University Of Finance & Administration INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc....

University Of Finance & Administration

INTERNATIONAL BUSINESS[E_IB]

PhDr. Karel Eliáš, [email protected]

Lecture content

History of Czech international business [IB]

European Union principles of IB

Opportunities & Threats of CZ membership in the EU

International Market research (analysis)

Data collection & selection in IB

6.

INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc. [email protected]

History of Czech IB

100 years ago: in “top ten” of the most advancedcountries in the world

Before 2nd World War: orientation on western markets, stillCzechoslovakia =10th most industrially developed country

After 2nd World War (communist period): CZ „manufactury“ of thecommunist bloc with over 70 % of export into these countries

1989 fall of socialism: CZ‟s IB shift to the western partnersagain (Questionable move today)

2004 CZ joins EU:• Elimination of trade barriers (duties, quotas and other restrictions)

• Solid business climate in CZ => inflow of FDI (often based ongovernmental INCENTIVES) 7.


CZ - joining EU

CZ member of EU since 1.5.2004 (in the wave of 10countries - the biggest enlargement in the EU history)

1st half of 2009 Czech presidency of the EU

today 27 countries

members are sovereign nations that have agreed tocede certain of their powers to the EU

Negotiations about further countries accession

8.


EU business principles

single market

non-existence of tariffs (custom duty), quotas andadministrative restrictions of import & export

prohibition of EU companies DISCRIMINATION(tenders, market operations, certification)

no DUTY CHECKS on the borders within EUmembers

single business, duty & immigration approach(policy) towards third parties

strict regulations - environment single currency (EUR) / Schengen Space

9.


Business Advantages & Disadvantagesof Czech accession of EU

ADVANTAGES DISADVANTAGES- duties elimination - stronger- free movement of competitiongoods / partly free - less freedom inmov.of labor some of state- larger market economical(single market) decisions

10.


OPPORTUNITIESfor Czech ent. at EU single market

Custom duties

• Elimination / removal of business restrictions• Cut of bureaucratic cost

Mutual approval of norms

• No need for additional certification

Allocation of production units wheremore effective

• Low labour cost• lower input cost

• easy access to financial & insurance services• release of public orders / commissions

11.


THREATSfor Czech ent. at EU single market

Strong competition

• Threat of lowering the competitiveness of Czech companies(necessity to find another competitive advantage)

Pressure on lowering prices & profits

SME more vulnerable in competitionwith MNE

Labour market / different socialconditions

TAX systems

12.


INT environment & its influence on business

IB works in a certain environment, whichhas an influence on:

Decision making WHETHER OR NOT to enterthis market (market selection)

Entry mode (the form of entry)

Choosing of mktg strategy

PEST analysis = analysis of int.envi:P olitical & Legal e.

Economical e.Social & Cultural e.Technological e.

13.


Basic business analysis

Analysis of externalenvironm. (market)

PEST / STEEP /STEEPLE

• Factors: political, economical,social, technological (PEST),ecological (STEEP), legal andEuropean (STEEPLE)

• Barriers to entry

COMPETITIONanalysis

Analysis of innerenvironm. (company)

SWOT

• Threat of substitutes• Buyer power

• Supplier power• Rivalry / degree of rivalry of

present competitors

• Strengths• Weakness

• Opportunities• Threats

14.


[PEST] P - Political & Legal environment

Legal environment: possibility to control ownership

possibility to buy properties (lands, buildings)

possibility to repatriate the profit abroad

law enforcement possibility to set up a new company & finishing

entrepreneurship

Political environment:

o political system and political stability

o influence of interest groups / stakeholders

o relation to foreign companieso corruption

15.


[PEST] (P) - LEGAL environment

COMMON / CASE law

• Cases create legal precedents

CIVIL law

• Detailed listing what IS and IS NOT permissible

RELIGIOUS law

• Based on the faith & practice of a particular religion

BUREAUCRATIC law

• Often in communist and dictatorships• is whatever the country‟s bureaucrats say it is

16.


[PEST](P) - POLITICAL environment

Political IB barriers:

Sanctions Embargo

Exchange rate manipulation Dual-use

Nationalizationo expropriation

o confiscation

Privatization

17.


[PEST] E - Economic environment

economic policy of government:

o IB policy

o rate policy

basic macro-economic measures and theirdevelopment / trend

proportion of „grey economy‟

18.


[PEST ] S - Social & Cultural environment

• Culture: Extent of freedom of society Hierarchy

Value orientation (e.g.: western pattern etc.)

• Institutions:- Family

- Religious bodies- Educational institutions

• Further factors:- Language

- Non-verbal communication- Way of dressing

- Aesthetics- Life styles

19.


[PEST] T - Technological environment

existence & quality of basic infrastructure

quality & availability of communication infrastructure: TV,

broadcast, phones etc.

IT - possibility of data transfer abroad =>

internationalization of services,

standardisation

approach to information E-commerce / e-business

B2C, B2B, C2C (e-Bay), C2B

20.


Basic business analysis

Analysis of externalenvironm. (market)

PEST / STEEP /STEEPLE

• Factors: political, economical,social, technological (PEST),ecological (STEEP), legal andEuropean (STEEPLE)

• Barriers to entry

COMPETITIONanalysis

Analysis of innerenvironm. (company)

SWOT

• Threat of substitutes• Buyer power

• Supplier power• Rivalry / degree of rivalry of

present competitors

• Strengths• Weakness

• Opportunities• Threats

21.


Decision making - foreign market evaluation

PEST / STEEP / STEEPLE analysis

Competition analysis (Porter)

SWOT analysis

BENCHMARKING

Emerging market trends

DATA collection:

Secondary data

= was collected

already

Primary data= necessary to obtain it

22.


Data collection

SECONDARY / desk

• analysing ofsecondary data

• low cost

• quick execution

PRIMARY / terrain

• collection &analysis of primary d.

• relatively high cost

• time-consuming

23.


KEY terms

- Czech presidency of the EU

- EU international business principles

- Single market- International market analysis / Competition analysis /

Internal analysis- Types of law systems [Case / Civil / Religion / Bureaucratic]

- Business Analysis- PEST - international business environment evaluation

- Primary x Secondary data, collection

24.


Thank you for your attention

25.


University Of Finance & Administration INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc....

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