Pestle Analysis
12/3/2012
History of International Business
Forces Behind Globalization
Pre-industrial Trade around the world Strong manufacturing base of Europe & UK in early 1900 American dominance after WW-II Bretten Woods Monetary Agreement Japan Influence post 1970 Soviet weakness Developing nations stepping up exports Entry of China/India/Mexico/Brazil Worldwide Communication
Increase in and expansion of technology Liberalization of cross-border trade Development of services that support IB Growing consumer pressures Increased global competition Changing political situation Expanded cross-national cooperation
Criticisms of Globalization
Why Companies Engage in IB
Threats to National Sovereignty Skewed economic growth (pressure on natural resources) Growing income inequality Threat to cultural and social changes
To expand sales To acquire resources To minimize risk
Strategic Advantages of Trade
Global Strategy Alternatives
• Exporting
Exports:
Use of excess capacity Reduced production of costs per unit Greater profitability Spread of risk Cheaper supplies Additions to product line Reduction of risk of non-supply
Imports:
– direct and indirect • Merchandise or Services • Licensing • Franchising • Joint Ventures • Direct Foreign Investment
1
12/3/2012
Global Economic Activity – 2011
Opportunities Offered by IB
Country
GDP $billion
GDP(PPP) $billion
Population million
GDP Per capita $
Improved Standards of Living Higher profits Better Wages Ethics, Corporate Governance and Social Responsibilities Globalisation
US China Japan Germany France Brazil UK Italy Russia Canada India Spain
15094 7298 5869 3577 2776 2492 2417 2198 1850 1736 1676 1493
15094 11300 4440 3099 2217 2293 2260 1847 2383 1396 4457 1413
314 1347 127 82 65 192 62 61 143 35 1210 46
48070 5418 46212 43622 42707 12979 38983 36032 12937
History of International Business
Forces Behind Globalization
Pre-industrial Trade around the world Strong manufacturing base of Europe & UK in early 1900 American dominance after WW-II Bretten Woods Monetary Agreement Japan Influence post 1970 Soviet weakness Developing nations stepping up exports Entry of China/India/Mexico/Brazil Worldwide Communication
Increase in and expansion of technology Liberalization of cross-border trade Development of services that support IB Growing consumer pressures Increased global competition Changing political situation Expanded cross-national cooperation
Criticisms of Globalization
Why Companies Engage in IB
Threats to National Sovereignty Skewed economic growth (pressure on natural resources) Growing income inequality Threat to cultural and social changes
To expand sales To acquire resources To minimize risk
Strategic Advantages of Trade
Global Strategy Alternatives
• Exporting
Exports:
Use of excess capacity Reduced production of costs per unit Greater profitability Spread of risk Cheaper supplies Additions to product line Reduction of risk of non-supply
Imports:
– direct and indirect • Merchandise or Services • Licensing • Franchising • Joint Ventures • Direct Foreign Investment
1
12/3/2012
Global Economic Activity – 2011
Opportunities Offered by IB
Country
GDP $billion
GDP(PPP) $billion
Population million
GDP Per capita $
Improved Standards of Living Higher profits Better Wages Ethics, Corporate Governance and Social Responsibilities Globalisation
US China Japan Germany France Brazil UK Italy Russia Canada India Spain
15094 7298 5869 3577 2776 2492 2417 2198 1850 1736 1676 1493
15094 11300 4440 3099 2217 2293 2260 1847 2383 1396 4457 1413
314 1347 127 82 65 192 62 61 143 35 1210 46
48070 5418 46212 43622 42707 12979 38983 36032 12937