IB- difficulties and benefits

International firms operate in environments that are highly uncertain and where the rules of the game are often ambiguous, contradictory and subject to rapid changes(as compared to domestic firms).Global mangers need to learn the shifting factors unique to the playing field and identify new ways of doing business, catering to the changing priorities of foreign governments.It is important to include the international outlook into a firm's (that is going global) vision and mission along the broad parameters of products/ services offered,markets served,capabilities, quality and result.This helps focus the attention of managers on the opportunities and threats outside the domestic playing field.

1. Political and legal differences

2.Cultural  and Linguistic differences

3.Economic differences

4.Differnces in monetary system and regulation

5.Differences in marketing infrastructure

6.Differences in trade practices

Without foreign markets, most small firms would not have sufficient economies of scale to allow them to be competitive with larger economies.(e.g Hong Kong).International competition may not be a matter of choice when survival is at stake.

Developing countries inspite of economic and marketing problems are excellent markets.(strong economic growth in Latin America and Asia Pacific).Many large US companies have done well because of their overseas markets.( IBM,Compaq)Foreign markets also offer solution for variable demnds that fluctuate along cyclical factors(such as recession) or seasonal factors(such as climate) and help to stabilize business.Such markets also help to cutout fluctuations by providing outlets for excess production capacity.

While benefits for export are self evident, imports can also beneficial by constituting the reserve capacity for local community.Without imports there is no incentive for domestic firms to moderate their prices.Lack of balanced imports can result in inflation and excessive profits for local firms.

Unrestricted trade has been found to increase  GNP and employment in general.

International trade also allows countries and their people to have access to better standards of living.Without trade product/service shortages would force people to pay more for less.