International business

Advantages and disadvantages of international business 

Advantages 

Disadvantages 

Types of trade

1. Import trade 

When a businessman of a country buys some goods from the Businessman of another country it is called import Trade. For example: When India buys petroleum products from Iran it will be imported for India.

2. Export trade

When the trader of one country sells something to the trader of another country it is called export trade. For example: America sells cotton cloth to canada, it will be export trade for America.

3. Entreport trade

When a country imports some goods from another country and then exports the same goods to some third country it is known as entreport trade.

Foreign trade

Foreign trade

When the conduct of trade crosses the national boundaries and reaches the foreign lands. Foreign trade is born. The importance of foreign trade is increasing every day, the reason is simple because no single country can produce all the things it requires. Hence, it has to depend on another country for something for the other . In this way every country buys things it needs and which are in short supply from other country.

Home trade

Home trade

When the buying and selling of things take place within the national boundaries it is called home trade.

1. Local level trade

Local trade is limited to some villages, towns, district. This trade includes things of daily use and things of perishable nature, which can be fresh fruits, sweets, milk, vegetables etc.

2. State trade

When the trader start trading above the local level and trades on the state level. IT is called trade on the state level. For example A trade among the different districts like trade in coal, pulses, utensil etc.

3. Interstate trade

When trade is carried on among different states of the country it is called interstate trade. This class of trading includes those things which are produced in some particular state they may include sugar, cloth, machinery etc.

Trade

Trade means buying and selling of goods and services with the purpose of getting profit, in other words trade means exchange of goods and services for the purpose of mutual profit of both the buyer and seller those who perform these activities are called traders and their activities trade. Trade can be carried on smallest as well as largest scale.

1. Home trade
2. Foreign trade

Industry 

It refers to that economic activity which undertake the production of goods and services.

1. Primary industry 

It refers to that industry which produces unrefined raw material out of which finished products are made.

2. Secondary industry 

It refers to that industry which use is the raw material produced by primary industry and change them into finished item.

3. Tertiary industry

It refers to that industry which produces services.

(a). Hindrance of finance: It is removed with the help of the banking industry. 

(b). Hindrance of risk: It is removed with the help of insurance industry.

(c). Hindrance of communication: It is removed with the help of advertisement industry.

Role of profit in business 

For long survival 

Profits alone help a business to continue to exit for a long time. In the absence of profit the establishment of a particular business losses its justification. Generally, it has been observed that businesses where the profit is very little or no profit at all close down very quickly. If we look at the whole scene, we find that for that from the social point of view only business meets the requirements of the people. In this way we can say that the business are an absolute necessity and profit has a great role in keeping them alive.

For rapid growth

Every Businessman wants that his business should flourish. It means that business should continue rising in the scale of development. There is no denying the fact that all the Businessman want their business to develop. But the question is: how this development can be possible? The answer to this question is: sufficient capital can make it possible. Now, the all important question arise where will this money come from? The simple answer to this question is that there are many sources of getting money. These shows include the issuing of shares, issuing of debentures and ploughing back of profits. The more is the profit in a business, the more re-investment became possible. Consequently, the business makes more progress or development.

For increasing efficency 

There is no power other than self interest which can get a work done by people. Here self interest means profit. It means that profit is that power which motivates or encourage people to work more and in a better way.  In order to run a business the owner and the workers are the two parties concerned. The owners want that they should get the maximum profit. Therefore, they try to do more and better work. On the other hand, the workers want that they should get the maximum bonus they therefore try to increase profit by working more and in a better way. In short profit is that power which motivates both the parties. It finally helps in increasing the efficiency of business.

Business -meaning

It refers to that economic activity which is conducted on regular basis to earn profit thought the production and sale of goods and services.