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ECONOMIC ENVIRONMENT
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ECONOMIC SYSTEM
ECONOMIC SYSTEM IS THE SYSTEM OFPRODUCTION, DISTRIBUTION ANDCONSUMPTION OF GOODS AND SERVICES OF ANECONOMY
IT ADDRESSED THE PROBLEM OF ECONOMY LIKESCARCITY THROUGH ALLOCATION OF FINITEPRODUCTIVE RESOURCES
ANOTHER WAY OF CLASSIFYING COUNTRIES ISTHEIR ECONMIC SYSTEM
KEEPING THIS IN MIND COUNTRIES ARECLASSIEFIED AS MARKET ECONOMIES,COMMANDECONOMIES AND MIXED ECONOMIES.
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TYPES OF ECONOMIC SYSTEM
1. PLANNED ECONOMY/COMMAND ECONOMY
2. MARKET BASED ECONOMY/ MARKET
ALLOCATION
3. MIXED ECONOMIC SYSTEM/ MIXED
ALLOCATION
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1. PLANNED ECONOMIC
SYSTEM/COMMAND ALLOCATION
ALSO KNOW AS CENTRALLY PLANNED ECONOMY STATE HAS BOARD POWERS TO SERVE THE PUBLIC
INTREST
THESE INCLUDE DECIDING WHICH PRODUCT TO
MAKE AND HOW TO MAKE CONSUMERS ARE FREE TO CHOOSE THE
PRODUCT FROM AVAILIABLE PRODUCT, BUTDECISIONS ABOU WAT TO PRODUCE IS MADE BY
THE STATE PLANNERS. ADVERTISING,PROMOTION DISTRIBUTION IS
HANDLED BY THE GOVT. TO CUT EXPLOITATIONBY INTERMEDIARIES.
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2. MARKET BASED ECONOMY/
MARKET ALLOCATION
IT IS THE SYSTEM WHICH RELIES ON
CONSUMER TO ALLOCATE RESOURCE.
CONSUMER MAKE DECISION WHAT WILL BE
PRODUCED BY WHOM
ROLE OF STATE IN A MARKET ECONOMY IS TO
PROMOTE COMPETITION AND ENSURE
CONSUMERS PROTECTION
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3.MIXED ECONOMIC SYSTEM/ MIXED
ALLOCATION
IT REPRESENTS A MIXTURE OF STATE
CONTROL ON ONE HAND AND THE ECONOMIC
FREEDOM OF ENTREPRENEURS AND
CONSUMERS ON OTHER IS THE NATURAL
OUTCOME.
GNP PER CAPITA PROVIDES A VERY USEFUL
WAY OF GROUPING THESE COUNTRIES.
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IMPACT OF ECONOMIC ENVIRONMENT
ON INTERNATIONAL BUSINESS
1. THE CURRENT STATE OF GLOBAL ECONOMY AND WAT ITIS LIKELY TO BE IN THE NEAR FUTURE.
2. DEMAND DYNAMICS FOR A PARTICULAR PRODUCT IN AGIVEN MARKET.
3. SUPPLY SITUATION OF A PARTICULAR PRODUCT ORSERVICE AT A PARTICULAR TIME.
4. FACTORS AFFECTING PRICING OF A PRODUCT ANDSERVICES
5. COMPETITION IN A MARKET
6. SHORT TERM AND LONG TERM PROFITABILITY7. DEPRESSION OF ECONOMIES THAT RESULT IN RISE OR
DECLINE OR STABILITY IN ECONOMIC GROWTH RATES ATGLOBAL AND NATIONAL LEVEL
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AVAILABILITY OF FDI AND FII
REGULATION AND MANAGEMENT OF
NATIONAL ECONOMIES
WORLD FOOD PRODUCTION LEVELS AT A
PARTICULAR TIME
RATE OF INFLATION IN AN ECONOMY
EXTENT OF LPG
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CULTURAL ENVIRONMENT
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INTRODUCTION
IT IS ONE OF THE CRITICAL COMPONENT OF IB
AND DIFFICULT TO UNDERSTAND.
BECAUSE IT IS HAS DIFFERENT SHARED VALUES ,
BELIEF WHAT IS RIGHT FOR ONE GROUP.
NATION CULTURE IS BODY OF GENERAL BELIEF
AND VALUES THT IS SHARED BY NATION .
WHICH INCLUDES HISTORY,LANGUAGE,RELIGIONGEOGRAPHIC LOCATION, GOVERNMENT AND
EDUCATION.
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CULTURE IS SYSTEM OF VALUE AND NORMS THAT
ARE SHARED AMONG A GROUP OF PEOPLE AND
THAT WHEN TAKEN TOGETHER CONSTITUTE A
DESIGN FOR LIVING.
VALUE MEANS ABSTRACT IDEA ABOUT WHAT A
GROUP BELIEVES TO BE GOOD, RIGHT AND
DESIRABLE. NORMS MEANS THE SOCIAL RULES AND
GUIDELINES THAT PRESCRIBES APPROPRIATE
BEHAVIOUR IN PARTICULAR SITUATIONS.
SOCIETY MEANS USED TO REFER TO A GROUP OFPEOPLE WHO SHARE A COMMON SET OF VALUE
AND NORMS.
