School of Management & Commerce

Assignment No: 2

Program: MBA
Course: International Business

Submitted to: Submitted by:

Prof: Manish Garg Name: Nishant kushwaha
Program: MBA
Semester: IVth
Roll No: 22MBA0025
Ques 1-: Discuss the method of payment in international business?
Ans -: the method of payment in international business can vary depending on factors
such as the nature of the transaction, the relationship between the buyer and seller, the
level of trust, and the regulatory environment. Here are some common methods of
payment:

Cash in Advance: This method involves the buyer making full payment before the goods
are shipped or the services are rendered. It provides the seller with the highest level of
security but may deter potential buyers due to the risk involved.

Letters of Credit (LC): A letter of credit is a financial instrument issued by a bank on

behalf of the buyer, guaranteeing that the seller will receive payment upon presenting
the required documents and complying with the terms and conditions specified in the
LC. It offers security to both the buyer and seller, as payment is guaranteed if the
conditions are met.

Documentary Collections: This method involves the use of commercial documents, such
as bills of exchange and shipping documents, to facilitate payment. The seller ships the
goods and forwards the shipping documents to their bank, which then forwards them to
the buyer's bank for payment. The buyer can obtain the documents upon payment or
acceptance of a bill of exchange.

Open Account: In an open account transaction, the seller ships the goods and extends
credit to the buyer, who agrees to pay at a later date, typically within a specified period,
such as 30, 60, or 90 days. This method is convenient for buyers but carries higher risk
for sellers, as they may not receive payment on time or at all.

Consignment: In a consignment arrangement, the seller ships the goods to an agent or

distributor in the buyer's country, who sells the goods on behalf of the seller. The seller
retains ownership of the goods until they are sold, at which point they receive payment
from the agent or distributor.

Online Payment Platforms: With the advancement of technology, online payment

platforms such as PayPal, Stripe, and Transfer wise have become popular for facilitating
international transactions. These platforms offer convenience, speed, and security for
both buyers and sellers.

Each method has its advantages and disadvantages, and the choice of payment method
depends on various factors, including the level of trust between the parties, the
complexity of the transaction, and the availability of financial resources. Additionally,
businesses may use a combination of payment methods to mitigate risk and optimize
cash flow.

Ques 2-: Discuss various objective of international marketing along with

challenges involves in international market.

Ans: International marketing involves promoting and selling products or services in

multiple countries outside the company's domestic market. The objectives of
international marketing typically align with broader business goals and can vary
depending on the company's stage of international expansion, market conditions, and
industry dynamics. Here are some common objectives:

Market Expansion: One of the primary objectives of international marketing is to

expand into new markets to increase sales and revenue. Companies seek growth
opportunities beyond their domestic market by tapping into international markets with
demand for their products or services.

Diversification: International marketing allows companies to diversify their revenue

streams and reduce dependence on a single market. By operating in multiple countries,
companies can spread risk and minimize the impact of market-specific fluctuations or
economic downturns.

Brand Building and Recognition: Establishing a strong international presence can

enhance brand recognition and reputation globally. Through effective marketing
strategies, companies aim to create awareness, build trust, and cultivate a positive
perception of their brand among international consumers.

Access to Resources and Talent: International expansion can provide access to valuable
resources, including raw materials, skilled labor, technology, and intellectual property.
Companies may enter international markets to leverage these resources for production,
innovation, and competitive advantage.

Economies of Scale and Cost Efficiency: Operating in multiple markets allows companies
to achieve economies of scale by spreading fixed costs over a larger volume of sales.
Through efficient production, distribution, and marketing processes, companies can
reduce costs and improve profitability.

Challenges in International Marketing:

Cultural Differences: Cultural diversity across international markets presents challenges

in understanding consumer behavior, preferences, and communication norms.
Companies must adapt their marketing strategies to resonate with local cultures while
avoiding cultural faux pas.

Legal and Regulatory Compliance: Navigating complex legal and regulatory

environments in different countries can be daunting. Companies must comply with local
laws, regulations, trade policies, and taxation systems, which may vary significantly from
their home country.

Political and Economic Instability: Political instability, government policies, trade

barriers, and economic fluctuations in international markets can impact business
operations and profitability. Companies must assess and manage geopolitical risks to
ensure continuity and resilience.

Market Entry Barriers: Entry barriers such as tariffs, quotas, import restrictions,
licensing requirements, and trade barriers can hinder market access and expansion
efforts. Companies need to develop entry strategies that mitigate risks and address
regulatory challenges.

Competitive Pressures: Intense competition from local and international competitors in

foreign markets poses challenges for companies entering new territories. Companies
must differentiate their offerings, build competitive advantages, and adapt to local
competitive dynamics.

Logistical and Supply Chain Complexity: Managing global supply chains, logistics,
transportation, and distribution networks can be complex and costly. Companies must
optimize their supply chain operations to ensure efficient delivery of products and
services to international customers.

Currency Fluctuations and Exchange Rate Risks: Volatility in currency exchange rates
can impact the profitability of international operations and financial transactions.
Companies must hedge against currency risks and manage exposure to exchange rate
fluctuations.

Addressing these challenges requires careful planning, market research, strategic

decision-making, and continuous adaptation to changing market dynamics. Successful
international marketing strategies are tailored to the unique characteristics of each
target market and aligned with the company's overall business objectives.