Fundamental Global Issues in Business Expansion

This document discusses the four fundamental global issues that businesses need to consider before expanding into new international operations. It explores the cultural, political, economic, and ecological factors that impact business expansion. The document provides insights into how businesses can navigate these issues to ensure successful expansion.

CONTEMPORARY
GLOBAL ISSUES IN
BUSINESS AND TOURISM

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
A) Four fundamental global issues which business must consider before leaping into new
international operations...............................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Globalization is a very important factor for businesses in the market so that there is going
to be effective working and higher profitability in the market so that the business will be able to
operate effectively. Businesses expand themselves to get higher market share and higher sales so
that they will be able to gain profitability which is very important. The report is going to consist
of fundamental global issues which businesses need to consider before expanding themselves in
new market so that they will be able to have the portfolio and brand image in the market
increase.
MAIN BODY
A) Four fundamental global issues which business must consider before leaping into new
international operations
There are a lot of fundamental measures which a business has to take to be able to
operate effectively in the market and specially increase of expansion so that there is going to be
effective working which would be present. The report is going to discuss the four fundamental
which being cultural, political, economic and ecological factors which business needs to monitor
and evaluate before taking further planning and decisions of expanding.
 Cultural
A business originates in one country which is going to have a different value, belief and
culture for themselves which needs to be present so that the employees and the customers are
going to have higher satisfaction which is going to be present. Business will have to get in
changes in the products and services as well according to this factor so that they will be able to
satisfy the needs and demands which are going to impact the profitability and reputation in the
market (Xudoyаrov, 2019). The culture and values are going to differ when the business wants to
expand themselves in other markets which is going to make the company get in more changes so
that there is going to be right working. Employees are the backbone of the organization and if
they are not provided with a healthy environment to work within then they are not going to have
better functioning. The productivity in Tesco is very important because the demands and needs

of the customers have to be matched so that there would be higher profitability in the market
which is good for getting in higher economic stability as well.
The best example is Tesco wanting to expand them in India which is going to make a lot of
difference in the organization which is related to this aspect in the market. Employees of Tesco
in India are going to be locals and they are not going to be able to follow the same culture which
was being followed in UK but there are going to be a lot of changes which have to come.
Employees are going to be paid less and more work can be taken out of the employees if the
work culture is maintained and they are well motivated so that there is going to be higher market
share would be present (Cao, Li and Song, 2017). Job satisfaction of the employees has to be
present only then the company will be able to do well in the market which is why understanding
the culture is very important for the company in the market so that there are going to be higher
values which are going to be present. There can be miscommunication as well which can take
place in the market or business when the culture is not going to be same which would make the
company have higher sales and the organization will be able to have higher profitability.
 Political
There are a lot of taxations and other policies which are present in the market which
businesses in the market have to have so that there are going to be higher performance which is
going to be present. There are right investors and right information which needs to be provided
to the government of the country as well so that there is going to be better understanding
between the two and the expansion in the country is going to be effective (Ponizovkina,
Agibalova and Mamedova, 2019). Shipment and other merchant products and services have to be
prohibit to the government before anything is taking place so that there is a legal action which is
being followed by the company which Tesco is aware about so that there is going to be effective
working which would be present in the company. Government approval has to be taken by the
businesses to be able to operate in the new market internationally which Tesco is aware of and
due to its good networking and social image in the market the organization will be able to
develop themselves.
Tesco is having a lot of experience in the market and are also aware of the taxation and trades
which the countries are having so that there is going to be smooth functioning. The company

wants to expand themselves in India and develop in that country even after so much of
competition which already exists there. The political stability has to be present in the country so
that the policies and trades are not going to changes which is going to be in favour of the
organization so that the planning and structure which Tesco is having for themselves is going to
be intact which is a very good factor for the company to have in the market. This is going to
make the brand image and recognition in the market also increase which is good for the business
to have. There are a lot of employment policies as well which are changing in the country which
has to be followed so that there is going to be effective working and the employees and the
customers are well satisfied (Mariani and et.al., 2018). There are a lot of actions for the
customers as well which is that there has to be good transparency which needs to be present on
the products and services which Tesco is going to be serving in India so that there is going to be
effective working which would be present.
 Economic
The economic factor always affects to a business when it expands its business operations in
the international market place. Currently Tesco serves in many countries, like; Peris, Australia,
Netherlands, Germany, Norway, Iceland, Ireland etc. In this situation, issues relating economy
always affects to this retail business in both manners, positively and negatively (Franceschelli,
Santoro and Candelo, 2018). Basically, the impact of economic factors is very simple to
understand. For example; when economic conditions of a market place or a country are effective,
then this factor will positively affect to Tesco in market place. On the other side, if economic
conditions of a country are not good, then this factor will negatively affect to Tesco in market
place. This is the main reason that, upper management of this retail company mostly tries to
expand its business operations in such countries where economic conditions are completely
favourable for a business. Factor of economic stability also affects to Tesco while operating
business operations internationally. Basically, stable economy is very appropriate for
organisational growth of venture, because when any country’s economic conditions highly
fluctuates, then this economic factor will very badly or negatively affect to existing businesses
and venture of that country.
However, top-level management of this retail company completely knows that how to deal
with the impacts of economic factors. Tesco runs in market place for many years, in which

