Review and Discussion Questions

1. (a) Which are the forces that compose the business macro-environment?
The factors that make up the macro-environment are economic factors, demographic
forces, income and purchasing power, labor forces, technological factors, political, legal,
and regulatory forces, international political/economic, technological forces, social and
cultural forces and consumer behavior.
1. Economic Forces - The majority of social, political, cultural, and general historical
advances in human evolution are driven by economic forces. The economic
environment is of primary concern to modern businesses because it affects
competition, customer purchasing power, and spending habits.

2. Demographic Forces - In developed countries, the average age of the

population is rapidly increasing. Businesses can better understand their markets
by dividing people in a country according to their age group, sex, education,
occupation, or other characteristics.

3. Income and Purchasing Power - income is unable to assess the market's

potential in respect to a product. The same amount of money does not buy the
same items everywhere, and requirements and costs vary by country and
location, which is why purchasing power is so crucial.

4. Labor Forces - Labor is a key economic component, and its cost, quality,
quantity, composition/diversity, mobility, organization, and regulation are all
major drivers. These features are not universal throughout industrialized nations,
while certain trends may be seen. Millions of employees from impoverished
nations have been lured to industrialized countries by the potential of
substantially greater salaries and political situations in their own country.

5. Political, Legal, and Regulatory Forces - Any country's business operations take
place inside its political and legal framework. People and rulers wield power in a
context of governmental institutions, political parties, and organizations. These
are the result of shared ideological views and practical needs. They have an
impact on business in a number of ways, including taxation and sovereignty.
 6. International Political/Economic - Formalized cooperation or connections
between industrialized and developing nations, as well as between developed
and developing countries, result in environmental conditions that regularly and
significantly influence enterprises. The European Union (EU), the North American
Free Trade Agreement (NAFTA), and the Association of Southeast Asian Nations
are the most prominent examples.

7. Technological Forces - Technological Factors - The industrialized countries are

usually the spear of technological change and innovation; they have unique
advantages over their competitors because of their knowledge, experience and
capital. Six elements that characterize the current situation of technology:
a. Fast pace of Technological Change.
b. High Research & Development Budgets.
c. Concentration on Minor Improvements.
d. Increased Regulation.
e. Technological Convergence and Ubiquity of Technology.
f. Explosive Growth of the Internet.

8. Social and Cultural Forces - Culture and society have been discussed, as well as
their relevance and function in corporate operations and activities, as well as
certain global differences. The impact of industrialized nations on consumer
behavior, their involvement in corporate environment and management, and
their role in distinguishing are all examined further in regard to the industrialized
countries.

9. Consumer Behavior - Consumer behavior refers to the behaviors people engage

in when purchasing, using, and discarding goods and services. The purpose of
this debate is to identify the reasons why understanding consumer behavior is
critical for doing business in developed nations, and to provide solutions to these
problems.

(b) How do these differ in industrialized countries?

The same mentality, principles, and methods apply to doing business in
industrialized nations as they do in most other countries. The variables to be
 addressed within that theoretical context, rather than the theoretical environment
itself, are what distinguishes economic activity in industrialized nations. The
business climate in industrialized nations is marked by continual change that is
neither controlled nor significantly influenced by any firm, industry, or
government.

2. Describe the main elements that characterize consumer behavior in industrialized

countries and elaborate on the ways businesses adjust their approach to consumers
to adapt to these elements.
In the industrialized world, understanding consumer behavior is important for
doing business. Economic wealth, freedom of business activity, high levels of
education, and a socio-cultural setting that encourages personal and shared
growth and expression characterize an industrialized countries. As a result, the
elements that characterize industrialized countries are those that control an
average person’s motivation to level up their income.

3. What is the nature of the competitive environment in the industrialized countries, and
which are the strategic and tactical options available to businesses operating under
these conditions?
A competitive environment is in which a business competes and functions. The
strategic and tactical options available to businesses operating under these
conditions are through business's management implementation of excellent
management strategies and establishing a business foundation between
management and employees. Good connections, continuous improvement,
employee participation, team building or staff training, and empowerment are all
strategic and tactical alternatives that firms may implement. Recognizing the
value of client input can lead to the development of new marketing approaches,
but marketing methods would be ineffective unless quality and dependability
were to improve.

4. List and explain the most likely advantages and disadvantages of having to manage a
company in an industrialized country (management of the internal environment).

1. Intellectual property protection - Industrialized countries are particularly

concerned about intellectual property protection. National and international
 organizations, as well as laws and regulations, have been formed to achieve this
goal. Patents, trademarks, trade names, copyrights, trade secrets, and industrial
espionage are all covered under these laws. The difficulty in adopting or
enforcing these rules in non-industrialized nations is a significant challenge.

2. Employment laws - In industrialized nations, employment laws exist to

safeguard both employees and employers' rights by establishing minimum pay
levels and ensuring safe, humane, and nondiscriminatory working settings. These
rules are particularly rigorous in industrialized countries, raising the standard of
job conditions, relationships, and benefits to levels inconceivable in most of the
world's less wealthy countries.

3. Corrupt practices laws - Organizations' capacity to function through activities

such as bribery and other unethical practices has been constrained by corrupt
practices laws. Many organizations in industrialized countries have official internal
policies that protect their management's ethical, personal, and commercial
behavior. Internal restrictions are sometimes even stricter than legal law.

4. Anti-boycott laws - Participating in international boycotts that have not been

authorized by the country making it prohibited under anti-boycott law. It is
important to note that, while laws and regulations are effective advocates for
ethical business practices, they are not the only ones. They can't exist without the
help of other factors that help them develop and execute.

5. Can one assume that knowledge and experience of doing business in one
industrialized country can be used at “face value” in another industrialized country?
Why?
We can’t assume that knowledge and experience of doing business in one
industrialized country can be used at “face value” in another industrialized
country because of many macro-environmental factors such as culture, what may
appear courteous in one country may be unpleasant and unprofessional to
another. The market, a product that is a success in the country could be a failure
in others. As well as International law because regulations governing commerce,
taxation, currency conversion, and contracts differ from one country to the next.
It is important to study both the macro-environment and micro-environment of
every country the business want to enter.