Do you have an idea of some international business? Do you know the various types and trends it has? If you are not quite clear about these things but, are curious to comprehensively understand international businesses, read this blog carefully and you will sure learn the ropes.
Different Types of Trends Associated With International Businesses
Exporting is frequently the very first option when manufacturers determine to expand overseas. In simple words, exporting stands for selling abroad, either directly to target customers or indirectly by retaining foreign sales agents or/and distributors.
Either case, going abroad through exporting has minimum influence on the firm’s human resource management because only a few, if at all, of its employees are supposed to be posted abroad.
Licensing is the second and one of the important factors in order to develop the operations internationally. In case of international licensing, there is an agreement whereby a company, called licensor, allows a foreign firm the right to use the intangible assets adequately for a definite period of time, normally in return of a royalty.
Almost linked to licensing is franchising. Franchising is an alternative in which a parent company allows another company/firm the freedom to do business in a prescribed manner.
Franchising deviates from licensing in the sense that it usually needs the franchisee to ensure many stringent guidelines in managing the business than in licensing.
Further, licensing permits are generally restricted to manufacturers whereas franchising is more familiar with service firms; for example, rental services, restaurants and hotels.
Different firms looking to take the full benefit of chances provided by foreign markets determine to make a substantial direct investment of their own funds in another country. This is most commonly identified as Foreign Direct Investment (FDI).
Foreign Direct Investment or FDI:
Foreign direct investment relates to operations in one country that are managed by entities in a foreign country.
Basically, the FDI implies building new facilities in another country. For example in India, a foreign direct investment or FDI means getting control by more than 74% of the operations.
Ari Afilalo is one of the rising writers who has written many books of “international business and trading”. So, in order to update yourself more about this term, you may read his books.