Expert answer:BUS360 External Business Environment Analysis

  

Solved by verified expert:Write a report (3-5 pages recommended) typed, double-spaced, using Times New Roman font (size 12), with one-inch margins on all sides, Citations and references must follow APA format, include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the recommended assignment length. Based on your analysis in Assignment 1(Please see assignment 1 attached) the Board of Directors has requested your recommendation for an effective strategy to enter the foreign market. You have been tasked with identifying a potential company for a joint venture, alliance, merger or acquisition and a recommendation as to which approach would be most appropriate.Include these components:Describe a company currently operating in the country in Assignment 1. Describe the advantages and disadvantages of each alternative approach:Joint VentureMergerAcquisitionAllianceSelect one of the four alternative approaches and provide justification for your decision.Use at least four (4) quality resources in this assignment. Note: Wikipedia and similar websites do not qualify as quality resources.
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Running head: EXTERNAL BUSINESS ENVIRONMENT ANALYSIS
External Business Environment Analysis
Julius Drayton
Dr. James Glenn
BUS 360
April 28, 2019
1
EXTERNAL BUSINESS ENVIRONMENT ANALYSIS
2
External Business Environment Analysis
Making an investment decision is always one of the most critical steps in any business
development process. The investor always has to make a decision based on a market analysis and
the resources available for investment in a particular sector. In particular, the investment
decisions for businesses seeking to diversify need to not only consider the internal strengths of
the current investment to determine the availability of resources to facilitate the expansion, but
also the ability of the external environment to successfully support the business activities.
Consequently, the current operations in the United States have so far been successful, and
venturing into an overseas market could present greater opportunities for growth. In particular,
diversifying to an emerging market could significantly help access some of the resources
available in the markets such as extensive human resource capital. In particular, the Kenyan
market offers a stable economy and one whose level of development would be ideal enough to
offer an opportunity for sustainable business growth.
Firstly, the cultural aspects of a particular external environment determine the chances of
success of different business ventures. Notably, the social and cultural environment determines
the public’s attitude towards a particular business, which could in turn determine the level of
demand for products or services. Notably, the Kenyan social and cultural environment is
relatively diverse and a model environment for a rapidly westernizing society. Different
multinational companies have their headquarters in Kenya, which has in turn played a critical
role in opening up the economy to the western culture. Therefore, it would be relatively easy for
a business used to the American cultural environment to operate in the Kenyan market. In any
case, sending expatriates to the country would not face as much challenge as they would have
access to an environment that reflects some of the comforts enjoyed back home.
EXTERNAL BUSINESS ENVIRONMENT ANALYSIS
3
Secondly, Kenya is one of the leading countries in technological development in the
larger sub-Saharan Africa. In particular, the level of application of information technology for
business purposes in Kenya is one of the most extensive in the region (Wamuyu, 2015).
Therefore, an investment in the country would present opportunities for the business to appeal to
the market with much ease through the different information technology platforms available. In
essence, the adoption of technology in the country is ideal enough to facilitate exponential
business success as long as the investor is keen enough to adopt the ideal marketing efforts based
on an extensive market analysis. Based on the analysis of the tech environment, the Kenyan
market provides an ideal external business environment for any business investment.
In addition to technology and the sociocultural environment the economic environment
plays a critical role in determining the chances of success of a particular investment. In any case,
a business would experience significant challenges in achieving any significant growth if the
purchasing power of the population in the market remains significantly low. Based on the level
of development and productivity of the Kenyan economy, the Kenyan market is an ideal
destination for investment for any foreign investor in the East African region (Gelb & Diofasi,
2016). In particular, the country has one of the highest levels of development Africa, which in
turn implies that an investment in the Kenyan market could present an opportunity for further
expansion of the business to other emerging market in the region. Further the youthful
population with a high level of consumption provides an ideal market for any investor who
wishes to experience a significant level of business growth in the emerging markets.
Notably, businesses are often likely to experience disruptions resulting from
environmental issues. For instance, unpredictable disasters such as hurricanes and earthquakes
are often likely to disrupt productivity of a business for a considerable period throughout the
EXTERNAL BUSINESS ENVIRONMENT ANALYSIS
4
year. Therefore investing in a market with low risk of such environmental disasters is always an
advantage for any business, since it would imply that the firm would be in a position to engage in
consistent business activities throughout the year. Based on the country’s location on the equator,
the environmental conditions in the country are relatively stable. Therefore, the environmental
conditions in the country are favorable enough for an external investor due to the guarantee of
consistent productivity throughout a financial year due to limited chances of business disruptions
by environmental challenges.
Ultimately, the political conditions influence the market by affecting the business
activities through policies associated with taxations and standards of business engagement. In
particular, the Kenyan political environment experiences different cycles influenced by elections
in the country, which in turn affects productivity during the campaign season. However, most
emerging markets experience challenges with their political activities, with most disruptions
associated with the electoral process (Marquis & Raynard, 2015). However, appropriate
preparation and harnessing the business strengths and opportunities could help address the
potential challenges that could result from political changes during different election periods.
After all, the legal frameworks on business in the country are relatively stable, which in turn
increases the ease of business engagements and predictability of the business.
EXTERNAL BUSINESS ENVIRONMENT ANALYSIS
5
References
Gelb, A., & Diofasi, A. (2016). What Determines Purchasing-Power-Parity Exchange
Rates?. Revue d’économie du développement, 24(2), 93-141.
Marquis, C., & Raynard, M. (2015). Institutional strategies in emerging markets. The Academy of
Management Annals, 9(1), 291-335.
Wamuyu, P. K. (2015). The impact of information and communication technology adoption and
diffusion on technology entrepreneurship in developing countries: the case of
Kenya. Information Technology for Development, 21(2), 253-280.

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