GLOBAL BUSINESS

Issues Affecting the Global Business Environment

Table of Contents

INTRODUCTION1

THE COMPANY'S SITUATION1

IMPORTANCE OF TRIAD NATIONS2

ROLE OF FOUR MAIN DETERMINANTS OF NATIONAL COMPETITIVE ADVANTAGE3

i.Factor Conditions3

ii.Demand Conditions3

iii.Related and Supporting Industries4

iv.Firm Strategy, Structure and Rivalry4

TECHNIQUES FOR ASSESSING COMPETITIVENESS4

i.Internal4

ii.External5

STRATEGIES FOR EXPANDING IN EU5

JAPAN AS A TARGET MARKET FOR MNE'S7

EMERGENCE OF INDIA AND CHINA AS AN INTERNATIONAL MARKET7

MAIN ISSUES8

i.Price Increase8

ii.Competition8

iii.New Technologies9

CULTURAL DIFFERENCES9

STEEP ANALYSIS11

Social11

Technological11

Economical11

Ecological12

Political12

EXCHANGE RATE RISK12

Measurement of exposure to the Exchange Rate Risk13

FINAL CHOICE13

China13

Issues Affecting the Global Business Environment

Introduction

The world has now turned into a global village and people are looking for ways for expanding their business. They want to improve their sales and increase revenues, which is why they are looking to make sure that they expand their business. They want their company to be known worldwide so that the sale of the company reaches new height. There are two factors that act as a hindrance between the country's expansion worldwide; competition and flow of funds. The companies that want to expand, but are unable to do so face these two difficulties. They face fierce competition in the country where they are looking to expand, and if they are ready to compete with other countries, they cannot expand because of scarcity of resources (Wang, 1996, pp. 50). Other factors such as political, economic and social factors also affect the global business environment and are discussed in this paper with respect to the Japanese SME, Elecdyne.

The Company's Situation

The company, Elecdyne is based in Tokyo and was established in 1990. It started with five employees, and now it employs people over 100. It manufactures a range of electronic devices, such as DVD and MP3 players, VCRs, Televisions etc. It also produces equipments that are used by a number of European and Japanese multinationals. These equipments are hi-fi technology and help these companies in managing their security and in making their workplace a safe environment. The company, Elecdyne currently operates in the Japanese market only; however, is looking for expansion. Elecdyne was successful on the basis of its pricing strategy.

This helped them in leading the electronic market in Japan, but slowly and gradually it lost its position. Since the past two years, the company has been finding it very difficult to compete with the market and has also lost its position as the market leader (OECD, 1999, pp. 15). The reason behind this was the company was finding it difficult to keep up with the changing environment. The company was also unable to earn much so that it could pay it employees also pay the licenses' fee and was also unable to hire research graduates that would have helped the company in coming out of the situation and in making them the market leader again.

Importance of TRIAD Nations

TRIAD Nations, Japan, EU and US play a very significant role in the promotion of international commerce. They are the market leaders in most of the commodities worldwide; therefore, their impact on the global business is huge. They are the ones who are proving commodities to a very great extent to almost each ...