Understanding International Business Environment

IBE or International Business Environment is a sum total of all the factors which may impact the functioning and strategic planning of firms operating on global or international levels. In the simplest form, IBE refers to the international surroundings in which any firm operates. Moreover, IBE is not restricted only to the companies but it also plays a crucial role in the growth and development of any country. In today’s interconnected and globalised world businesses of every scale are looking for international opportunities. Hence understanding IBE and the factors affecting it is a precondition to step into the international market and tap global opportunities. It will help you in planning international expansion strategies more comprehensively and effectively. Through this article, you will understand everything you need to know about IBE.

Different Forms of IBE
There are various forms of International Business, which are as follows:

Cross Border Trading: It includes import and export of goods and services
Franchising: Setting up of franchise units in other countries. It involves the cost of franchise and other expenses. Unit has to pay royalty to the Franchiser.
Licensing: Giving of rights to business entities in other jurisdictions, so that they can do business in their name.
Joint Ventures (JVs): Partnering up with local players to enter the domestic markets of other countries such as TATA Starbucks and Vistara Airlines.
Foreign Direct Investment (FDI): Direct investment in some other jurisdiction or country to set up the business, manufacturing, or similar unit. FDI is very beneficial for the receiving country as it helps in the development and growth of the country.

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