Question

Mention 4 major categories of the international business environment. Mention and explain each of them.

Answer 1

Q) Mention 4 major categories of the international business environment. Mention and explain each of them.

Ans- International business environment, this concept is arrised in order to understand various factors involved like social & culture, economic, legal and political which we should know before starting an business internationaly. This study will keep us aware of risk factor in foreign market.

Lets try to understand the foremost 4 categories as mentioned:

(a) Political Environment- This help us to understand the government and their policies involved with a business to start in their territory. This study will help us about the restrictions and level of risk offered by government.

(b) Economic Environment- To understand this we/business must know the per capita income and National Income of that economy. This also includes cost & availability of raw material and the skills sets of labour or manpower.

(c) Technological Environment- This factor helps to know the level of technology and material used in the production of goods and services. Nowadays most of the economy have the good level of acceptance towards new technology.

(d) Cultural Environment- Cultural factor is a very important, as different economy have their own cultures and faith in it. For Eg: In European countries people prefer coffee during breakfast & in China we see people prefer boiled vegetables. So the business have to understand the lifestyles and religious factors of the economy.