Since most national economies are closely linked today, international business is growing importance nevertheless.
Various barriers to effective world business exist. Business executives must expect and learn to handle a lot of problems. They are such problems as cultural barriers (understanding language, Education, social values, religious, attitudes and consumer habits). For example, Procter and Gamble successful in many foreign markets by studying a nation’s culture and then tailoring products and marketing to meet consumer needs. For example: R&G learned that people in the Philippines wash clothes with a laundry bar and then squeeze the juice of a local fruit, kalamansi, into the water. The fruit gives clothes a fresh scent and acts as a stain remover.
The second problem is – physical barriers. Tariffs and trade restrictions.
Political and legal factors The problem of dumping is sometimes a threat to firms engaged in international business. D-g, selling goods abroad at a price lower than that charged in domestic market, is prohibited in many countries. It is important to distinguish between an international firm and a multinational corporation. An international firm is limited to the first 2 levels of international business – selling abroad either through exports or overseas marketing. A multinational corporation, by contrast, operated both production and marketing facilities on an international level. The multinational corporation considers the world its market.