a) Geographic environment is an important component the foreign environment and refers to a country’s climate, topography, natural resources and people. Everyone engaged in international business must have some knowledge of geographic features of the foreign country as these influence the nature and characteristics of a society. It also affect demand pattern of the people living in the country. Geography is a major contributory factor to the development of business systems, -trade centres and routes.

Different climatic conditions give rise to demand for different types of products. It is largely due to climatic differences that people differ in their housing, clothing, food, medical and recreational needs. Many a time needs are same, and demanded. But because of the climatic and topographic differences, products need adaptation or modifications to suit local conditions.

Geographic conditions also affect a firm’s plant location decision. A firm prefers to set up its manufacturing plant in a country which has favourable climatic conditions, possesses suitable topography and where raw materials, energy and labour are cheaply and abundantly available. Foreign country’s nearness to other markets and its strategic location on major trade routes are other equally important considerations.

Firms’ distribution and logistics strategies are directly influenced by geographic conditions in the foreign markets, Re-order points and safely level stocks are kept generally higher for those countries or places which are not easily accessible and can be cut off suddenly and heavily due to bad weather.

Location of a country on the world map is an equally important consideration. It affects its trade prospects with other countries. Landlocked countries such as Bolivia, Zambia and