Special Problems in International Business Essay.
What make international business strategy different from the domestic is the differences in the business environment. The important special problems in international business are as follows: 1.Political and legal differences: The political and legal environment of foreign markers is different from that of the domestic market. The complexity generally increases as the number of countries in which a company does business increases. It should also be noted that the political and legal environment is not the same in all provinces of many home markers.
For instance, the legal environment is not exactly the same in all the states of India. 2.Cultural differences: Cultural differences are one of the most difficult problems in international marketing, as explained in the next chapter. Many domestic markets, however, are also not free from cultural diversities. 3.Economic differences the economic environment may vary from country to country.
4.Differences in the currency unit: The currency unit varies from nation to nation. This may sometimes cause problems of currency convertibility, besides the problems of exchange rate fluctuations.
The monetary system and regulations may also vary. 5.Differences in the language: An international marketer often encounters problems arising out of differences in the language. Even when the same language is used in different countries, the same words or terms may have different meanings or connotations. The language problem, however, is not something peculiar to the international marketing. The multiplicity of language in India is an example.
6.Differences in the marketing infrastructure: The availability and nature of the marketing facilities available in different countries may vary widely. For example, an advertising medium that is very effective in one market may not be available or may be underdeveloped in another market. 7.Trade and investment restrictions Trade and investment restrictions are very important problems in international business. 8.High costs of distance: when the markets are far removed by distance, the transport cost becomes high and the time required for effecting the delivery tends to become longer. Distance tends to increase certain other costs also. 9.Difference in business practices: Trade and other business practices and customs may differ between markets.