Que 1) How international business is different from domestic

business? what are the opportunities and challenges involved in

international business?
Ans 1) International business refers to the economic activities conducted between different countries
or across borders, whereas domestic business refers to economic activities conducted within a single
country.
# There are several key differences between the two:
1. Market Size and Diversity: International business allows access to a larger and more diverse
market compared to domestic business. By expanding internationally, businesses can tap into new
customer segments, cultures, and consumer preferences.
2. Political and Legal Environment: International business involves dealing with different political
systems, legal frameworks, and regulations in various countries. Companies must navigate
international laws, trade barriers, customs procedures, and government policies, which can
significantly impact their operations.
3. Cultural and Social Factors: International business requires an understanding and adaptation to
different cultures, languages, and social norms. Companies need to tailor their products, marketing
strategies, and business practices to suit local preferences and customs.
4. Currency and Exchange Rates: International businesses must deal with multiple currencies and
fluctuating exchange rates, which can impact their profitability and financial stability. Foreign currency
exchange risks need to be managed effectively to mitigate potential losses.
5. Logistics and Supply Chain Management: Operating across borders introduces complexities in
terms of logistics, transportation, and supply chain management. International businesses need to
consider factors like customs duties, shipping, warehousing, and distribution networks to ensure
efficient operations.

# Opportunities in International Business:

1. Expanded Market Reach: Access to larger customer bases and new markets can lead to
increased sales and revenue growth.
2. Economies of Scale: Expanding globally allows businesses to achieve economies of scale
through higher production volumes and reduced costs.
3. Diversification: International expansion reduces reliance on a single market, providing a buffer
against fluctuations in domestic markets.
4. Access to Resources: Businesses can gain access to new resources, such as raw materials,
technology, talent, and capital, by operating internationally.

# Challenges in International Business:

1. Cultural and Language Barriers: Differences in language, customs, and business practices can
create communication and operational challenges.
2. Legal and Regulatory Complexity: Dealing with diverse legal systems and compliance
requirements increases the complexity of international operations.
3. Political and Economic Risks: International businesses are exposed to political instability, policy
changes, economic downturns, and trade disputes, which can impact their operations and profitability.
4. Managing International Operations: Setting up and managing operations in multiple countries
requires careful planning, coordination, and adaptability.
Que 2) what do you understand by international competitive
advantage? how to gain competitive advantage internationally?
Discuss with example.
Ans 2) International competitive advantage refers to the unique strengths and capabilities that allow a
company to outperform its competitors in the global marketplace. It involves leveraging distinctive
resources, skills, or strategies that create value for customers and give the company an edge over its
rivals in international markets.

To gain a competitive advantage internationally, companies can focus on the following strategies:
1. Differentiation: Offering unique and differentiated products or services that meet the specific
needs and preferences of international customers. This can be achieved through innovation, superior
quality, customization, branding, or design. For example, Apple Inc. has gained a competitive
advantage globally through its innovative and user-friendly products like the iPhone and MacBook.
2. Cost Leadership: Becoming a low-cost producer or provider of goods or services, which allows
companies to offer competitive prices while maintaining profitability. This strategy requires efficient
operations, economies of scale, cost control, and effective supply chain management. For example,
Walmart has achieved international competitive advantage by leveraging its vast scale and supply
chain efficiencies to offer low prices to customers.
3. Focus Strategy: Concentrating on a specific niche market or customer segment, either
geographically or based on unique customer needs. By understanding the specific requirements of a
target market, companies can tailor their products, services, and marketing efforts to effectively serve
that segment. For example, luxury brands like Louis Vuitton or Gucci focus on a high-end customer
segment globally, providing exclusive and premium products.
4. Technological Leadership: Leveraging advanced technology, research, and development
capabilities to create innovative products, processes, or solutions that surpass competitors.
Technological leadership enables companies to introduce cutting-edge products or offer superior
value to customers. For instance, Tesla has gained international competitive advantage through its
electric vehicle technology and innovation in the automotive industry.
5. Global Strategic Alliances: Collaborating with partners in different countries to gain access to
local expertise, distribution channels, resources, or market knowledge. Strategic alliances can help
companies overcome entry barriers, reduce costs, and expand their reach in international markets. An
example is the partnership between Starbucks and Nestle, where Nestle gained access to Starbucks'
coffee products and brand recognition for distribution in various global markets.
6. Strong Branding and Marketing: Developing a strong and recognizable brand image and
effectively marketing it across international markets. A strong brand can create customer loyalty, trust,
and differentiation. Companies like Coca-Cola or McDonald's have successfully built globally
recognized brands that give them a competitive advantage in various countries.

It is important to note that gaining international competitive advantage requires a deep understanding
of target markets, competitors, and the ability to adapt to local conditions. Continuous innovation,
investment in research and development, building strong relationships with local partners, and
effectively managing global operations are also critical factors in sustaining and enhancing
international competitive advantage.
Que 3) What are the roles and objective of World Bank and IMF in
the development of developing countries? Under what different
schemes of world bank, developing countries can get finance for the
development?