International Business: External Factors and Business Support Systems

INTERNATIONAL
BUSINESS

INTRODUCTION
International business refers to the act of country to trade in global markets other than the
home country. It can be seen as a lucrative opportunity for organisations to facilitate business
growth and expansion, thereby, expanding the share in marketplace. The present report is based
on Tesla which is one of the leading automobile companies across the global market.
P5. Explain the external factors that influence a selected business considering trading
internationally
For everything a business organisation, it has been analysed that external factors plays a crucial
role which mainly influence upon its operations or strategies developed in order to gain
competitive advantages. Without proper analysis of the external environment it can be said that a
company cannot sustain for a longer period of time frame just because there are many business
organisations within a sector that are performing well considering all the changes. In the same
way, it is also required for Tesla to examine the external environment in order to to graph
competitive advantages or to enhance profit margins. This may also help in trading
internationally through enhancing the number of stores of Tesla in all over the world. In order to
identify the the influence of the external factors on test last performance while trading
internationally, pestle analysis has been done underneath:
PEST analysis:
Political Factor:
One of the crucial part linked to external environment that is political which mainly involves
influence of governmental policies related to taxes and others that might impact upon of business
organisations operations. This mainly identifies governmental impacts on businesses and their
remote or macro-environment. Governmental entities are among the main societal forces that
affect businesses and industries. For example, policies on trade can limit industry performance
and the company’s revenues. In this external analysis case, the following political external
factors are significant to Tesla and the automotive and energy solutions industries: Governmental
incentives for electric automobiles (opportunity), New global trade agreements (opportunity) and
Political stability in the majority of major markets (opportunity). Since the business organisation
that is Tesla performing its operations and manufacturing electronic cars through using
renewable resources, government has offered range of benefits for this organisation in order to
trade at global level which involves low Interest rates. Therefore it can be said that while
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performing business at international level trading among borders, Tesla would definitely get
support from governments because of the products that they have made for their customers.
Economic Factor:
Another crucial factor which basically relies upon financial sources regarding a company or
regarding a country where an organisation is looking forward to expand its business all
performing in the same Nation. If it is talk about Tesla then, conditions might include anything
from market growth, trade levels, currencies, and other variables that influence the automotive
business. For example, the solar energy market’s growth rate determines the growth
opportunities of the company’s solar panel business. Tesla needs to address the following
economic external factors that influence the automotive market: Decreasing battery costs
(opportunity), Decreasing renewable energy costs (opportunity) and Economic stability issues
(threat). Considering this, Tesla could easily Grab a good position within the automotive market
at international level. Since Tesla is directly focusing upon electronic cars, it will be required for
the organisation to to reduce the cost of renewable energy that they are using under their
products.
Social Factor:
This is another factor which mainly impacts upon International trading of a business
organisation because it involves arrange of elements like human mentality, perception and many
other thoughts of an individual regarding a company or regarding the acts which organisations
has made. If it is talked about Tesla Inc. it has considered that how the business aligns with the
social trends in its target markets. It is much required for Tesla's managers to ensure that
strategies are applied to maximize the business benefits of such external factors. The
sociocultural external factors important in Tesla’s business are as follows: Increasingly
popularity of low-carbon lifestyles (opportunity), Increasing preference for renewable energy
(opportunity), Improving wealth distribution in developing markets (opportunity). Considering
these factors it can easily be said that Tesla could easily enter a whole new market in specified
time frame. Change the organisation is looking forward to enter new markets like Sweden or
Singapore, it will be required for Tesla to look into to the social cultures which has been
followed by both of these countries.
Technological factor:
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