- Strategic Management Tutorial
- Strategic Management - Home
- Strategic Management - Introduction
- Strategic Management - Types
- Strategic Management - Process
- Strategic Leadership
- Organization Specifics
- Performance Issue
- The Top Leadership
- Entrepreneurial Orientation
- The External Environment
- Organization & Environment
- Analyzing the External Environment
- Judging the Industry
- Mapping Strategic Groups
- Organizational Resources
- The Resource Based Theory
- Intellectual Property
- The Value Chain
- Other Performance Measures
- Company Assets: SWOT Analysis
- Business Level Strategies
- Different Types
- Cost Leadership
- Niche Differentiation
- Focus Strategies
- The Best-Cost Strategy
- Aiding Business Level Strategies
- Competitive Moves
- Competitor's Moves
- Cooperative Moves
- International Marketing Strategies
- Pros & Cons
- Drivers of Success and Failure
- International Strategies - Types
- International Markets - Competition
- Cooperative Level Strategies
- Concentration Strategies
- Vertical Integration Strategies
- Diversification Strategies
- Downsizing Strategies
- Portfolio Planning
- Strategy and Organizational Design
- Organizational Structure
- Creating an Organizational Structure
- Organizational Control Systems
- Legal Forms of Business
- Strategic HR Management
- Growth & Nature
- Organizational & HRM Strategy
- Impact of HRM on Performance
- Strategic Management Resources
- Strategic Management - Quick Guide
- Strategic Management - Resources
- Strategic Management - Discussion
Strategic Management - Pros & Cons
Competing in international markets is one of the most important activities for a country’s economy. However, as with any other domain of business, there are many advantages and disadvantages of the process.
Advantage of International Business
Earning valuable foreign currency − International business enables a country to earn valuable foreign currency by promoting and exporting its goods to other countries.
Division of labor − Competing in international markets leads to specialization in the production of goods. Therefore, quality goods are produced by the best players.
Optimum utilization of available resources − International marketing reduces waste of national resources. Each country tends to make the optimum use of its natural resources.
Benefits to consumers − Consumers become the king due to international business. Better quality goods are available at reasonable prices.
Encouragement to industrialization − In international marketing, the exchange of technological knowledge enables undeveloped and developing countries to establish new industries.
Economies of large-scale production − Production on a large scale becomes the norm because of extensive demand. The advantages of large-scale production become available to all participants on international marketing.
Stability in prices of products − International business diminishes the wide fluctuations in the prices of products. It offers stabilization of prices throughout the world.
Widening the market for products − International marketing expands the market for products all over the world. With increasing scale of operation, the profitability of the business increases.
Creating employment opportunities − International marketing leads to a boost in employment opportunities. It also raises the standard of living of the host countries.
Disadvantages of International Business
Adverse effects on economy − One country’s illness affects the economy of another country. Also, large-scale exports discourage the development of importing country. Therefore, the economy of the importing country may suffer.
Competition with developed countries −International business hampers the growth and development of developing countries, if international business is not regulated and controlled.
Rivalry among nations − Cut-throat competition and tendency to export more commodities can increase the rivalry between nations. This may interrupt international peace and progress.
Colonization − The importing country may become a colony due to economic and political dependence, and industrial backwardness.
Exploitation − International business may result in exploitation of developing countries by the developed countries. The powerful and dominant economies regulate the economy of poor nations.
Publicity of undesirable fashion − International business may lead to advertisements which may not be suitable for our atmosphere, culture, tradition, etc.
Language problems − Different languages and cultures in different countries create barriers to establish trade agreements.
Dumping policy − Developed countries may start dumping their products to developing countries below the cost of production. As a result, industries in developing countries may get evicted.
Adverse effects on home industry − The survival of infant and nascent industries is endangered due to international business. Unrestricted imports and dumping may lead to collapse of domestic industries.