International-Business-Dr-R-Chandran-E-book

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38 International Business- Dr. R. Chandran percentage of the population can afford to buy premium products. Since this does not represent the purchasing power of the whole country, the revenue is minimum. 8. Economic diversity In the same country, a few urban centers may offer outstanding business opportunities, while in remaining areas there is no demand at all. Nairobi I Kenya, Lusaka in Zambia, Johannesburg in South Africa, Sao Paulo in Brazil and Casablanca in Morocco are cities with the highest purchasing power and demand for refrigerators, air conditioners, TV sets etc. However in other parts of the country, there is hardly any opportunity to do business. In Madagascar, despite the fact that it is a highly resourceful country, one can not get even the basic item for survival, exept in two cities, Tamatave and Antamarino. c) ECONOMY AT A GOBAL LEVEL Besides the home country and the Host country, there are certain other factors, which can influence the pattern of international business. Organizations such as the World Trade Organization, World Bank, International Monetary Fund, Asian development bank and the organization of petroleum Exporting countries (OPEC) can affect international business. The preferential treatment given to the members of NAFTA, ASEAN, the European Union and COMESA can have a negative impact on the trade between outside cartels and non-members. When shipments move from one destination to another, there are transit ports which charge huge sums as surcharge or transit charges. Only for Private Circulation
SOCIAL ENVIRONMENT 39 International Business- Dr. R. Chandran The social environment encompassing religious aspects, language, customs, traditions and beliefs, influences buying consumption habits. Many companies face failure in foreign countries, due to their inability to understand the socio cultural environment. For example whenever any company establishes business in some African countries, the local population expects that many jobs will open up for them. Very few countries perceive tat they may be exploited. Due to the entry of foreign firms the economic and hence the social environment of an area can completely change. An example is southern China, which has completely changed to an affluent society due to the fact that almost 2000 companies get their products manufactured in coastal south China. 1. National Taste In Thailand, People prefer black shampoo; Nestle brews different varieties of instant coffee because people in those countries have different tastes, uncommon in other countries. Green is the favorite color of all the Arab countries; Red is still widely used in Russia, in banners, posters, and hoardings although communism is in no way relevant to modern Russia. 2. Language Cross culture and cross border operations call for necessary language skills, e.g. South Koreans have learnt Indian languages to operate in India. One can see this in Hyundai or LG factories in India. Companies also have to change their brand names and slogans in different countries. In Japan, General Motor’s slogan “body by fisher” means “corpse by fisher”, and Pepsi Cola slogan “come alive” means come out of the grave. Prior to promoting the brand, one has to take into account the sociocultural background of a specific nation and different interpretations of a name in the local language. 3. Values and beliefs Only for Private Circulation
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Page 3 and 4: COMPANY COUNTRY OF ORIGIN REFORM PR
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) Constant motivation of subsidiari
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2. Organizations with an Internatio
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3.3 Organization according to Geogr
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Joint Venture with an Indian Partne
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Stage:6 “Global mindset, customer
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The Decision Making Process 155 Int
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Environmental Issues 159 Internatio
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AGREEMENTS OBJECTIVE OF AGREEMENT b
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AGREEMENTS OBJECTIVE OF AGREEMENT 1
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AGREEMENTS OBJECTIVE OF AGREEMENT f
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Tariff Barriers 191 International B
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D) On the basis of trade relations
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Types of non-tariff barriers 195 In
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World Bank 199 International Busine
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• Macroeconomic & Economic Growth
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• Local Currency Financing • Mu
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INTERNATIONAL MONETARY FUND 205 Int
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ASIAN DEVELOPMENT BANK 207 Internat
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Mode of transport Type of delivery
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How many intermediaries are require
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Factor Conditions PURCHASING POWER
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R= 44 ×100 = Rs. 40 110 243 Intern
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3. Freedom loving and self-reliant.
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Three sources of employees for inte
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Strategy of the organization Need f
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