Why do international business?

There are 3 general objectives as drivers of international business in companies:


1. Expansion of sales. The sales of the companies depend on the interest of the consumers in their products and services and their willingness and capacity to buy it. The number of people and the amount of their purchasing power are greater in the whole world than in a single country, so that companies can increase their potential market in seeking international markets. 


2. Obtaining resources. Manufacturers and distributors look for products, services and components manufactured in foreign countries. In addition, capital seek, technology and information of the use of countries of origin; Sometimes they do so to reduce their costs, sometimes to acquire something that is not available in their home country. Although a company may initially use resources to expand overseas, once the operation is abroad, foreign resources, such as capital or skills, can serve to improve its domestic operations. 


3. Minimization of risks. In order to minimize fluctuations in sales and profits, companies must seek foreign markets to take advantage of the different economic cycles (recessions and expansions) that exist between countries. Many companies enter international business for defensive reasons, because they want to counter the advantages that competitors could obtain in foreign markets that, in turn, could harm them domestically.