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Physical and social factors of competitive business

Choice of entry mode in international business[edit]

Strategic variables affect the choice of entry mode for multinational corporation expansion beyond their domestic markets. These variables are global concentration, global synergies, and global strategic motivations of MNC.

  • Global concentration: many MNEs share and overlap markets with a limited number of other corporations in the same industry.
  • Global synergies: the reuse or sharing of resources by a corporation and may include marketing departments or other inputs that can be used in multiple markets. This includes, among other things, brand name recognition.
  • Global strategic motivations: other factors beyond entry mode that are the basic reasons for corporate expansion into an additional market. These are strategic reasons that may include establishing a foreign outpost for expansion, developing sourcing sites among other strategic reasons.[14]

Means of businesses[edit]

Physical and social factors[edit]

  • Geographical influences: There are many different geographic factors that affect international business. These factors are: the geographical size, the climatic challengeshappening throughout the world, the natural resources available on a specific territory, the population distribution in a country, etc.[16]
  • Social factors: Political policies: political disputes, particularly those that result in the military confrontation, can disrupt trade and investment.
  • Legal policies: domestic and international laws play a big role in determining how a company can operate overseas.
  • Behavioral factors: in a foreign environment, the related disciplines such as anthropology, psychology, and sociology are helpful for managers to get a better understanding of values, attitudes, and beliefs.
  • Economic forces: economics explains country differences in costs, currency values, and market size.[12]