Doing Business in other Countries

Global Environmental Scan

Important when considering businessChanges cause investors to be waryNew laws can form

Government Stability

If you are going to do business in other countriesNeed to know trade lawsTax/tariffs

Domestic laws need to be followed by foreign companiesEx) Toys cannot be advertised in Greece

Trade Regulations and Laws

InfrastructureRoads, buildings, telecommunications, etc.

Labor ForceConsider cost and quality of laborEducation and skill levels of workersEx) India has been supporting technology

education and has a pool of skilled workers

Economic Factors

Standard of LivingEx) when Honda entered China’s consumer

market, it recognized that most Chinese people could not afford cars. The company targeted the motorcycle market instead.

Foreign Exchange RateExchange rates vary everydayCan have a big affect on company profits

Eco Factors Cont.

Language and SymbolsEx) In the US the number 13 is considered

unlucky. Many hotels do not have a 13th floorIn China and Japan the number 4 is unpopular

because it relates to deathHolidays and Religious Observances

In India the cow is sacred so little beef is soldMcDonalds instead sells Chicken, Fish, and Vegi

burgers

Socio-Cultural Factors

Social and Business EtiquetteA common practice in one country might take

on a different meaning elsewhere.Example: Gift giving might be considered part

of business in the Far East, but in the US or Canada it could be an illegal bribe.

Socio-Cultural Cont.