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International Business

notes consider the sentiment of an opposition coalition led by the Bhartiya Janta Party. The party’s
1995 campaign for state election called for a re-evaluation of the 2015 MW Dhabol Project. Enron
responded by quickly beginning the construction believing that it would become more difficult
for a new government to reverse the process. Enron’s request that the US Energy Department
intervene only invited even more backlash. In the end the project was suspended before being
negotiated.

self assessment

Choose the appropriate answers:

1. When considering entry into a foreign country, any multinational marketer would be well
advised to make a through analysis of ..................
(a) Social risk

(b) Natural risk
(c) Political risk
(d) None of these
2. Any review of a country’s political system and its impact on foreign business must remain
free of .................. notions.
(a) stereotyped
(b) branding
(c) trading

(d) none of these
3. The sources of political instability include ..................
(a) social unrest
(b) attitude of nationals
(c) policies of the host government

(d) all of the above

5.2 economic environment

The international marketer is fortunate in having a substantial body of data available that charts
the nature of the environment on a country-by-country basis. Each country has national accounts
data, indicating estimates of gross national product, gross domestic product, consumption,
investment, government expenditures and price levels. Also available on a global basis are
demographic data indicating the number of people, their distribution by age category, and rates
of population growth. National accounts and demographic data do not exhaust the types of
economic data available. A single source, The Statistical Year book of the United Nations, contains
global data on agriculture, mining, manufacturing, construction, energy production and
consumption, internal and external trade, rail, road and air transport, wages and prices, health,
housing, education, communication (mail, telegraph and telephone), and mass communications
by book, film, radio, and television. These data are available for all high income countries. The
less developed a country is, the scarcer is the availability of economic data. In the low income
countries of the world, one cannot be certain of obtaining anything more than basic national
accounts and demographic and external trade data. Nevertheless, in considering the world’s
economic environment, the marketer’s problem is not one of an absence of data but rather one of

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