches, for instance, imagining it price, it would never be price-competitive as to compare with those mass produced watches from Asia. Not considering the fact that, there has been a strong market among assured consumer groups in terms of quality, endurance and as well as the so-called “snob appeal” that owning a Rolex, Patek-Philippe or Audemars Piguet which they offer.
While with that products like German cutlery, English bone China, Scottish wool, fine French silks such as Hermes and others importing and exporting goods always find its way in place of the international trade scene. For this reason, because consumers around the world are willing to promote the importing and exporting of goods to somehow satisfy their perception that there are certain best countries making certain goods. But one should remember that this may also be risky. Especially online businesses nowadays are widely patronized by almost all people around the globe.
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