Competitive Factors That Influence International Business Environment

Content:

1. What You Should Know About International Business Environment
2. Understanding Success & Failure In International Business Environment
3. International Business Environment and It’s Changing Nature
4. Competitive Factors That Influence International Business Environment
5. Requirement for General Environmental Scanning in International Business
6. Systemizing the Search for Int Business Opportunities
7. Key Factors That Drive The Competitive Environment

The third key step for an international company is understanding the competitive factors influencing its business.

The competitive environment has changed quite dramatically in recent years. The political situation has changed; for example, the march towards market-based economies seems irreversible. This has been managed by the Chinese by means of a new economic mechanism which differentiates Chinese practices from those of capitalist societies.’ The focus is on the state regulating the market and the market guiding new ventures. Resources also play a key role in terms of the movement of capital, skilled labor and effective management.

Demographics also have a role as a competitive factor because markets are becoming fragmented and growing at a previously unknown rate. For example, in February 1995 China marked the birth of its one billion two hundred millionth citizens. The government used the occasion as an opportunity to champion the cause of family planning. There was little mention in the Chinese press that a decade ago planners hoped they would not see 1.2 billion until after the year 2000. The economist intelligence unit forecasts that China’s population-will be as high as 1.33 billion by the year 2001. As the most populous nation on earth, China will struggle with population control well into the next century.

Competitive Factors - International Business Environment

Economic performance is a competitive factor, and even Vietnam has been successful in battling high levels of inflation, averaging 300 per cent between 1985 and 1988. By introducing economic measures, they have managed to stabilize the currency, increase product availability and reduce the inflationary pressures in the economy. The result of these measures has been a drop in inflation to 30 per cent and the creation of a relatively competitive economy.

The use of communications networks has blossomed in many countries, Even China has entered a period of phenomenal growth in telecommunications. During the 1980s the Chinese telecommunications industry was the fastest-growing in the world. In 1994 the Xinhua News Agency reported that annual Chinese telecom investment grew by over 50 per cent in 1993 and close to 0.25 million long-distance lines were added, more than the total for the preceding three years. Donations of decommissioned exchange equipment from Hong Kong since the mid-1980s, with accompanying technical personnel from China to undertake training and installation/maintenance, helped on a basic level. In China, collaborations with western companies at the leading edge of technology in China’s own projects have confirmed the commitment of western companies to developing a world-class telecommunications infrastructure throughout the new market.

The use of capital has been influenced by the investment patterns and trends being set by companies over the last decade. The criteria for investment have changed for many companies and the methods of investment promotion have changed. A focus on cooperation and sharing resources has also emerged, as in the production-sharing contracts being set up in Vietnam.

Transportation and logistics are proving to be an advantage for many companies and this sector is attracting a high level of dual governments and companies entering new markets. Companies are investing heavily in logistics as a mainstay of their international competitive strategies. A series of initiatives is being introduced by companies and governments which place a strong emphasis on cross-border cooperation.

The environment can emerge as a key consideration when entering a new business environment, depending on the sensitivity of customers and governments to the effect business actions can have on the wellbeing or otherwise of the business environment. The design and implementation of policies and strategies by companies can help towards gaining a greater level of awareness and understanding of the position taken by a particular company on the key environmental issues.

Continue at: Requirement for General Environmental Scanning in International Business