2.1 What is the importance of international business

1
2.1What is the importance of
international business?

• Allows countries to expand their search of
  new markets or products
• To provide goods and services that other
  companies might not have
• To know surrounding neighbors

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Purpose of International Trade

• Involves companies in one country fulfilling the
  needs and wants of another country
• Involves companies bringing in products and
  services to meet consumers requirements
• This is usually done either by importing or
  exporting goods

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Reasons for Importing

• My need a product that can only be obtained in a
  foreign country
• We might import if a country is specialized in a
  product or its its cheaper to make in that
  country than here
• When the demand is great for the manufactured
  good

4
The Exporting of Goods and Services

• when exporting good and services to another
  country, the exporter must find potential
  business or individual customers
• the exporter must also be prepared to overcome
  challenges such as establishing a company
  presence in that country
• the faster a product is shipped, the more it
  costs

5
When is a company ready to trade internationally?

• only after a company has investigated its
  management commitment, its competitive advantage,
  cash flow, and its capacity to produce products
  that would appeal to the target market
• When it is able to provide strong financial and
  personnel support
• All businesses can seize international trade if
  the meet the above requirements

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Trade Missions

• visits by selected firms to a target
• foreign market
• Incoming Trade Mission
• Visits to a country by foreign buyers and
  invertors, which helps to increase the visitors
  knowledge of that country as a possible source of
  supply and a place to invest or arrange a joint
  venture

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Trade Missions contd

• mission organizations are usually familiar with
  the target market and can help a company
  interested in exploring useful info from other
  delegates
• They handle most of the logistical details with
  trips, leaving participants free to concentrate
  on their business

8
Trade shows

• trade shows and trade affairs allow a potential
  purchaser to communicate with suppliers
• products can be promoted, identify potential
  sales opportunities, develop valuable business
  contacts
• Trade shows often focus on one industry

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Exporting Goods and Services

• Importing and Exporting
• Some of Canadas Exports lumber, textiles,
  clothing, furs, aircrafts, trains, minerals, and
  chemicals
• Some of Canadas Imports machinery, vehicles,
  and electronic components
• Canadas exporting services
• Goods and Services
• Ex. Cirque du Soleil

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Foreign Investments

• International Business involves foreign
  investments
• Public-sector investments
• Private-sector investments
• Foreign Direct Investments (FDIs)
• Ex. Euro Disney
• Portfolio Investments