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COMPONENTS OF CULTURE
1. LANGUAGE
2. ATTITUDE AND VALUES
3. SOCIAL ORGANISATION4. EDUCATION
5. TECHNOLOGY
6. POLTICAL SYSTEM7. LEAGAL SYSTEM
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CHARACTERISTICS OF CULTURE
CULTURE IS PRESCRIPTIVE
CULTURE IS SOCIALLY SHARED
CULTURE FACILITATES COMMUNICATION CULTURE IS LEARNED
CULTURE IS SUBJECTIVE
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IMPACT OF CULTURE ON
INTERNATIONAL BUSINESS
CULTURE DETERMIES GOODS AND SERVICES
CULTURE DETERMINES ATTITUDE TO WORK
CULTURE AND GLOBAL BUSINESSS CULTURE AND COMPETITIVE ADVANTAGE
CULTURE STRATEGY.
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INTRODUCTION
ENVIRONMENT IN WHICH THE FIRM OPERATESWILL HAVE A SIGNIFICANT IMPACT ON ACOMPANYS INTERNATIONAL MARKETINGACTIVITIES.
GREATER THE LEVEL OF INVOLVEMENT IN AFOREIGN MARKETS, THE GREATER THE NEED TOMONITOR THE POLITICAL CLIMATE OF THECOUNTRIES BUSINESS
CHANGES IN GOVT. RESULT IN CHANGES INPOLICY AND ATTITUDE TOWARDS FOREIGNBUSINESS.
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POLITICAL SYSTEM IT IS A SYSTEM OF POLITICS AND GOVERNMENT
IT IS USUALLY COMPERED TO THE LAW SYSTEM,ECONOMIC SYSTEM, CULTURAL SYSTEM ANDSOCIAL SYSTEM
THE SYSTEM OF GOVT. IN A NATION HAS IMPACTON BUSSINESS
TYPE AND STRUCTURE OF GOVT. PREVIALING IN ACOUNTRY DECIDES,PROMOTES,ENCOURAGES,DIRECTS,CONTROLS
THE BUSSINESS OF THAT COUNTRY A POLITICAL SYSTEM THAT IS
STABLE,HONEST,EFFICIENT AND DYNAMIC WHICHENSURES POLITICAL PARTICIPATION TO THE
PEOPLE AND SECURITY TO THE CITIZENS
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CLASSIFICATION OF POLITICAL SYSTEM
1. PARLIAMENTARY GOVT.
2. ABSOLUTIST SYSTEM
3. TWO PARTY SYSTEM4. MULTI PARTY SYSTEM
5. SINGLE PARTY
6. DOMINATED ONE PARTY
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TYPES OF POLITICAL RISK
1. GENERAL INSTABILITY RISK
2. OPERATION LIST
3. OWNERSHIP RISK4. TRANSFER RISK
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IMPACT OF POLITICAL ENVIRONMENT
ON INTERNATIONAL BUSSINESS
1. POLITICAL IDEOLOGY OF GOVT.
2. POLITICAL STABILITY IN A COUNTRY
3. RELATIONS OF GOVT. WITH OTHERCOUNTRIES
4. POLICIES TOWARDS INTERNATIONAL
BUSSINESS/MNCS
5. GOVT. CONTROL AND RESTRICTIONS
6. TREATEMENT OF FOREIGN INVESTERS
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LEGAL ENVIRONMENT
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INTRODUCTION
THE COUNTRYS LEGAL SYSTEM IS THE MEANS AND
METHOD THAT IT USES TO REGULATES BUSSINESSPRATICES,DEFINE HOW COMPANIES CONDUCTSBUSSINESS TRANSATIONS .
THE LEGAL ENVIRONMENT REGULATES THEOPERATION OF FIRM IN INTERNATIONAL MARKETS
IN IB ,DISPUTES ARE COMMON ,TO RESOLVEDIFFERENCES BETWEEN COUNTRIES ,ALL THE MEMBERNATIONS OF THE WTO HAVE ESHTABLISHED A DISPUTE
SETTLEMENT BODY. IT IS A FINAL AUTHORITY AND PASSES RULING AND
FRAME REGULATION ON DISPUTE BETWEEN THECOUNTRIES.
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INTERNATIONAL MARKETINGIS
AFFECTED BY THREE BODIES OF LAW
1. INTERNATIONAL LAWS
2. HOME COUNTRY LAWS
3. HOST COUNTRY LAWS
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KINDS OF LEGAL SYSTEM
1. CODE LAW
2. COMMON LAW
3. THEOCRATIC LAW
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ISSUES IN LEGAL ENVIRONMENT
1. BRIBERY
2. BRANCH VS SUBSIDIARY
3. COUNTERFEITING
4. STRATEGIC CONCERNS
PRODUCT SAFETY AND LIABILITY
MARKETPLACE BEHAVIOUR
PRODUCT ORIGIN
LEGAL JURIDICTION
ARBITRATION
5. GRAY/GREY MARKET
IMPACT OF LEGAL ENVIRONMENT ON
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IMPACT OF LEGAL ENVIRONMENT ON
INTERNATIONAL MARKETING.
1. DEREGULATION
2. GLOBALISATION
3. CONCERN FOR NATURAL ENVIRONMENT
4. INTELLECTUAL PROPERTY5. PRODUCT LIABILITY AND SAFETY
6. COMPETITION AMONG BUSINESS
7. BRIBES AND CORRUPT PRACTICES
8. ADVERTISING AND SALES PROMOTION
9. CONTRACTS
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