PEST-Factors effecting international business

Presented by:Siby Varghese(97)Krishna Yagnik(120)Harsh Sonpal(103)Kaushal Solanki(101)Ashwini Pathak(64)Shruti Pillai(67)

What is International Business? Features of international business:

- Large Scale Operations- Integration of Economies of many countries- Dominated by developed countries and MNC’s- Keen competition- International restriction- Sensitive nature

International Business

North America Advanced Mixed Economy Member Of WTO,APEC, NAFTA Etc. 50 States World's Largest Producer Of Both Electrical

And Nuclear Energy Leading Exporter Of Wheat And Corn And

Ranks Third In Rice Exports. Defense And High Quality Products

Overview: U.S.A.

Second largest country in the world Land mass- 10 million sq.kms Population 3,34,87,208 Official languages – English and French Currency Canadian dollar (CAD) GDP – purchasing power parity $1.564 Member of , APEC, NAFTA,WTO, Organization

for Security and Cooperation in Europe etc Indians are now the second-most populous

cultural group immigrating to Canada, behind Chinese.

Canada

India, Officially The Republic Of India  Is A Country In South Asia.

Second-most Populous Country Tenth-largest By Nominal GDP  ($1.84

Trillion) Third-largest By Purchasing Power Parity Diverse Culture Milk Is India's Largest Crop By Economic

Value The Service Sector- 55.6% Of GDP,

Industrial Sector-26.3%, Agricultural Sector-18.1%

World's Tenth-largest Importer,Nineteenth-largest Exporter

India

 India  United States  Canada

Population 1,210,193,422 314,256,00034,951,600 (October 2012) (35th)[8]

Area3,287,240 km2 (1,269,210 sq mi)

9,526,468 km2 (3,678,190 sq mi)

9,984,670 km² (3,854,085 sq mi)

Population Density 370/km2 (958.2/sq mi) 33.7/km2 (87.4/sq mi) 3.41/km² (8.3/sq mi)

Capital New Delhi Washington, D.C. Ottawa

Largest CityMumbai – 13,922,125 (21,347,412 Metro)

New York City – 8,363,710 (19,006,798 Metro)

Toronto

GovernmentQuasi-federal parliamentary constitutional republic

Federal presidential constitutional republic

Federal Parliamentary democracy and Constitutional monarchy

Official languagesHindi and English, 21 other constitutionally recognised languages

English (de facto) English and French

Main religions

80.5% Hinduism, 13.4% Islam, 2.3% Christianity, 1.9% Sikhism, 0.8%Buddhism, 0.4% Jainism

78.4% Christianity, 16.1% non-Religious, 1.7% Judaism, 0.7% Buddhism, 0.6% Islam, 0.4% Hinduism

67.3% Christian 3.2% Islam, 1.0% Jewish, 1.1% Buddhism, 1.5%Hinduism, 1.4% Sikhism

GDP (nominal)$1.848 trillion ($1,389 per capita)(10th)

$15.094 trillion ($48,386 per capita) (1st)

$1.396 trillion ($40,541 per capita

GDP (PPP)$4.515 trillion ($3,694 per capita)(3rd)

$15.094 trillion ($48,386 per capita) (1st)

$22.8 billion (1.5% of GDP)

Indian Americans60,000 American born people living in India

2,765,815 People of Indian origin living in the United States

11,65,145 People of Indian origin living in Canada

Exports include: information technology services, textiles, machinery, gems and diamonds, chemicals,  iron and steel products, coffee, tea, and other edible food products.

Imports include: aircraft, fertilizers, computer hardware, scrap metal, and medical equipment, space craft and others.

Trade synergies:2013 : U.S. trade in goods with India

Month Exports Imports Balance (All figures are in millions)

January 2013 1,699.3 3,171.1 -1,471.8

February 2013 1,605.0 2,829.6 -1,224.5

March 2013 1,861.6 3,662.0 -1,800.4

April 2013 1,655.3 4,075.3 -2,420.0

May 2013 1,935.8 4,201.5 -2,265.7

June 2013 2,396.5 3,418.5 -1,022.1

TOTAL 2013 11,153.5 21,357.9 -10,204.4

Month Exports Imports Balance (All figures are in millions)

January 2013 23,142.8 27,963.4 -4,820.6

February 2013 23,210.0 25,732.9 -2,522.9

March 2013 25,990.9 28,299.0 -2,308.1

April 2013 26,245.0 28,590.5 -2,345.5

May 2013 26,476.7 28,343.1 -1,866.4

June 2013 25,532.3 27,143.5 -1,611.2

TOTAL 2013 150,597.7 166,072.4 -15,474.7

2013 : U.S. trade in goods with Canada•  Largest trade relationship in the world• In 2012, US merchandise trade with

Canada consisted of $324.2 billion in imports and $292.4 billion in exports

Canada and India

• Canada has nuclear trade with India. • Bilateral merchandise trade between India

and Canada increased 23.4% to 5.2 billion CAD.

• India’s export to Canada was $2.5 billion, while import was $2.6 billion in 2011.

Political factors

Government Policy

Labour Laws

Tax policy

Federal Challenge

Government BlackBerry Dispute Issue between India & Canada

Track users

Security system

Lawful access

Interception facilities

Global retail giant

FDI Norms 30% local sourcing

To protect interest of Indian small scale industries

Walmart entering into Indian market

Health & safety laws (avian influenza)

Increase of import duty

To safeguard the interest of Indian farmers

WTO Dispute Settlement Panel

Impose import ban on US poultry

Economic Factor

Economic Factors Affecting International Business Operations

GDP Inflation Unemployment Poverty Labor costs Balance of payments

Features of an Economy

A mechanism that deals with the production, distribution, and consumption of goods and services

Types:◦ Market economy◦ Command economy◦ Mixed economy

Economic System

Why is the U.S.-India Strategic Dialogue significant? 

