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Integration And Interdependence Of National Economies Economics Essay

International Business conducts business ventures all over the world. These transactions are the copy of goods, services, technology, managerial knowledge, and capital abroad. International business will involve exports and imports. International Business is also known, called or referenced as a worldwide Business or a global Marketing.

An international business has many choices for conducting business, it includes,

Exporting goods and services

Giving license to create goods in the host country

Starting a jv with a company

Opening a branch for producing & distributing goods in the number country

Providing managerial services to companies in the number country

My opinion:

Most companies and professionals have to face the increasing globalization of marketplaces and competition. Start the business must make a decision whether it should turn into a worldwide competition to make it through. Most companies need to compete globally to become successful. More companies are exploring new suggestions to take their business to the next level, like going globally. Going global permits the company to be more diverse. Different market segments will be accessible with different customers. The needs and needs of other countries are likely the same but at differing times of the entire year that allows for the company to earn much more profits when it's slow-moving in their own country. Resources at lower costs can be available when your business goes overseas.

Once a firm has went globally, they need to get their organizations to make it work. Creating a global strategy is complicated because the business must play the big major market segments, standardize the primary product, and adapt to an alternative market positioning. There are many benefits when going global with a firm if they're willing to go after a global strategy. Heading global will take that company's success to another level. The administrator must be willing to take chances, and have an openness and conscious decision making. International markets deliver potential new opportunities for companies.

Firms internationalize because:

Internationalization has been seen as a procedure for increasing involvement of enterprises in international markets.

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First, there are market factors. Actually, some of the most important known reasons for the increasing prevalence of born global firms grow from the familiar storyline of the speedy globalization of markets that has accompanied the fall of tariff barriers and other legal barriers to trade combined with increased harmonization in business techniques and consumer tastes. At the same time, many newer market sectors (think, for example, of microprocessors or software) haven't been strongly segmented into home markets in any significant way but will always be global and demanded global participation of their creation.

2. Second, this pattern has been exacerbated by changes in technology that continue steadily to lower communication and transportation charges for small firms, erasing the useful boundaries to international entrepreneurship that recently been around in many companies.

3. Third, there's a set of factors growing from the increasing use of alliances and the changing dynamics of firms that make internationalizing from inception not only a choice, but a strategic necessity for a few new endeavors. We will consider each one of these subsequently.

Other reasons:

Helps as development strategy: - Geographic extension can be utilized as a company strategy. Even though companies may develop their business at home.

Helps in taking care of product life cycle: - every product has to go through different stages of product life cycle-when the merchandise reaches the last phases of life cycle in present market, it could get proper response at other markets.

Technology advantages: - some companies have spectacular technology advantages by which they enjoy central competency. This technology helps the business in acquiring other market segments.

New work at home opportunities: - business opportunities in overseas markets help in expansion of several companies. They might reach a saturation point in domestic market.

Proper use of resources: -Sometimes professional resources like labor, minerals etc. are available in a country but are not productively used.

Availability of quality products: - when market segments are available, better quality goods will be accessible everywhere. Foreign companies will market latest products at affordable prices. Good product will be available in the market segments.

Earning forex: - international business helps in earning forex which might be used for strategic imports. India needs foreign exchange to import crude oil, deface equipment, raw material and machinery.

Helps in common growth: - countries be dependent upon each other for meeting their requirements. India will depend on gulf countries because of its crude oil products.

Investment in infrastructure: - international business necessitates proper development of infrastructure. A company coming into international business must invest in roads.

Q2. In what areas have technical advances got their greatest effect on facilitating world trade and investment?


Most important drivers of market globalization since the 1980s have been scientific advances in communication, information, manufacturing, and transportation. While globalization makes internationalization an essential, technological advances provided the opportinity for internationalization. With the help of this, companies now interact more proficiently with foreign habits and value-chain participants than ever before. Firms transmit all variety of data, information, and essential marketing communications that help ensure the clean running of their businesses worldwide.

Companies use information technology to increase the productivity with their businesses, which provide substantive competitive advantages. Technological advances have made the cost of international operations affordable for all types of organizations.

The most important activity underlying technical advances is invention. Societies and organizations innovate in various ways, including new product designs, new development processes, new approaches to marketing, and new means of arranging or training. Creativity results primarily from research and development.

An advance in technology supplies the opportinity for internationalization of firms.

Advances in technology:

Facilitates the development and disperse services and systems;

Reduces the price of conducting business internationally;

Enables even smaller organizations to travel international

Helps organize worldwide activities;

Mitigates geographic distance by giving virtual interconnectedness with customers, subsidiaries, intermediaries, and suppliers.

Technological advances experienced the best impact in several key areas:

Information technology.


Manufacturing, and


Q3. Suppose you get a job at Fossil Fuel, Inc, an oil company that is severely been severely criticized for global business practice that have emerged to exacerbate economic, political and public phenomena in a few countries. Your supervisor directs you to definitely increase your knowledge of market globalization, with a view to developing company strategies that tend to be hypersensitive to the firm's globalization critics. Inside your investigation, you discover that we now have five major measurements associated with market globalization. What exactly are these dimensions? What exactly are the drivers of market globalization? Framework and elaborate your answer in the form of a memo to your supervisor.



