A.

External Analysis (Industry) Classify the following factors of international and industry
environment by selecting the factors which have a positive impact-opportunities, mark “O”
or negative impact-threats mark “T”. In the case where there is no significant effect mark
(-). Also add two other opportunities and threats of great importance for the international
activity of the company.

ENVIRONMENTAL AND SECTORAL FACTORS O, T, or (-)

Reduction of barriers (custom tariffs, quotas) to international trade O
Technical barriers to international trade T
Economic integration of countries (EU, NAFTA, ASEAN, etc.) O
Use of internet for international business O
Improvement of the transport systems O
Level of maturity of the internal market O
Appearance of emerging markets as manufacturers T
Appearance of emerging markets as consumers O
Concentration of the ownership of the companies -
Increasing power of retail O
Appearance of new products T
Changes in consumer behavior O

1. Tariffs and taxes increase the cost of your product to the foreign buyer, and may affect your
competitiveness in the market. That tariff reduction creates many economic benefits.
Proponents of the WTO have emphasized its positive results by pointing to reductions in the
cost of living, increases in income, and improvements in efficiency.
The unilateral decision by a country to reduce the tariffs it imposes on its imports. Tariffs are
considered economically inefficient because they make imports less competitive than
domestically produced goods, which can result in more expensive products for consumers.
Across the board tariff reductions help prevent this; they also may be intended to encourage the
country's trade partners to do the same and make the country's exports more competitive
abroad.

2. Technical regulations and standards set out specific characteristics of a product — such as its
size, shape, design, functions and performance, or the way it is labelled or packaged before it is
put on sale. In certain cases, the way a product is produced can affect these characteristics, and
it may then prove more appropriate to draft technical regulations and standards in terms of a
product's process and production methods rather than its characteristics per se.
A technical barrier to trade (TBT) is any regulation, standard or procedure that could make
exporting goods to another country more difficult. TBTs are often greater obstacles to exporters
than tariffs (import fees).
Testing or certification procedures are examples of technical barriers to trade. For instance, a
Canadian entrepreneur may have a product certified by the Canadian Standards Association
(CSA), but that certification may not be valid in other countries. This forces the company to
recertify the product in the country where they wish to sell it—a potentially costly and time-
consuming procedure.
 The World Trade Organization’s Technical Barriers to Trade Agreement aims to reduce these
barriers to trade, as do most free trade agreements. The goal in both cases is to create a more
open and competitive marketplace.
Accordingly, Technical Barriers to Trade mainly induce an increase in the fixed costs of
exporting. Importantly, smaller firms are more adversely affected by Technical Barriers to Trade
in their export participation and entry and exit decisions. The effect of Technical Barriers to
Trade on firms' product diversification is found to be sector-dependent: positive for agricultural
sectors and mixed for non-agricultural ones. Finally, firms generally tend to increase their
market diversification in response to Technical Barriers to Trade. This is especially true for large
firms within their set of African and Asian destination markets. By contrast, there are lower
prospects of firm diversification into less stringent destinations within the European region.
In general, these costs arise from the translation of foreign regulations, hiring of technical
experts to explain foreign regulations, and adjustment of production facilities to comply with
the requirements. In addition, there is the need to prove that the exported product meets the
foreign regulations. The high costs involved may discourage manufacturers from trying to sell
abroad. In the absence of international disciplines, a risk exists that technical regulations and
standards could be adopted and applied solely to protect domestic industries.

3. Economic integration can reduce the costs of trade, improve the availability of goods and
services, and increase consumer purchasing power in member nations. Employment
opportunities tend to improve because trade liberalization leads to market expansion,
technology sharing, and cross-border investment.
4. A lot of effects have been felt in international business following the introduction and
development of the internet as a means of communication. One of the immediate impacts of
the use of the internet in international business was the expansion of market for goods and
services. A study of the relationship between expansion of the use of internet and the level of
international trade revealed a significant relationship between the two elements.
It has been found out that as the use of internet spreads among countries, an increase of ten
percent in the number internet web sources leads to a corresponding 0.2 percent increase in the
amount of products that a particular country exports. In view of that research outcome, it can
be concluded that the development of internet usage together with its expansion across the
globe has had the effect of expanding international trade by increasing inter border business
transactions. This can be attributed to the increased access of information that internet usage
has developed since contrary to the previously dominating communication media, internet
became a global connection allowing business entities to advertise and reach markets
throughout the world. Internet has also had the impact of reduced amount of money spent in
communications (Fleming, Mueller and Thiemann, n.d., p. 8).

5. Because of its intensive use of infrastructures, the transport sector is an important component
of the economy and a common tool used for development. This is even more so in a global
economy where economic opportunities have been increasingly related to the mobility of
people and freight, including information and communication technologies. A relation between
the quantity and quality of transport infrastructure and the level of economic development is
apparent. High-density transport infrastructure and highly connected networks are commonly
 associated with high levels of development. When transport systems are efficient, they provide
economic and social opportunities and benefits that result in positive multiplier effects such as
better accessibility to markets, employment, and additional investments. The outcome of
improved capacity and efficiency where transport provides employment, added value, larger
markets, as well as time and costs improvements. The overall demand of an economy is
increasing.

6.

1.
2. https://www.wto.org/english/tratop_e/tbt_e/tbt_info_e.htm
3. https://www.investopedia.com/terms/e/economic-integration.asp#
4. https://www.linkedin.com/pulse/why-internet-has-resulted-more-international-business-assan
https://www.shiplilly.com/blog/how-the-internet-affects-international-trade/
https://ivypanda.com/essays/impacts-of-internet-on-international-business/
5. https://transportgeography.org/contents/chapter3/transportation-and-economic-
development/
6.