INTERNATIONAL

BUSSINESS
ENVIRONMENT
 INTRODUCTION

An International Business Environment (IBE) refers to the surroundings in

which international companies carry on their businesses. It plays a critical
role in the development and growth of a country.

International business encompasses all commercial activities that take

place to promote the transfer of goods, services, resources, people, ideas,
and technologies across national border.
 Types of Business Environment

• Micro Environnent.
• Macro Environnent.
• Market Environnent.
• Natural Environnent
1. Micro Environment
A microenvironment can be described as a collection of elements that affect the functioning of the
business. It's completely internal and does not include third parties and external vendors.

2. Macro Environment
When a business environment lies outside the market and microenvironments, it is called a
macro business environment. Gross Domestic Product (GDP) Inflation, employment rates, expenditure, and
monetary/fiscal policies are a part of macro environments.

3. Market Environment
A business's market environment combines internal and external factors that influence an
organization's marketing activities. It determines their business strategy and may involve launching specific
campaigns for increased customer acquisition and sales..
4. Natural Environment
• Natural environments refer to a collection of natural resources used by businesses to conduct operations.  For
example, if a business deals with manufacturing, its natural environment would work with elements such as:
• Where the organization procures raw materials/goods from?
• How to deal with natural disasters such as forest fires, tsunamis, and floods
• What products are made using natural materials?
• Steps the business takes to reduce carbon footprint and give back to the environment.
Features of Business Environment
1. External and Internal Forces
• A business environment is created as a result of internal and external forces working together in totality. External
forces can be defined as the key stakeholders whom the organization comes into direct contact with. Stakeholders
are committed to the organization's growth and stay invested in the journey. 
• The company's top management is collectively described as internal forces and members defining the corporate
culture. Middle-level managers are responsible for making important decisions and establishing a level of trust
among subordinates.

2. Uncertainty
• It is very difficult to predict what could happen in the future, especially when multiple changes are taking place. As
in the case of technology trends, many customers choose to use smartphones instead of logging in from their laptops
to view websites. An organization's business environment or online business strategy can change due to this. 
• Other examples of uncertainty are when products become obsolete, and customers move on. A classic example is
women who prefer fusion wear in the fashion industry and those who opt out of buying traditional attires these days.
You can apply this to different industries, business models, and types of business.
3. Complexity
• Good business environments consist of numerous moving components and cannot be classified into one
category. Many dynamic and interrelated forces work in tandem, and it can be difficult to understand how
many variables make it up. A relative influence is given by each component on the entire enterprise, which
means it's easier to understand when you look at every part individually. 
• Every element of a business environment has its own features and characteristics. Removing a part could
impact the organization or improve its functioning, depending on what its role is in the system.

4. Relativity
• The business environment is subject to relativity and can differ from nation to nation. What's viewed as a
unique business environment may seem a failure in other countries. 
• For example, there is high demand for traditional outfits in India, but this demand is dwindling in Japan.
Another instance is the shift from soft drinks to fresh organic juice by beverage companies worldwide.
Business Environment Factors

• Managing business environments requires continuous monitoring and consideration of operational

planning, changes, and different variables. Several internal and external factors are involved and
how to influence company decisions.
• Below is a list of the six key factors that affect business environments.

1. Technological Factors
• As a company develops its business model, it may experience a sharp decline in sales if it doesn't
keep up with the latest technology trends.
• Technology is not limited to sales and can influence communications, billing, inventory
management, and business operations too. Companies that are leveraging automation to eliminate
manual tasks will operate more efficiently than those working in traditional ways.
2. Political and Legal Factors
• Political and legal factors influence how a business operates in that region and whether or not it can continue
functioning. Companies have to follow modern legislation policies, and those that do not will have to modify
their processes in order to stay compliant. Some policies that affect companies range from taxation, import
restrictions, intellectual property laws, employment laws, and tariffs.

3. Demographics
• Companies need to evaluate the demographics of their audience and ensure they are marketing the right
products to them. If customers do not get benefits and pain points aren't addressed, they cannot make the
most of offerings.
• Some demographics that impact business workflows are age, gender, location, nationality, marital status,
income level, level of education, and race.
4. Competitive Factors
Businesses can study their competitors, learn about the latest market trends, and stay ahead of the
competition. By remaining relevant in the industry and providing the best services to clients, they can continue
growing and not worry about losing revenue. Information collected about the market/competition can deliver
insights into their processes. It teaches how to improve products and processes and implement the right
strategies for marketing goods.
5. Social Factors
• Where customers live influences their decision to spend money on a company that sells specific
goods/services. If a business wants to succeed with the crowd, it must understand where the people are
coming from. Social factors include current events, societies, and local communities. 
• Businesses consider social movements and factors to make products more appealing to customers. They have
to cater to customers' specific preferences, values, and ideals to stay relevant.  

6. Global Factors
Global factors influence how a business deals with domestic and international issues. Social and cultural norms
are tied to global factors, and business leaders need to develop the right training programs for employees.
Business firms aim to develop a good array of products/services. Without being aware of global challenges, this
is not possible. The more customer economic status and global issues are considered, the better the quality of
products becomes. Additionally, it makes the business approachable to larger audiences and expands upon
targeted demographics.
Conclusion:

Business environments bring many job opportunities to employees and help firms
deal with a variety of challenges, pitfalls, and setbacks. They prepare them for the
future, teach them how to properly utilize resources, and cope with difficulties.