Importance of Assessing the Global Business Environment for Strategic Planning and Investment

This assessment highlights the significance of assessing the global business environment for developing strategic business plans and making investments abroad. It discusses the impact of political, economic, legal, and technological factors on strategic decision-making and provides examples from companies like Tesco and Sainsbury. The assessment emphasizes the need for global managers to analyze external business environments to stay ahead of competitors and meet customer needs.

Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
ESSAY.............................................................................................................................................3
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The global manager must focus on proper environmental scanning in order to make
strategic decision in a reliable and accurate manner. This assessment tends to focus on
effectively analysing the importance of assessing the global business environment in order to
develop effective strategic business plan and also in turn consider investing outside of the
country with specific relevant examples.
ESSAY
“A skilful global manager cannot develop a suitable strategic plan or consider an investment
abroad without first assessing the environment – political, economic, legal, and technological –
in which the company will operate” (Deresky, 2014 p.52)
Bini, Bellucci and Giunta, (2018) sought to examine the fact that, a global manager in
turn is considered to be as an effective person who in turn are largely responsible for carrying out
the business operations across various time zones and diverse cultural groups. This in turn
eventually calls for new set of skills and capabilities. A global manager in turn cannot develop a
suitable strategic plan because it in turns to set up the direction for specific organization. Douglas
and et.al., (2018) argued that, a global manager in turn cannot effectively develop the suitable
strategic plan without even assessing the external business environment of the organization.
External environment factors in turn are classified into macro and micro external environmental
factors. Macro external environmental factors in turn cannot be controlled, but the business in
turn are largely affected by such factors such as demographics, social, physical forces,
technological factors, etc. On the other micro environmental factors are internal environmental
factors which in turn is controllable by the management of the organization. It includes
distribution channels, competitors, customers, suppliers, etc. Assessing the external business
environment which mainly comprise of political, legal, environmental, social, economic,
technological, etc. in order to effectively assess the way company will operate. This helps in
shaping the future of the industries and also helps organization to be ahead of the competition. A
global manager in turn must focus on effectively analysing and interpreting the various consumer
trends. These socio- cultural force in turn helps in turn largely influence the organization at a
very large scale. When multinational companies tend to operate a global level, then it has to
comply with various components in order to operate at a global level. Every country tends to
have different set of rules and policies. There are various political factors such as labour law,

environmental law, tariffs, trade restrictions, political stability, tax policy, political stability and
instability, etc. which in turn largely affects the organization when they operate at a global level.
On the contrary, Hameed and Abbott, (2017, September) argued that, there are various range of
social factors which mainly affects the lifestyle of an individual. These factors in turn mainly
comprise of religion, wealth, size of the family, population density, buying habits, wealth,
population density of the country, etc. which in turn largely affects the organization when they
operate at a global level. Moreover, there are various set of economic factors which in turn
influence the business operations when working at the global level. There are varied government
activities which in turn has been taken place within various global boundaries. Exchange rate at
which one country purchase good is different for different countries. These factors in turn largely
influences the investment decision of the company. Economic factors such as wage rates,
policies, governmental activities, interest and tax rate of the country at a global in turn is very
crucial in order to develop various effective strategic plan. Additionally, Hamilton and Webster,
(2018) investigated that, technology in turn has been changing at an increasing pace. This helps
manager at a global level to evaluate the various alternative range of technologies which in turn
are largely available in order to sustain in the ever changing global environment. There are
various set of technological factors which includes innovation, research and development,
technological change, automation, etc. This environmental factors in turn helps global manager
to effectively produce various range of goods and services and also communicate the target
market with utmost accuracy and efficiency. Hillary, (2017) argued that, a global manager in
turn tends to put major emphasis on the various environmental factors which mainly comprise of
raw material, climate, laws and legislations associated with environment, reduction in carbon
footprint, accessibility to geographical location, promotion of positive business sustainability,
green house gas emission, etc. The global manager in turn tends to comply with these several
environmental legislations. Moreover, Idris, and Saridakis, (2018) sought to examine the fact
that, every country tends to have different set of legal laws and legislations which in turn makes
it highly difficult for the multinational companies to effectively comply with various legal laws
and legislations within the country. There are various factors such as health and safety,
competitive legislations, labour legal laws, equal opportunities, future legislations, etc. this in
turn largely influence the manager to develop a strategic business plan for the specific

