Free Essay

Demography and Investment Planning

In: Social Issues

Submitted By mathias12
Words 2200
Pages 9

Course : demography


Using relevant examples drawn from Zambia, discuss the relevance of demography in investment planning both domestically and internationally.

The world we live in today has become a business oriented with people investing almost any given sector that is open for investment. However, every of these investors don’t just enter into a sector without planning because all the investing that they carry out is a rational decision, with an aim of reaping serious profits, as argued by Von Neumann, and Morgenstern (1944), who argue that People rationally choose between alternatives, they act rationally while making their investment decisions (Von Neumann, and Morgenstern, 1944). Profit maximization in any investment is highly dependent on the market structure, especially on the consumers and to a greater extent the labor force, which in this case are the people. As stated above, all investors plan their investments as they seek to maximize profits, this planning is in the business sector referred to as investment planning, which by definition according to the Economy Watch, (2015) is focus on identifying effective investment strategies according to an investor’s risk appetite and financial goals. Through investment planning, one can identify the most appropriate portfolio mix. (Economy Watch, 2015)
As Investors plan, they plan for a lot of issues that will affect their investments such as labour, education levels and other factors related to the people. These factors are what are known as demographic factors. One might at this stage ask what demographic factors are. To answer this question, is imperative that we firstly define what demography is and then demographic factors.
This essay will therefore define demography as the statistical and mathematical study of the size, compositions and spatial composition of human populations and the changes over time in these aspects through the operation of the five processes of fertility, mortality, migration, marriage and social mobility (Bogue, D. 1969:1). Demographic factors will be defined as the Socioeconomic characteristics of a population expressed statistically, such as age, sex, education level, income level, marital status, occupation, religion, birth rate, death rate, average size of a family, average age at marriage. (Business dictionary, 2015).
Having defined demography and investment planning, it is now safe to state the main aim of the essay. The essay will therefore seek to provide possible solutions to the question “using relevant examples from Zambia, discuss the relevance of demography in investment planning both domestically and internationally?” The approach taken will be linking certain demographic variables to certain investment issues that investors look at when they are planning to investment in various economic fields.
Key to every investor investing or planning to invest in any given field is profit Maximization. This desire to maximize profits makes investors look at the size of the market in terms people through the various demographic factors. Our focus in the essay will look at the demographic factors of Population density, Age composition, Sex composition, Education level, Income level, Marital status, Occupation, Religion, Birth rate and Death rate. For investment planning, we shall mainly focus on planning for Labour, planning for what product to produce, planning for product Marketing and the economic potential of market area. This process is called Market segmentation, which is to divide the market according to various demographic factors.
Population density is the population per unit of land area; for example, persons per square mile or persons per square kilometer of arable land. This is important to investment planning in so many ways. The first sector under investment planning that we will link population density is when an investor is planning for labour. Usually areas that are highly populated such as urban areas have readily available labour, and in most cases cheap labour, for example, Kanyama compound in Lusaka provides readily available labour for the various manufacturing industries in the Chinika Industrial area that require lots of manpower.
Population density is also important when planning for marketing of the investors intended product in the sense that highly populated areas require less advertising as people are compacted hence they easily share information than compared to less dense areas such as the rural areas. Further, when planning to invest, population density is cardinal to knowing what products are very much on demand in a given area by assessing the most selling products in that particular market. This prevents future losses as the investor will know what products to invest in as regards to a particular market. This can be seen from the fresh produce sector especially those in the agricultural sector who plant vegetables, these tend to mostly sell their produce in areas that are highly populated, where people cannot even grow vegetables for themselves such as in Lusaka city, where vegetable producers are from the outskirts of Lusaka.
Age composition of a population is simply put the composition of the population as determined by the various age groups. This is important to important to investment planning firstly when planning for the product to produce, the majority age group in that population will obviously comprise the larger part of the market for examples, a population that is mainly comprised of toddlers will make the best market for toys, while a population mainly composed of teenagers who are still in their schooling years will make the best market for encyclopedias, scientific calculators, learning to read tools and financial institution providing loans to students like Bayport financial services behind UNZA main Library.
Age composition is also important when planning for labour investment as observed by Trewartha G, (1969), he argues that “age composition is one important determinant of the proportion of the population which is economically active.” (Trewartha, G. 1969:168). It is worth stating that many countries today have various labour laws where there is a minimum age in which someone can be employed. Depending on the age composition of a population, an investor can plan for labour in the sense that he can decide whether to import much of his labour or not due to age composition, although there are less changes of one being in this situation as the world today is facing serious levels of unemployment, with Zambia’s levels standing at %.
