Global Business Strategies A) First

Global Business Strategies

a) First student

The most important thing that management will need to do is to have a PESTEL analysis created by the team working on the development of the venture in the foreign country. A PESTEL analysis will investigate the political, economical, social and technological factors, as well as the environmental and legal ones that are likely to have an impact on the presence and activity of the company in the foreign country and that will shape the decisions that management makes (Gillespie, 2007).

The first four are the most important ones. The political factor will give management a good idea of the role that governmental plays in the business market, including in terms of the legislative proposals it is likely to support and its approach and strategy towards labor issues or promoting local businesses. A proper analysis of the political factor will also determine to what degree the governmental policy is likely to change if one of the opposition parties wins the elections.

The economic factors mostly refer to the macroeconomic policies that the government and the financial institutions in the foreign country are likely to undertake. This includes issues such as the interest rate, which will, in turn, play a role in determining how cheap credit is, both for the company setting up shop and for its competitors on the market.