Technological

Environment
OF International
Business
 Introduction
• Technological Environment means the development in the field of technology which
affects business by new inventions of productions and other improvements in techniques
to perform the business work.
• Technological environment consists of external factors in technology that impact
business operations.
• Changes in technology affect how a company will do business.
• Examples of technological changes are seen in aviation, electronics, energy,
communication, consumer goods industry, optics, medicines and manufacturing .
 Meaning of Technology
• Technology is about application of tools, methods and techniques to
improve production and processes.
• The intensity and type of technology use varies depending on the type of
economic activities an enterprise is involved in.
• Technology involves the purposeful application of knowledge, experience
and resources to create processes and products that meet human needs.
 Use of technology in Business
• It decreases the time it takes to perform a task and increases the volume of information
that can be processed.
• It has the ability to take on multiple tasks at once.
• There is a minimal chance of error when technology is used.
• The low acquisition costs along with the efficiency and precision of technology make the
benefits of using it in business undoubted.
• Technology has forced businesses to remain flexible, adapting their operations to newer
and better technological advances.
 Benefits of technology in International
Business:
• Improved productivity
• Improved competitiveness
• Improved quality of service (e.g. speed of service)
• Reduced industrial wastage
• Introduction of new and better products and services
• Reduced running/operating cost
 Opportunities in international business due to
technology:
•  The use of technology in business has created opportunities for more
technological advances.
•  Many business functions are able to operate autonomously with the use
of technology.
•  With technology running certain business functions constantly with
international employees, businesses are able to have customer support at
all times as well.
• The role that technology plays for the business sector cannot be taken for
granted.

• Almost all businesses are dependent on technology on all levels from

research and development, production and all the way to delivery.

• Technology and business are practically inseparable today.

• Without technology and computers, the routine business functions that are
the backbone of an organization would be severely slowed.
 Ways in which technology helps International
Business:
1) Telecommunications:
• This is the most obvious dimension of the technological environment facing international business.
Now people are using cellular phones, beepers and other telecommunications service, giving a way
to international growth.

2) Transportation:
• Technology In addition to developments in computers and telecommunications, several major
innovations in transportation have occurred since World War II. In economic terms, the most
important are probably the development of commercial jet aircraft and super freighters and the
introduction of containerization, which simplifies transshipment from one mode of transport to
another.
3) Globalization of Markets:
• Technological innovations have facilitated the inter­nationalization of markets.
Containerization has made it more economical to transport goods over long distances, thereby
creating global markets. Low-cost global communications networks such as the World Wide
Web are helping to create electronic global market places.
• In addition, low-cost jet travel has resulted in the mass movement of people around the world.
This has reduced the cultural distance between the countries and is bringing about
convergence of consumer tastes and preferences. 

4) E-Commerce:
• The Internet and the access gained to the World Wide Web have revolutionized international
marketing practices. Firms ranging from a few employees to large multinationals have
realized the potential of marketing globally online and so have developed the facility to buy
and sell their products and services online to the world.
 How technology promotes new products and
businesses:
• During the 1990s, the world of photography started to see a shift from film
photography to digital photography. Three big names in the field of film photography
then were Fujifilm, Konica and Kodak. The change in technology affected these
businesses greatly. Experts state that Fujifilm was more successful in adapting to the
new digital technology and today it manufactures digital cameras and lenses. Though
Kodak manufactured digital cameras during the 90s and 2000s it did not see great
success and now it has joined hands with Flextronics to stay in the domain. Konica on
the other-hand got merged to Minolta in 2003. Today, the company is into
manufacturing printers and copiers. This is a wonderful example of how technology
can impact the very existence of the business.
Technology’s importance to draw international
business strategies:
• The transformation in the way how data is collected, recorded, retrieved and
utilized has helped companies come up with groundbreaking business
strategies. Today, companies monitor customer taste and trends using data that
is available. The development in information technology has made it possible
for businesses to study customer behavior and develop strategies accordingly.
Technology has not only made it possible to collect and store data but
organizations are able to analyze the available data to come up with meaningful
conclusions and make informed decisions. With more and more customer
focus, data analytics will play a key role in growth strategies of companies.
 Conclusion
• Experts and researchers who have worked extensively trying to know the nature
and extent of impact technology can have over business state that technology has
disrupted business models and changed the fundamental principles. Those days
are gone where companies could stick to decades old model and they have their
share of customers in the market. Today, companies are working towards
aligning themselves with the new-age technology. Technology and globalization
has made its impact on business of all scales. Management professionals have
come out of the traditional path of using logical methods for planning and are on
continuous look out for new ways to help align themselves with the market
changes and get the best for their business.