As regards product marketing plans, the age composition has a serious importance in that the adverts for example should be tailored to catch the attention of the majority age group. Further, developments of social media such as Facebook and twitter and recent marketing trends such as social media advertising have made the age factor become so critical to planning for investment because social media is in most cases dominated by the young. So an investor wanting to draw the attention of the majority young people would do so very easily using social media, the age factor also helps to plan for product marketing in that the content and format of the advert will depend largely on the majority age group as observed by Michael A. Stelzner (2014) who argues that there's a direct relationship between a markets leading age and the kind of advertising done (Social Media Marketing Industry Report 2014: 16).
Moving to sex composition, which is in simple terms is the composition of the population in terms of sex. The demographic variable of sex composition is relevant to investment planning when planning for the market product in that the dominant sex will command a larger share of the market products yet at the same time helping the investor plan for the right product that will be gender specific, for example, scarves for women, neck ties for men.
The world has today seen a great campaign for gender equality like never before. The cries so far have been that men and women be given equal opportunity when employers are employing. Regardless of this campaign, the issue of gender preference by employers still lives on as argued by Mor Barak et al. (1998), and Konrad & Hartmann (2002) who argue that a large number of studies comparing the behavior and attitudes of males and females report that gender differences do exist when employing and planning for investment (Mor Barak et al. 1998, Konrad & Hartmann 2002). This is so because certain jobs favor mostly a single sex; let us consider the case of a drilling company, where the work is mostly physical, men are highly favored than women.
Certain investment sectors such as the ICT sector thrives on a market that is educated for both customers and labour force. Educational attainment levels of the population an investor intends to settle in become another critical issue although some sector like the agriculture do not thrive much on education levels. However, education is relevant to investment planning when it comes to planning for market product, for examples, products such as laptop computers are mostly bought by educated people. Education can also be said to be of relevance to investment planning when it comes to marketing of the product. In Zambia for example, it would be easy to advertise a product in English because all people that have attained an education understand Basic English unlike it would be to advertise a product in local languages. One advert can reach out to the masses due to education
It can be seen from above after linking some demographic variables to certain aspects of investment planning that the knowledge of demography is important to investment planning. For an investor planning to invest, demographics are really important if they wish to maximize on profit. Further, the method of obtaining market statistics is mostly thought to be for economics but in actual sense the demographer is the best source of information as they actually go in the fields to collect Personal statistics that include such information as income level, gender, educational level, location, ethnicity, race, and family size, all which are cardinal for investment planning.
For example, the field of insurance is all about managing risks. This is one area that can be used as perfect example to illustrate the relevance of demography to investment planning, let us consider the case of life insurance, the insurance company attempts to manage mortality (death) rates among its clients. The insurance company has different premium plans for various age groups and even based on sex. A person called an actuary constantly crunches demographic data to estimate the life of a person. This is why characteristics such as age, sex, smoker and etc. all affect the premium that a policy holder must pay. The greater the chance that a person will have a shorter life span than the average, the higher the premium that person will have to pay, and depending on one’s income levels, the company formulates the different payment plans to allow for people who are not high earners to also enjoy the services of insurance. The marketing department of a business might use demographic variables as an important input when formulating target customer profiles.
In conclusion, demography is very relevant to investment planning for the fact that any given investment requires the presence of people to participate in that particular investment activity. Like it has been stated in the introduction, all investment decisions are rational, even so, it should be stated that even all consumption decisions are rational, making it important for the investor to understand the Socioeconomic characteristics of a population, that will constitute a market for his investment. The source of the information needed to study a population is from demography from demographic factors as compiled by demographers and expressed statistically according to categories, such as age, sex, education level, income level, marital status, occupation, religion, birth rate, death rate, average size of a family, average age at marriage. This information is usually contained from a country’s census report as census is a collection of the demographic factors associated with every member of a population. As shown throughout the discussion, such information is needed for the process of market fragmentation, which divides consumers into groups based on their knowledge, attitudes, uses, or responses to a product. Therefore, investment planning relies heavily on demography through the various demographic factors, hence the relevance of demography to investment planning.

