1. Introduction Error: Reference source not found
Due to the business globalization, the global market brings more opportunities and creates more profits to the companies which invest in. Likewise, the interest attracts more and more investments which is targeting this big cake. Because of this, a product tend to consist of different components which are produced in various countries. It not only creates profit for many countries, but also stimulates the global business. However, there are some challenges existed in the market. Those challenges can be divided into Political, Economic, Social and Technological sector. Those also can be known as PEST model which give a description about the elements from the structure of the strategic management and it can affect the strategic development of a business as well.
This report begins by discussing the political challenges, the economic problem and the culture challenge respectively in current environment then to draw a conclusion and state personal opinions in terms of these challenges in the last part.
The biggest challenge of the development is that it requires stage that need to the clean and equitable economic growth. By （Schmidheiny, S. 1992).however, the most challenges emerge in the political, economic and culture area in current environment.
An analysis indicates the importance of political system varies from markets to markets in different countries. It is significantly important for enterprises to make strategies which help them to face the challenges as a result of local environment if they want to gain success. (Element of international business. 2010)
In order to establish a fair trade stage in global trade sector, government tends to provide fair opportunity to traders. The policy challenge is a objective problem. In competitive circumstances, the company aims to maximize the advantages of themself. In some countries, the government provided high import tax. Therefore, the price of the finished product is higher than those seperated components. For example in order to maximizie the profit, a large number of foreign companies decide to import the parts and then assemble into a product at the sales territory. Moreover, in China, the import tax of car adds extra 100% to the price; therefore companies are setting the factories in China to assemble vehicles. Because many parts can be obtained in local market, without shipping these components, it reduces the labor and financial expenditure. Similarly, the price of a component is lower than a car’s price; hence the import tax of the component will be lower than the import tax of the car.
To respect the local customs is one of the most significant factors to become a successful business. As a member of the global business company, the marketers have to acquaire and comprehend the cultures from different countries. The consumer perception can be affected by the culture directly. Also, the culture can impact the customer’s preference. According to （Onkvisit and J.Shaw 2009).
A company can be a legal person in law; the company may suffer the cultural diversity. The reason why it is difficult for business to entry into a new market is because of the cultural differences. It is really important to understand the local culture and local religion. Because choosing the suitable product and making a correct marketing strategic development may affect the business development directly. For example, pork is a traditional food in China but a taboo in Mussulmen. People do not eat pork in Mussulmen because of their religion, and they think pigs are in low status and believe they are contemptible. Hence the sales of Pork-product in Muslim area will result a lower sales. The…