Answer:
Answer explained below
Explanation:
Environmental Forces in International Markets
For many firms the question is not should we go overseas, but instead it is when should we go overseas. Examples of these firms include discount variety stores such as Wal-Mart or other firms like fast food restaurants such as McDonald's. The ability to spread their business to new places offers a whole new risk but with this risk comes the potential of great return. These firms however, must pay close attention to the environmental forces in international markets. These forces include socio-cultural, economic, and political, legal. and regulatory. Each of these forces has their own impact on how successful or how unsuccessful a firm can potentially become.
As we look at socio-cultural forces firms need to keep in mind that not ever place in the world thinks that same way that they do, and in this event they need to carefully study the behaviors of the people they will be presenting their business to. In an effort to do this firms must carefully know the culture of the people that will be shopping at their stores and tailor their business to fit their lifestyles. Examples of this can be seen though McDonald's. Some countries are more health conscience than others and if McDonald's wants to be successful overseas it must change its menu accordingly.
Modes Of Entry Into International Markets
Factors Influencing FDI
Foreign direct investment not only brings in capital, it also brings in latest technologies and modern management practices. Such investments are crucial to ensue that any country's industries would be able to create products and services in future that can be sold in international markets. As such FDI is important not just for the developing countries, it is also equally important for developed nations.Industrialized nations are among the largest recipient of FDI. Factors that are important for a country to attract FDI are give in the following;
Supply factors:
Lower production costs for certain products / industries compared with other countries attract foreign investment in those industries. Better logistics, warehousing and transportation infrastructure and systems (by air, sea or overland) also attract foreign direct investment. Abundant availability of natural resources and other factors of production lead to cheaper prices of these resources and may attract foreign direct investment.Firms also make foreign direct investment in foreign countries to access to key technologies
Demand factors:
Closer and good customer access also factors to bring in foreign direct investment. Advantages in marketing, being closer to customers, may also bring in FDI Firms may need to establish operations in foreign markets for exploiting of competitive advantages. Companies that have strong global brands may want to have full control over their brands in world markets and my engage in FDI for preservation of brand names and trade marks. Customers of firms are also often traveling / moving to foreign countries. Firms may also need to establish operations in foreign countries due to their customers mobility
Political factors:
Firms may also invest in foreign countries for avoidance of any trade barriers posed by the home of host countries. Home country or foreign country government may provide economic development incentives for FDI, encouraging firms to invest overseas
Name an international company.
Apple
Share with the class the ways a U.S. company is affected by a global market, including the international trade system, economies, governments, and cultural factors. Also discuss the different ways a company can enter international markets
The business world today is interconnected and interdependent as never before. The severity with which a crisis in Greece, a country that accounts for less than .5% of world