organization. Every organization who in turn has been established at a global level in turn must
properly assess the various external business environment.
Jones, Comfort, and Hillier, (2018) sought to examine the fact that, strategic business
plan in turn is largely influenced by the internal and external business capabilities. Without
knowing the impact of external forces on the operations of the business. The global manager in
turn cannot develop a strategic plan which in turn largely affect the working of the business.
Sainidis, Robson and Heron, (2019) investigated that, technology in turn largely influence the
relationship, efficiency and culture of the organization. It is considered to be very crucial for the
global manager to formulate an effective strategy in order to analyse the external and internal
business environment. Analysing external business environment in turn helps in taking decision
related with the investment abroad by understanding the impact of various external environment
forces.
For example, Tesco manager in turn tends to focus on critically evaluating there external
environmental factors which in turn largely helps in examining the various components of the
study. Tesco in turn is considered to be one of the largest supermarket chain within UK. It tends
to have good brand image and reputation. In order to develop a strategic alliance with the other
countries in order to reduce the intensive market competition. Tesco needs to understand the
various external environmental factors which largely affects its business operations. This helps
the global manager of the Tesco to effectively determine one of the best strategic plan which
helps the company to stand out in the market. It also helps global manager to critically evaluate
the various factors which in turn could influence the business operations. The management of the
company in turn focus on developing a strategic plan and take appropriate decision which in turn
helps in attaining goals and objectives of the company (Why is it important for managers to
understand the external environment?, 2020). It is very crucial for the organization to critically
assess the external business environment because it helps in making proper decision and
investment plan in order to remain ahead of its competitors. A global manager of the Tesco
cannot develop a plan to invest in other country globally without analysing the external business
environment of the specific country which in turn might affect its business operations. Not
assessing the global business environment in turn largely affects the business operations
adversely. This results in high degree of losses and downfall within the performance of the
business. The whole and sole motive of the global business manager is to evaluate the external

business environment in order to provide goods and services which in turn meets the needs and
requirements of the customers. Tesco tends to operate in diverse business environment where
the people in turn tends to have diverse background and culture. Hence, the global manager must
assess the socio business environment in order to develop a strategic plan to invest within the
specific country abroad.
Lampadarios, (2017) sought to examine the fact that, every global business organization
in turn tends to react in order to effectively keep up with various flow of business operations.
Change in any business operations in turn focus on critically demonstrating the key external
environmental factors which can affect the business operations. The global manager must focus
on proper environmental scanning in order to make strategic decision in a reliable and accurate
manner. Business planning in turn is considered to be crucial for understanding the key strengths
and weakness of the business operations. Okeyo, Gathungu and Peter, (2016) sought to examine
the fact that, rise in the inflation rate of the organization must in turn focus on effectively
evaluating the various business environmental set in order to carry out business operations in an
accurate and reliable manner. The key role of the global manager is to develop a strategic plan
which in turn comply with the attainment of higher organizational goals and objectives. The
global manager in turn tends to focus on carrying out several business operations by effectively
adopting to the diverse business culture and time zones. Liu and et.al., (2020) sought to examine
the fact that, The global manager in turn tends to focus on effectively organizing the business in
order to effectively adapt to the local requirements of all the countries within which the business
operates. The global manager coordinated the business activities by properly analysing the
business activities. Economy, technology and various other social conditions in turn largely
influence the operations of the business.
For example, in case of Sainsbury company, it is very crucial for them to analyse the
various technological transformation which in turn has been taking place within the industry.
Without analysing the market trends and patterns of the external business environment, the
Sainsbury company cannot develop a strategic business plan in order to stand out in the market
from its competitors. It is very essential for the global manager to critically evaluate the several
business environment which in turn largely affects its business operations. Sainsbury tends to
focus on analysing the market trend by effectively developing new range of products and
services. The power of the consumers in turn is to effectively change the economics by effect

