Stages of Internationalization of Business free essay sample

Area of Operation| Only India| Whole World| Sovereignties| Not many restrictions| Many restrictions (Tariff, Non-Tariff, Exchange Controls, Local Taxes, etc. )| Economic Conditions (Currencies, inflation, interest rates, accounting practices)| Relatively uniform| Widely varying among nations and among regions within nations| Money amp; Exchange Rates| Indian Rupee (in case of Indian domestic trade)| Different for different countries and transactions*. Different exchange rates and governmental restrictions ®. Culture| Relatively Uniform| Quite divergent among the nations and within the nations ®| Law amp; Regulation| Fairly Uniform amp; Only domestic| Code Vs Civil Vs Theocratic Vs Socialistic Vs WTO, National Vs International Vs Supranational| Mobility of Factors of Production| Free| Restricted| Politics| Stable and relatively unimportant| Often volatile and of decisive importance| Labor| Skilled labor is usually available| Often scarce and requires training/ relearning| Communication(spoken/written/officiallanguage)| Mostly Hindi or English| May be required to make use of local language| Risk (variation in inflation, currency, taxation amp; interest rates)| Comparatively less risky| Often more risky due to government controls and both developed and financial markets| Contracts| Once signed are binding| May be voided and renegotiated if one party gets dissatisfied| Control| Though a problem, but centralised control will do| A real problem, must maintain a fine balance between centralisation and decentralisation| Market Characteristic| Mostly Uniform| Different between nations and within national market| Business Values and Attitudes| Homogeneous| Heterogeneous| Environments| Only domestic environment| Domestic, foreign, and International| Level of development amp; stage of business cycle| Same throughout the domestic market| Each country may be at different level of development and different stage of business cycle| Coca Cola received payments in mul tiple currencies and needed to convert and protect its interests. We will write a custom essay sample on Stages of Internationalization of Business or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page @In Myanmar official exchange rate for a US $ is equal to 6 Kyats whereas market rate for imports is more than 1000 Kyats. Each party has to adjust its behavior to meet the expectations of the other. A number of considerations that collectively differentiate international business have been termed by Keith Head as six forms of separation. These are Political Separation (sovereignty, regional integration and increasing number of nations from 74 in 1950 to 220 today), Physical Separation (physical barriers and distances), Relational Separation (absence of past interactions and causing reluctance to engage in future transactions), Environmental Separation (temperature, rainfall, altitude, latitude, water availability, soil types, and mineral resources), Developmental Separation (levels of economic development), and Cultural Separation.