Environmental Factors And Extending Internationally Business Essay

In the performance of any business, it has been said that environmental factors is of best importance and account. It is not enough that organizations consider only interior factors. They also needs to put an unwavering emphasis on external factors because they are deemed to be affecting the type of the business enterprise by large level impact as well. Some of the environmental factors that happen to be internal include the company goals and objectives, their goal, and the worth of the very best management. However, whenever we speak of environmental factors, more emphasis is given on external environment because they show a larger effect on the performance of the business. External environmental factors include sociable and cultural environment, the monetary competition, technological developments, politics and legal weather, and demographics (Loudon et al). these factors must get enough and adequate attention especially in identifying the company's plans and procedures to at least warrant success especially in instances of international expansion where there is absolutely no guarantee of success in the international market which is entirely different and much harder to take care of when compared with the local picture.


When an enterprise aims to develop international operation, that is trying to attain a wider market by bringing out their business to places apart from what can be considered as the variety country, it is of paramount matter that they examine carefully the environmental factors of the united states in which they will operate because this will create an extremely big impact on their business performance and can be considered a very big reason behind their success or inability in the conduct of doing business.

In international expansion, there are numerous environmental factors which should be considered. One of the factors could be the communal and the social environment of the country where international extension will be done. These factors include, but not limited by, the affects of beliefs, worth, social establishments, and market behaviors that ought to be carefully analyzed especially in the formulation of strategies. In addition, another thing that ought to be looked at by businesses in their international growth is the demographic environment which includes the scale and development of the marketplace, the general population based on the target market, time, intimacy, education, gender, marital status, and any demographics which is relevant in their business performance and proper formulation. Technology would be other environmental factors that ought to be looked at because they'll determine hiw the innovation, creation, creation, and distribution of the merchandise in the international market would be innovative. This can likewise incorporate new research and development practices and advancements that may inevitably increase the business in a particular international market. Furthermore, the monetary and competitive environment will be also given an unwavering emphasis because they affect the international business in a significant way. A number of the factors that ought to be considered on this aspect include inflation, career, growth on the market or current economic climate, new challengers, and the economical condition of the united states. Lastly, another factor that ought to be looked at in international extension is the politics and legal environment. This consists of factors such as laws, regulations, and procedures which might have an effect on prices strategies, marketing methods, and distribution policies. Every company longing for international development, more than paying attention to international laws, should also study local regulations in their chosen country or countries of operation because they will have more impact in the performance of their business (Pagano & Verdin, 1995).

These environmental factors can also be helpful in several ways. It can open a lot of opportunities for the business such as development of new marketplaces, street to redemption in the rates of interest, long tern credit service by suppliers, and positive government policies. Alternatively, there are also dangers that are associated with these environmental factors. This includes fall in demand, upsurge in competition, products getting away from development, and technology being old (Boyes, n. d).


For me, the environmental factor with the biggest impact on the strategic movements of a business will be both financial environment and the politics and legal environment. These factors will have the biggest impact because they are all very unpredictable and incredibly volatile and sensitive to the global condition. The politics factor is very critical and can have the largest effect on the strategy because every part of the marketing blend - product, place, price, and campaign - is subject to laws and restrictions dependent upon the average person policies of different countries. The existence of federal laws and regulations, state laws and regulations, and other regulatory firms has a major impact on what strategies can be produced by the business. To include up to the circumstance, what even makes it even worse, is the fact that they need to consider the individual local insurance policies and laws on a per country basis, on a per federal analysis to deal and understand the regulating laws and regulations associated to doing business on that specific country (Lamb et al, 2006). Furthermore, the economical environment also offers a very big effect on the strategies which are designed. Once a business started out its operation or enlargement in a particular market or country, it is a given idea that the management and the complete organization has already come up with a set of strategies that have been formulated to bring about success in their chosen market. These strategies already include a set of methods and programs which shall be implemented in a given time frame to promote and market their business. However, financial condition is very unpredictable. An financial turmoil on big countries like the United States make a difference other countries. The decrease in the gross home product of a country and the changes in the purchasing electricity of the locals are of utmost concern as well. Due to the occurrences of such economical turmoil, companies and companies are then pressured by monetary chance to improve, reformulate, and redirect their strategies to be able to battle the changing financial environment.


With the dialogue presented above regarding the environmental factors and its effect on international expansion, it could be assumed that lots of business have previously experienced the reality of this sensation. Having the ability to expand internationally is no esay task for this requires a careful evaluation of individual and per country analytics that will employ a great effect on the performance of an business. Inability to look and review such environmental factors will lead to the business not earning by any means on that particular country.

Fast food chains and other restaurants, for illustration, are a few of the busineses that ought to be very wary on the impact of environmental factors for international development especially when eyeing countries that have unique group of beliefs and customs. Wendy's, when it widened in the Orient, considered the impact of the culture on their business. They add local products such as noodles and rice in their menu to be able to satisfy the needs of their local market. McDonald's also performed the same thing when it broadened in India since the locals on that place consider beef as sacred. Failure to do these steps can cause the loss of business (Loudon et al, 2005). Different companies must be bale to customise their offering to the public in order to be able to establish a stable market which will generate them income in the long run with their local operation in the particular country. These factors must be always mentioned and they must be careful not to disregard the local values which shall condition the operation of their business.

Another example which may be noted upon this topic is exactly what has been taking place with Microsoft. Many considered working for Microsoft as a desire job, it is saturated in terms of compensation, and the brand itself provides employees a sense of satisfaction in their careers. However, it's been estimated an average of 50 employees leave the business on a weekly basis. If indeed they want to extend internationally, they must be able to examine these factors such as the technological advancements and the federal government polices (Koontz & Weihrich, 2004).

The previous example could be the global enlargement strategy which was executed by WalMart. To effectively take care of international expansion, the business paid attention to tight federal government control over trade which impacted their business since they were able to easily help trade because they have got studied these guidelines beforehand. They have also recognized internet as an instrument for technology and for that reason will impact their international functions (Cravens & Piercy, 2006). WalMart paid attention to these factors because they are aware that their revenue era in the international market is highly reliant of how effective they may be in the management of the environmental factors.

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