factors affecting international business

By • Nikhil Nitin Wagh

: • Aniket Bhagwat Deokar
• Jitendra Nitin Thakur
• Abhishek Ravindra Shahane
• Mokshada Satyjit Sasane
• Kaveri Gorakshnath
M ungase
 Introduction
International business refers to the economic activities that involve
transactions between entities (individuals, companies, or governments) from
different countries. This includes trade of goods and services, investments,
and other forms of business collaborations.
International business is important for several reasons. Firstly, it provides
opportunities for businesses to expand their customer base and tap into new
markets, thereby increasing their revenue and profits. Secondly, it allows
countries to benefit from specialization and comparative advantage, leading to
a more efficient allocation of resources and increased productivity. Thirdly,
international business can promote cultural exchange and mutual
understanding between nations, leading to greater global cooperation and
peace.

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 Environmenta Cultura
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 Political Factors

Government policies, trade agreements, political stability,

and legal systems

Example: The United States' recent trade policies,

including tariffs on Chinese imports, affect businesses'
ability to import and export goods with China.

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 Economic Factors

Currency exchange rates, economic growth, inflation, and

consumer behavior

Example: A company that sells luxury goods may have

lower sales in a country experiencing economic downturns
because consumers are less likely to make non-essential
purchases.

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 Cultural Factors

Communication styles, customs, beliefs, and values

Example: A fast-food chain expanding internationally must

adapt its menu and marketing strategies to appeal to local
cultural tastes and preferences.

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 Technological Factors:

Access to technology, infrastructure, and innovation

Example: An e-commerce company must ensure that its

website and payment systems are compatible with the
technology and infrastructure available in the countries
where it operates.

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 Environmental Factors

Climate change, natural resources, and sustainability

Example: A company in the fashion industry must consider

the environmental impact of its production and supply
chain to maintain sustainability standards and meet
consumer expectations.

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 Legal Factors

Intellectual property laws, labor laws, and regulations

Example: A pharmaceutical company must navigate

complex legal frameworks and regulations in different
countries to protect its patents and bring new products to
market.

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 Conclusio
n
In short, companies need to consider a
variety of factors such as politics, economics,
culture, technology, and the environment
when conducting international business. By
doing so, they can minimize risks and take
advantage of opportunities in different
markets, leading to greater success in the
long run.

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Thank
you