I think the best way to define international business is to explain what drives international business. In the past few decades, international business has grown incredibly fast. There are many reasons for international business to grow at such a rapid rate, ranging from technological advances to improved political positions.Here are eight of the most influential drivers of international business growth.

I. Saturation of domestic market

In developed countries, the continuous production of similar products over the years may lead to saturation of the domestic market. Ultimately, the majority of the population owns the product and there is no need to replace the product. In Japan, for example: 95% of people have various types of electronic appliances, where organizations do not grow, so they have to go overseas to find new markets.

II. Opportunities in foreign markets

When the domestic market becomes saturated, there are many developing countries blooming on the market. Organizations have a great opportunity to improve their sales and profits by selling their products in these markets. More and more economies in these booming markets are calling for new goods and services to reach unprecedented levels.

III. Availability of Low-cost Labor

The labour force in developing countries is much cheaper than in developed countries. As a result, organizations have found it cheaper to shift production to these countries to reduce costs and increase profits.

IV. Increased demand

Consumers in countries that do not have the purchasing power to buy high quality products are now able to buy them because of improved economic conditions. Growing international demand has attracted more organizations into these growing markets.

V. Diversification

In order to combat the cyclical pattern of the enterprise, the company expands its business and makes it diversified. Through international expansion, companies can explore new markets, allowing them to make higher profits.

VI. Reduction of trade barriers

Many developing countries are liberalizing trade barriers and opening their doors to foreign multinationals. In addition, these countries are giving their companies the opportunity to set up their own organizations overseas. These trade barriers have stimulated trade between countries and opened markets that were previously unsuitable for use by international companies.

VII. Development of communication technology

The growth of technology and communications has been a instrumental driver of international commerce. This technology enables people to connect with people all over the world in an instant. Organizations can easily understand the needs, products, and services offered by other parts of the world. In addition, technology helps reduce transport costs, improve efficiency, and lead people to expand their business.

VIII. Consumer pressure

The growth of technology and communications has made consumers more alert. As a result, consumers around the world are demanding new, better goods and services. This pressure leads companies to study, merge or enter new markets.

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