Two mega styles have changed the international business landscape: the globalization of markets or economies and technical advances.

Market globalization is a broad term discussing the interconnectedness of national economies and the growing interdependence of purchasers, producers, suppliers and governments in various countries.

Globalization allows companies to view the globe as you large market place for goods, services, capital, labor, and knowledge.


Integration and interdependence of countrywide economies:

The aggregate of reconfigured and involved value-chain activities offers rise to monetary integration.

Governments contribute to this integration by:

Gradually decreasing trade and investment barriers;

Increasingly harmonize their monetary and fiscal guidelines within regional economic integration blocs (also called trade blocs), e. g. EU.

Establishing supranational institutions that transcend countrywide edges and involve cooperation that seek further reductions in trade and investment barriers, e. g. the US and the WTO.

Rise of local trading blocs and economical unions:

Since the 1950s, the introduction of local integration through trade blocs and monetary unions.

Trade bloc: A free-trade area established by two or more countries through multiple taxes, tariff, and trade agreements, designed to reduce or eliminate barriers to cross-border trade and investment.

Economic and financial union: An individual market with a currency. This is characteristic of more complex stages of economic integration.

Growth of Global investment and financial flows:

FDI is continuing to grow dramatically.

Firms and governments carry out global currency trading to fund cross-border trade and investment.

The free movements of capital around the world is extending financial activities across the globe and fostering interconnectedness among world economies.

Commercial and investment banking has become a global industry.

The bond market has gained worldwide range, with foreign bonds representing a major source of debts funding for governments and organizations.

Convergence of consumer lifestyle and personal preferences:

Lifestyles and personal preferences are converging, i. e. significantly standardized, resulting in global markets segments.

Transnational media plays a part in the convergence of buyer tastes, partly by emphasizing a particular lifestyle observed in the U. S. , Europe, or anywhere else.

While converging likes help in the marketing of standardized product/services to global consumers, they also signal the increased loss of traditional standards of living and principles in individual countries.

Globalization of production:

Intense global competition has made economies of scale a crucial key success factor. Global players are compelled to evaluate global sourcing to adopt advantage of nationwide differences in the cost and quality of factor inputs.

This clarifies why off shoring to low labor-cost locations such as china, Mexico, and Eastern Europe is so popular.

Services move: the services sector is also global sourcing.

Firms in retailing, bank, insurance, and data processing are all creating off shore facilities and interactions.

The syndication of foreign immediate investment has changed markedly, from an focus on developing to services.


Worldwide reduction of barriers to operate and investment:

National governments have sought to reduce trade and investment barriers, which has accelerated global monetary integration.

The world trade firm (WTO) has facilitated this.

The WTO is a multilateral governing body empowered to regulate international trade and investment, and has been involved in an ongoing liberalization of member expresses economies since the late 1940s.

Joining the WTO in 2001, even china has committed to make its market more accessible to international companies.

Market opening is closely associated with the emergence of local trade blocs, a key sizing of market globalization.

Market liberalization and adoption of free markets:

The tearing down of the Berlin Wall structure in 1989, the collapse of the soviet union's overall economy that same year, and china's free-market reforms signaled the finish of the 50- season cold conflict between communist regimes and democracy.

It was the transition of command economies to market-driven economies that facilitated their regular membership into the global current economic climate.

The East Asian nations, stretching from South Korea to Malaysia and Indonesia, possessed already embarked after an ambitious program of market liberalization in 1991.

These events opened up about one-third of the world to freer international trade and investment.

With privatization of recently state-owned industries, these countries have liked greater monetary efficiency, simultaneously bringing in foreign capital.

Industrialization, Economic Development, and Modernization:

Industrialization transitions rising marketplaces- Asia, Latin America, and Eastern European countries- from being low value-adding commodity producers, dependent on low-cost labor, to complex competitive manufacturers and exporters of high quality products such as electronics, computer systems, and aircrafts.

The adoption of modern technology, improvement of living specifications, higher discretionary income levels and adoption of modern legal and banking practices increases the attractiveness of growing markets as investment goals and aid the spread of ideas, and products.

International of world financial market segments:

Integration of world financial markets enables international dynamic firms to rise capital, borrow funds, and take part in foreign currency deals wherever they go.

Cross-border transaction is made easier partly because of this of the ease with which money can be moved between purchasers and sellers through the network of international commercial banks.

The globalization of money enables businesses to pay suppliers and collect obligations from customers worldwide.

Technological advances as a Drivers of Market Globalization:

Advances in technology provides the means for internationalization of firms

Advances in technology:

Facilitates the development and distributed services and technology;

Reduces the price tag on doing business internationally;

Enables even smaller companies to move international

Helps coordinate worldwide activities;

Mitigates geographic distance by providing virtual interconnectedness with customers, subsidiaries, intermediaries, and suppliers.

Technological advances have had the best impact in several key areas:

Information technology.


Manufacturing, and


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