The Local and

International Business
Environment in the
By Pearl Miumi Asato Salvador Firm
WHAT IS A BUSINESS ENVIRONTMENT?
• Business operates within a complex network of
political, legal and institutional framework
conditions - the "socalled" business climate.

• The definition of business environment means all

the internal and external factors that affect how
the company functions including employees,
customers, management, supply and demand and
business regulations.

WHY STUDY BUSINESS ENVIRONTMENT?

• Development of broad strategies to ensure
sustainability

• To foresee the impact of socio-economic

changes at the national and international
levels on firm’s ability

• Analysis of competitor’s strategies and

formulation of effective counter measures
WHAT IS A “LOCAL”
BUSINESS?
 THE LOCAL BUSINESS
• Communication is easier.

• Because it is a business entity whose commercial activities are

performed within a nation. Alternately known as internal business

or sometimes as home trade. The producer and customers of the

firm both reside in the country. In a domestic trade, the buyer

and seller belong to the same country and so the trade agreement

is based on the practices, laws and customs that are followed in

the country.

• Access to materials and labor maybe limited.

• Low transaction cost, less period between production and sale of

goods, low transportation cost, encourages small-scale

THE LOCAL BUSINESS ENVIRONTMENT

• A conducive local business climate reduces the costs of

doing business, unleashes economic potential and attracts

investment. In contrast, if the local business climate is

shaped by problematic governance patterns, political

guidelines, laws and regulations and ineffective

 administration, private and public sector pay enormous and

unnecessary costs with negative impact on economic

THE PHILIPPINE BUSINESS

ENVIRONMENT
• Philippines imposed foreign ownership
restrictions.

• 17 procedures and 80 days to establish foreign

owned business.
• Constitution prohibits foreign companies from
buying land.

WHAT IS AN “INTERNATIONAL”

BUSINESS?
 THE INTERNATIONAL BUSINESS

• The area of operation of an international business

is vast, i.e. It serves many countries at the same
time.

• The company conducting international business is

known as a multinational company. These companies
enjoy a large customer base from different
countries, and it does not have to depend on a
single country for resources.
 THE INTERNATIONAL BUSINESS
ENVIRONMENT
• International Business is one whose manufacturing and trade
occur beyond the borders of the home country. All the
economic activities indulged in cross-border transactions
comes under international or external business. It includes
all the commercial activities like sales, investment,
logistics, etc., in which two or more countries are
involved.
 • In different countries, sometimes even within a country,
there are substantial differences in attitudes, beliefs.
motivation morality, superstition, and perception, and as

Important Differences of
Local and International
Business
1.COVERAGE
2.QUALITY STANDARDS

3.CURRENCY

4.CAPITAL INVESTMENT

5.RESTRICTIONS

6.NATURE OF CUSTOMERS

7.CONDUCTION OF BUSINESS RESEARCH

8.FACTORS OF PRODUCTION