Global Business Environment

Objectives
At the end of the presentation, the students are
able to:
1. Define global business environment
2. Discuss the global economic, political and
demographic power and their indicators
3. Explain consumer environment and consumer
engagement
4. Enumerate the aspects of consumer behavior
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Global Business
Environment
It can be defined as the
environment in different
sovereign countries, with
factors exogenous to the
home environment of the
organization, influencing
decision making on resource
use and capabilities.
 It is described as the reality of the nature
of international trade: it is evolving in a
fundamental way as a result of numerous
forces shaping the nature and dynamics
of global commerce.
 It examines key political, economic, and
cultural developments and institutions that
constitute the global business environment.
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Business Environment
Global Economic, Political,
and Demographic Power
 Global Economic Power
What is global economic power?
How is it changing? How can it be
measured?
 It is broadly defined as the ability to control
or influence the behavior of others through
the deliberate and politically motivated use
of economic assets.
 It can also be thought of as the ability to
resist external control or influence because
dependence on external factor is sufficiently
diverse to preclude vulnerability to outside
pressure.
It is associated with what societies and
governments can create for themselves:
sound financial and macroeconomic policies,
an educated and adaptable work force,
market-based competition, a supportive
infrastructure (including transportation,
communications, and energy distribution),
and a stable and welcoming investment
climate backed by good governance and
predictable rules.
 Today, China is fast catching up as a global
economic forum, while the public perception around
the world, including India, is that the US still
remains at the top, according to a new survey in 38
countries.
The survey shows "in seven of the 10
European Union nations, China is considered the leading
economic power (it is tied with the US for top spot in
Italy)."
 Across all of the countries surveyed in Latin
America, as well as most in Asia and sub-Saharan
Africa, people tend to believe that the US is the top
economy.
Over the past year, perceptions of relative US
economic power have declined in many of America's key
trading partners and allies.
Following the onset of the financial crisis nearly a
decade ago, Europeans increasingly named China, rather
than the US, as the world's leading economic power.
 Global Political Power
It is the power over many international decisions
made as far as the governmental policies goes.

It means that you have power to push/achieve what

you want - for example, policy
 Political power comes in many
dimensions. For the U.S., foreign aid is an
effective way to cement its political clout
globally.
But in order to have political power, they must
have stability at home. The U.S. has the oldest
working national constitution in the world, as well
as strong institutions and rule of law to accompany
it
Global Demographic Power
 Population growth and decline in different
countries, combined with an ageing population
around the world, will create a markedly different
consumer market by 2050.
In many developed countries, the working
population will decline significantly and this gap will
need to be filled by immigration, later retirements
and productivity gains, which could be accelerated
by the growth of the digital ‘machine-to-machine’
economy.
 An ageing workforce, ageing customers,
the shift in economic power and the rise of the
Millennial generation (Generation Z) will have
profound implications and opportunities for
your business.
Your business will need to anticipate
demographic developments and bring
products and services into line with the
changing customer base in the markets you
serve.
 India is expected to benefit from a
“demographic dividend” for years to come. The
country will soon have 20% of the world’s working-
age population, and boasts a birthrate of 2.5
children per woman. The statistics are staggering.
The working-age population, aged 15-64, will rise
by 125 million over the next decade, and another
103 million over the following decade.
 Consumer Environment

Everything external to consumers that

influences what they think, feel, and do. The
consumer environment is the medium in which
stimuli are placed to influence consumers.
 Consumer Engagement
It is a business communication
connection between an external
stakeholder (consumer) and an
organization (company or brand) through
various channels of correspondence.
Thank You