International Expansion into an emerging market

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Introduction: Business environment consists of all those factors that have a bearing on the business. Just as the survival and success of any individual depend on his innate capability- such as the physiological factors to cope with the environment and the extent to which the environment is conductive to the development of the individual, the survival and success of a business organization depend on its innate strength-resources at its command, including physical resources, financial resources, human resources, skill and organization- and its adaptability to the environment and the extent to which the environment is favourable to the development of an organization.


Formulation of strategy is sometimes defined as establishing, a proper firm environment fit. The business environment (external) has broadly two components viz, business opportunities and threats to business. The external forces (Macro) are generally; more uncontrollable than the micro forces (internal) when the macro environment is uncontrollable, the success of a company/ organization depends on its adaptability to the environment. A report (quoted in Hill, 2003, pg 491) by Ravenscraft and Scherer concluded that over 75% of acquisitions fail. Two of the main reasons are a (Hill, 2003, pg 492) "clash between the cultures of the acquiring and acquired firm"and secondly, a failure to (Hill, 2003, pg 492) "realize synergies by integrating the operations" of the two companies. Important macro environment factors include economic environment, political and regulatory environment, social/cultural environment, demographic environment, technological environment natural environment and global environment. ...
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