International Business Environment

Sachin Kumar
Learning
Outcome

After this Lecture, you will be able to

• Classify the various types of risks while undertaking
an international assignment.
• Illustrate recent world trade and foreign investment
trends.
Gary Cohn Once Said…

If you don’t invest in risk

management, it doesn’t matter
which business you are in, it’s
a risky business.

Gary Cohn
Risks Associated with International Business
• Cultural Differences • Currency Exposure
• Negotiation Patterns • Assets Valuation
• Decision Makin Style • Foreign Taxation
• Ethical Practices • Inflationary and Transfer
Pricing

Currency
Cross
(Financial)
Cultural Risk
Risk

Commercial
Country Risk
Risk

• Weak Partner • Government Intervention

• Operational Problems • Social and Political Unrest
• Timing of Entry • Legislation
• Competitive Intensity • Bureaucracy and Corruption
• Poor Execution of Strategy • Lack of safety for IPR
https://www.thehindu.com/opinion/editorial/serious-allegations-on-canadian-prime-minister-justin-trudeaus-charges-against-india/article67323180.ece
https://www.livemint.com/market/stock-market-news/indiacanada-news-canada-pension-fund-investment-stood-at-21-billion-in-about-70-listed-stocks-
in-2022-11695195915381.html
https://www.livemint.com/companies/news/mahindra-and-mahindras-canada-based-associate-resson-aerospace-files-for-a-voluntary-windup-
11695273951852.html
PESTEL Analysis

• A PESTEL analysis is an acronym for a tool used to identify

the macro (external) forces facing an organisation.

• The letters stand for Political, Economic, Social,

Technological, Environmental and Legal.

• Depending on the organisation, it can be reduced to PEST or

some areas can be added (e.g. Ethical)
PESTEL Analysis

• A PESTEL analysis is an acronym for a tool used to identify

the macro (external) forces facing an organisation.

• The letters stand for Political, Economic, Social,

Technological, Environmental and Legal.

• Depending on the organisation, it can be reduced to PEST or

some areas can be added (e.g. Ethical)
PESTEL Analysis

• A PESTEL analysis is an acronym for a tool used to identify

the macro (external) forces facing an organisation.

• The letters stand for Political, Economic, Social,

Technological, Environmental and Legal.

• Depending on the organisation, it can be reduced to PEST or

some areas can be added (e.g. Ethical)
PESTEL Analysis

Political

Legal Economic

PESTEL
ANALYSIS

Environmental Social

Technological
G20 Priorities

Green Inclusive
Development Growth

Technological
Focus on SDG
Transformation

Multilateral Women Led

Institutions Development
Trends for Trade in Goods and Services
India Tariff Rates
Global Status of FDI Trends -FDI Inflows (Billion
Dollars)
India Foreign Direct Investment 1970-2023
FDI inflows by Region

Source: Statistica
That’s all for now…