International Business



International Business

Introduction

As a senior manager in a US based MNC, the company is considering expanding itself in the emerging market. Therefore, three emerging markets are evaluated through their pestle analysis. Our MNC manufactures the fast food products and provides the services of restaurants and fast food chains all over the US. It is decided by the management that the fast food chain must be expanded into an emerging and potential market. It is important for the MNC to choose such country which is highly stable and boosts the business (Sherman, 2001).

A multinational corporation is an enterprise which operates its products and services in one country or more. It places its headquarters in its home country, but manages in several countries, called host countries. The headquarters operates all its branches, and offices and other location in host countries. Multinational corporations can be as large as exceeding some countries GDP amounts and therefore these large corporations as influencing economies, international relations and governments.

Pestle Analysis

This section includes evaluation of three countries on the basis of economic system, political environment, legal and regulatory environment, technological environment, ethical system, social responsibility indicators and cultural dimensions. The cultural dimensions analyze the leadership styles and the operating norms related to the cultural differences. This section will compare and analyze the happenings and events of the three countries which will contribute in the final decision for MNC expansion. Governments have a very important relation with MNCs. Government has the authority to decide about concessions, benefits and licenses; to charge taxes and release regulation; and change contracts or seize investments accordingly. On the other hand, MNCs have the power financially to serve globally; organize proprietary technology; and authorize capital and operations (Sherman, 2001).

India

Political

The political aspects include the government policies and subsidization. This is important for the businesses and infrastructure of the economy. India is a very large economy where the federal republic government operates. The common law of English, separate personal law codes according to religion, compulsory OCJ jurisdiction with reservations are applied in the country. The political situation of the country is not much stable. For most of the time, Indian National Congress has led the federal Government of India. Generally, the government is led by the coalition among the major political parties of India. The major policies which affect the businesses in India are the taxation policy, privatization, deregulation, international trade regulations, general initiatives and international stability.

Economical

This section comprises of the interest rates, taxation changes, inflation, economic growth and exchange rates. Many constructive steps have been taken by the government for the solution of economic problems which includes the central planning, control of State of certain industries and importance of private sector. The policies initiated by the government included the licenses of industries, disinvestment in public sector industrial enterprises, liberalization of foreign capital, technology agreements and promotion of foreign investment by Foreign Investment Promotion Board. GDP of India is the third highest against the purchasing power. The per capita income is at continuous growth ...