Economic and Political Environments Comparison

Economic and Political Environments Comparison

Section One

Multiple factors affect the decisions that are made regarding business. One of these factors is political stability. Political aspects can cause turmoil in the business environment; the prevailing political situation determines the various economic practices in a country. The policies that the government creates impact the economic environment. The size and nature of economic practices or activities are dependent on the policies instituted by the government. The main political variables include international relations, instability, institutions, and ideology. Changes in laws and regulations, freedom of expression, press freedom, bureaucracy, and the government’s participation in unions and international agreements pertaining to labor are the main manifestations of political factors (Albulushi, Irtaimah, & Al-Khasawaneh, 2020). When a country is stable politically, it experiences more economic growth through local or foreign investments because businesses thrive and generate more revenue for the government through taxes (Gale & Samwick, 2014). Our assignment writing help is at affordable prices to students of all academic levels and academic disciplines.

Economic factors such as consumer spending help determine the price that targeted clients are willing to pay for a service or product. In addition to the consumers’ disposable income, the country’s Gross Domestic Product also plays a role in decision-making. The GDP provides a clear prediction of the country’s expansion and growth in terms of available opportunities. If a country’s GDP is low, an expansion might be non-beneficial. However, a company might consider expanding into a market with a high GDP. The GDP per capita also provides a clear representation of the country’s wealth (Saymeh & Orabi, 2013). Based on the figure that represents the GDP per capita, one can easily determine or predict the success of the expansion. Furthermore, the rate of inflation directly affects businesses because it can change the demand and supply curve. If the rate of inflation is high in an economy, the pricing of products and services is affected directly. The consumers’ purchasing power is also affected as the demand and supply elements are affected. The rate of unemployment is also important because it determines if the targeted market will perceive the product as a necessity or a luxury (Albulushi, Irtaimah, & Al-Khasawaneh, 2020). If more people are unemployed, the target market diminishes because more people must prioritize basic needs over luxury products. Thus, they will spend less on products they perceive as luxuries.

Section Two

Section Three

1. China- Most appropriate
2. Germany
3. Brazil- Least appropriate

Product: Digital cameras

My ratings are based on the human poverty index, GDP, economic blocs impacting trade, and purchasing power parity. China is the first choice due to its high GDP. The high GDP signals a possibility for the expansion of businesses as the spending power of consumers increases as well. This means that a demand for more digital cameras is created alongside the expansion (Sun & Heshmati, 2010). Furthermore, the low human poverty index shows that a high number of people are in employment. Thus, those living below the poverty line are also less than in a country such as Brazil, which has a higher human poverty index. Thus, making a business decision in China is easier because more people are capable of spending on digital cameras. Finally, China’s partnerships that support trade regionally and internationally are ideal for the expansion of business. The economic blocs create an opportunity for international sales, thus enabling expansion (Gechev, n.d).

Germany would be my second choice because the ability to make expansion decisions is easier than it would be in Brazil. The already high GDP signals rapid growth of the economy, enabling policies and favorable political conditions. It would be easier to expand the digital camera business in Germany than in Brazil because the demand for products and services exists. This is due to the consumers’ ability to spend. Furthermore, trade agreements with other nations facilitate increased trading activities. The gender hindrances to doing business in Germany are less than in Brazil. This is indicated in both countries’ gender development indexes. The human poverty index indicates that the country’s population is significantly empowered financially because less individuals are living below the poverty line in comparison to Brazil. Thus, setting significantly higher prices and selling larger volumes of digital cameras can be achieved in Germany more easily than in Brazil. This implies that a company is likely to make significantly higher revenue in Germany than in Brazil. Based on the table, it is easier to do business in China and Germany than it is in Brazil due to the potential for growth.

 References

Albulushi, I. b., Irtaimah, H. J., & Al-Khasawaneh, M. M. (2020). The Impact of External Environment Factors on Business Continuity Management to Promoting the Higher Education Excellence in Oman. European Journal of Scientific Research, 156(3), 327-340.

Gale, W. G., & Samwick, A. A. (2014). Effects of Income Tax Changes on Economic Growth. Brookings Institution. Retrieved from https://www.brookings.edu/wp-content/uploads/2016/06/09_effects_income_tax_changes_economic_growth_gale_samwick.pdf

Gechev, V. (n.d). China & India: A Comparison Of Economic Growth Dynamics (1980-2018).

Saymeh, A. A., & Orabi, M. M. (2013). The Effect Of Interest Rate, Inflation Rate, Gdp, On Real Economic Growth Rate In Jordan. Asian Economic and Financial Review, 3(3), 341-354.

Sun, P., & Heshmati, A. (2010). International Trade and its Effects on Economic Growth in China. Retrieved from https://ftp.iza.org/dp5151.pdf

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Overview

There are many factors that should be examined when considering a new international market. In this assignment, you will explore how a company can qualify or quantify the economic factors of markets and how they can influence the process of selecting a new market for a product. As you complete this assignment, consider how the lessons learned and resources used can be applied to your course project.

Economic and Political Environments Comparison

Prompt

You are an international trade consultant ranking the overall quality of various international markets for a product of your choosing. Select a product you would be interested in introducing to a new market, then complete the Module Three Assignment Template (located in the Guidelines for Submission section of this document). Then, rank your recommendations for a new market and justify your rankings using key economic and political data points. Examples of products include digital cameras, activity trackers, curtains, coffeemakers, and so forth.

Specifically, you must address the following rubric criteria:

• Application of Data: Describe your initial thoughts on how insights from the required data to be collected could help to inform business decisions. For example, consider what information each data point provides, whether you think some data points should be weighted more or less heavily than others in making a business decision, what ideal data points might look like for expansion into a new market for your product, the ways that different political systems may impact a decision, and so forth.

• Political and Economic Data Collection: Complete the table in the provided template by finding the appropriate information and data points for each identified category using course and external resources.

• Ranking and Rationale: Rank the appropriateness of introducing your selected product into the three markets from “most appropriate” to “least appropriate” using the gathered political and economic data you collected, then provide a rationale for why you ranked the markets the way you did on the basis of the data you gathered.