Global Environmental Scan

1. Global Environmental Scan Doing Business in other Countries

2. Government Stability • Important when considering business • Changes cause investors to be wary • New laws can form

3. Trade Regulations and Laws • If you are going to do business in other countries • Need to know trade laws • Tax/tariffs • Domestic laws need to be followed by foreign companies • Ex) Toys cannot be advertised in Greece

4. Economic Factors • Infrastructure • Roads, buildings, telecommunications, etc. • Labor Force • Consider cost and quality of labor • Education and skill levels of workers • Ex) India has been supporting technology education and has a pool of skilled workers

5. Eco Factors Cont. • Standard of Living • Ex) when Honda entered China’s consumer market, it recognized that most Chinese people could not afford cars. The company targeted the motorcycle market instead. • Foreign Exchange Rate • Exchange rates vary everyday • Can have a big affect on company profits

6. Socio-Cultural Factors • Language and Symbols • Ex) In the US the number 13 is considered unlucky. Many hotels do not have a 13th floor • In China and Japan the number 4 is unpopular because it relates to death • Holidays and Religious Observances • In India the cow is sacred so little beef is sold • McDonalds instead sells Chicken, Fish, and Vegi burgers

7. Socio-Cultural Cont. • Social and Business Etiquette • A common practice in one country might take on a different meaning elsewhere. • Example: Gift giving might be considered part of business in the Far East, but in the US or Canada it could be an illegal bribe.