Analysis of Factors Driving Global Commerce and Trade

This essay analyzes the key factors driving global commerce and trade, including cost, market, environment, and competition. It also explores the complexities and challenges faced by organizations operating in a global environment.

Global Business
Environment

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Analysis of the key factors that are driving the global commerce and trade.........................1
LO 2.................................................................................................................................................2
P2 Explanation of complexities of strategic challenges faced by organisations when operating
in a global environment...............................................................................................................2
LO 3.................................................................................................................................................3
P3 Evaluation of influences of globalisation...............................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Global business environment is the combination of different types of forces that are
leaving positive as well as negative impacts upon functionality of business. It is very important
for all the companies to make sure that they are able to analyse implications of all of them so that
the possibility of uncertainties in future could be reduced (Bedianashvili, 2016). Present essay is
based upon British Airways which is one of the largest entities in aviation industry. It is
delivering services all around the world to the customers. This essay covers various topics such
as analysis of the factors that are driving globalisation and determination of strategic
complexities associated with operating in a global environment. Along with this, evaluation of
the influences of globalisation in organisational governance, leadership, structure, culture and
functions is also covered in this discussion.
LO 1
P1 Analysis of the key factors that are driving the global commerce and trade
Globalisation can be defied as the opportunity which is reducing trade barriers for the
entities to execute operations in multiple countries. With the help of it, all the companies can
establish their business in different nations without specific restriction. It has facilitated global
trade and commercialisation. British Airways also take advantage of it and expanded its business
in different countries. In order to fly to Mauritius, it is essential for the entity to analyse the
factors of globalisation and trade. There are various types of factors which are cost, market,
environment, competition etc.
While planning to fly to Mauritius it will be very important for British Airways to
analyse the total cost so that estimation of required funding could be made. With the help of
globalisation, the barriers and international trade related costs are being reduced as cost is a
factor which drive globalisation. Most of the companies expand their business in various
countries because of low cost. By paying attention towards this factor the entity will be able to
fly to Mauritius successfully (Bhagra and Sharma, 2018).
Another factor which drive the globalisation is market because when the organisations
will be having different markets to establish business then it will help to expand the business
globally. While planning to fly to Mauritius it will also be an essential factor which should be
focused by British Airways. It will be a great opportunity for the entity to capture the large
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market share by flying to a new country. It will also result in increased customers as new country
will increase the clients.
One of the key factors that are driving globalisation is environment. It is the global
environment which facilitates all the entities to capture the large market share by offering
products and services to large number of individuals. This factor should also be focused by
British Airways when it will be flying to Mauritius. By analysing it, the top-level executives of
the entity will be aware of all the potential changes which may take place in Mauritius and it will
facilitate to be prepare to deal with all f them. For example, if the environment of a country is
positive and less influenced by political parties then it attracts large number of companies to
expand their business in that nations. It shows that this factor plays a very important role to drive
globalisation (Damarwulan and Farida, 2018).
Level of competition is also a factor which is driving globalisation as most of the large
entities are operating business in multiple countries which is resulting in increased competition.
Due to this, the companies are becoming more concerned with adopting competitive advantage
and for this purpose, they try to expand in more and more nations. In order to fly to Mauritius, it
will be essential for British Airways to determine the competitors in the country and then
formulate effective strategies to deal with them.
LO 2
P2 Explanation of complexities of strategic challenges faced by organisations when operating in
a global environment
British Airways is planning to diversify its operations in global environment by flying to
Mauritius. While expanding business in a new country it will be very important for the
organisation to make sure that it is able to deal with all the complexities and challenges that may
pose risk for its business. Some of the major complexities which could be faced by British
Airways are discussed below:
International supply chain management is one of the major complexities which could be
faced by British Airways while flying to Mauritius because it will be very important for it to use
the policies of international supply chain management. When expanding business in Mauritius it
