INTERNATIONAL

BUSINESS ENVIRONMENT
 BUSINESS ENVIRONMENT

An uncontrollable environment will

negatively affect any organization’s efforts
whatever they might be. You need to have a
heavily structured method and environment
to process information into relevant bits for
each department to produce results. Team
environments are the backbone of any
organization. Nothing can work without a
collaborative effort on all departments.
 TYPES OF ENVIRONMENT

 Internal Environment
 External Environment
INTERNAL BUSINESS ENVIRONMENT
FACTORS

 Management
 Manpower
 Machine
 Material
 Money
 EUREKA FORBES

Eureka Forbes followed the globally tried

and tested direct selling route for marketing
its products in India, thus becoming one of the
first direct selling companies in India. The
company believed that its core strength was
its people.
 EUREKA FORBES STRATEGY

 Direct marketing of consumer appliances

 Importance of sales force
 Customer relationship management
 Advertising strategies in consumer appliances
industry.

MANAGEMENT + WORKFORCE
 EUREKA FORBES

 70% share in water purifier market AQUAGUARD

 80% share in vacuum cleaner market EURO-CLEAN

 TYPES OF EXTERNAL ENVIRONMENT

 Political forces
 Legal forces
 Economic forces
 Competitive forces
 Level of technology
 Geography and infrastructure
 Cultural forces
 POLITICAL ENVIRONMENT

The policies and attitudes towards

business are a government ides of how best to
promote the national interest, considering its
own resources and political philosophy. A
government control’s and restricts a
company’s activities by encouraging and
offering support or by discouraging and
banning or restricting its activities depending
on the government.
POLITICAL ENVIRONMENT EXAMPLE

A change in the government does not

always mean change in the level of political
risks. In Italy the political parties have changed
50 times since the end of World War II but the
business continues to go on as usual. In
comparison is India, where the government
has changed 51 times since 1945 but however
much of the government policies remain
hostile to foreign investments.
 ECONOMIC ENVIRONMENT
Economic environment refers to the
aggregate of the nature of economic system
of the country, the economic policies of the
government, the organization of the capital,
the nature of factor endowment, business
cycles, the socio-economic infrastructure etc.
The successful businessman visualizes the
external factors affecting the business, and
makes suitable to get the maximum with
minimize cost.
 ECONOMIC ENVIRONMENT

 Income distribution & discretionary income

 Productivity: unit labour costs and labour
compensation costs.
 Major international debtors
 Inflation, interest rates, availability of credit
 LEGAL ENVIRONMENT

Legal environment includes flexibility and

adaptability of law and other legal rules
governing the business. It may include the
exact rulings and decision of the courts. These
affect the business and its managers to an
extent.
EXAMPLE OF LEGAL ENVIRONMENT

For Instance, in 1992, the Supreme Court

ordered the closure of a number of tanneries
in Kanpur as they were polluting Holy Ganga.
In August 1993 several foundries around the
famous Taj Mahal were ordered to be closed
down because of air-pollution caused by them
gad adverse impact on the whiteness of Taj
Mahal.
  
TECHNICAL ENVIRONMENT
The business in a country is greatly
influenced by the technological development.
The technology adopted by the industries
determines the type and quality of goods and
services to be used. Technological
environment influences the business in terms
of investment in technology, consistent
application of technology and the effects of
technology on markets.
 TECHNOLOGY LEADERS

 Japan

 US

 China
  
COMPETITIVE FACTOR
This refers to the ability of a country (or firm)
to provide goods and services which provide
better value than their rivals.

COMPETITIVE FACTORS:
 Major advantage in price, marketing, innovation
or other factors.
 Number and comparative capabilities of
competitors.
 Competitive differences by country.
SOCIAL AND CULTURAL ENVIRONMENT

The social environment of a nation determines

the value system of the society. Sociological
factors such as costs structure, customs and
conventions, cultural heritage, view toward
wealth and income and scientific methods,
respect for seniority, mobility of labour etc.
have far-reaching impact on the business. These
factors determine the work culture and mobility
of labour, work groups etc.
 CULTURAL PROBLEMS

 Lack of communication
 Language
 Values, belief systems, business ethics,
business practices, behavior, etiquette and
expectations.
 Company Culture
 GEOGRAPHICAL ENVIRONMENT
There are a number of physical and
environmental forces influencing and effecting Int’l
business in Canada.

GEOGRAPHICAL EXAMPLE

 Effects communication
 Time zones
 Distances to travel for work and leisure
 Population density low outside of major urban
centers
 BARRIERS
 Topographical, “Latitude” and climatic
challenges
 Many areas of Canada not suitable to living all
year round
 Weather effects growing seasons for food
 Cost of food effects health and lifestyles
 Mountains act as barriers to transportation,
communication, and limit habitable land
space.
THANK YOU