Presentation on theme: "The Global Context Lecture 3 The Global Business Environment."— Presentation transcript:
The Global Context Lecture 3 The Global Business Environment
Lecture Objective Explain the nature of the global environment Undertake an external environmental audit Analyse the impact on business of changes in the external environment Assess the attractiveness of countries as places to do business
ORGANISATION beliefs demographic trends technology ethics laws pressure groups Political events inflation interest rates credit availability treaties Europe ecology social problems media values taxes banks neighbours ideas The External Environment
Complex Confusing Dynamic Change is accelerating Turbulent
Opportunities New markets Reductions in cost Economies of scale Access to raw materials
Threats Increased financial risks Increased political risks Increased exposure to natural disasters
Why Scan the Environment? For the most probable opportunities and threats Their potential impact on the organisation Ability of organisation to deal with them
Impact Analysis High priority Medium priority High priority Medium priority Low priority Medium priority Low priority Probability of Occurrence Probable Impact on Organisation high medium high low
External Environmental Analysis(PESTLE) ORGANISATION SOCIO-CULTURALLEGALTECHNOLOGICALECOLOGICALPOLITICAL ECONOMIC AND FINANCIAL
Basic Screening Market indicators – Trade Statistics – GDP – GDP per capita – Growth in GDP – Ownership of cars, TVs, telephones etc.
Sources of Information United Nations World Bank International Monetary Fund (IMF) International Labour Office (ILO) Organisation for Economic Co-operation and Development (OECD) CIA Factbook All available on Internet
Secondary Screening Ease of operation Risks of doing business
Political and Legal Environment Government regulation – Economic policy – Taxes/Incentives – Employment law – Health and safety law – Environmental policy – Competition policy
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