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International business conducts all the over the world and size of market is very large. Main transaction includes transfer of goods and services, technology, knowledge etc and also involves exports and imports. The main features associated with international business includes large scale operations, sensitive nature, restrictions at international level, keen competition, mostly dominated by developed countries and integration of economies of many countries. The global environment is developing challenge to industries due to increase in level of competition. Threats and opportunities are present in the environment and companies are taking advantage of such opportunities but on the other hand level of competition is so high that has become difficult to survive in the market. In this report several tasks will be undertaken which includes identification of elements which have direct impact on industries, how government policies affect business enterprise and personal traits & behaviors of entrepreneurs required to run firm.
There are many elements present in the external environment that have direct impact on the organization. These factors include taste and trends, budget and economy, competitors and technological. They directly affect the working of firm and there is need to analyze all such factors in order to work smoothly and with better efficiency (Ball, 2006). In case of taste and trends they are rapidly changing and all the industries operating in the retail sector have to keep check on the preferences of consumer and current market trend. Like with the help of social media sites company can analyze the present conditions of the market. the next element budget and economy has direct impact on the firm as if the economy is highly growing then consumers will prefer to buy high price product and vice versa. It directly depends on the purchasing power of consumers which suggests whether to buy high quality product or not. Cost of the product should be less than competition then only market will consume it (Ball and et. al, 2012).
Competition is the next element which is curse to the new business entering into the market as companies operating since past have well established market and strong customer base so in order to compete them new industry have to develop unique marketing strategies which would encourages customers to buy that brand. If in that particular market competitors are not present then company can easily establish and expansion opportunities will increase.
Challenges present in the global market can act both as advantage and disadvantage to the firm. It depends on the firm what kind of strategies are adopted to reduce the impact of major risks present in the global market like competition. The only way to beat competitor is to develop unique products in the market which contain different characteristics that are not available in the market easily. Adopting these entire techniques is supportive as firm can gain competitive advantage and loyalty of consumers will also increase (Geringer and Minor, (2010). In the modern era level of technological advancement is very high and companies are adopting new modern style to produce products and services.
Adopting new techniques serves as promotional tool and company becomes market leader as cost of production decreases and profit increases with rise in sale. But it requires large investment and time in implementation. Fewer employees are required in production as major part of work is carried out by machines with minimum efforts (Hallows, Wolf and Marks, 2011).
Other company’s present in the same sector can adopt better technological methods as they may be having strong financial base and sound economic conditions which encourage them to rapidly adopt such method. In case of new firms it is not possible as they are not having adequate amount to invest in purchasing new technology as in starting profit are not so high which prevent to perform such development activities. Political factors needs to consider while conducting operations of the enterprise like environmental laws according to firm has to adopt activities which cause less pollution and will save the environment (Hill, 2012). Firms have to follow recycling techniques in order to reduce the burden on environment. By adopting this style both government and company will be benefitted as sales will increase due to eco friendly products and need of government authorities will also be fulfilled.
There are many factors present in external environment that have direct impact on working of the organization like political, legal, environmental etc. in case of new venture government can directly influence the policies of new enterprise as every firm design its own strategy and policies to work. Polices of the company is linked with its operations and it provides full information regarding the organization. Government of the country ahs direct impact on the policies adopted as company has to work under guidelines issued by government (Huff, 2009). The policies issued by government like tax, rules, regulations and political stability has direct effect on the organization as firm has to consider all these factors and if these factors are ignored it can lead to unexpected outcomes also.
Government issues several types of laws like regulatory, labor, tax and reporting which is necessary to be followed by companies. Regulatory laws are basically some standards that affect how businesses functions in specific situations (Iyer, 2009). The industries laws issued are regulatory in some way and several categories of legislation are present that are applied to certain industries. It also includes environmental laws and building code laws which are set by federal government and state government. Regulatory laws are also present for international trade and most types of business licensing (Kapoor and Sherif, 2012).
In order to work in challenging environment entrepreneurs have to follow different methods in their working style so as to cope up with changes and reduce the level of risk. Personal traits and behavior of entrepreneur in present market includes drive and energy, self confidence, high initiative and personal responsibility, internal locus of control, tolerance of ambiguity, moderate risk taking, low fear of failure, use of feedback, continuous pragmatic problem solving, use of resources, clear goal setting and self impose standards (Sharan, 2006). These are some of the personal traits that are essential to be present in modern entrepreneurs.
Many of these characteristics are self explanatory and are linked with each other. Traits present within the entrepreneur helps him to work better and fewer efforts are applied in work due to unique qualities present. In the above report certain threats were discussed like competition, technological advancement, government factors, economic factors etc. all these threats present in
Businessman can easily survive in situation of perfect competition due to features like low problem solving and clear goal setting. Proper knowledge is available regarding use of resources will help to gain competitive advantage and cost of production will also reduce by this. Features like drive and energy, personal responsibility will help to work with more efficiency and outcomes arrived are above expectation level. It will become easier to face any type of challenge in the market. Successful entrepreneurs have clarity of vision by which they can clearly define where the company is today and where it will be tomorrow (Svensson, 2002). This feature can directly support as more employees gets attracted, investors can be easily convinced and it brings more partners. Close attention is paid to details which helps in analyzing the major problem faced and helps in reducing the impact of that issue. Style adopted by entrepreneur is more flexible than it can help organization in every way as government rules and regulations changes rapidly in that case working style can be changed easily in order to work under those guidelines (Wang, 2013).
From the above case it has become easy to analyze the impact of international global environment on particular industry. Several factors are present in the market which has direct impact on firm and increases overall risk. Governmental factors develop hurdles due to which it becomes difficult to work as firm has to work under such guidelines and follow rules, regulations issued. Environmental laws are regulated with the main aim to save society from operations of industries like pollution; waste etc. organization has to work according to environmental laws like producing eco friendly products and adopting recycling techniques in the method.
Technological factors serve both as advantage and disadvantage as level of advancement is increasing due to which firms have to adopt new working style and helps to work better with lesser efforts. But all these techniques require large investment. So firms have to keep check on all the important factors as they directly affect the operations of enterprise and if all the factors are taken care then it will become easy to gain competitive advantage.
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