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Good Evening All,
To commence this discussion, I want to highlight the different factors that multinational enterprises need to be aware of before proceeding with making any strategic decisions and attempting to enter international markets, this is because the four factors listed below can pose risk to organisations therefore analysis such as PESTLE analysis should be conducted to identify these risks to aid decision making, especially when going international.
There are two categories that form the political aspect which are macro-political, which are risks such as inflation, taxation and the security risks posing a threat to all businesses in one country and the second category is micro-political, which only impacts specific firms when things such as new regulations or taxes are introduced (Wall et al, 2015).
It is important to identify and understand the economic factors that can impact an organisation which includes aspects such as exchange and interest rates, inflation, unemployment rates and more. Without exploring this adequately this would impact the growth of the business within the international market especially as the economic climate is constantly changing therefore organisations will have to adapt their strategies.
There will be different legal systems and regulatory environments world-wide therefore international managers would be required to understand the impact of the legal system specific to the market that they are looking to enter into (Wall et al, 2015).
Environmental and ethical implications around the world differ dependent on the country therefore just like legal implications, the organisation needs to identify areas that will impact them the most such as law regarding the environment, technological advances or how ethical behaviour can influence consumers purchasing decisions (Mamdouh, 2016).
A question to the group It is clear that MNEs looking to internationalise need to be aware of their markets by identifying these factors however, I would be interested to see if anyone feels that any particular factors are more essential than others and if so, why?