Name

: Lidya Velesia

Student ID

: 1566049

Class

: PRA-MBA B

Subject

: Introduction to Business

BUSINESS IN A BORDERLESS WORLD

Business in international trade supports opportunity to become growth company, and also can
support innovation in global trade in tight market for better and cheaper market trade.
International business is buying, selling, and trading of good or services across the national
boundaries (O.C Ferrell, et.al. 2014). Because of trading in international market, some difference
with other country become blurred because many company expand to international market with
many different ways. In the end, global trade market needs to balance with global brand and
local consumer preferences.
One or two countries can have an agreement together to gain raw material that not available in
their country or vice versa, or gain the material that can be bought with cheaper price. Some
nations can have absolute advantage, comparative advantage, or outsourcing. There are two ways
of trading between countries (O.C Ferrell, et.al. 2014); 1) Import: buying goods or services from
another country, 2) Export: selling domestic goods or services to another country. Because of
export and import inside the country, there will be two probabilities of country income; trade
deficit or balance trade (trade surplus) that is the different amount or value of export and import.
When a company decided to expand their company to compete in global trading market, they
have to consider barriers of countries. Research of economic, legal, political, socio-cultural, and
technological background of the country help company to choose suitable strategic approaches
and level of involvement to expand to new country. Level of infrastructure, exchange rates,
different of laws, exchange controls, quota, politic stability, war, social life and also different of
culture (ethics values) can effect global trading market in one country to expand business.
Although there are some barriers that should be consider before international trade, there are also
organisation and agreement that help companies to grow and involve in global markets, and there
are also trade agreement that promote eliminating tariffs and trade restriction among members
(O.C Ferrell, et.al. 2014), such as GATT (General Agreement on Tariffs and Trade), WTO

(World Trade Organisation), NAFTA (North American Free Trade Agreement), EU (European
Union), APEC (Asia-Pasific Economic Cooperation), ASEAN (Association of Southeast Asian
Nations), World Bank, IMF (International Monetary Fund).
Many businesses can involved in international trade at many levels, the degree of commitment
and effort required are increasing because the level of involvement in international trade are
increasing. Ranging in expiring and importing, trading companies, licensing, franchising,
contract manufacturing, joint venture, direct investment, and multinational corporations.
Companies may choose one from two basic strategies (O.C Ferrel, et.al. 2014); 1) multinational
strategy that customise products based on cultural, technological, current issues differences in a
country, 2) global strategy that standardise product as a single entity.
Reference:
Ferrel, O.C. Hirt, G.A. Ferrel, L. Business: A Changing World 9th Edition. McGraw-Hill
Education Publ. USA.