Economic

Social

Technological

Legal and regulatory

Environmental and ethical

Political


The political makeup of a country will impact a business’s ability to trade as communist countries such as China have stricter rules and regulations for foreign countries wishing to trade their country than democracies such as the USA and UK.

Political parties left and right will also impact a countries openness to international trade and the policies they put in place will either encourage or discourage international trade from happening.


A countries tax policy can impact the attractiveness of that country to businesses wanting to set up operations there. Tax is a legal factor but is impacted by politics.

Corporation tax rates 2021:

•UK – 19%

•Brazil – 34%

•Ireland – 12.5%

•Isle of Man – 0%

Economic


Economic factors greatly impact the success or failure of international business and again their choice of where to trade internationally.

Factors such as:

•Economic growth or decline

•Interest rates

•Exchange rates

•Inflation

•Employment/unemployment

All these can influence a business’s decision of where to trade or whether to trade internationally at all. These external economic factors can either make international trade 

Two of the key reasons for such a rapid expansion in global trade is:

•The influence of the internet

•Having variety of international payment methods

Each of these have supported the increase in international business and made it simpler to trade internationally.

The internet has meant that communication is now easier and quicker but also it has made business processes much more efficient.

Information Exchange The way that small businesses exchange information has changed drastically since the Internet has become popular. Small businesses did not have the financial resources to arrange large meetings with suppliers or developers that would require air travel and accommodation expenses. Now, through email, online video conferencing and document-exchange websites, small businesses can collaborate with developers and vendors all over the world inexpensively and with a full exchange of necessary information

Marketing One of the more significant effects that the Internet has on global markets for small business is the ability for small businesses to reach an international audience for a very low cost. A corporate website can become a marketing resource for a company that can be accessed by anyone in the world. Social networking websites allow companies to interact with millions of potential clients worldwide at no cost. 

Monitoring The Internet allows small business owners to be more mobile by making it easier to manage a business from anywhere. A small business owner on a business trip can stay in real-time contact with his office through an online chat function and exchange important documents with anyone from any location in the world. The Internet has allowed small business owners the freedom to pursue business opportunities while still maintaining control over their businesses. 

 

•Email – speeds up communication

•Google translate and other translating services

•Whatsapp – allows collaboration and free!

•Cash in advance

•Letters of credit

•Open account

•Consignment

•International credit cards

•International bank transfers

•Commercial payment systems

•Religion & beliefs
People of certain religions and beliefs may impact the types of goods or services a business provides. It may rule them out of trading in that country but may also mean that they have to adapt their product to enter that market. McDonald’s tends to adapt their menu to meet local tastes in order to trade successfully in different countries.

•Family structure

•Spending & Saving habits

•Income

•Consumer tastes/preferences

These will differ by country and have the potential to impact a business’s success in a particular country. 

Being able  to communicate with customers employees and clients would be important 

Attitudes to business
Social structure
The class society , working class , middle class etc and their are 7 classes in total in the UK and it has a difference on how you run your business
Religion 
Values
Attitude to work
Openness to change 
Ethnic make up of populations 

◦send workers to a different country to work

◦employ a local workforce

◦have some workers in one country and some in another

Workforce practices

 Daily operating practices, such as health and safety have a major impact on the reputation of a business, why is this?

 

 How does this link to the business’ management style? How does the country the business operate in affect workforce and management practices? Think of the overall culture of the country.

Organisational culture

 “This is how we do things around here” 

 

 The organisational culture is impacted by the countries’ overall culture, why is this? Can an international business maintain their organisational culture in other countries?

LOCAL CULTURE

Local culture will also affect the way any international business operates in a country. This is because different cultures and people have different ideas and tastes.

Local culture also affects the days of the week, working hours and lunch.
FOR EXAMPLE: In Christian countries, it is common to have Saturday and Sunday as the weekend. But in Islamic countries, most people have their weekends on Friday and Saturday. Friday is a day of prayer and Saturday is the second day of the weekend.

Marketing strategies and brand name

Sometimes it is possible for businesses trading internationally to use the same advertising and brand names (McDonald’s) but not possible in some instances (Schwarzkopf Hair Care products translates as ‘Black Head’ Hair Care in English). You need to be aware of expressions/idioms that may cause confusion.
FOR EXAMPLE: ‘It’s raining cats and dogs’

Advertising

This varies from country to country.
FOR EXAMPLE: In Islamic countries, women who advertise are seen with their hair and shoulders covered but not in UK/USA.

Cultural differences such as views relating to the role of women, homosexuality and ageing play a major role on how advertising takes place.

Hand gestures are important.
FOR EXAMPLE: The ‘thumbs up’ sign in the UK/USA is a positive gesture but in the Middle East, it is an insult and would upset the local people.

