The Influence and Impact of Key Factors That Affect the Practice of International Business in South Africa

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NAME: UKWU OKWUDILI AMOBI.

I D NUMBER: U04200910

TOPIC: THE INFLUENCE AND IMPACT OF KEY FACTORS THAT AFFECT THE PRACTICE OF INTERNATIONAL BUSINESS IN SOUTH AFRICA

TABLE OF CONTENTS

1. INTRODUCTION
2. OBJECTIVES OF INTERNATIONAL BUSINESS
3. FACTORS THAT AFFECT INTERNATIONAL BUSINESS
1.4 A BRIEF INTRODUCTION OF THE SOUTH AFRICA ECONOMY
1.5THE INFLUENCE AND IMPACT OF KEY FACTORS THAT AFFECT THE PRACTICE OF INTERNATIONAL BUSINESS IN SOUTH AFRICA 1.5 CONCLUSION
1.6 REFERENCES

1.1 INTRODUCTION
International business is a term used to collectively describe all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more nations. Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons.[1] It refers to all those business activities which involves cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc[2] A multinational enterprise (MNE) is a company that has a worldwide approach to markets and production or one with operations in more than a country. An MNE is often called multinational corporation (MNC) or transnational company (TNC). Well known MNCs include fast food companies such as McDonald's and Yum Brands, vehicle manufacturers such as General Motors, Ford Motor Company and Toyota, consumer electronics companies like Samsung, LG and Sony, and energy companies such as ExxonMobil, Shell and BP. Most of the largest corporations operate in multiple national markets. 1.2 OBJECTIVES OF INTERNATIONAL BUSINESS

The Objectives of International business are sales expansion, resource acquisition, risk minimization.

1.3 FACTORS THAT INFLUENCE INTERNATIONAL BUSINESS
Factors that affect International business include differences in legal systems, political systems, economic policy, language, accounting standards, labor standards, living standards, environmental standards, local culture, corporate culture, foreign exchange market, tariffs, import and export regulations, trade agreements, climate, education and many more topics. Each of these factors requires significant changes in how individual business units operate from one country to the next. The conduct of international operations depends on companies' objectives and the means with which they carry them out. The operations affect and are affected by the physical and societal factors and the competitive environment. Physical and societal factors

• Political policies and legal practices
• Cultural factors
• Economic forces
• Geographical influences
Competitive factors
• Major advantage in price, marketing, innovation, or other factors. • Number and comparative capabilities of competitors
• Competitive differences by country
There has been growth in globalization in recent decades due to the following eight factors: • Technology is expanding, especially in transportation and communications. • Governments are removing international business restrictions. • Institutions provide services to ease the conduct of international business. • Consumers know about and want foreign goods and services. • Competition has become more global.

• Political relationships have improved among some major economic powers. • Countries cooperate more on transnational issues.
• Cross-national cooperation and agreements.
1.4 A BRIEF INTRODUCTION OF THE SOUTH AFRICA ECONOMY
The economy of South Africa is ranked as a upper-middle income economy by the World Bank, which makes the country one of only four countries in Africa represented in this category, (the others being Botswana, Gabon and Mauritius).[2] About a quarter of the population is unemployed,[3] and...
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