Bogue, D. (1969). Principles of Demography. Wiley: New York.
Business Dictionary (2015). Demographic factors. [Online]. Available from [Accessed: 23 February 27, 2015, at 19:24 Hrs.].
Churchill, Gilbert A., Jr., and Peter, Paul J. (1998). Marketing: Creating value for customers (2nd ed.). New York: Irwin McGraw-Hill.
Economy watch (2015). Investment planning. [Online]. Available from [Accessed on 23 February 2015, at 10:45 Hrs.]
Konrad, A. M., & Hartmann, L. (2002). Gender differences in attitudes toward affirmative action programs in Australia: Effects of beliefs, interests, and attitudes towards women. Gender Roles, 45(5-6), 415-432.
Mor Barak, M. E., Cherin, D. A., & Berkman, S. (1998). Organizational and personal dimensions in diversity climate. Journal of Applied Behavioral Science, 34(1), 82-104
Stelzner A M. (2014). How Marketers Are Using Social Media to Grow Their Businesses. Washington D.C: Social Media Examiner
Trewartha G. T. (1969). A Geography of Population: World Patterns. New York: John Wiley and Sons Inc.

Similar Documents

Premium Essay

Strategic Mgt

...provide some 200,000 customers with current accounts, foreign currency accounts, savings, wealth management and investment services. Citi International Personal Bank also gives customers access to offshore investments. High-net worth individuals and families are also able to access the Citi Private Bank for a complete range of wealth management services. Citibank is part of Citigroup Inc., with 200 million customer accounts, doing business in more than 160 countries and jurisdictions. Around the world, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. B. Research Design and Methodology Chapter II : External Analysis A. Economic Forces The Economic measures affects the banking sector to boost the economy by giving certain concessions or facilities. If in the savings are encouraged, thenmore deposits will be attracted towards the banks and inturn they can lendmore money to the agricultural sector and industrialsector, therefore, booming the economy. B. Social Forces The primary social factor that have a huge impact in the analysis of the macro-environment of the business is the demography, in the demographics there are two areas in the demography in which most businesses are concerned, the working population on which it identifies the number of......

Words: 550 - Pages: 3

Premium Essay

Marketing Plan

...Marketing management orientation * Marketing management wants to design strategies that will build profitable relationships with target consumers. * There are 5 alternative concepts under which organizations design and carry out their marketing strategies: Production, product, selling, marketing, and societal marketing concept. Five alternative concepts * 1. Production concept – The idea that the consumer will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency. * 2. Product Concept- the idea that consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvement. * 3. Selling Concept – The idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. * 4. Marketing Concept- A philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. A customer-centered “sense and respond” philosophy. The job is not to find the right customers for your product but to find the right products for you customers. * 5. Societal marketing concept- the idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements,...

Words: 2564 - Pages: 11

Premium Essay

Marketing Mix

...awareness of its brand within the European market in specific UK, she want the consumer to see to view the brand as a manufacturer of cars of great quality and design. To support this growth plan, Kia has to develop its brand identity. (Kwan, 2004) Furthermore, Kia ready to do a strategy and plan to keep forward in the market and build its private brand, So it look what people want and the new generation Kia it is a sport car and cool so its object for the middle ages and to promote it should make alliances with large sports markets to attract the new audience. To do this harnessed the power of sports marketing to influence consumers’ perception of its products.(Hillary, 2006) An aim for Kia is to become a major player in the UK car market. Planning is which customers need are identified, a business then has to establish processes that enable it to satisfy these needs. Its marketing strategy supports its objectives with a focus on increasing brands awareness; it aims to emphasize the great design and quality of Kia’s...

Words: 1259 - Pages: 6

Free Essay


...In this paper we are going to start with a background on the demography of Iran and the pharmaceutical industry. Then we will move forward to expand this subject in terms of the different issues we might face in order to outsource drive thru services. Finally some recommendations will be provided in the conclusion. In this paper we are going to start with a background on the demography of Iran and the pharmaceutical industry. Then we will move forward to expand this subject in terms of the different issues we might face in order to outsource drive thru services. Finally some recommendations will be provided in the conclusion. Steve jobs Steve jobs DRIVE THRU PHARMACIES IN IRAN DRIVE THRU PHARMACIES IN IRAN Innovation distinguishes between a leader and a follower Innovation distinguishes between a leader and a follower Abstract Abstract business plan: outsourcing drive thru services to iran by: dorna shakoory asl business plan: outsourcing drive thru services to iran by: dorna shakoory asl Pharmacy as the last unit in the pharmaceutical supply chain is responsible for providing and delivering medicines to the patients and giving necessary advices to them, according to their needs and prescriptions based on standard health conventions of the......

