As companies grow bigger and bigger, most companies would decide on expanding their business to other places globally. Their purposes can be because there are other places where a larger or more attractive market may be available.
When a company is considering on moving to other places in the world, they must keep four factors in mind. The acronym for the four factors is P.E.S.T. The factors are political, economical, socio-cultural and technological, respectively.
Firstly, the political factor is how usually how the political system works in that country or city. A political system could include political stability and different set of laws. Secondly, the economical factor would include the economy of the country. The factors would include GDP, economical growth, and economical stability. Thirdly, the socio-cultural factor would include describes social and cultural factors. For social factors, it could include infant mortality rate, immigrant rates etc. As for cultural factors, it could include their religion, their set of believes and the food they eat. Lastly, technological factors is basically how advanced their knowledge is in the application of science knowledge. Factors could include different payments methods, new and unique communication devices.
When looking back at this topic, international business, and answering the guiding question, I feel that companies expand their business to other places around the world, as every country is different, therefore different people have their own needs and wants.
Byron Chow
{ 1 comment… read it below or add one }
I like how you had a detailed description and explanation about the P.E.S.T analysis and how it relates to international businesses! One improvement, though, would be probably to elaborate more on how this unit connects with the guiding question.