Issues in Business Management Assignment
Added on -2020-07-22
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CRITICAL ISSUES INBUSINESS MANAGEMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................4MAIN BODY...................................................................................................................................41) Drivers of globalization for Tesco..........................................................................................42) Growth of Tesco in South Korea in comparison to other global companies..........................63) Reasons behind Tesco decided to leave South Korea.............................................................9CONCLUSION..............................................................................................................................10REFERENCE.................................................................................................................................11
ILLUSTRATION INDEXIllustration 1: Business performance of Tesco in South Korea.......................................................7
INTRODUCTIONGlobalization is the term in which companies move to other nations in order to expandtheir business. It increases competition and supports in improving performance of business units.Tesco is the multinational retailer which has started its business in South Korea in the year 1999.It has localized its stores in order to provide quality services to clients (Tesco sells South KoreanHomeplus business for £4bn, 2017). Changes in operating environment has affected sales ofTesco in the South Korea. Changes in regulations and enforcement of merchants affected thebusiness environment of entity to great extent. Global recession has affected spending power ofconsumers and sales of the firm got reduced. After that it was very difficult for Tesco to continueits operations in South Korea so its exist from this market. MAIN BODY1) Drivers of globalization for TescoTesco was conducting its business in South Korea well but as condition of the country getaffected then it was very difficult for Tesco to sustain in the market for longer duration. It wasfacing huge loss thus, it has taken decision to move from South Korea (Drivers of Globalization:Integration of Theories and Models, 2005). Globalization is the term which define the shifting ofan entity towards international market. GATT (general Agreement on Tariffs and Trade) hasmade regulation which reduces trade barriers and any small firm can enter into new marketeasily (Tesco sells South Korean Homeplus business for £4bn, 2017). Drivers of globalization forTesco in relation to their expansion and exit from South Korea are as following:Economic conditionIt is considered as one of the major element that impacts on business unit and itsglobalization. If the economic condition of any nation is good then firms can earn more profit,but if condition of region is not good then it becomes difficult for organizations to sustain in suchenvironment for longer duration. In the initial years South Korea was having strong currencyvalue and many investors like to invest into this market (Schaltegger and et.al., 2017). This hasforced Tesco to enter into this market and cited firm has spent huge money and time to establishits business into Korean market. It has started providing variety of retail products at affordablerates. Its virtual stores and Tesco Homeplus has attracted more people towards its stores. Afterthe recession economic condition of the country gets badly affected (Drivers of Globalization:
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