Words: 4846 - Pages: 20

Free Essay

Systems Thinking Approach as a Unique Tool for Sustainabletourism Development: a Case Study in the Cat Ba Biosphere Reserve of Vietnam

...the study of the tourism system in the Cat Ba Biosphere Reserve of Vietnam. This study shows that systems thinking has proved to be an effective and powerful tool to explain the complexities of the tourism system. It has helped to simplify, clarify and integrate isolated problems associated with the industry, and provided a mechanism for group learning and decision making to achieve desirable outcomes. The paper proposes systems thinking be used as an appropriate tool for sustainable tourism development. Key words: complexity, dynamics, sustainability, systems thinking, sustainable tourism development 1. INTRODUCTION In recent years, systems thinking (Jackson, 2003; K. Maani, E. & Cavana, 2007) has been widely applied in the development planning process by academics, scholars, managers, planners, and policy makers (Andrew & Petkov, 2003; Macadam, Vanasch, Hedley, & Pitt, 1995; Schianetz, et al., 2009; Winch, 1993). Systesms thinking is a scientific...

Words: 5250 - Pages: 21

Premium Essay

Review consumer. 3 Eras of Marketing: * Production Era: * Sales Era (1946): * Concept Era (1957): Societal Marketing Concept: Trying to come up with a product that is god for society. Define a Market: People, Money, Need, Authority to buy, Enough to get a return on investment, Availability to consumers. Chapter 2: Define Strategic Planning: “Where do we want to be next year, how do we get there?” SWOT Analysis: Analyzing the Strengths, weaknesses, opportunities and threats Mission Statement: How you portray your goal to the public Portfolio Analysis: Strategic Business Units: Smaller entity businesses under an umbrella company. BCG Matrix: Cash Cow, Star, Question Mark, Dog Product to Market Expansion grid: * Existing, Existing= Market penetration * Existing, New = Market Development * New, Existing = Product development * New, New = Diversification Marketing Mix: The 4 P’s * Product * Price * Promotion * Place Define Positioning: The way by which the marketers attempt to create a distinct impression in the customer's mind Chapter 3: Environmental scanning: Looking into what factors can hurt your business - Macro: indirect effect a. Demography: Study of human population change b. Geography c. Education: d. Diversity e. Economy - Micro: Direct effect a. Work Force b. Suppliers c. Marketing d. Selling e. Publics: Media, financial, government, citizen Legislature: Anti-Monopoly -Sherman......

Words: 429 - Pages: 2

Premium Essay

Pest Analysis

...strategic approach to their activities”. Discuss this statement describing in detail the components of the said analysis. 1.1 INTRODUCTION Apart from a company’s internal resources there are several other factors that have a profound impact the performance of a company. The internal resources usually refers to the employees of the firm, contractors, sub-contractors, suppliers and so on whereas the external environment refers to the market, clients, stakeholders, etc. 1.2 PEST ANALYSIS According to Kotler (1998), PEST analysis is a useful strategic tool for understanding market growth on decline, business position and direction for operations. The use of PEST analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research. In order to survive, be profitable and maintain their competitive advantage, organizations have to recognise and take advantages of the external environments as well as identifying and consider threats when developing strategies. One of the most commonly used analytical tools for assessing external factors in a business situation is PEST analysis. Pest is an acronym for Political, Economic, Social and Technological external factors. PEST analysis is beneficial when conducting research before beginning a new project or to help conduct market research. Also, PEST analysis helps to determine how the external factors will affect the performance and activities of a business......

Words: 2639 - Pages: 11

Premium Essay

Something to Do with Population

...PROGRAM ON THE GLOBAL DEMOGRAPHY OF AGING Working Paper Series Population Dynamics in India and Implications for Economic Growth David E. Bloom January 2011 PGDA Working Paper No. 65 The views expressed in this paper are those of the author(s) and not necessarily those of the Harvard Initiative for Global Health. The Program on the Global Demography of Aging receives funding from the National Institute on Aging, Grant No. 1 P30 AG024409-06. 1 Population Dynamics in India and Implications for Economic Growth1 David E. Bloom Harvard School of Public Health January 2011 Keywords: Age structure China-India comparison Conditional convergence Demographic dividend Demographic transition Economic growth Economic growth in India Policy reform Population health Population of India Abstract Demographic change in India is opening up new economic opportunities. As in many countries, declining infant and child mortality helped to spark lower fertility, effectively resulting in a temporary baby boom. As this cohort moves into working ages, India finds itself with a potentially higher share of workers as compared with dependents. If working-age people can be productively employed, India’s economic growth stands to accelerate. Theoretical and empirical literature on the effect of demographics on labor supply, savings, and economic growth underpins this effort to understand and forecast economic growth in India. Policy......