recognizing the key factors which in turn largely affects the business operations. The global
manager of the Sainsbury tends to focus on global strategic thinking which in turn leads to higher
operational goals and objectives. Global management in turn is important because it helps in
effectively protecting the well being of the organization. The management of the Sainsbury must
in turn focus on effectively adhering to the various local and regional laws and legislations of the
organization within which they operate. The global manager tends to effectively utilize the basic
understanding of the external environmental factor in turn largely influence the growth
Trajectory of the business in order to develop appropriate market strategic plan for future growth
and investment (What is an External Environment in Business? - Definition, Types & Factor,.
2020). This study tends to influence the attitude and various behaviour of the customers. The
attitude and behaviour of the customers in turn largely influence the working of the Sainsbury
company. They in turn must focus on effectively developing the various adverse effects they in
turn tend to have on the performance and productivity of the business. Change within the ruling
elites, government bodies, change in the trends of demographics, change in regulations and
policies in turn largely affects the business. This in turn also influence the strategic plan of the
business.
McCannHutchison and Adair, (2019) sought to examine the fact that, it is very crucial for
the global manager to assess the external business environment in order to effectively develop
strategic business plan an in turn focuses on investing abroad. The management of the company
in turn evaluates how are the market and environment conditions of the specific country in order
to carry out business operations with utmost accuracy and efficiency. Every global manager in
turn within the organization must in turn tend to focus on effectively demonstrating the various
conflicts which in turn might arise in order to attain high degree of operational goals and
objectives. The global manager in turn tends to reflect on its own strategic plan and formulate
their decision by effectively analysing and evaluating to carry out each business activity in an
efficient and reliable manner. Okeyo, Gathungu and Peter, (2016) sought to determine the fact
that, analysing the external business environment in turn helps in developing strategic business
plan which in very crucial for the growth and development of the person. The global manager
must focus on continuously understanding and managing the various needs and requirements of
the company in order to develop a strategic plan which is beneficial for the sustainable growth of
the business. There are various external environment factors such as social and economic factors,

competitors, customers, technological factors, etc. which in turn largely affects the operations of
the business.
For example, the statement stated is true as the manager cannot make plans for its future
growth and expansions without analysing the factors that may affect its business. It involves
taking important decisions related to the business and its environment. There are various factors
to be factors like the political factors, economic factors, legal and the technological factors. All
these factors can greatly influence the working of organisation. Manager of Morrison evaluates
each of these aspects such as political factor, where they analyse the interference of government
within the business. The frequency of change in the governing bodies and the rules and
regulations laid by the government. It also requires to analyse the opportunities and threats that
they may face with the concerned departments. Regarding the economic factor it analysed the
purchasing power of people in the country of expansions. Manager the demand for products
buying behaviours, inflation rate and the economic conditions. If the economy of the country is
not strong a company may not be able to survive in the market using it its existing strategies and
pricing policies. This also includes analysing the employment level for assessing the labour rate
in the country as it may not be sell the product at same price with high labour. Morrison's
manager analysed the technological advancement in the country. This is required to be analysed
for assessing the technologies that will be used for improving the productivity and efficiency. All
these are assessed very carefully for framing an effective strategic plan for making investments
in abroad.
CONCLUSION
From the above carried out study it has been concluded that, the statement is considered
to be true, because every global manager who in turn operates at inter national level must focus
on effectively assessing the external business environment suitable before developing strategic
plan or considering an investment abroad. This in turn helps in shaping the several business
operations. This study also demonstrates the examples of Tesco, Sainsbury and Morrison in
order to agree with the set quote.

REFERENCES
Books and Journals
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alliances in the UK construction industry. In 13th International Postgraduate Research
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Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Idris, B. and Saridakis, G., 2018. Local formal interpersonal networks and SMEs
internationalisation: Empirical evidence from the UK. International Business
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Jones, P., Comfort, D. and Hillier, D., 2018. Materiality and external assurance in corporate
sustainability reporting: an exploratory case study of the UK construction industry. World
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Lampadarios, E., 2017. Critical Business Environment Factors for SMEs in the UK Chemical
Distribution Industry: A Qualitative Perspective. Journal of Research in Business
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Liu, G and et.al., 2020. Networking-bonding actions, quality of ties, and channel member
collaboration: Evidence from UK-based small firms. Journal of Small Business
Management, pp.1-34.

McCann, L., Hutchison, N. and Adair, A., 2019. External funding of major capital projects in the
UK Higher Education sector: issues of demand, supply and market timing?. Journal of
Property Research.36(1). pp.97-130.
Okeyo, W.O., Gathungu, J. and Peter, K.O., 2016. Entrepreneurial orientation, business
development services, Business environment, and performance: A critical literature
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Sainidis, E., Robson, A. and Heron, G., 2019. Environmental turbulence and the role of business
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Online
What is an External Environment in Business? - Definition, Types & Factors. 2020. [ONLINE].
Available through:<https://study.com/academy/lesson/what-is-an-external-environment-in-
business-definition-types-factors.html>
Why is it important for managers to understand the external environment?. 2020. [ONLINE].
Available through:<https://www.enotes.com/homework-help/why-important-managers-
understand-external-341207>