will be very important for the managers to manage the international supply chain so that they can
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manage the international operations. Complexity with it will be the way in which it should be
managed (Hamilton and Webster, 2018).
Impact of international trade law is also a complexity which could be faced by British
Airways. International trade law is required to be focused by all the entities so that business
could be operated successfully. This complexity will also be faced by British Airways because it
will have to analyse the trade laws of Mauritius and then comply with them to ignore legal
interferences.
For each and every entity which expands business in a new country it is very important to be
aware of the concept of economics of globalisation as it can help to formulate effective
decisions. It will also create complexity for British Airways because the management will have
to gather information of it which may require large period of time.
The above discussion shows that there are various complexities which are required to be
focused by British Airways so that it can expand its business in Mauritius. All of them are
required to eb deal properly to achieve the goals of capturing large market area (Kasemsap,
2018).
LO 3
P3 Evaluation of influences of globalisation
Globalisation leave impacts upon all the companies which have already expanded their
business or willing to expand in future. In order to reach the goals successfully it is very
important for all the companies to make sure that they are able to analyse the influences. As
British Airways have planned to fly to Mauritius so it is essential for it to determine influences. It
can help it to reduce the negative impacts of them. The influence of globalisation on British
Airways could be analysed with the help of following analytical models:
Governance and leadership, is the first model which is required to analyse the influence
of globalisation upon business. Governance is the set of rules and regulations that are required to
be followed by all the entities while expanding business globally. It can influence globalisation
of British Airways as the organisation will be required to follow the rules and regulations of the
country in which it will be expanding. Leadership is the ability of leaders which is required by
them to guide a group of individuals (Lasserre, 2017). It can also an influence of globalisation
upon British Airways because the organisation will require to make sure that the leader which is
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selected is able to guide all the subordinates from different countries. Another factor which is
also required to be focused is that the leader is able to understand the requirements and language
of the staff.
While expanding business in a new country the companies are required to make changes
in structure and pay attention towards the functions. Main purpose of it is to assure the successful
accomplishment of predetermined goals. As British Airways will be flying to Mauritius so
globalisation will influence the structure and functions of entity. In order to reduce tehri
influence the entity will be required to make changes in both of them according to the global
environment.
Hofstede Organisational culture model is a framework which is used to differentiate
between different types of cultures which could be adopted by companies according to their
choice. These cultures are power distance index, individualism vs collectivism, uncertainty
avoidance index, masculinity vs femininity, long vs short term orientation and indulgence vs
restraint. All of them will influence British Airways if it will not be able to analyse the culture
which is followed by Mauritius. Lack of knowledge of about the culture of the country will
affect the functionality of business (Trad, 2019).
The above discussion shows different models which could be focused to analyse the
influence of globalisation upon the business expansion of British Airways in Mauritius.
CONCLUSION
From the above essay it could eb concluded that global business environment is a
combination of different factors which are required to be focused by all the organisations to
reduce negative impacts of them upon business. There are various types of factors which are
driving globalisation. These are market, cost, environment and competition. Some of the specific
complexities which could be faced by while expansion are international trade law, international
supply chain management and economics of globalisation. The models which could be used to
analyse influence of globalisation are governance and leadership, organisational Structure and
functions and Hofstede Organisational culture.
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REFERENCES
Books and Journals:
Bedianashvili, G., 2016. The Global Business Environment, European Integration and the
Cultural Potential of Social-economic Development of Georgia. Globalization &
Business.
Bhagra, A. and Sharma, D. K., 2018. Changing paradigm of employability skills in the global
business world: A review. IUP Journal of Soft Skills. 12(2). pp.7-24.
Damarwulan, L. M. and Farida, N., 2018. The Role of Quality of Entrepreneurial Networking
and Responsiveness to Global Business Environment in improving the Marketing
Performance of Indonesian Exporting SMEs. Quality-Access to Success. 19(165).
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kasemsap, K., 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Trad, A., 2019. The Business Transformation Framework and Enterprise Architecture
Framework for Managers in Business Innovation: Knowledge Management in Global
Software Engineering (KMGSE). In Human Factors in Global Software
Engineering (pp. 20-49). IGI Global.
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