An international business, unlike a multinational enterprise, Multiple Choice
needs to have manufacturing units in at least two foreign nations.
need not customize its products to the requirements of national markets.
needs to manufacture products or provide services that target a global market.
need not invest directly in operations in other countries.
The correct answer and explanation is :
The correct answer is: need not invest directly in operations in other countries.
Explanation:
An international business refers to a company that conducts business transactions across national borders. However, it does not necessarily have to establish manufacturing or operational units in foreign countries. This distinguishes it from a multinational enterprise (MNE), which often operates its own production facilities or subsidiaries in multiple countries.
Here’s a breakdown of the options:
- Need to have manufacturing units in at least two foreign nations: This is not a requirement for international businesses. While multinational enterprises (MNEs) may have manufacturing units in several countries, international businesses may operate by exporting products, licensing, franchising, or using joint ventures without necessarily having their own facilities abroad.
- Need not customize its products to the requirements of national markets: While this might be true for some international businesses (particularly those in industries where products have universal appeal), it is not a defining characteristic of international business. Some international businesses may customize their products to suit local tastes, regulations, or preferences, although it is not mandatory.
- Need to manufacture products or provide services that target a global market: While many international businesses operate globally, there is no requirement that they must target a global market. International businesses can target specific markets or countries depending on their strategy and the type of business they are in. The focus can be on a few countries rather than an entire global market.
- Need not invest directly in operations in other countries: This is the correct definition of an international business. An international business may engage in trade (like exporting or importing), licensing, franchising, or other forms of market entry without necessarily establishing direct manufacturing units or operations in foreign countries. The key point is that international businesses are involved in business activities that cross national borders but do not need to invest directly in foreign operations.
Thus, the key distinction for international businesses is that they may conduct operations across borders without the necessity of establishing a direct presence, unlike multinational enterprises.