INTERNATIONAL
BUSINESS ENVIRONMENT
INTRODUCTION
The term international business is very wide because it
involves wide range of activities across national
boundaries. An enterprise has to operate business
activities with all these factors which exist outside or near
any unit. This is called environment. If firm operates
according to environment it may survive otherwise not.
IMPORTANCE OF BUSINESS
ENVIRONMENT
Helps in Conducting Business Operation
Different Strategies
Depth Knowledge
Market Potential
Help in Adopting Marketing Mix
To Keep Pace With Dynamism
Easy to Identify Controllable and Uncontrollable Factors
COMPONENTS OF INTERNATIONAL MARKETING ENVIRONMENT
1. Economic Environment – Economic factors are one of the most important factors to be considered for
formulation of international marketing strategy. Economic development, income including national
income, per capita income all affect marketing strategies.
(1) Low Income Countries
(2) Moderate Income Countries
(3) High Income Countries
Economies classified according to industrial structure:-
(a) Subsistence Economies
(b) Raw Material Exporting Economies
(c) Industrialising Economies
(d) Industrial Economies
Contd…
2. Social and Cultural Environment – Social and Cultural factors both affect the international market
environment. An international marketing mix can only be effective as long as it is relevant to a
given culture. Social behaviour and comments have different meanings in different cultures. Some
components of culture are:-
(1) Religion
(2) Education
(3) Technology and Material Culture
(4) Law and Politics
(5) Language
(6) Aesthetics
(7) Values and Attitudes
(8) Social Organisation
PESTEL Analysis
Contd…
3. Political Environment- The Political Environment of a country plays a
vital role in influencing the market. Price, size of market coverage,
advertisement etc. influence the market. The political situation is
likely to be different in different countries. So political environment
of overseas country should be studied in detail.
Contd…
4. Legal Environment- Legal Environment refers to rules, regulations
and principles that national govt consider binding upon themselves.
Exporters have to deal with different legal systems.
Contd…
5. Physical Environment-Physical Environment consists of natural
resources including minerals, animal population etc. Global
warming, deforestation, dangerous levels of air and water pollutions
are some of the critical issues faced by the marketers
Contd…
6. Technological Environment- Technology is one of the important
determinants of success of a firm as well as the economic and social
development of a [Link] and technology are fast changing.
These types of factors affect the market.
Contd…
7. Business Environment- The trade environment of a country also
effects the international marketing decisions. An exporter should
know the trade customs and behaviours of trading country so that he
may gain faith and goodwill of local middlemen and customers.
Exercise:
• Choose a company in Vietnam and analyze its macro-economic
environment, by applying the PESTEL tool.
• You may need to do some research
• Be ready to present your findings to the class
• You can work in your group (as for your assignment)
• If you have questions, please ask
THANKYOU