the environment Natural environment—this primarily involves assessing the country’s size, climate, availability of water resources, topographical conditions, the climate zone in which the country is located, elevation, and much more.
Demographic environment—focuses primarily on a country’s population size, the ratio of men to women, and trends in population development (particularly regarding family size, the number of marriages or single people, divorce rates…), population density, the number of economically active residents, educational attainment, health statistics, and the degree of urbanization…
Technical environment – focuses on a country’s technical infrastructure. This primarily includes the level and coverage of telecommunications services and networks, the density and structure of retail networks, the quality and structure of transportation networks, and the level of financial services…
Legal environment – closely related to the political environment. In the international arena, there are a number of rules designed to facilitate international trade. On the other hand, however, individual countries also maintain different legal standards, which can pose a risk to businesses and lead to their failure.
Political Environment – The following concepts are related to the political environment:
· Categorization of countries by political risk – politically very stable countries, politically relatively stable countries, politically unstable countries, countries on the verge of a political upheaval, and countries at war.
· Political risk indicators – the main indicators include, above all, a country’s political stability, political regime, political party system, government stability, the parliamentary and legislative system, social unrest, racial tolerance, signs of violence and terror, unlawful behavior, technology piracy, the attitude of the local population toward foreign entities, and so on.
Cultural Environment—focuses primarily on language (verbal and nonverbal expressions, level of thinking, body language…), aesthetics and the arts (areas related to appearance, taste, style, and design, which influence product packaging and advertising…), values and way of life (attitudes toward values, family, social groups, national identity…), education (level of literacy, which influences the creation of advertisements and determines their clarity, as well as product instructions…), religion (which plays a significant role in some countries, as religion shapes human values—certain products may thus be prohibited, differences emerge in holidays, countries have different days off during the week, and women hold different positions in society…),
Social environment—this is closely related to the cultural environment. It focuses primarily on social stratification and relatively permanent divisions within society. Two main social groups are distinguished: reference groups (primary and secondary) and aspirational groups.