International and local businesses
International business is a business process where goods and services and other commercial activities are carried out across multiple countries. International business creates globalization which promotes an interdependent and integrated economy. It encompasses various activities such as exchange of goods and services, resources intellectual properties, assets and more (Newlands & Hooper, 6). Other important point to note is that international business requires a strategic management in order to achieve performance objectives. In addition, international business requires entrepreneurship which encompasses opportunities and innovative ideas. On the other hand, local business is a process where business activities are carried out in local area. Local business has increased growth through online visibility and physical locations. An important point on local business is that it requires a tax registration certificate and other regulations (Newlands & Hooper, 6). The point is international business differs from local business in various ways. In international business, skills and knowledge based on new markets are needed. In addition, laws and regulations, marketing strategies, customers’ behaviors and other related issues have to be considered. In preparing to enter in international market, it is important to note that business operations will be impacted by the new culture. In other words, cultures makes international business to differ from local business in that in order to succeed in business practices, an organization must learn about the culture and how to associate with people (Newlands & Hooper, 7). Cultural factors are a major thing that makes difference in that people in different nations have different perception when it comes to business practices. Language is also a barrier to business and organization needs to develop mutual acquaintances in order to avoid uncertainly.
The major thing that creates the difference on how international and local business operates is the activities performed. Note that local business focus on local practices while international business does not only focus on business practices but also conditions and laws in the host countries. The other factor that makes international business look different is commercial environments. This means that countries in which the organization is running its operation have different commercial environment in terms of development (Newlands & Hooper, 8). The latter affects internal business in that some countries are industrialized and have good infrastructure while others are developing. The development countries will provide effective transport and communications, financial system, and more. However, developing countries lack effective systems for business operations and organization will be forced to offer the same services offered in own county. Technology also makes the difference in that there are countries with advanced technology and skilled workforce while others lack the ability to use the technology (Newlands & Hooper, 10). Thus, foreign markets need different technology to meet customers’ needs. Other factor that makes the difference is the level of competition, in foreign markets, organization will experience a dynamic and complex competition and a strategic tool such as the Porters 5 forces is required to evaluate whether the organization will be able to compete. International marketing also requires market intelligence in terms of market strategy, market structure and competitors. Even though local business requires business strategies, it does not focus on competition but its concentrate on customer base, innovation and long-term plan (Newlands & Hooper, 10). Unlike local business, international business needs to adhere to the legal system to avoid long term effects on business. In advertising goods and services, international business is required to find the appropriate media to reach all customers in different nations.
Work cited
Newlands, David J, and Hooper J. Mark. The Global Business Handbook: The Eight Dimensions of
International Management. London: Routledge, 2016. Internet resource.
