The document discusses the international business environment and its key elements. It defines international business environment as the surrounding in which international companies operate and notes it plays a critical role in a country's development. The international business environment involves political risks, cultural differences, exchange risks, and legal/taxation issues. It identifies the main types of international business environments as political, economic, technological, cultural, and competitive. Each type is then discussed in more detail regarding its key factors and how they should be considered by organizations operating internationally.

1. International Business
Environment
BACC 6
November 4, 2022

2. International trade is the purchase and sale of
goods and services by companies in different
countries.
What is International Trade?

3. International Business Environment
● refers to the surrounding in which
international companies carry on their
businesses.
● plays a critical role in the development and
growth of a country.

4. International Business Environment
Benefits:
● Helps in expanding the business,
● Exposure to more customers
● Helps in the proper management of the
product life cycle and
● Helps in mutual growth

5. International Business Environment
Involves different aspects:
● political risks;
● cultural differences;
● exchange risk; and
● legal and taxation issues

6. Types of International Business Environment
● Political Environment
● Economic Environment
● Technological Environment
● Cultural Environment
● Competitive Environment

7. Types of International
Business Environment

8. Political Environment in International
Business
➔ The political risk, the government’s
relationship with a business, and the type of
government in the country

9. Political Environment in
International Business
● Political system of the business
● Approach of the government towards
business
● Incentives and facilities offered by the
government
● Legal restrictions for licensing
requirements and reservations to a
specific sector
● Restriction on importing capital goods,
technical know-how and raw materials
● Restrictions on exporting services and
products
● Restrictions on distribution and pricing
of goods
● Required procedural formalities in
setting the business
An organisation needs to take into
account the following aspects while
planning a business plan for the
overseas location:

10. Economic Environment in International
Business
➔ The factors contributing to the country’s
attractiveness to foreign businesses.
➔ Differ from one nation to another

11. Economic Environment in International
Business
➔ Better infrastructure, education, healthcare,
technology, etc., signals high levels of economic
development
➔ levels of economic activities combined with
infrastructure, education, and the degree of
government control affect the facets of doing a
business.

12. Economic Environment in International
Business
Countries are divided into three main economic
categories:
● more industrialised or developed
● less developed or third world
● newly emerging or industrialising economies

13. Economic Environment
in International
Business
● Economic system to enter the
business sector
● Stage and pace of economic growth
● Level of national GDP and per capita
income
● Incidents of taxes, direct and indirect
tax
● Available infrastructure facilities and
the difficulties
● Availability of components, raw
materials and their cost
● Sources of financial resources and
their costs
● Availability of workforce, managerial
and technical workers, their salary and
wage structures
While analysing the economic
environment, an organisation intending
to work in a particular business sector
should consider the following aspects:

14. Technological Environment in International
Business
➔ Includes factors related to the machines and
material used in manufacturing services and goods
➔ A significant aspect of the international business
environment is the level and acceptance of
technological innovation in countries

15. Technological Environment
in International Business
● Level of technological
developments in the country
as a whole and specific
business sector
● Pace of technological changes
and obsolescence
● Sources of technology
● Facilities and restrictions for
technology transfer
● Time taken for the absorption
of technology
In analysing the technological
environment, the
organisations should consider
the following aspects:

16. Cultural Environment in International
Business
➔ One of the crucial components
➔ Most difficult to understand
➔ described as a commonly held and shared
body of general values and beliefs that
determine what is right for one group

17. Cultural Environment in
International Business
● Approaches to society towards
business in specific and general areas
● Influence of cultural, social, and
religious factors on the acceptability of
the product
● Lifestyle of people and the products
used by them
● Level of acceptance and resistance to
change
● Demand for a specific product for a
specific occasion
● Values attached to particular products,
i.e. possessive or the functional value
of products
● Consumption pattern of the buyers
While analysing cultural
factors, the organisation
should consider the following
aspects:

18. Competitive Environment in International
Business
➔ Differs from country to country
➔ The political, economic, and cultural
environmental factors help determine the
degree and type of competition that exists
in a country
➔ Competition can come from various sources

19. Thank You!
“And we know that God causes all things to work together for good to
those who love God, to those who are called according to His purpose.”
- Romans 8:28

20. Activity: Analyzing the International Business Environment
Choose a company:
1. Apple
2. McDonald’s
3. Coca-Cola
4. Google
5. Amazon.com
6. San Miguel Corporation
7. Nestle Philippines
Incorporated
8. Accenture
9. Shell Philippines
10. Procter and Gamble
Philippines
11. SM Investments
Corporation
12. ABS-CBN Corporation
13. BDO Unibank
14. Unilever Philippines
15. Jollibee Foods Corporation