Class 11 Business Studies Chapter 11 Notes - FREE PDF Download
services, and resources beyond a country's geographical boundaries. Advances in communication and transportation have enabled efficient global trade, making it easier for countries to engage in international business. This chapter explores the key aspects of international business, including the reasons for engaging in global trade, the scope of international business, and the benefits it offers to nations and firms. Understanding these concepts helps in grasping the dynamics of global markets.
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Chapter 11 International Business Notes allows you to access and review the chapter content quickly. For a comprehensive study experience, check out the Class 11 Business Studies Revision Notes FREE PDF here and refer to the Class 11 Business Studies Syllabus for detailed coverage. Vedantu's notes offer a focused, student-friendly approach, setting them apart from other resources and providing you with the best tools for success.
FAQs on International Business Class 11 Notes: CBSE Business Studies Chapter 11
1. What is the core concept of International Business for a quick revision?
For a quick recap, international business encompasses all commercial activities, including trade, investment, and transportation, that take place between two or more countries. It involves the cross-border exchange of goods, services, capital, and technology, extending beyond the geographical limits of a single nation.
2. How can I quickly recall the key differences between domestic and international business?
To quickly recall the differences, remember that domestic business operates within one country's borders, dealing with a single currency, legal system, and a relatively uniform culture. In contrast, international business is more complex as it faces challenges like:
- Different currencies and fluctuating exchange rates.
- Varying legal and political systems.
- Diverse cultural and social environments.
- Greater logistical and transportation complexities.
3. What is a simple way to summarise the main reasons for engaging in international business?
A simple way to remember the primary drivers is to focus on differences and advantages. Countries engage in international business because of the unequal distribution of natural resources, differences in labour productivity, and the desire to gain a specialisation advantage by producing what they are best at. This creates opportunities to profit from price differences between markets.
4. What are the main modes of entry into international business mentioned in the chapter?
The key modes of entry into international business that are essential for revision are:
- Exporting and Importing: The most direct method of selling goods to or buying from other countries.
- Contract Manufacturing: Outsourcing production to a local firm in a foreign country.
- Licensing and Franchising: Granting a foreign firm the right to use intellectual property (like a patent or brand name) for a fee.
- Joint Ventures: Forming a partnership with a foreign company to establish a new business entity.
- Wholly Owned Subsidiaries: Setting up a production or marketing facility in a foreign country that is 100% owned by the parent company.
5. What is the core conceptual difference between licensing and franchising for a quick recap?
The core difference for a quick recap is the scope. Licensing typically involves granting rights over intangible property like patents or trademarks for producing goods. In contrast, franchising is broader and more common for services, where the franchisor provides a complete business model, including the brand name, operating systems, and marketing strategies.
6. Why is Foreign Direct Investment (FDI) considered a more complex entry mode than simply exporting?
Foreign Direct Investment (FDI) is conceptually more complex because it involves a much higher level of commitment and risk. Unlike exporting, which is primarily a trade activity, FDI involves investing in physical assets like factories and machinery in a foreign country. This requires significant capital, a deep understanding of local laws and markets, and direct management of foreign operations, making it a high-stakes, long-term strategic decision.
7. What is the logical flow to remember for the export procedure?
To remember the logical flow of the export procedure, it helps to break it down into three main stages:
- Pre-shipment: This stage involves receiving the inquiry and order, checking the importer's creditworthiness, obtaining an export licence, and arranging for pre-shipment finance.
- Shipment: This includes procuring the goods, conducting a pre-shipment inspection, getting excise clearance, and reserving shipping space.
- Post-shipment: This final stage covers packing and forwarding the goods, insuring them, obtaining customs clearance, and negotiating documents to secure payment.
8. How do institutions like the WTO and IMF help create a stable environment for revision of global business concepts?
These institutions provide a predictable framework that makes global business concepts easier to understand. The World Trade Organization (WTO) sets and enforces rules for fair trade, reducing uncertainty. The International Monetary Fund (IMF) focuses on global financial stability, especially exchange rates, which is vital for international payments. The World Bank assists developing countries, helping them become active participants in the global economy. Together, they create a structured environment for international trade.
9. What are the key benefits of international business for a nation's economy?
For a quick summary, the key benefits for a nation are:
- Earning valuable foreign exchange to pay for necessary imports.
- More efficient use of national resources through specialisation.
- Stimulation of economic growth and creation of employment opportunities.
- Improved standard of living by providing citizens access to a wider variety of goods and services.
10. Why is understanding export promotion schemes important when revising the concept of international competitiveness?
Understanding export promotion schemes is crucial because they directly show how a country can make its goods more competitive globally. Schemes like the Duty Drawback Scheme or Advance Licence Scheme reduce the cost of production for exporters by refunding or waiving taxes on materials used for exports. This cost reduction allows firms to price their products more attractively in foreign markets, directly linking government policy to a firm's international success.
