International Business Environment

International Business
Environment

1TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
ESSAY ............................................................................................................................................3
Market analysis for India.............................................................................................................3
Market analysis of Brazil.............................................................................................................6
Porter five forces analysis of Brazil.............................................................................................8
SWOT analysis for India ............................................................................................................9
SWOT analysis for Brazil ........................................................................................................10
Potential impact of risk for opening and entering into new market: .........................................11
Investment decision ..................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
1

ILLUSTRATION INDEX
Illustration 1: PESTEL analysis.......................................................................................................4
Illustration 2: Statistics of India and Brazil.....................................................................................6
Illustration 3: PORTER's five forces...............................................................................................7
Illustration 4: PESTEL analysis.......................................................................................................9
Illustration 5: POTERS five forces model.....................................................................................11
Illustration 6: SWOT analysis........................................................................................................13
Illustration 7: SWOT analysis........................................................................................................14
2

INDEX OF TABLES
Table 1: PEST for India...................................................................................................................6
3

INTRODUCTION
International business environment is defined as exchange of goods and services between
two or more countries (Hamilton and Webster, 2015). In this process buying and selling of goods
is done in the global market of countries EU manufacturing company of UK is planning to set up
a new organization in India and Brazil. In the present report relevant analysis models, theories
and their critical evaluation has been done. In this report PESTLE, Porter’s five forces model and
SWOT analysis has been done for India and Brazil. In addition to this, potential risk for business
to enter into new market has been explained in the report.
ESSAY
Globalization has provided opportunities to organizations to expand their existing
business in other countries (Cooper and Finkelstein, eds., 2014). Different risks and challenges
are associated while expanding business in other countries. EU manufacturing company is
planning to open its new organization in India and Brazil. There are some challenges for
company to expand the scope of business in both countries which are as follows:
Market Analysis for India
PESTLE analysis: PESTLE analysis helps in identifying the factors of particular country
that affects the business, that is, political, economic, social, technological, legal and ethical
environment (Ferreira, Santos and Reis, 2014). It provides detailed analysis of external factors
that might affect company to increase the scope of business by operating in India. PESTLE
analysis for EU manufacturing company is like:
Political factors
India is one of the largest democratic countries in the world. Political environment of
India gets affected by policies made by government, interest of politicians and various opinions
of political parties (Welford, 2013). Political factors put a huge impact on the business
environment of firm operating in India. Various other taxes are also imposed by the government
of India that put a direct impact on business organization (Verbeke, 2013). On the other hand,
government is also influencing privatization and motivating free businesses by scheming variety
of programs.
Economic Factors
4

Since the policies for industrial reformation came into force in India economy of India is
growing steadily (Ishii and Xuan, 2014). This policy has decreased industrial licensing and
restriction has been removed from foreign capital. Industrial formation policy has also
introduced FIBP in India. Economic environment of India has been improving due to this policy.
India has reported GDP of $5 trillion in the year 2013. In the year 2014, GDP has increased by
5% in comparison to the previous year.
Social factors
Social factors are defined as change of trends in particular country that may adversely
impact the business environment (Chebbi and et.al, 2017). Continuous rise in population of India
is resulting in the rise of cost of pension and enhancement of employment (Cavusgil and et.al,
2014). So government of the country is following structure which provides employment
according to age. Criteria of these structures are described according to education, background,
distribution of income, working attitudes, etc.
Technological Factors
Increasing use of technology is unusually influencing the development of product and
also, providing processes of cost cutting. India is having both 3G and 4G technology which is
5
Illustration 1: PESTLE analysis
(Source: PESTLE, 2017)