Introduction:
A global company has to formulate strategies based on its missions, objectives and goals. Strategy formulation is a must for a global company to make decisions regarding the markets to enter, product/service range to introduce in the foreign countries.
The fundamental basis for strategy formulation is the environmental analysis. Environment provides the opportunities to the business to produce and sell a particular product. Environment sometimes poses threats and challenges to business.
Business should enhance its strengths in order to face the challenges posed by the environment. Study of environment helps the business to formulate strategies and run the business efficiently in the competitive global markets.
Meaning of International Business Environment:
Environment means surrounding. International business environment means the factors/activities those surround/encircle the international business. In other words, business environment means factors that affect or influence the MNC’s and transnational companies.
Factors that affect International Business include Social and Cultural factors (S), Technological Factors (T), Economic Factors (E), Political/Governmental factors (P), International factors (I) and Natural factors (N).
William F. Glueck defined the term environmental analysis 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”.