What are the major issues that will be discussed? 

What can be achieved during this round of the strategic dialogue? 

What economic concerns will the two sides want to discuss? 

How will civil nuclear cooperation factor into the strategic dialogue? 

What is the current state of relations between Washington and New Delhi?

The U.S.-India Strategic Dialogue: Forging the Next Phase of Cooperation

Recommendations for India

-Expand the basis for collaboration Undertake planned second-generation economic reforms. -Encourage foreign direct investment (FDI). -Improve defense cooperation with key states. -Influence Iranian calculations

Opportunities Unbound: Sustaining the Transformation in U.S.-Indian Relations

Recommendations for the United States:

- Explore a free-trade agreement with India. -Sustain leadership attention. -Seek a deeper partnership on Afghanistan. -Build up India’s defense capabilities

Opportunities Unbound: Sustaining the Transformation in

U.S.-Indian Relations

Canada - India Bilateral Trade

According to Statistics Canada, bilateral merchandise trade between Canada and India in 2011 totaled approximately CAD$ 5.2 billion, an increase of 23.4% percent 2010.

While Canadian merchandise exports to India in 2011 totaled $2.6 billion (a 27.7% percent increase 2010), imports from India reached $2.5 billion (a 19.3% percent increase from 2010).

India Bilateral Direct Investment

Demographics Distribution of Income Life Style Changes Consumerism Educational Levels

Social-Culture Factors

Demographics & Distribution of Income ◦ Division of population - Male / Female◦ Age Group of the Population◦ Disposable Family Income

Disposable Income in the hands of the different Age Groups

Education Level of the Age Groups

Social-Culture Factors Cont..

Life Style Changes & Consumerism◦ Attitude to living

Different Age Groups In tune with available disposable income Thrust on taking care of present needs by spending

than saving for the future. Joint living and nuclear families Availability of various media tools Reach of the media to the population

Social-Culture Factors Cont..

Cultural Comparisons

Aspect INDIA Canada/USA

Family Family is the first priority.Children are celebrated and sheltered.Wife fulfills domestic role.Mobility is limited.

Family is usually second to work.Children often minimally parented; are independent.Wife often fulfills dual roles.Mobility quite common.

Religion Hindu dominator. Mixed religions."Master of own life" outlook.

Education Memorization.Emphasis on theoretical.Rigid, broad curriculum.

Analytical approach.Emphasis on the practical.Narrow, in-depth specialization.

Nationalism Very religious & culturalisticProud of long history and traditions.Reluctant to settle outside India.

(U.S.)Very patriotic.Proud of "American way of life."Assumes everyone shares his/her materialistic values.(Canadian) Less than U.S.. Often has more " World" view.

Personal Sensitivity Difficulty separating work and personal relationships.Sensitive to differences of opinion.Fears loss of face, especially publicly.Shuns confrontation.

Separates work from emotions/personal relationships.Sensitivity seen as weakness.Tough business front.Has difficulty with subtlety.

Etiquette "Old world" formality.Etiquette

Formality often sacrificed for efficiency."Let's get to the point" approach.

Personal Appearance Dress and grooming are status symbols. Appearance is secondary to performance.

Status Title and position more important than money in eyes of society.

Money is main status measure and is reward for achievement.

Aesthetics Aesthetic side of life is important even at work.

No time for "useless frills".

Ethics Truth is tempered by need for diplomacy.Truth is a relative concept.

Direct Yes/No answers given and expected.Truth seen as absolute value.

MCDONALD AND HINDU CULTURE McDonald’s is the world’s largest

user of beef “Maharaja Mac” – which is made of mutton. “McAloo Tikki Burger”, which is

made from chicken. Found beef extract in the oil. Close McDonald’s 27 stores in the

country.

SOCIO-CULTURAL ANALYSIS

COCO COLA: Labeled “No- alcohol” on their bottles supplied

to the Gulf countries.

NOKIA: Introduced Hindi language SMS for Indian users.

SOCIO-CULTURAL ANALYSIS

A surprising demographic trend is that both China and India have more than twice as many English-speaking college graduates each year than does the United States.

Reproduced with permission from Short, J. C., Bauer, T., Ketchen, D. J., & Simon, L. 2011. Atlas Black: The Complete Adventure. Irvington, NY: Flat World Knowledge

Providing India with internet access anywhere there is electricity and Canada with commercial opportunity

Reducing the Time and Cost of Aircraft Development and improving passenger safety

Developing affordable drugs to better treat and prevent malaria

Developing environmentally sound fuels that increase the competitiveness of the aerospace industry

Match-Making Mission in Water Technologies

INDIA – CANADA TECH RELATIONS

Low-Cost Medical Technologies Arsenic Removal from Drinking Water Defence Relations

INDIA – US TECH RELATIONS

First Unbundling Second Unbundling Changes In Geography, Supply, Sectors Global Trade Growth To Become More

Concentrated

Future of International trade

Interdependence Intense competition Globalization Price difference

Growing importance of international business

US Aims To Expand India Arms Trade By “Billions Of Dollars”

Trade Between India, US On Track To Cross 100bn This Year

Ford Plans To Make India An Export Hub

USA and INDIA

Current Bilateral Trade - $5.2 Billion Increase To $15 Billion Is Expected By

2015 Transportation And Communications

Sectors Canadian Manufacturing Facilities Jobs Created Are Based At Plants In India Some Of The Deals:

Prairie Pulp & Paper Inc With Central Pulp & Paper Inc

Taraspan Of Kanata And Tulip Telecom

canada and india

Oil Exports To USA Rising Vehicles Gold

USA and Canada

Importance Of International Business PEST Effects

CONCLUSION

Thank you!