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in the future. Woods (2001) states that the wealth that great multinational
companies possess, which reflects on the wealth of a country, happened

as a consequence of several thousands of years of economic change. She
points out that as the event of today is the history of tomorrow, to predict
the future you must analyse today’s issues and those in the past.

Therefore, the major factors influencing business behaviour are Politics,
Economics, Socio cultural issues and Technology (PEST influences)

which is discussed later on in this unit.

1.4 Internationalisation

A brief study of the history of internationalisation reveals the reasons for

the existence of an international market, and the creation of international
market strategy including competition, cultural differences, competitive

advantages and other related elements and factors. In the 1960s, many
US companies expanded overseas, attracted by higher rates of growth

and opportunities in the maturing markets of Europe, Latin America and
Asia. The growth of the US domestic market encouraged many companies
to investigate opportunities in such other increasingly rich markets.

In the 1970s, Japanese companies started to become involved in markets
such as the US and Europe. At that time, Japanese companies became a
major threat to those of the US (their market ranged from consumer

electronics to heavy construction equipment (Douglas and Craig, 1995).
Some European companies, whose domestic markets were attacked, also

retaliated by entering US markets, although they hesitated because of the
size of the competition. As competition was developing worldwide,
however, they had little option. In the 1980s, the growing, newly

industrialised nations began entering not only the US and European
markets but also those in Asia and Africa. The 1990s also showed major

changes in changing market boundaries. Some markets, such as Europe
and North America, became increasingly integrated, while others, notably
the former Soviet Union and Yugoslavia, became more fragmented. In

addition, markets in China, India and Indonesia grew, as a result of
changing geopolitics. As result, many markets became global, and

national boundaries gave way to global pressures. Thus it was that global