Activities in the international environment

International business has been on the rise in line with globalization trends. It has become easier than ever for businesses and economic systems to interact in the global economy due to the ever-reducing interaction barriers. Some businesses are taking their production activities in the international environment with the aim of exploiting the vast opportunities created by international business. Other businesses are exploiting the global market, and this is enabling them to maximize sales. The international business presents both opportunities and threats. The vast opportunities have attracted many businesses leading to a sharp increase in the number of multinational companies. Samsung is one of the companies that have been engaging in international business for decades.
Samsung Group is a household name in the global business environment. The company was established in the year 1938 to carry out trading activities. The next two decades after the company’s establishment was characterized by massive growth and diversification. The company diversified to food processing, textile, and insurance services and started exploiting international business opportunities. The company joined the electronics industry in the 1960 and has since then enhanced its presence in this market to be among the world’s largest vendors of consumer electronics and manufacturer of semiconductors (Michell 2016). Samsung later diversified to construction and shipbuilding being a substantial player in these sectors. Companies affiliated with Samsung Group include Samsung Electronics, Samsung Engineering a construction company, Samsung Heavy Industries a shipbuilding company, and Samsung C&T a construction company. These affiliates are recognized globally in their respective sectors. Most of the company’s revenue comes from Samsung Electronics that is the world’s second largest ICT company based on revenue. The company’s revenue for the year 2017 was 174 billion, and the company employs around 500000 people in its global operations (Michell 2016). Samsung exploits both the global market and the international production environments. Although most of the company’s factories are in South Korea, it has strategic facilities across the globe, especially in Asia. Samsung faces a complex international business environment comprising of factors that determine the opportunities and threats facing multinational companies.
International Business Environment
The international business environment is made of factors that influence firms participating in international business. Factors in this environment are broad, and most of them cannot be influenced by individual companies and governments. International businesses are therefore only required to align their strategies with the realities of the international business environment. Succeeding in the international business environment is dependent on the extent to which managers understand key factors in the international business environment. International environment factors include political, economic, technological, and social-cultural factors. These factors to great extent influence strategies implemented by a multinational company.
Political Factors
The political environment impacts operations of multinational companies. Samsung’s operations are spread worldwide implying that it interacts with many segments of the political environment. The legal environment is a segment of the political environment since laws are made through political processes. Factors of the political environment that affect multinational companies include political stability, business sentiments, legal factor, and relationships among countries (Keillor 2013). Political instability interferes with business operations which is damaging to profitability. South Korea is a relatively stable country and the government invests heavily in ensuring a supportive business environment. As a result, the company’s activities in the home country are not disrupted by political dynamics. However, the fact that the company operates in the global economy makes it vulnerable to political instability in other countries. The Arab world has been facing instability in the past one decade. This instability has affected sales in the affected countries adversely. Samsung commands a substantial market share in the Arab countries implying that political turmoil in these countries is reducing sales. Business sentiments in the global environment affect performance. These sentiments are classified into pro-business and anti-business sentiments. Pro-business sentiments are positive statements about a business made by influential political leaders. These statements enhance the company’s position in the market. On the other hand, anti-business sentiments erode a business image (Hamilton 2015). In the year 2017, Samsung faced a problem emanating from faulty high-end phones that attracted many anti-business sentiments. These sentiments had a negative impact on the company’s market share in the high-end smartphone market. The legal environment influenced the operations of multinational companies. A multinational company is expected to comply with a diverse legal environment comprised of distinctive legal environments. The complexity of the legal environment exposes multinational companies to non-compliance risks. In the past, Samsung has faced cases emanating from non-compliance.

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