Words: 12409 - Pages: 50

Premium Essay

Demographic Transitional Theory

...FEDERAL UNIVERSITY KASHERE P.M.B 0182, GOMBE FACULTY OF HUMANITIES, MANAGEMENT AND SOCIAL SCIENCE COURSE CODE; 4303 COURSE TITLE; DEMOGRAPHY ASSIGNMENT QUESTION; Brief Explanation of Demographic Transition Theory GROUP (5) MEMBERS FUK/HMSS/12B/SOC/1042 FUK/HMSS/12B/SOC/1043 FUK/HMSS/12B/SOC/1044 Course lecturer; PROF. UMAR BAPPAH TABLE OF CONTENTS 1. Introduction 2. Demographic transitional theory 3. Stages of demographic transitional theory 4. Criticisms of demographic transitional theory 5. Summary of demographic transitional theory 6. References INTRODUCTION Demographic transition (DT) refers to the transition from high birth and death rate to low birth and death rates as a country develops from a pre-industrial to an industrialized economic system. This is typically demonstrated through a demographic transition theory. The theory is based on an interpretation of demography history developed in 1929 by the American demographer Warren Thompson (1887–1973) Thompson observed changes, or transitions, in birth and death rates in industrialized societies over the previous 200 years. Most developed countries are in stage 3 or 4 of the model; the......

Words: 3546 - Pages: 15

Premium Essay

Environmental Science

...Demographic Transition Santoya Rodriguez Environmental Science April 5, 2013 Demographic Transition Introduction Demography is a science that rarely makes general theories. Demographic transition refers to the logical sequence of historical phases every population passes as they become modernized (Azia, n.d). The basic principle of demographic transition is that there is an informal connection between modernization and a decline in fertility and mortality. In other words, as societies progress from pre-modernized to a modernized society they experience lower death and lower birth rates. Most of human history was characterized by high crude death rates (CDR). In fact, they averaged 40 or per thousand in most populations. High CDR was caused by a number of factors; however, epidemics and other social conditions were the most common causes. However, as seen in North America and Europe during the 19th century, as epidemics and other social conditions are improved, death rates decline. This particular pattern of change in mortality factors is called the epidemiologic transition, which represents one aspect of the demographic transition (Wright & Boorse, 2011). Four Phases of Demographic Transition In Phase I of demographic transition, a population is characterized by high CBR that is being controlled by equally high CDR. It is known as the most primitive of the phases because there is a high fluctuating CBR and CDR, which results in little to no population growth (Azia,......

Words: 1139 - Pages: 5

Premium Essay


...and the overall marketing process. ▪ Know all the necessary and sufficient condition for an exchange ▪ Study all types of marketing management orientations and know the differences between them (Production, Sales, Market and Societal). II. Strategic Planning for Competitive Advantage (Chapter 2) ▪ Understand how business strategy relates to marketing and what is SBU. ▪ Review the different types of marketing strategies (e.g. Ansoff’s strategic Opportunity matrix and BCG matrix) and their components. ▪ Know the elements of a Marketing Plan ▪ Identify what a SWOT analysis is and the components that comprise this overall evaluation process. ▪ Study different ways in which a company can gain competitive advantage. ▪ Understand marketing mix (4P’s) and all it’s components in detail. III. The Marketing Environment (Chapter 4) ▪ Understand how the environment affects marketing related decisions and apply this to firm decision making. How does the environment affect marketing decisions? Understand factors such as social factors, demographic factors, economic factors, technological factors, and political and legal factors. ▪ Review: 1) component lifestyles, 2) demography, 3) age categories/ cohorts (e.g. Tweens, Baby boomers, and Generation Y. ▪ How do purchasing power, inflation, and recessionary pressures affect product sales? ▪ Understand how business strategy varies when reaching ethnic markets. What variables......

