The Internal

8/12/2019 The Internal

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The Internal & External Factors of GlobalizationBy Ben Taylor, eHow Contributor

International companies must consider several internal and external

factors when it comes to globalization.

Globalization is a ubiquitous term that has became increasingly significant following the SecondWorld War. As a function of primarily free economies, globalization allows businesses and

individuals to interact and trade as part of a world economy. It removes traditional geographicand political boundaries to commerce, staging the entire world as a theatre for business. Such

staging has internal and external affects on various segments of a business, including companybranding, employee capabilities, and consumer and market analysis.

Globalization Factors

o A global economy opens new markets for both buying and selling; as such, theway companies do business, and the way consumers interact with companies,

must change. These changes are the internal and external factors of globalization.Internal factors of globalization include how the firm changes its practices to

compete on a worldwide scale. Production, development, customer service andmarketing strategies are all internal factors of globalization, according to the

Intelligent Business Plan Software website. External factors include new marketenvironments to which the company must become accustomed, particularly the

nuances of the people and laws to which the company will be exposed.

Company Branding


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o Internally, the company should develop branding strategies that align its logo andexternal presence in a new market with its global image. One approach is to

emphasize the brand's association with quality products and services, according tothe website My Strategic Plan. Company branding needs to spark interest in the

company itself, according to The M Companies. The perceptions worldwide

consumers have of a company and its brands are a prominent factor ofglobalization because a company's brand is often the first thing consumers seewhen they interact with the company.

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Employee Capabilities

o To compete in a worldwide market, companies must internally evaluate the workthat their employees are capable of. Primarily, companies need to ascertain thestrengths and weaknesses of their employees, as well as any problems, constraints

or performance uncertainties that global competition might create, according to

My Strategic Plan. Identifying strengths and weaknesses internally permits the

company to reorganize itself for maximum efficiency and will help the companynegotiate the world economy and the new markets it opens.

Consumer Analysis

o Consumer reaction to a new product or company is paramount when entering anew market. Externally, globalization requires a company to analyze consumptiontrends for several markets, then adapt to what their new customers buy. Analyzing

consumer trends includes segmenting the market into different types of

consumers, identifying a consumer's motivation for buying and ascertaining the

market's unmet needs, according to My Strategic Plan. Such an analysis enablesthe company to create unique offerings for unique consumers, creating a vibrant

presence.

Market Analysis

o Externally, companies in global markets need to understand the market itself.Market analysis helps a company determine the size of the market, how it isgrowing and how to create a presence in the market geared toward profitability,according to My Strategic Plan. Each market will have unique barriers to entry,

including local political or economic uncertainties, the availability of resources,and even the local reaction to a global company.
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1. eHow2. Business3. Business Accounting4. Factoring5. External Factors Affecting a Business

External Factors Affecting a BusinessBy Andrew Button, eHow Contributor

Environmental factors have a major influence on business.

Businesses are affected by many factors, internal and external. The external factors that have thestrongest affect on businesses are typically legal, political and economic. Businesses do not existin a bubble. Rather, they exist as part of a community, in which they are responsible and

accountable stakeholders.

1.Economic Factorso The most important external economic influence on a business is the level of

competitiveness in its market. This factor determines how much profit a company

can make. Other factors, like consumer demand, tax rates and interest rates, affect
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businesses by determining how much people are willing to pay for their products

and how much of the resultant revenue must be given to the government.

Social Factors

o Social factors determine what a business can and cannot do. Businesses thatengage in racist marketing campaigns or abuse their employees may be subjected

to boycotts, divestment campaigns, and other devastating forms of social

backlash. Thus, social mores determine the informal rules that businesses must

play by.

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Legal Factors

o Laws determine the formal rules that businesses have to play by. Business lawsdeal with competition: for example, no monopolies; employment: minimum

wage; and taxation; among other things. Businesses that form illegal monopolies,for example, may be subjected to lawsuits and broken up into smaller businesses.

Because the penalties for corporate malfeasance are so severe, most businesses

take the law very serious.

Political Factors

o Political issues occasionally come to influence the activities of the businesscommunity. Corporations often spend many billions of dollars lobbying to

influence political decision makers for this reason. Businesses may get involved

in politics, for example, when their international operations come under fire fromhuman rights groups, or when a high-profile politician recommends an increase in

corporate taxes.

Environmental Factors

o Environmental factors have profound effects on the way businesses operate. Theavailability of natural resources in a given area determines whether resourcecompanies could profit from operating there. The presence of pollution

determines whether it is safe for businesses to put employees in a certain area.

Environmental laws regulate the extent to which businesses themselves are able topollute.
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1. eHow2. Culture & Society3. Political People & Groups4. Liberals5. Social Factors Affecting Environmental Problems

Social Factors Affecting Environmental ProblemsBy Jen Oda, eHow Contributor

Respect and love for the

environment is the first step to real environmental change.

No other species has created as much for art, invention and scientific discovery as humans. Noother species has caused as much environmental damage as well. Humans have made a supreme

impact on earth for better and for worse. To make a real impact on environmental change people

must understand why they behave the way they do and make changes starting from the inside

out.

1.Speciesismo Introduced by Peter Singer in his 1975 book "Animal Liberation," the concept of

"speciesism" refers to "a prejudice or bias in favor of the interests of members ofone's own species and against those of members of other species." It is the belief

that human life is superior and more valuable than other forms of life on earth.

Speciesisim justifies the unchecked use, manipulation, destruction and killing of
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other lifeforms and landforms in order to satisfy even the most trivial of human

desires. Speciesism, therefor, is a problematic societal factor in affecting positive

environmental change. Only a holistic understanding of the intrinsicinterdependence of all species on earth helps solidify the necessity for respect of

all life forms. All humans, plants and animals depend on each other to survive and

maintain a healthy balanced ecosystem. By destroying the natural resources ofone species the whole is adversely affected.

Consumerism

o According to the Worldwatch Institute's "State of the World 2004: Special Focus:The Consumer Society," consumerism is an unsustainable way of life. It places

unnecessarily heavy demands on natural resources and does not allow enough

time for regrowth. High demands encourage unsustainable production methodscausing large amounts of pollution and destruction to the environment.

Consumerism also promotes inequality amongst the human population. Chapter

one of "State of the World: 2004" states that 60 percent of the world'sconsumption is used by only 12 percent of the world's population while 2.8 billion

people struggle to survive on two dollars a day. If the consumer mentality evolved

to more sustainable methods of production improvements in both social andenvironmental change would follow suit.

o

Big Business

o The Washington Post, February 2011 article titled "House GOP Targets ObamaRegulations" states that chief executive officers of major corporations are

opposed to the new environmental government regulations to curb carbon dioxide

emissions from big businesses because they fear it will hinder "job creation andeconomic recovery." Radical changes in big business production methods could

initially eliminate jobs that are contributing to the destruction of the water, air and

land. Adhering to strict environmental regulations could also cost corporationsbillions of dollars to institute sustainable production methods, endangering

thousands of jobs. For these reasons, the White House and corporate executives

strive to reach a balance between the corporate world and the world ofconservation and protection.

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