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Class11
Business studies
Chapter 11
International Business

 Meaning of international Business: those business

activities that take place across the national frontiers. It
involves not only the international movements of goods
and services, but also of capital, personnel, technology
and intellectual property like patents, trademarks ,know-
how and copyrights. Companies have started
increasingly making investments into foreign countries
and undertaking production of goods and services in
foreign countries to come closer to foreign customers
and serve them more effectively at lower costs. All these
activities form part of international business.

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 International Business vs domestic business

 Benefits of international business

★benefit to countries:
(i) Earning of foreign exchange: International business helps
a country to earn foreign exchange which it can later use for
meeting its imports of capital goods, technology, petroleum
products and fertilisers.
(ii) More efficient use of resources: When countries trade on
this principle, they end up producing much more than what
they can when each of them attempts to produce all the
goods and services on its own.
(iii) Increased standard of living: In the absence of
international trade of goods and services, it would not have
been possible for the world community to consume good and
services produced in other countries that the people in these

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countries are able to consume and enjoy a higher standard of

living.
★benefit to firm
(i) Prospects for higher profits: When the domestic prices are
lower, business firms can earn more profits by selling their
products in countries where prices are high.
(ii) Increased capacity utilisation: Many firms setup
production capacities for their products which are in excess
of demand in the domestic market.
(iii) Improved business vision: The growth of international
business of many companies is essentially a part of their
business policies or strategic management.
 Export-Import Procedures and Documentation

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 Procedure of import trade

1. Trade enquiry
2. Obtaining important licenses
3. Arrangement of foreign exchange
4. Placing the indent (or order)
5. Dispatch of the goods by export
agent
6. Appointment of clearing agent
7. Endorsement of delivery of goods
8. Payment of import duty
9. Payment of dock dues
10. Taking delivery of the goods
11. Dispatch of goods by clearing agent
12. Sending documents to importer
13. Taking delivery of goods from
railway station
14. Making of payment

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