THE INTERNATIONAL BUSINESS CHALLENGE
As businesspeople survey the world marketplace today, they are both impressed and intimidated
by the diversity and change they see in the 200+ national markets and 6+ billion
people. Yet this is the marketplace they must understand in order to build products and services
for worldwide customers in the face of increasing international competition. Successful
international corporations are those that recognize the diversity of the world marketplace,
and are able to cope with the uncertainties of doing business in continually changing market
environments. Figure 1.2 summarizes the international business challenge.
The Diverse International Marketplace
The task of understanding the diversity of the world marketplace is immense. International
executives must cope with the following:
Political diversity as world markets may be governed by autocracies (chiefs, kings,
dictators, one-party governments) or democracies.
Economic diversity as national wealth disparities vary from $107 per capita per
year in Burundi to over $71,000 per capita in Norway.
Regional diversity in distributions of wealth and population: North America has
5–6 percent of the world population but controls almost one-third of world gross
domestic product (GDP); Asia has about 60 percent of the world population, but
less than a quarter of the world GDP (12 percent without Japan).
Cultural/linguistic diversity: The world’s 200 nations are divided into about 10,000
linguistic/cultural groups,1 a crude average of some 50 languages or ethnic groups
per country. The Sudan has 600 ethnic groups and 400 different languages spread
across its 31 million population. India has Hindi and English as its major
languages, but supports many hundreds of dialects across its regions.
Diversities in country size and populations: The number of countries in the world
economy was about 60 at the start of the 20th century. This rose to 96 by 1960 and to over 200 as
the millennium drew to a close. The population of these countries varies, from Mainland China and India with 1.3 and 1.1 billion inhabitants, respectively, to 43 nations with less than 1 million inhabitants each.2 Equality may perhaps be a right, but no power on earth can ever turn it into a fact.
Developmental diversities between industrialized nations (80 percent urban populations, 3 percent of GDP from agriculture) and industrializing nations such as those in sub-Saharan Africa and parts of Asia that are 30 percent urbanized and obtain over 30 percent of their GDPs from agriculture.3 more important than other worldly issues. This causes problems, as religion often supersedesnational allegiances and makes religious conflicts among the most difficult to resolve.