All businesses are required to come up with strategies for the operatons of their business, however
it is much more important for internatonal business to adopt many diferent strategies essental for
the running of the business in diferent internatonal markets. Strategies have to be designed for
each operatonal aspect of the business and have to be made specifcally for each market.
Strategies
There are eight main ways that businesses can operate internatonallyy
Subsidiary businesses
A subsidiary business is one where the parent company has got a holding in its shares of 50 per cent
or more. It is controlled by the parent company but can operate in another country. The subsidiary
has to follow the laws of the country in which they are based and pay relevant taxes and other
business expenses accordingly.
There are 2 ways to establish a subsidiary business of a parent companyy
- A business can be set up in the new country as a subsidiary of an existng company
- An existng business can be taken over
In terms of legal liabilites, the subsidiary business operates in its own right so this means that it has
its own legal liabilites. There are benefts to buying and, therefore, owning a subsidiary for
internatonal operatonsy
- Limits risks
- Good controls in place to expand the business internatonally
- Supply chain relatonships and supplier networks are purchased as they are existng
Joint ventures
A joint venture is when two or more businesses come together by contractual arrangement to focus
on a partcular business transacton or deal. Businesses enter into joint venture to reduce risk and
share expertse. A company that produces and item may enter into a joint venture with a trading
company as their businesses complement each other. Another type of joint venture might be an
arrangement between a producer and a supplier of goods.
Partnerships
Partnerships, like joint ventures, are used to bring diferent partes together. However, partnerships
are usually for the longer term and join the diferent businesses together more closely through legal
processes. Partnerships can be brought together for commercial reasons or to share expertse, for
example, Norfolk police have worked with Lithuanian and Polish police to share training and
expertse. Partnership can be brought together with unlimited liability for the actons and each
partner, or more commonly, with limited liability.
Partnerships are diferent from joint venture as they usually are indefnite in length, are multple
project focused, have joint profts and liabilites, share resources, such as staf and also have votng
rights and ownership with the partnership.
Limited liability is when a restricted amount of money that the business is liable for can be paid out if
the partnership goes wrong.
it is much more important for internatonal business to adopt many diferent strategies essental for
the running of the business in diferent internatonal markets. Strategies have to be designed for
each operatonal aspect of the business and have to be made specifcally for each market.
Strategies
There are eight main ways that businesses can operate internatonallyy
Subsidiary businesses
A subsidiary business is one where the parent company has got a holding in its shares of 50 per cent
or more. It is controlled by the parent company but can operate in another country. The subsidiary
has to follow the laws of the country in which they are based and pay relevant taxes and other
business expenses accordingly.
There are 2 ways to establish a subsidiary business of a parent companyy
- A business can be set up in the new country as a subsidiary of an existng company
- An existng business can be taken over
In terms of legal liabilites, the subsidiary business operates in its own right so this means that it has
its own legal liabilites. There are benefts to buying and, therefore, owning a subsidiary for
internatonal operatonsy
- Limits risks
- Good controls in place to expand the business internatonally
- Supply chain relatonships and supplier networks are purchased as they are existng
Joint ventures
A joint venture is when two or more businesses come together by contractual arrangement to focus
on a partcular business transacton or deal. Businesses enter into joint venture to reduce risk and
share expertse. A company that produces and item may enter into a joint venture with a trading
company as their businesses complement each other. Another type of joint venture might be an
arrangement between a producer and a supplier of goods.
Partnerships
Partnerships, like joint ventures, are used to bring diferent partes together. However, partnerships
are usually for the longer term and join the diferent businesses together more closely through legal
processes. Partnerships can be brought together for commercial reasons or to share expertse, for
example, Norfolk police have worked with Lithuanian and Polish police to share training and
expertse. Partnership can be brought together with unlimited liability for the actons and each
partner, or more commonly, with limited liability.
Partnerships are diferent from joint venture as they usually are indefnite in length, are multple
project focused, have joint profts and liabilites, share resources, such as staf and also have votng
rights and ownership with the partnership.
Limited liability is when a restricted amount of money that the business is liable for can be paid out if
the partnership goes wrong.
