The term international business refers to any business that takes place across international borders. At its most basic, it includes the sale of goods and services between countries.
Yet, other forms of international business do exist. For example, a business that produces components or products overseas but sells them domestically can be considered an international business, as can an organization that outsources services, such as customer service, to locations where labor expenses are cheaper.
For most organizations, decisions around building, producing, and selling products or services are informed by many factors. Cost is an important one because businesses that primarily operate in developed markets, like the United States and Europe, can often source cheaper labor abroad.
Other factors play a role in decision-making, too. For example, an organization that makes a conscious effort to become more sustainable may produce its product as close as possible to the end user to reduce greenhouse gas emissions related to transportation, even if it might result in higher labor costs. Likewise, a business may take pride in sourcing local labor to create jobs and support the economy.
Although international business can benefit the global economy, it also carries inherent risks. The fact that each country has its own government, regulations, inflation rates, and currency can complicate business models and must be weighed against the perceived benefits of operating internationally. Some of the most common challenges of international businesses include language and cultural barriers, currency exchange rates, and foreign politics and policies.
Because of these challenges, those who have a successful career in international business need various skills and expertise, such as strong communication skills, emotional intelligence, an understanding of other cultures, and thorough knowledge of finance, accounting, entrepreneurship, and global economics. Acquiring these combined skills, along with international business experience, can lead to career success.
Are you interested in working with an international organization? Do you have plans and aspirations to take your business international? Here’s a look at five well-known international businesses that have successfully—and not so successfully—navigated the global market.
Examples of International Businesses
1. Apple
Apple Inc. was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in the 1970s and is now considered one of the most influential international companies. Headquartered in the United States, Apple designs, develops, and sells electronics, software, streaming, and online services worldwide.
Apple opened its first international location in Tokyo, Japan, in 2003 after saturating the American market. Under Jobs, Apple touted ease-of-use, innovative design, and customer loyalty with the marketing slogan, “Think Different,” and it continues to use visionary strategic marketing and a tight ecosystem to overcome competition and attract creative audiences around the globe.
Apple not only sells products internationally but has supply chains from 43 countries that ship supplies to China for final production and assembly. By keeping a tight-knit and strong relationship with suppliers, strategic inventory, and a focus on sustainability, Apple stands as one of the world’s most successful companies.
2. Financial Times
The Financial Times is a formerly British daily newspaper that’s now owned by Japanese holding company Nikkei. The Financial Times’ mission is to deliver unbiased, informed investment and economic information to empower individuals and companies to make secure investment decisions.
The Financial Times had a rocky start trying to break into the international market. Andrew Gilchrist, former managing director of the Financial Times, describes his experience at the publication in the online course Global Business.
During his tenure, the Financial Times prioritized entering the international market in India. Despite a large English-speaking population and strong government support, domestic journalism was considered culturally and legally suspect. In fact, the Financial Times was eventually tied up in legal knots because the local newspaper barons were able to challenge every move through the courts.
Eventually, the Financial Times’ attempt to go international in India led to an economic slowdown and sluggish company growth.
3. McDonald’s
Two brothers, Maurice and Richard McDonald, converted their drive-through barbecue restaurant in San Bernardino, California, into a burger and milkshake restaurant—now known as McDonald’s—in 1948.
The McDonald brothers focused on creating a better business system geared toward self-service and efficient and repeatable processes that relied on heating lamps instead of waiters. This model, known as “Speedee,” led to lower costs, cheaper products, and faster growth, and it became the epitome of “fast food.”
Soon after, Ray Croc took McDonald’s a step further by bringing in franchisees and suppliers, leading to the creation of restaurants across the United States. McDonald’s model continued to expand, and, in 1967, the company opened locations in Canada and Puerto Rico.
McDonald’s has been internationally successful, thanks in large part to the consistency its business model allows. The fact that a Big Mac tastes the same regardless of which country you order it in is a testament to the company’s long history. Today, there are 38,000 restaurants in over 120 countries.
4. Coca-Cola
Coca-Cola was created by pharmacist John Pemberton in 1886 at a soda fountain in Atlanta, Georgia. It was used as a tonic for common ailments due, in part, to the addition of cocaine and caffeine derived from the kola nut, which was a major ingredient at the time. (This was later removed from the recipe in 1903.)
Although popular at its inception, Coca-Cola became the company it is today because of the marketing and business leadership of Asa Griggs Candler and future investors, who dramatically increased sales and expanded syrup factory production into Canada.
Eventually, an independent bottle company licensed the rights to Coca-Cola’s syrup production and distribution, streamlining production and generating massive profits. Coca-Cola later remarketed for Germany, China, and India, and it’s now sold everywhere except Cuba and North Korea.
Coca-Cola currently has over 900 bottling and manufacturing facilities worldwide, many of which are in North America, Asia, and Africa.
5. H-E-B
H-E-B is a popular American grocery company with more than 340 stores in Texas and northeast Mexico. It was founded by Florence Butt in 1905 and expanded into Mexico in 1997.
The primary driver of international expansion wasn’t a desire to capture greater market share, but rather, a desire to gain access to foreign produce markets in warmer climates, from which the company could source produce during its domestic suppliers’ off-season in the northeastern United States.
Craig Boyan, president of H-E-B, explains in Global Business that, upon becoming an international business, H-E-B bought blueberries from Chile and Peru to sell year-round. Despite it being expensive to ship blueberry crates to Texas, this enabled the company to continue meeting its customers’ needs. Since then, production has increased with demand, especially in Mexico, which has an ideal climate to produce blueberries year-round. H-E-B now sources blueberries mostly from Mexico, making them more available and affordable for customers.
How to Learn International Business Skills
Many businesses succeed by expanding their markets and production and supply chains internationally. But doing so requires savvy business leadership bolstered by economic knowledge, an understanding of markets, and the ability to learn political and cultural trends.
If you’re considering joining a global business or thinking about ways to expand your organization internationally, it’s important to develop the skills you need to be successful. Completing an online course, such as Global Business, is an excellent way to quickly gain those skills.
Are you interested in breaking into a global market? Sharpen your knowledge of the international business world with our four-week online course Global Business, and explore our other Business in Society courses.
