With the increase in globalization the market for the businesses and companies is increasing and they are growing and expanding their business cross borders. The business in these international markets is expanding fast. The company’s expanding their business in these new territories are exposed to various external environmental factors which can be a great boom for the company or may be a great risk and lead to huge losses.

International Business is comprises of all business and commercial activities related to sale and purchase of goods and services, investment in other countries, movement of resources, transfer of technologies and ideas across the international borders between two and more countries.

Business can control their internal environment, it is difficult on other side to create impact or have power to make major changes in the external environment. Thus it is imperative to all Business Leaders is to keep an eye over these factors and be the primary adaptors to following the trend and implement / utilize them for their benefit. Below are the factors affecting International Trade expansion in Overseas Market:

The Social / Cultural Environment:

These cultural environments are highly influenced by religious, family, educational and social cultural systems in marketing and promotion. Companies expanding to overseas markets must be aware and sensitive about the foreign cultural and social beliefs etc. If these factors considered and implemented properly they can grow easily else it may lead to huge loss and failure.

There are few cultural differences which may lead to problems in entering to new markets such as Language, Colour, Customs, Taboos, Values, Aesthetics, time, business norms, religion, and social cultures.

The Political / Regulatory Environment:

The Political or Legal Environment in each country is different. These environment abroad leads to political stability, will and support for business expansion and growth and explore or they can be anti-business or against foreign companies etc.

The Political or Legal Environments have huge impact of companies in way of:

  • Contract Agreement for supply of goods and services.
  • Government policies, regulations related to specific sector or industry.
  • Patents, copywrites, trademarks, brand names, labelling patents.
  • Safety and pollution norms.
  • Licence and Registration procedures.
  • Ease of doing business.

Demographic Environment:

Demographic factors are vital and uncontrollable item in business expansion in other countries. Studying these factors thoroughly such as people’s vital statistics, their age, gender, race, ethnicity, location, preferences etc. These factors help organizations decide their marketing strategy for product placement, size and composition of target market and their demand preferences.

Technology Environment:

Technology is one of the most important factor and it can stimulate growth under capitalism and it is the application of science and engineering skills and knowledge to solve the problem related to production and organizational problems. With introduction of new equipment’s and software help in production increase and cost reduction are one of the most valuable assets for the company. These days many IT Companies use technology to create change, improve efficiencies and streaming operations.

Economic Environment:

This is one of the most important and influential category of external environments to business. The economical factors such as economical growth, slowdown, inflation or deflation, demand and supply, increase or decrease in employment and per capita income, increase or decrease in interest rates and taxes etc are one of the most important external factors influential to the growth or failure of any businesses.

The Competitive Environment:

The Competitive Environment also plays an important role for the organizations to work on their products and services to be better and on other to be most competitive and fairly priced, else the risk of losing business is huge. Having a fair competition in the market plays a great source of competition and encouragement to produce better goods and services for their customers.

Infrastructural Environment:

Infrastructural Environment supports the organizations to build their setup or the systems and make sure that the infrastructure of the company are good enough to handle the operations and the functions of the organizations smoothly. With the modern and advance quality requirements are the power, internet and Wi-Fi connections and this will help in better performance. In another words better infrastructure leads to the better opportunities and support organization to perform better.

Summary:

Many Organizations have discovered that they should focus on international markets for their expansion and growth in the new territory where either the competition is less, demand is high or the supply is low and opportunities are immense to make profits and organizational growth. We can say that there are bunch of contributing factors, could be internal or external and are one of the major source for business expansion and growth in International or Global Markets.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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