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The challenges include geographical changes control over operations and adoptability. International business is always changing. Globalization is coming through all types of companies, the profit or no-profit, public or private, small or large. Need for physical and technological infrastructure is increasing. Internationalization creates wealth and employment.

As a result of cut throat local competition. To have more brand awareness. Capitalize on natural and human resources of host country. Encouraging host government policies. Expansion To get international exposure. More sales. . REASONS:         More profits.“International Entrepreneurship is a process of conducting business across national boundaries”.

         IMPORTANCE OF INTERNATIONAL BUSINESS TO FIRM: GE = C1 + PL + E + D + C2 + C3 GE = C1 = PL = E = DC = C2 = C3 = Global Entrepreneurship Culture Politics and Legal Environment Economy and economic integration Distribution Channel Change Communication (Level of Technology) .

banking  facilities. ECONOMICS: Differences exist in level of economic development. communications. legal system. roads.g. business ethics and norms. Marketing and  Distribution System and issues of raising capital. Venture Capital Market.  . banking systems. electricity. educational system. Interest. Government  regulations. STAGE OF ECONOMIC DEVELOPMENT: Differences exist on Infra-structure e. currency valuation.1.  2.

imperialism. dictatorism. BALANCE OF PAYMENTS: The difference between country value of export and import over time and effects  Business transactions and exchange rates among countries. TYPE OF SYSTEM:   (Surplus Balance) (Deficit Balance) The socio-economic system existing in a country.3. socialism and social welfare.  Export > Import Export < Import 4. Various systems include capitalism. . communism.

e. Legal system covers property rights.5. POLITICAL ND LEGAL ENVIRONMENT: Political system is law making i. ownership risk. conflicts. . Individualism: A person is looking after him or his immediate family members and then society Collectivism: In collectivism it look it society first and then after his family members. system of parliament. Democracy Vs Totalitarianism Democracy: People have right to choose their representative. civil disturbance and terrorism. system of courts. Political Risk Analysis: Risk includes operating risk. Individualism Vs collectivism. Totalitarianism: No involvement of public.e. product safety and liability. gorilla war fare. Legal system constitutes of law implementation i. transfer risk. contract laws.

. TECHNOLOGICAL ENVIRONMENT: (Production and Operational Technology) Variations exist among countries. norms. Collection of bellicose. .6. Bribery and corruption issue. artifacts. New Product Development. symbols. Translation problems and errors. CULTURAL ENVIRONMENT: Each element of business plan has some concurrency with local culture. Standardization and National responsiveness Customers are interest in consistent technology. 7.

developed. political philosophy. religion. reinforce and learnt. economic philosophy. education. manners and customs. . Elements include language.Common ways of thinking and behavior that are passed on from generations or transmitted by social organization. social situations.

E. . E.i) Language: Language is composed of verbal and non-verbal components whereas non-verbal includes body position. living standards. Business relationship is also important. middle class and lower class.g. ii) Social Structure: This affects life style. a family in USA comprises of parents and children whereas in other countries grand parents and other relatives are also part of family Social classes that is upper class.g. in Arabs it is very common to say Bukra Inshallah. Time is assumed differently in different cultures. Employees relationships. Reference Group that reflects individual’s behavior. gestures and physical space. Manager. and consumption patterns. eye contact.

Islam. Religion is reflected in values and attitudes of individual and society. Hinduism. Christianity. Embargos controls sanctions.iii) Religion: The shared believes and attitudes e. Buddhism and non-religious. iv) Political Philosophy: The rules and regulation of a country impacting the global entrepreneur and the way he conducts the business e.g.g. .

career paths and technology levels. .g. Import duties.) Education: The formal and informal education that may include literacy rate. Tariffs and subsides.v) Economics and Economic Philosophy: Whether the country is overall in favour of trade or impose trade restrictions e. vi. skills.

how to wrap it and manner of giving it. what gift. use of silence gaps Gift Giving: Whether to give a gift.vii) Manners and Customs: Negotiation: One has to be careful before reaching on conclusion e.g. .

economic efficiency and economic growth and development. that determines price. .CATEGORIES OF ECONOMIC SYSTEM: There are four categories of economic system: i) Market Economy: All or most of the activities are privately owners and services are not planned. No restriction on supply. Production depends on supply and demand factors.

ii) Command Economy: Type. Japan and Korea.) State Directed Economy: Government has an established industrial policy and direct investments of private firms e.g. iii) Mixed Economy: Both market and command economy that is private and government ownership e. iv. Italy.g. France. quantity and price are planned by government and pre government owned. Lack of efficiency as there is no competition. Sweden. . usually health care is controlled by government.

Distribution channel differ considerably among countries and can affect. investment policies. cost of product. amount and type of competition.Logistics and transportation had improved a lot. political risks and marketing plan. . exchange rates. Factors include overall sales potential. geographic size of country. success of a company a lot.

Mutually agreed upon systems of reduction of above and violating country may be pressurized to change its policies.i) General Agreement for Trade & Tariff (GATT): WTO (World Trade Organization) (The purpose of WTO is free trade among nations) Barriers include duties. restrictions quota. subsidies and taxes. tariff. .

E. .ii) Increasing Protectionist Attitude: They results from events happening in the last decade.g. iii) Trade Blocks and Free Trade Areas: Groups of nation facilitating trade among themselves And excluding outsides. Trade deficit of USA. NAFTA (North American Free Trade Agreement) European Community based on the principle of Supranationality and the members countries cannot enter Into trade agreement on their own. emergence of Japan and China and bilateral export restraints to avoid GATT.

The problems include:  Increased cost of product.   . Conformance with the local content one. Voluntary export restraint.

  The influence. . Careful analysis and determine the best country to enter. attractiveness as the potential investment opportunities.