This chapter is the first that focuses on international business relationships at the corporate level. We begin with a discussion of the various environments that companies must consider when seeking to internationalise, and then the discussion moves on to how companies select foreign markets, and the factors involved in their decision-making process. When seeking to identify a country-market into which they could internationalise their operations, most companies will go through a process of assessing the potential level of risk and return (return on the time and money invested) that the market presents; this enables them to balance the potential risks (negative factors) with the potential benefits (positive factors) of operating in that country. We then evaluate the various options available for entering the chosen foreign market, ranging from simple export, to Foreign Direct Investment (FDI) in its many forms; we also evaluate the payment options available. The case study exercise deals with the internationalisation options open to a distiller of high-quality Scottish malt whisky. Business is about satisfying customer requirements, and in order to understand these requirements we must understand the environment in which these customers live and work – the external environment: in fact, there are three major external environments to consider for each new country-market in which a company seeks to operate.
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