What are the 3 Basic Levels of International Business?

Companies and business activities have gone through an immense amount of change since the beginning of the 21st century. Acceleration of financial and commercial processes in the international market has created several opportunities for businesses to extend their operations beyond their origin countries and national borders. The latest corporate studies have distinguished 3 general levels of international activities, namely domestic, international, and multinational.

Before getting in headfirst, remember that every business experiences the effects of foreign markets and competition in the global economy. Because of this, some businesses are taking measures to exploit not only the domestic markets but also the rest of the world. The first step in deciding whether or not to adopt a global perspective and understanding the different levels of business activity.

Here are the 3 basic levels of international business one should know before deciding to expand their horizon.

1. Domestic Business Operations

A domestic business conducts all company operations, from acquiring raw material to selling and marketing products or services, within its country of origin. Many small businesses, such as restaurants, bookstores, and convenience stores are domestic businesses. These companies are free to conduct business in the origin country's market, where they may compete with other small, medium, and large domestic companies, as well as international and multinational companies.

2. International Business Operations & Operations Management Course

International companies operate primarily in a single country buy have some point of exposure to the foreign markets as well. In other words, these companies conduct their primary business operations within its native country, however, imports some products or raw material from other countries, or exports some of its products and services to foreign markets.

3. Multinational & Transnational Business Operations

A multinational business typically has its headquarters in its native country, however, it operates worldwide through several subsidiaries. It buys resources and raw material, manufactures and sells its products, and borrows money from foreign markets and invest in these markets to earn a considerable profit.

Whereas, transnational companies are the largest form of multinational businesses with separate divisions that operate with a significant amount of independence in their respective markets. These companies maintain large independent divisions, employ senior executives from a variety of countries, and often make decisions from a global perspective that is not controlled by its national headquarters. In other words, these subsidiaries or branches are given complete freedom to operate on the basis of individual market study and act accordingly and independently of their headquarters.

Summing Up

As international commerce has grown to be more diversified and complicated, most economists have devised the aforementioned classifications to describe corporations among different levels of international business activities. To get in-depth knowledge on the subject, you might need the guidance of a strategic international business course. These courses help you understand the complexities to operate outside national borders and whether it is suitable for your type of business. If you have a strategic international business certification, you can face the challenges of the vulnerable and dynamic environment of international business. So, it advised that you take up a strategic international business course or do a deep study and research on the topic before you decide to move your business across borders.