Ans1 International Versus domestic business An international business is a business whose activities are carried out across national

borders. This differs from a domestic business because a domestic business is a business whose activities are carried out within the borders of its geographical location. A domestic company is one that confines its activities to the local market, be it city, state, or the country it is in. It deals, generally, with one currency, local customs and cultures, business laws of commerce, taxes and products and services of a local nature. The international company on the other hand deals with businesses and governments in one or more foreign countries and is subject to treaties, tariffs. Currency rates of exchange, politics, cultural differences, taxes, fees, and penalties of each country it is doing business in. It may also be conducting business in it is home country, but the emphasis is on trading in the international marketplace. International business is different from domestic business because the environment changes when a firm crosses international borders. Typically, a firm understands its domestic environment quite well, but is less familiar with the environment in other countries and must invest more time and resources into understanding the new environment Motives of firm for Internationalization:In terms of ease of doing business internationally, following major forces are important: 1. Motives of Internationalization of Firms The factors which motivate or provoke firms to go international may be broadly divided into two groups : (1) Pull factors (2) Push factors (1) Pull Factors: Those factors or forces which attract the foreign firms to do business in Foreign market are come under this categories. Such attraction include, broadly, the relative profitability & growth prospects. These are also called Proactive reasons. The followings are important Pull Factors : (a) Profit Advantage: IB could be more profitable than the domestic. But if

not profitable than Total Profit would be increase & thus it become again profitable. (b) Growth opportunities: To increase sales To increase market share of the firms (2) Push Factors: It refers to the compulsion of the domestic market such as saturation of the market, which prompt companies to internationalize. These reasons are also called Reactive reasons. The followings are important push factors: (a) Competition: Increase competition in domestic market is one of the main cause & consequences of globalization. (b) Domestic market constraints: Surplus production in home market Decline the demand of the domestic product in the home market Small domestic market in size or limited home market To take the benefit of economies of scale by producing mass production (c) Political Stability Vs. Political Instability. International business grew over the last half of the twentieth century partly because of liberalization of both trade and investment, and partly because doing business internationally had become easier.

5 Write a note on : Global business Finance. A5 Global Business finance activities help organizations engage in cross-border transactions with foreign business partners, such as customers, suppliers and lenders. Government agencies and non-profit institutions also use international finance tools to meet operating needs. Global finance covers all procedures, techniques and tools that financial institutions, such as banks and insurance companies, provide to clients. These tools may include financing agreements and transaction strategies on securities exchanges, such as the Tokyo Stock Exchange. Global Business finance plays a significant role in modern economies. Business transactions are not only interconnected more than ever before, but most companies engage in multinational activities through export and import A Global finance specialist helps a firm access global markets and use financing tools to operate in the short term and long term. He also evaluates the company's cash levels and recommends adequate funding options to management. Types of products available in international finance vary by location, transaction requirements and legalcompliance needs. The most popular products are global corporate bonds and loans, equity shares on international markets and private transactions with foreign business partners. There are various institutions involved in Global finance transactions, such as traditional financial institutions, government entities and central banks. Other organizations include microfinance and development institutions, such as the World Bank and the International Monetary Fund.