Words: 903 - Pages: 4

Premium Essay

Sole Proprietorship Organization

...Table of Content No. | Topic | Page Number | 1 | Planning | 2,3,4 | 2 | Organizing | 5 | 3 | Leading | 6 | 4 | controlling | 7 | 5 | Conclusion | 8 | Chapter One: Planning Gadget Importer Express: It is a sole proprietorship organization. There is only one owner of this organization. All the decision will be taken by the owner. He will take all the risk and he will enjoy the profit. Objective: The primary objective of Gadget Importer Express is to earn profit by delivering superior product to its customers. Customer will order the product from different e-commerce site like “Amazon”, “E-Bay”, and “Alibaba” etc. For them will will import the product and deliver it to them. We will take a commission. Mission: World famous ecommerce site are not operating in Bangladesh. Our mission is to take order from young people who want to buy nice and beautiful gadget from “Amazon”, “E-Bay”, “Alibaba” etc. sites. Vision: We want to be a large importer in future. Then we will import much more things from abroad. Office: Primarily I will hire an office in Nikunja-2. All the activities of the organization will be operated from here. Reason behind choosing this business: Now a day’s most of the young adults use internet. By using internet they can know about all the products available around the world. So a new types of demand is being created. Often they want to buy goods from abroad. But there is no specific means to satisfy this needs. Although there are some......

Words: 1335 - Pages: 6

Premium Essay

India as Investment Destination

...make your dreams come true. Then in 1991, under the leadership of Shree PV Narasimha Rao, India embraced Liberalization and Globalization. Since then India has become a hub for various brands ranging from Panasonic and Suzuki to Sony, Mercedes, Audi and what not. Today, India, popularly known as the land of snake charmers in the West, is undergoing a massive transformation and charming the world with its 3D effect- Democracy, Demography and Demand. The world’s largest democracy went for election in mid 2014 and its resultant was a stable government giving hope to the fellow Indians to building a new nation and providing aspirations to the foreign investors about India as an investment destination Our Prime Minister, Mr. Narendra Damodar Modi has inarguably taken it upon himself to market India globally. As a move to boost cross country relationship, tourism and trade, the Prime Minister travelled to popular and powerful countries of the world offering a hard to resist deal of ‘Make in India’. With opening its avenues for Foreign Direct Investment (FDI), India story is selling big time across the world as the favorite destination to attracting foreign investors. The fact was further corroborated as India topped the list...

Words: 2206 - Pages: 9

Premium Essay


...CONTENTS * Introduction………………………………………………………………………..........2 * * Explain the various elements of the marketing process.........................................3,4,5,6,7 * * Evaluate the benefits and costs of a marketing orientation..............................................8 * * Show macro and micro environmental factors which influence marketing decisions.......9 * * Propose segmentation criteria to be used for products in different markets....................10 * Choose a targeting strategy for a selected product for Gatorade in Vietnam..................11 * Demonstrate how buyer behaviour affects marketing activities in different buying situations...........................................................................................................................11 * * Propose new positioning for a selected Gatorade in Vietnam product...................12,13,14 * * Conclusion………………………………………………………………………………14 * * References ………………………………………………………………………………15 Introduction PepsiCo is known as a beverage company of USA. PepsiCo was formed very early and has demonstrated its success in the market of many countries around the world. PepsiCo currently has branches in many countries market. In Vietnam market, PepsiCo had just penetration in recent years but it has tended to thrive. PepsiCo's products include all kinds of soft drink such as Pepsi Cola, 7-up, Mirinda,...

Words: 3841 - Pages: 16

Free Essay


...What is international business? What are the primary reasons that companies engage in international business? International business consists of all commercial transactions (private or governmental) such as sales, investment, and transportation that take place between two or more countries. Companies` primary reason to engage in international business is to make profit, however government may not be motivated by profit. Firms engage in international business for three main reasons; expanding sales, acquiring resources, and reducing risk. 1- There are more potential consumers in the world than found in any single country, so the companies might try to increase their sales by reaching international markets. 2- Producers and distributers seek out products, services, resources and components from foreign countries sometime because domestic supplies are inadequate or they might want to gain competitive advantage, so they want to cut costs by acquiring special resources. 3- Reducing risk. Operating in countries with different business cycles can minimize swings in sales and profits; they might go international for defensive reasons. 2. Why should domestic managers have an understanding of globalization and international business? What are the current views regarding the future of globalization? Studying international business is important because 1- most companies either are international or compete with international companies. 2- Modes of operations may differ from those......

Words: 1618 - Pages: 7