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Global Business Environment

Prof: Sham Choughule

Previous Assignment
Top 10 brand in the world ? Export casting from India find out total cost of export Production cost V/s transaction cost How to minimize transaction cost while export marketing ?

Why study of environment is required ?


The political environment in a country influences the legislations and government rules and regulations under which a foreign firm operates. The economic environment relates to all the factors that contribute to a country's attractiveness for foreign businesses.

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Why study of environment is required ?


Today there are thousands of MNCs which operate in many parts of the globe. Such companies should familiarize themselves with the languages, cultures and the business environments of the countries in which they are operating.

Environments some example


Luxury product cannot be sold in low income group country Some product cannot be sold in the foreign market due to culture Meat in India and Gulf country Wine in Gulf country

Some country bans good of another country by way of Tariff & Non tariff barrier

Economic environment
Ratio of income and saving Purchasing power of customer Luxury good cannot be sold in low income group country Hyper market FMC/Durables/House Hold items are required large based of consumer Example: Pen Soap etc

Super Market from Thailand & Singapore

Economic environment
Developing economy Industrial product for newly developing economy Example-equipments for construction roadports-dams-power plant railway line Example 1)Power project based on nuclear energy at Jaitapur Ratnagiri

Example 2)Essar is importing 5 Billion USD material from China to set up ports and SEZ Example 3) Suzulan is importing wind mill for foreign country on regular basis

Economic environment
Less develop countries are suitable for push consumer good like clothing Batteries, tires, building material packed foods

Economic environment
High Income group country New & innovative product Example LCD with3D 4D from China
Balance of Trade (+ or -) Negative trade balance imposing more restriction on Import No credit facility for import

Degree of Economic co operation


FTA Free Trade agreements NAFTA SAPTA ASEAN Indo-Sri Lanka Indo-Nepal Integrated Market EU 27

Economy of the world


Ranking Country Approximate GDPPurchasing Power Parity
1-United States of America$13,860,000,000,000 2-China$7,043,000,000,000 3-Japan$4,305,000,000,000 4-India$2,965,000,000,000 5-Germany$2,833,000,000,000 6-United Kingdom$2,147,000,000,000 7-Russia$2,076,000,000,000 8-France$2,067,000,000,000 9-Brazil$1,838,000,000,000 10-Italy$1,800,000,000,000

Political environment
Indo China trade war India has banned Chinese telecom equipment on security ground India also banned Chinese toys on health ground Pakistan had banned Indian Sugar

Perception in mind : Product concept


Japanese cars Sri Lankan /Kenyan tea Ugandan chillies Zimbabwean beef Tanzanian coffee Malawian tobacco Indian cashew nuts Malaysian rubber Nigerian beer

Legal environment USA


US Customs has notified 10+2 rule which is required 100% information electronically to US Customs Accordingly Shipping companies have to submit IGM before 24 hours to load on ship This rule helpful to USA to monitor foreign cargo coming into American sea ports

Legal environment China


24 Hours advance submission for all imports to China This has commenced from 1st Jan 2009 2 hours before bulk cargo 4 hours before loading aircraft 2 hours loading on train 1 Hour before loading for road vehicles

Legal environment India


Pre shipment inspection certificate for scrap import on security ground Ship will not allow to Indian water Certificate of origin from EIA is must in case of Export of >Marine product >Basmati rice >Dairy product Imported cosmetics to be listed with drug controller

Culture
Anthropological approach Religious believe Religion provides the best insight into a society's behaviour Caste in India Food habit Deshi V/s foreign food Pizza V/s Vada pav Zunka Bhakar Dress Western V/s Indian Religious function festival Zimbabwe did not allow both alcoholic and non alcoholic beverages to be packed in cans

Culture
This is particularly true of foodstuffs. Sadza in Zimbabwe, a staple food made from maize meal, would not go down well in Beverley Hills, California. on the other hand Products of a more technical nature, like computers, have a universal appeal

Culture
Nationalism is a cultural trait which is increasingly surfacing. The break-up of Yugoslavia and the USSR are witness to the fact Indian approach Opposition to globalization Be Indian Buy Indian Now a new approach Hindi Chinese Buy buy

For Discussion
How following factors are impacted to marketing the product ? language, social norms, religion, ethics, socio economics, traditions, societal regulations, nationalism, social organization

Assignment -2
Find out new markets in USA Canada Latin America Middle East Africa South east Asia and Europe For export potential

Thanks
Bye Bye Prof: Sham choughule shamc2001@yahoo.co.in

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