Societal forces impacting international business
International business is everywhere, from heavy-hitting, well-known multi-national corporations like (well, you name it) to brand-new, garage-based startups. Simply put, international business is any transaction that takes place between two or more nations. So an online based sale here that ships to a customer in Russia applies.
Because it’s so easy to engage in international business, especially with the advent of eBay, Craigslist, YouTube, and Etsy, there are societal forces every business person should be cognizant of. While there are a myriad of societal forces, here are the top 3 worth focusing on at any stage of your business development:
Societal force #1: technology
This ever evolving tool is crucial to all aspects of business. It’s important to not only keep abreast of local and international technological changes, but also how technology growth (or decline) in one country can impact another.
For example, you may think investing in 4G cell phone tower infrastructure in Mumbai will be the next big thing, but you should find out what the technology landscape will support. I met a gentleman in Japan who bought 2G and 3G technologies and took them to third world countries whose infrastructure doesn’t support an advanced technology such as 4G.
Looking at what works in your home country in terms of software, hardware and bandwith are great starting points to figure out what the market locally will bear, but if you plan to be successful abroad, it’s best to understand what works in that country.
Societal force #2: economy
Knowing more than just exchange rates would be of great benefit to anyone looking to be an international business person. Currency exchange rates are important to know, but more so are the reasons behind potential currency, tariff and duty changes.
If you are involved in a product-based business, one competitive advantage could lie in understanding the economic landscape. Not only can you adjust your pricing accordingly, but you can insulate yourself from the effects of drastic currency changes.
It’s important to not only understand the economic climate of the country with which you desire to conduct business, but also of its neighboring countries. Since so many countries rely on good economic relations with other countries, especially contiguous ones, research the economics of surrounding countries.
Societal force #3: culture
Culture is a huge topic, but one aspect of culture to keep your eyes and ears on are ideologies. Local, generational, perceived, real, and ancestral ideologies permeate any country you may seek to do business with. Ideologies can and do change, so keep in mind what your product or service can do to aid or impede such a transformation.
Educate yourself on local nuance, norms, and belief systems. All of these will determine if and how other cultures will do business with you.
Key takeaways:
- Research the societal forces that effect your business the most.
- Plan around societal forces, they are moving targets that evolve and change.
