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Managing International Business Environment


Business Environment consists of factors such as political, macroeconomic factors. Managing business environment is essential for promoting growth and profitability of the business and it involves decision making and strategic planning. In this context, the crucial decisions that the management has to make include setting targets for business besides the identification as well as forecasting of the political and economical trends. “The global business environment can be defined as the environment in different sovereign countries, with factors exogenous to the home environment of the organization, influencing decision making on resource use and capabilities. This includes the social, political, economic, regulatory, tax, cultural, legal, and technological environments.” (Global Business Environment. 2007).

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Business environment needs to assess the level of transparency, availability of credit, infrastructure, commitment on taxes, availability of labour, trade liberalisation, IT and foreign investment availability. In addition, business environment involves short term and long term risk rating against the ratings of other countries. In the business environment of foreign market the analysis of foreign direct investment such as foreign ownership laws, attitude of foreign investors, recent foreign direct investments etc need to be taken into account. “The many benefits Thailand offers foreign investors make it one of the region’s most attractive investment destinations. Comparative analysis of costs of doing business in Asia underscores Thailand as a cost-competitive location for investors, offering a quality lifestyle for expatriates. Adding a healthy macroeconomic environment, a positive regulatory business environment and a welcoming culture clearly sets Thailand apart from its competitors.” (Thomas 2008).

Since the marketing environment is globally changing rapidly companies need to monitor and should be aware of the major contributing factors that are causing this transformation in order to understand the environment and to evolve suitable strategies for the implementation of the appropriate policies for marketing. This, to a large extent will determine the success or failure of a business organization in a specific region. It is necessary to study the demographic environment in order to evaluate the population growth, standard of educational of the people, the nature of ethnic groups, their attitude etc. In addition, a study of marketing environment also has the scope of understanding the economic factors that affect the income, prices of competitors’ products, savings available with the public, their spending habits etc.

A study of marketing environment will also consider socio-cultural factors as these will influence the market by way of beliefs, norms, values, perception etc. Physical including natural factors such as raw material, high energy costs, changing role of government and increased regulation are affecting the strategic marketing decision. Technological factors such as varying research and development budgets, opportunities for innovation etc will further influence the business especially in the long run. Environmental analysis is defined as “the process by which strategists monitor the economic, governmental/legal, market/competitive, supplier/technological, geographic, and social settings to determine opportunities and threats to their firms.” (Unit – I: International Business – An Overview. P. 11).

It is important to review the latest projects, mergers, acquisitions, privatisation, local players, market share and multinational companies etc that have set up shop in a particular place to have a correct appreciation about the business environment. Managing the business environment must also focus on company’s vision, mission and strategic planning. Marketing environment consists of task environment which is the immediate factor such as production, distribution, promotion and broad environment such as demographic, economic, physical, social, technological political, socio-cultural and political and legal factors.

“The process of urbanization has significant implications for business in the region: It creates operating difficulties; it presents challenges which necessitate solutions; it brings societal responsibilities to the fore; and, most interestingly, it presents a range of potentially lucrative business opportunities.” (Phantumvanit 1992).


Global Business Environment. (2007). [online]. ICMR Case Studies and Management Resources. Web.

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PHANTUMVANIT, Dhira. (1992). Business and the Environment in Thailand. [online]. TDRI Quarterly Review. 2008. Web.

THOMAS, Alita. (2005). Why Thailand? [online]. 2008. Web.

Unit – I: International Business – An Overview. [online]. International Business Environment. P. 11. 2008. Web.

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