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International business environment
- 2. BUSINESS IS DEFINED AS A SET OF ACTIVITIES RELATING TO INDUSTRY AND COMMERCE
- 3. WHEN BUSINESSACTIVITIESARE CARRIED ACROSSTHE POLITICAL BORDERS OF A COUNTRY, IT ISTERMED AS INTERNATIONAL BUSINESS.
- 4. A BUSINESS ENVIRONMENT INCLUDES VARIOUS EXTERNAL ACTORS AND FORCES THAT SURROUNDS A FIRM AND IMPACTS THE OUTCOME OF ITS DECISIONS AND OPERATIONS
- 5. THE OBJECTIVE OF BOTH DOMESTIC BUSINESS AND INTERNATIONAL BUSINESS IS “MAKING PROFITTHROUGH CUSTOMERS SATISFACTION AND SOCIALWELFARE”
- 8. 1. •DOMESTIC ENVIRONMENT 2. •FOREIGN ENVIRONMENT 3. •GLOBAL ENVIRONMENT
- 9. THESE FACTORS OPERATE AT THE NATIONAL LEVEL, FIRMS ARE GENERALLY FAMILIAR WITHTHEMANDARE ABLETO READILY REACTTOTHEM SOME FACTORS OF DOMESTIC ENVIRONMENT – 1. COMPETITIVE STRUCTURE 2. ECONOMICCLIMATE 3. POLITICALAND LEGAL FORCES
- 10. Firms are generally not cognizant of these factors and their influences on business activities. It includes- 1. Geographical environment – country’s climate, topography, natural resources and people 2. Economic environment – Economic development, Income( GNP and Per Capita income), expenditure Pattern, Infrastructure 3. Financial Environment - Monetary and fiscal policies, commercial and Foreign investments policies, balance of payment account 4. Demographic Environment – size, age and gender wise composition of a population 5. Socio- cultural environment- language, aesthetics, Education, Religion and superstitions, attitudes andValues, Material culture,Technology, social groups and organizations and business customs and practices 6. Political environment 7. Legal environment 8. Ecological environment
- 11. World Economic Conditions International Financial System International agreements and treaties Regional Economic groupings World wide economic recessions International Financial Liquidity or stability Working of International Organizations Generalized System of Preferences International Commodity agreements
- 12. MICRO ENVIRONMENT These are the actors in the firm’s immediate environment Which directly influence the firm’s decisions and operations These includes: - Suppliers - Market intermediaries and service - organizations - Competitors - Customers - General public MACRO ENVIRONMENT It affects the firm as well as other actors in the firm’s micro environment These includes: - Geographical - Economic - Financial - Socio cultural - Political - Legal -Technological - Ecological
- 13. Knowledge of international business environment is very important. Environment affects a firm’s strategic as well as tactical decisions so it becomes imperative for the firm to have in- depth knowledge of the various components of domestic, foreign and global environment