Q:

Why do companies engage in international business?

A:

Quick Answer

Companies often engage in international business to increase their sales, to become more popular, and to acquire new resources. International business allows a company to sell to new markets that could potentially increase sales significantly.

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Full Answer

International business means business that is in multiple different countries. Many companies who are doing very well in their original country will start to market and sell their product or service to other countries. There are many factors to take into account when marketing to another country, such as language barriers and cultural differences. For example, most of India does not eat beef, so a company that sells beef products would not want to engage business in India.

International business provides both a large risk and a large potential reward. The most common reason that a company would engage in international business would be for the potential millions of new customers that could buy their product. For instance, Coca-Cola was very popular in the United States, but gained millions of new customers and much more profit once it started being sold in other countries. Similarly, other countries may be able to provide resources that are priced lower than in a company's original country. The company could then try to market their product in that country and have a lower production cost with the cheaper resources, which means a higher profit if the sales are equal.

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