International Business (2)


Companies international business generally involve themselves in stages from the simplest stage that does not contain risks to the most complex stages and contains very high business risks, as for the following stages:


A company that starts from the earliest involvement is to carry out incidental exports. Occurs when a foreigner arrives in our country and then he buys goods and then sends them to a foreign country.


The previous stage can continue to develop and establish regular and continuous business relationships and the old transactions will be more active. The liveliness of the business transaction relationship is marked by the growing number and type of international trade commodities. The active stage in the domestic company itself began actively carrying out management of the transaction. Unlike the initial stage where the entrepreneur acts passively, the so-called purchasing stage.


The next stage of the sales phase of the license is only the brand or license, so that the recipient country can do a fairly extensive management of the marketing and production processes including raw materials and equipment. To use the license, the company and the recipient country must pay a fee for the license to the foreign company.


The more active stage is that a company in a country sells not only licenses or trademarks but also all its attributes including equipment, production processes, recipes for the production process, quality control, quality control of raw materials and finished goods, and forms of service. The so-called “Franchising”, or franchise, the company that receives it is called “Franchisee”, the giving company is called “Franchisor”. Type of business such as food, restaurants, supermarkets, fitness centers and so on. Franchise forms that are currently popular in their own country among domestic companies have several benefits, including:

• Proven system management.

• Has a well-known name.

• An established performance record for assessment tools.

Conversely, those who have ugliness include:

• High costs for implementing a franchise

• Business decisions will be limited by Francilisor

• Is greatly influenced by the failure of other forms of Franchise. If the failure of one will arise the assumption that the other forms of franchise are ugly.


This stage of overseas marketing will require management intensity and higher involvement because the Host Country must actively and independently carry out marketing management for its products in a foreign country (Home Country). Then the company will know more certain about the behavior of its customers who are no other and familiar to them because they are local people or local residents. This stage is often referred to as the “Active Marketing” or “Active Marketing” stage.

6. OVERSEAS PRODUCTION AND MARKETING (Total International Business)

The last stage is the most intensive stage in engaging in international business, namely “Overseas Production and Marketing”. In this stage a foreign company comes and establishes a company in that foreign country complete with all of its capital, then carries out the production process in that country, and sells its products in the recipient country. This form has a positive element for developing countries because recipient countries do not need to provide a lot of capital to set up these factories in general, developing countries are still poor in funds for nation building. This is reasonable because it does not import the industrial products from foreign countries will rival and shut down the domestic industry branches.

Trade barriers include the selection of trading partners from a particular country, usually partners are chosen on the basis of both economic and economic considerations. Another way that is often used by a country to limit imports of a commodity is by setting an “Import Quota”, therefore Indonesia which wants to widen its international trade routes is always looking for other countries which do not impose quotas on merchandise. Countries that do not set quotas are referred to as “Nonquota Countries” or also called “embargoes”. In this way, the state prohibits the entry of commodities that come from a particular country that is subject to the embargo. There are still other forms in a country to limit imports from other countries by means referred to as “Exchange Control” or referred to as “Purchase Returns”. Then every country that will sell its goods to a country then he must buy commodities from that country. If the state does not buy commodity rewards, the Import transaction fails.