Top Five Factors Affect the Global Business Environment

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In this early decades of 21st century, the world is changing at extraordinary pace where one side there are global challenge like climate change, terrorism, falling water tables, rising food/water/energy prices, resource depletion; on the other side there are opportunities like technological advancement, increasing internet users, digitization of business and increasing uses of renewable energy. Comprehensively, in these contexts of opportunities and challenges, today global business environment is directly influenced by availability of raw materials, reliability of supply chain, labor supply, wages, worker expectations, government regulations and consumer demand. As the global business environment is dynamic and fluctuates therefore companies that want to grow its business at global level imperative for its business executive or business manager to have sound understanding of external factors that affects functionality of the business. This blog aims to highlight top five factors that affects global business environment.

Top Five Factors Impact International Business:

Political Factors:

First of all, let's understand political factor. Political factor is the government regulation that impacts the socio-culture environment of the country, the economic environment of the country, and influence how government accepts new technology and work on its development. Business manager or business executive should have sound understanding of political factors where company is operating actively. Any political decision influence business operations of the company positively or negatively, in this scenario businesses cannot do much about it. With political change, there is change incountry's tax and economic policies, political stability, foreign trade regulations, and employment laws that directly influences business operations.

Legal Factors:

Legal factors impact international business environment significantly. When you are expanding your business in the international market, it is imperative to understand international business legal environment that affects business. Organizational Law, Securities Law, Contract Law, Consumer Protection Laws, Employees Protection laws, Immigration Laws, Government Procurement Laws, are some significant legal factors that affects business. Therefore, companies that want to expand its business in international market, then legal services for business is strongly recommended. Legal services for business from top law firm not only secures business financially and legally but also proves efficacious in business activities like Trademark Registration, Company Registration, Merger & Acquisition, Joint Venture, FDI consultancy, etc.

Technological Factors:

Today, revolutionary and disruptive technologies are putting a great impact in international business environment. Robotic technology is beings used to revolutionize manufacturing process where from assembling cars to computers to moving goods in warehouses, robots are doing everything. Chat GPT is being used to optimize and simplify business operations like marketing, sales, tech support, human resource management. In addition, quantum computing, artificial intelligence, edge-computing to net-zero buildings; technology is transforming business operations across the globe. In this scenario, companies that want to expand its business in the international market, its business manager or executive should have sound understanding of trending technology, consumer behavior and develop marketing strategy accordingly to ensure growth of the business.

Economic Factors:

Economic factors influence international business environment greatly. International business greatly affected by economic factors like demand and supply, marginal and total utility, money and banking, economic growth and development, income and employment, general price level, trade cycles, inflation, and recession. For example, nowadays layoffs and recession haunting the world where the International Monetary Fund predicted that in October 2023 global growth will fall to 2.7% and that would be the weakest year for the world economy since 2001. In this scenario, companies that want to expand its business in the international market, its business manager or executive should have sound understanding of economic factors to save company from any financial calamities.

Disaster (natural and otherwise) and Global Pandemic:

In today's modern, globalized, and interconnected world international business environment greatly affected by disaster (natural and otherwise) and global pandemic. Global pandemic COVID-19 disrupted international business drastically wherein the world witnessed some of the largest reductions in trade and output volumes since World War II. Disaster whether natural or manmade affects international business landscape, it impacts the distribution of material goods. Today, we are observing severe consequence of climate change where the likelihood of certain events such as floods, earthquake, wildfires, droughts has increased that affects thousands of people and disrupt entire industry sectors for years.

Conclusion:

From market expansion, cost reductions to labor disruption; globalization has provided considerable opportunities for the business. In addition, modern technology like robotic technology, automation, 5G network and artificial intelligence are redefining the global business environment. In this scenario, company that wants to expand its business in international market, then its business executive or business manager should have sound understanding of international business legal environment, new-age technology, global politics, and economic factors that impact business.

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