This strategy seems to have worked considering China’s current economic growth. After the launch of the ambitious program, China’s real economic growth shot to an average of 9 percent as compared to the 6 percent before 1978. In most of the peak years after 1978, the growth actually reached 13 percent (Bramall 366). It is not only China’s economy that has greatly improved, but also her capita income, which has almost quadrupled.

The growth has thus seen improvements in infrastructure development and provision of social amenities, which has attracted many investors in the region. However, operations of many business establishments in the region face many economic challenges, which if not considered may throw them out of business. The economic factors that influence business operations are Foreign Direct Investment, Inflation Rates, Infrastructure, and Currency & Exchange Rate.

With this population comes an extensive market for international companies. As companies scramble for the Chinese market share, they soon realize the need to understand and embrace the culture of the Chinese to win their trust and make sales. The main cultural influences in China include Taoism, Confucianism, and Buddhism (Tang 65).

The business in China is mostly relationship driven. Therefore, doing business in China demands developing a good relationship with the people and understanding their culture. It is hard to make a sale by simply presenting a product to potential buyers without developing the relationship first.

This is contrary to western cultures where businesspersons make sales first and then develop relationship later. Understanding of Chinese culture and its influence on business operations require analysis of cultural elements such as ethnic language groups, social structure, religion, education, economic philosophy, and political philosophy.

The Constitution establishes a federal democratic republic form of government. That is, we have an indivisible union of 50 sovereign States. It is a democracy because people govern themselves. It is representative because people choose elected officials by free and secret ballot. It is a republic because the Government derives its power from the people.

The purpose of our Federal Government, as found in the Preamble of the Constitution, is to "establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity." In order to achieve this purpose the Founding Fathers established three main principles on which our Government is based:

 

The USA is a multi-party system, with two major political parties: the Democratic Party and the Republican Party. The Democratic Party is generally considered to be more liberal, while the Republican Party is generally considered to be more conservative. There are also several minor political parties in the country.
The USA enjoys a stable political climate, even though there have been some challenges recently. It also has an enormous influence over the political dynamics of many countries around the world. However, the USA faces international criticism for some of its interventionist policies in some parts of the world.

 

The USA advocates and promotes democracy around the world. With a stable political environment, advanced infrastructure, and technology, it positions itself as a great destination for foreign direct investment.

 

Consequently, the country has been the first choice for many multinational companies for foreign direct investment for a long time. However, countries such as China, India, Brazil, Turkey, Nigeria, South Africa, and many others have come forward as contenders for foreign direct investment.

 

However, the global economic landscape is changing very rapidly which is a challenge for the USA. There is no doubt that it is an economic superpower and world leader. However, it may turn out to be the 3^rd in the global ranking by 2050 in terms of gross domestic product by purchasing power parity.

 

The USA has a strong manufacturing sector, which is responsible for producing goods such as cars, electronics, and machinery. Its service sector is composed of industries such as finance, healthcare, and hospitality.

 

Some of the top exports of the USA are refined petroleum, crude petroleum, cars, integrated circuits, and vehicle parts that largely go to countries such as Canada Mexico, China, Japan, and Germany.

 

The USA is one of the most highly educated countries in the world. It is home to some of the world’s most prestigious universities, such as Harvard University, Stanford University, and the Massachusetts Institute of Technology.

 

It is also one of the most advanced countries in terms of healthcare. However, health care is not usually free and certainly not cheap for many people.

 

Likewise, police violence, crime, and infant mortality rate are some other issues of grave concerns.  Consequently, the country needs to do a lot more to improve the law and order conditions. 

 

People are generally health conscious; however, fast food culture has contributed to obesity and other illnesses in the country. A majority of the population has a liberal mindset; however, the country witnessed racial tensions recently which reminded many of the troubled times the country went through by the end of the Second World War.

The USA is also famous for its cuisine, which is a unique blend of traditional American dishes and international flavors. From burgers and fries to tacos and burritos, it has something for everyone. It also has a vibrant entertainment scene, with a wide range of activities and events, from sporting events to concerts to amusement parks.

 

The USA is very well known for social mobility though a decline was noticed in the last ten years. Social mobility refers to the upward or downward movement of people from one social class or economic level to another. In other words, it is a change in a person’s socio-economic situation (OECD, 2023).

 

The USA has been at the forefront for adapting and applying technologies in a wide variety of fields. Technologies have indeed changed the ways many things are done.

 

Many jobs have been transferred from the USA to other countries and production facilities have been relocated. While this has helped companies reduce their production costs, it has also made many Americans upset.

 

The rate of technological innovation and change is extremely rapid in the USA. However, the country faces strong challenges from a number of countries e.g. China, South Korea, and India.