University Of Finance & Administration
INTERNATIONAL BUSINESS
[E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
Lecture content
 History of Czech international business [IB]
 European Union principles of IB
 Opportunities & Threats of CZ membership in the EU
 International Market research (analysis)
 Data collection & selection in IB
6.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
History of Czech IB
 100 years ago: in “top ten” of the most advanced
countries in the world
Before 2nd World War: orientation on western markets, still
Czechoslovakia =10th most industrially developed country
After 2nd World War (communist period): CZ „manufactury“ of the
communist bloc with over 70 % of export into these countries
 1989 fall of socialism: CZ‟s IB shift to the western partners
again (Questionable move today)
 2004 CZ joins EU:
• Elimination of trade barriers (duties, quotas and other restrictions)
• Solid business climate in CZ => inflow of FDI (often based on
governmental INCENTIVES)
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
7.
CZ - joining EU
 CZ member of EU since 1.5.2004 (in the wave of 10
countries - the biggest enlargement in the EU history)
 1st half of 2009 Czech presidency of the EU
 today 27 countries
 members are sovereign nations that have agreed to
cede certain of their powers to the EU
 Negotiations about further countries accession
8.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
EU business principles
 single market
 non-existence of tariffs (custom duty), quotas and
administrative restrictions of import & export
 prohibition of EU companies DISCRIMINATION
(tenders, market operations, certification)
 no DUTY CHECKS on the borders within EU
members
 single business, duty & immigration approach
(policy) towards third parties
 strict regulations - environment
 single currency (EUR) / Schengen Space
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
9.
Business Advantages & Disadvantages
of Czech accession of EU
ADVANTAGES
- duties elimination
- free movement of
goods / partly free
mov.of labor
- larger market
(single market)
DISADVANTAGES
- stronger
competition
- less freedom in
some of state
economical
decisions
10.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
OPPORTUNITIES
for Czech ent. at EU single market
Custom duties
• Elimination / removal of business restrictions
• Cut of bureaucratic cost
Mutual approval of norms
• No need for additional certification
Allocation of production units where
more effective
• Low labour cost
• lower input cost
• easy access to financial & insurance services
• release of public orders / commissions
11.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
THREATS
for Czech ent. at EU single market
Strong competition
• Threat of lowering the competitiveness of Czech companies
(necessity to find another competitive advantage)
Pressure on lowering prices & profits
SME more vulnerable in competition
with MNE
Labour market / different social
conditions
TAX systems
12.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
INT environment & its influence on business
IB works in a certain environment, which
has an influence on:
 Decision making WHETHER OR NOT to enter
this market (market selection)
 Entry mode (the form of entry)
 Choosing of mktg strategy
 PEST analysis = analysis of int.envi:
P
olitical & Legal e.
Economical e.
Social & Cultural e.
Technological e.
13.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
Basic business analysis
Analysis of external
environm. (market)
PEST / STEEP /
STEEPLE
COMPETITION
analysis
Analysis of inner
environm. (company)
SWOT
• Factors: political, economical,
social, technological (PEST),
ecological (STEEP), legal and
European (STEEPLE)
• Barriers to entry
• Threat of substitutes
• Buyer power
• Supplier power
• Rivalry / degree of rivalry of
present competitors
• Strengths
• Weakness
• Opportunities
• Threats
14.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
[PEST] P - Political & Legal environment
Legal environment:





possibility to control ownership
possibility to buy properties (lands, buildings)
possibility to repatriate the profit abroad
law enforcement
possibility to set up a new company & finishing
entrepreneurship
Political environment:
o political system and political stability
o influence of interest groups / stakeholders
o relation to foreign companies
o corruption
15.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
[PEST] (P) - LEGAL environment
COMMON / CASE law
• Cases create legal precedents
CIVIL law
• Detailed listing what IS and IS NOT permissible
RELIGIOUS law
• Based on the faith & practice of a particular religion
BUREAUCRATIC law
• Often in communist and dictatorships
• is whatever the country‟s bureaucrats say it is
16.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
[PEST] (P) - POLITICAL environment
Political IB barriers:
 Sanctions
 Embargo
 Exchange rate manipulation
 Dual-use
 Nationalization
o expropriation
o confiscation
 Privatization
17.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
[PEST] E - Economic environment
 economic policy of government:
o IB policy
o rate policy
 basic macro-economic measures and their
development / trend
 proportion of „grey economy‟
18.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
[PEST ] S - Social & Cultural environment
• Culture:
 Extent of freedom of society
 Hierarchy
 Value orientation (e.g.: western pattern etc.)
• Institutions:
- Family
- Religious bodies
- Educational institutions
• Further factors:
- Language
- Non-verbal communication
- Way of dressing
- Aesthetics
- Life styles
19.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
[PEST] T - Technological environment
 existence & quality of basic infrastructure
 quality & availability of communication infrastructure: TV,
broadcast, phones etc.
 IT - possibility of data transfer abroad =>
internationalization of services, standardisation
 approach to information
 E-commerce / e-business
 B2C, B2B, C2C (e-Bay), C2B
20.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
Basic business analysis
Analysis of external
environm. (market)
PEST / STEEP /
STEEPLE
COMPETITION
analysis
Analysis of inner
environm. (company)
SWOT
• Factors: political, economical,
social, technological (PEST),
ecological (STEEP), legal and
European (STEEPLE)
• Barriers to entry
• Threat of substitutes
• Buyer power
• Supplier power
• Rivalry / degree of rivalry of
present competitors
• Strengths
• Weakness
• Opportunities
• Threats
21.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
Decision making - foreign market evaluation
 PEST / STEEP / STEEPLE analysis
 Competition analysis (Porter)
 SWOT analysis
 BENCHMARKING
 Emerging market trends
DATA collection:
 Secondary data
= was collected already
 Primary data
= necessary to obtain it
22.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
Data collection
SECONDARY / desk
PRIMARY / terrain
• analysing of
secondary data
• collection &
analysis of primary d.
• low cost
• relatively high cost
• quick execution
• time-consuming
23.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
KEY terms
Czech presidency of the EU
EU international business principles
Single market
International market analysis / Competition analysis /
Internal analysis
- Types of law systems [Case / Civil / Religion / Bureaucratic]
- Business Analysis
-
- PEST - international business environment evaluation
- Primary x Secondary data, collection
24.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz
Thank you for your attention
25.
INTERNATIONAL BUSINESS [E_IB]
PhDr. Karel Eliáš, CSc.
18303@mail.vsfs.cz