existing management of business has proper knowledge about how to deal economic situations
(Mihardjo and Sasmoko, 2019). For example; currently economic conditions of many countries
become very ineffective just because of corona virus pandemic, in which existing management
knows how to management this current situation. Even, currently the UK’s economy system also
become very ineffective, and the United Kingdom is home country of Tesco, in which existing
economic conditions of this country is not favourable for business. Recently, due to corona virus,
many people in across the world has lost their jobs in across the world. In this situation, after
losing jobs people wants to invest their money in purchasing those products only which are very
essential to them. So that, company have to plan for expanding its business operations in those
countries which has effective economic conditions in current Covid 19 time period as well.
On the other side, upper management of this venture have to avoid expand its business
operations in such countries or market segments where existing economy highly fluctuates.
Basically, high economic fluctuation is very big economic issue to a business or company in
market place, because issue promotes uncertainties in organisational growth. According to
different business experts, high inflation rate within a country’s economic system is also a very
big issue, because inflation can influence to Tesco for decreasing prices of its products and
services (Malik Boyle and Mitchell, 2017). However, upper management of company many
times faces this issue of economic inflation in its many years of business operations, in which it
has enough knowledge about how to deal with the impact of this types of economic issues. The
R&S (research & development) department of Tesco needs to be highly active in its existing job
role for researching about which market places are very favourable to Tesco for expanding its
business operations by economy wise. Then, upper management of retail company have to take
step of business expansion after complete market research.
 Ecological
Top-level management at Tesco have to consider ecological issue as well, because this is
very necessary to company for systematically expanding its business operations in market place.
Many times, ecological issues also very negatively affect to any company’s business operations
in market place, so that existing management at Tesco have to consider this issue as well. Tesco
is a multinational retail organisation, in which it faces different challenges and difficulties in
different countries. Basically, each country has its own ecological conditions, in which upper

management have to make a specific plane for properly dealing with all types of ecological
factors (Imaz and Eizagirre, 2020). For example; many countries charges very higher rate of
taxation from multinational companies for promoting home businesses and venture, in which this
ecological factor is not favourable to Tesco, because it is also a popular multinational company.
Many times, this retail venture is not able to hire appropriate employees in its workplace because
of lack of skills and talent in a country, in which this is another major ecological issue to
company, because highly talented and skilled employees are very necessary to Tesco for gaining
huge competitive advantage in market place. However, this ecological issue influence to upper
management of Tesco to expand own business only in such countries where many skilled and
talented employees and workers simply available in market place.
After seeing different challenges and issues in the global market place, the upper
management of Tesco have to improve its conflict management and problem-solving
competences for properly dealing with ecological issue in each market segment. For example;
due to have lack of modern technology in a market place, Tesco can’t improve its business
performance and productivity, because in this dynamic world, technological advancement is very
necessary to gain appropriate outcomes in market place (Bashir and Farooq, 2019). For resolving
this issue, management of Tesco have to expand own business operations in that market place
where modern and latest technologies will simply available. On the other side, lack of raw-
material is also a big ecological issue in many countries, in which upper management of Tesco
need to ensure before expand its operations that, it will easily organise raw-material or not in that
country where it wants to expand its business operations.
CONCLUSION
On the basis of above findings, it can be concluded that Tesco can face many issues while
expanding its business operations in the international or global market place. In this situation,
top-level management of company have to make specific plan for properly identifying key issues
of global market place, like; cultural, political, ecological and economic. Then it needs to expand
its business in such market segments where it can simply resolve its various issues.

REFERENCES
Books and Journals
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