International Business Focus Areas
International Business is a loose term to describe aspects of business that are not directly tied to the domestic marketplace. For example, it can encompass cross border trade of goods and services; the regulation of international financial markets; the investment climate in foreign markets; global market intelligence; intercultural business customs and practices; and much more.
International Business information can be broken down into the following six focus areas, which are covered in this module:
|1. Country Profiles
|These reports contain essential country information like demographics, key economic indicators like Gross Domestic Product (GDP) and Foreign Direct Investment (FDI), business climate information, top industries, market opportunities and challenges, and an overview of the political and economic environment.
|2. International Company resources
|These are free and subscription-based resources where you will find public company data, including financials, filings, news, management information, and more. Because there is no forced disclosure for private companies, there are fewer sources available that track and they are almost exclusively subscription-based.
|3. Global Market Intelligence
|Market intelligence consists of two parts: 1.) Industry data, including industry size and share, key players, and growth projections for mature and emerging industries, and 2.) Market research on potential customers and consumers around the world, including market size, demographics, trends, preferences and opinions.
|4. International Trade
|This information focuses largely on the import/export markets of countries, including existing trade agreements, and anything related to the flow of capital, goods or services across borders. The World Trade Organization (WTO) is an important entity, as it “deals with the global rules of trade between nations” and also oversees the General Agreement on Tariffs and Trade (GATT).
|5. Economic Data & Statistics
|Country data relating to demographic, economic and social indicators from intergovernmental and non-governmental organizations (IGOs and NGOs) including the United Nations (UN), the International Monetary Fund (IMF), the World Bank and the Organisation for Economic Co-operation and Development (OECD).
|Each country has different cultural norms governing business communication and conduct. In order to create a hospitable and inclusive business environment for cross-border activities, it’s critical to understand the business culture around common business topics like the exchange of business cards, meeting protocol and gift-giving.
SWOT/PESTLE/Porter’s Five Forces Frameworks
As you discovered in Module 4, Industry & Market Research, there are commonly used business analysis frameworks to examine competitive dynamics within a company or industry. An important part of understanding an industry is knowing how market and economic forces change depending on geographic location.
For example, if you are conducting a PESTLE analysis, which looks at external factors on a company, then you will need to know where to locate business information for companies headquartered outside Canada. To illustrate, if you are using PESTLE for a company based in France, these are some potential questions that you might want to ask, along with resources that you would want to consult:
|Resource Type to Consult
|What are the major political parties of the country?
Who is the head of state and which party is represented?
How stable is the current government?
|country profile information
|What is the country’s GDP? What are the major import/export markets?
What are its foreign direct investment (FDI) inflows and outflows?
|economic data & statistics / international trade
|What are the country demographics (age distribution, income level, educational attainment, etc.)?
|economic data & statistics / global market intelligence
|How developed is its tech infrastructure?
Is there equitable access to high-speed internet?
How many citizens have smartphones?
|global market intelligence
|What type of law is practiced?
Where are company disputes adjudicated?
What tax regimes are used?
|How much energy is produced and consumed by type?
What are its major natural resources?
What environmental treaties are in place?
|global market intelligence/ country profile information
Likewise, for SWOT and Porter’s Five Forces, knowledge of international business resources is critical for using these analysis tools to inform and influence business decision making on a global level.