Global Business - Benefits and Drawbacks

Added on - Dec 2020

Trusted by 2+ million users,
1000+ happy students everyday
Showing pages 1 to 8 of 44 pages
-
UNIT 11 – RESEARCH
PROJECT
TABLE OF CONTENTS
Title: To identify benefits and drawback of global business environment – A study on Tesco plc.
..........................................................................................................................................................1
RESEARCH OBJECTIVES............................................................................................................1
RESEARCH QUESTIONS.............................................................................................................1
LITERATURE REVIEW................................................................................................................1
RESEARCH METHODOLOGY.....................................................................................................5
DATA ANALYSIS AND INTERPRETATION.............................................................................7
DISCUSSION...............................................................................................................................21
RECOMMENDATION AND ALTERNATIVE RESEARCH METHODOLOGY.....................21
CONCLUSION.............................................................................................................................22
REFERENCES..............................................................................................................................24
Title:To identify benefits and drawback of global business environment – A
study on Tesco plc.
RESEARCH OBJECTIVES
To determine advantages of business expansion with global business environment.
To identify challenges faced by business due to global business environment.
To articulate factors which impact business through global business environment.
To give recommendations for business expansion with global business environment.
RESEARCH QUESTIONS
What are the advantages of expanding business with global environment?
What are challenges faced through business with context to global business environment?
Which factors impact business through global business environment?
What recommendations you give for business expansion on basis of global business
environment?
Significance of the study: The present study is highly significant which in turn provides
assistance to other scholars who are interested to do study in the field of globalization. Further, it
will also help Tesco in developing strategies which can be used for global business expansion. In
addition to this, concerned study will also provide companies, operating in retail sector, with
effectual framework for decision making. Another main behind choosing this topic is having
interest in the area of globalization, research etc.
LITERATURE REVIEW
Theme 1: Benefits and challenges of business expansion of global business environment
AccordingtoKalitanyi(2019), toremaincompetitive,everyopportunitymustbe
considered for raised production efficiency and broaden reach by doing business globally.
Usually large margins are driven through economies of scale, so wide operations scale could lead
to larger profit. This might help in attaining lowering cost with increment in production scale via
international expansion. The main reason behind this is of spreading fixed cost across various
product as this will decrease per unit cost, and gives outcome related to operational efficiencies
decrease variable costs. In the similar aspect, economies of scale could work for any business
1
regardless of size and technological improvements allows businesses to be highly productive in
major areas such as marketing, hiring and purchasing.
On the contrary,Ferro and et.al., (2019)has stated that while doing business globally, it
is very important to customize product.For instance, there is requirement of putting labels on
product which are specified in other languages as with limited budget, this could be very
difficult. The cost of product customization and considers extra time for implementing. With
context to global brand, there is requirement of customizing but with absence of enough amount
of marketing as it is very difficult to attain.
As per views ofAbubakar, Benna and Benna (2019), there is not need for accepting
restrictions of local market where product could extract an international market where business is
prone for seasonal alterations along with pronounced fluctuations in demand. This might lead to
protect itself with expansion in market which is less volatile.Amankwah-Amoah, Osabutey and
Egbetokun (2018)has argued that, one might run into regulatory problems as countries engage
for free trade arrangements for making it easier for organizations to sell it to other countries.
Generally, it is difficult for other countries for sellers for moving in their territory. In this aspect,
it might have to repay unusually huge taxes and tariffs throughout the process where companies
gauge about hassle of moving in certain countries is worth.
Hopkinson and et.al., (2018)has stated that doing business globally opens new stream of
revenue but also brings new challenges for dealing with foreign regulations and culture. It helps
in improving sales as launching business globally which means that more market and entering
foreign markets then it will enable for extending life cycle of mature products.Means that
product may touch maturity stage in domestic market and by launching it into foreign market
product is bring to growth stage in the new market.Thus, it is the one of the best strategy that
company can employed in order to increase life of its product in the market.Kirton and Maclaren
(2018)has critiqued that, for going global there is requirement of complying with rule of country
on basis of imported products by other countries. Establishing trademark or patenting in every
country is significant for protecting business but laws of trademark are differing among
countries.
According toPierce and Velliaris (2019), launching business globally helps in competing
with foreign companies as knowledge could translate for helping other business as well. In
2
simple words, this had broadened horizons around world and strengthened with different cultures
exposed on regular basis.It can be observed that when any company open its business in the new
market it forms joint venture or directly start business at its own level. It can be said that if
business start in joint venture knowledge sharing and technology transfer happened. Hence, it
can be said that there are multiple benefits of operating business in the foreign market.The
global business has natural benefit due to variation in every culture makes stronger for exposing
its services and products to overall people. In the same series, business becomes very less
vulnerable for alterations of trends which change on timely basis. Generally, customers tend to
work in mobs comparatively to individuals where each one is popular. The global business is
guarded against with alteration in business trends due to high access to markets within targeted
demographics.
Gouvea, Kapelianis and Montoya (2018)has argued that there might be need for
customisingitsbusinessaccordingtoculture.It comprisesvariousculturewith needof
significant staff, money and time. The cultural sensitivity and deference with local customs plays
important role with relationships from its international customers. The history and customs of
other culture must be respected as it strengthens relationships and builds bridges in international
marketplace. With context of appropriate understanding about cultural nuances along with social
etiquette avoids corporate embarrassment during meetings in other countries. Hence, language
could become a very significant barrier while doing business globally as local language as barrier
to attain success. It is slowing down with software and apps for translating words in workable
language but these technologies are still very imperfect. In this context, unexpected fluctuation in
currency could destroy profits but could also give windfall. It could be controlled with hedging
currency but with appropriate information about great deal is to seek services of professional
currency trading firm. The translation in credit card currency could also be highly problematic so
it must be considered.
Theme 2: Factors impact business with global business environment
According toReis and et.al., (2019), global business environment is replicates as multiple
sovereign nations which are outside of the business's home environment as they are influencing
organization to make decisions for application of resources. The operating situation of company
is dependent on both internal and external factors. In this aspect, there should be consideration of
3
various factors such as language which needs to be paid close attention for doing global business.
There is presence of various mistakes for advertising internationally which will not help
organizationstosellitsproduct.Lacy,GuptaandHayward(2019)hasarguedthat,
communication is major challenge for business along with great burden to enter market with
different native language. The global business must consider impact of communication for hiring
local talent and to create virtual teams and global workplace along with interaction from local
customers. The most strategic concern is human resource for entering in global markets.
Klepac and Berg (2019)stated that entering global market could difficult for business due
to consumer habits and regional values. Personality and culture combines for shaping consumer
behaviours in specific region throughout world or country.Means that culture and consumer
behaviours of the people is different across the nations due to different socio-economic factor.
Due to all these reasons strategy that is applied in one nation cannot be applied on another. Thus,
it is the one of the big threat of business environment for the business firm.For purpose of
marketing business in foreign country there is requirement for identifying that its free thinking
culture or peer group has huge influence on buying decisions. With this aspect, there must be
consideration of other psychological and societal factors which influence buying decisions in
country which has been targetted for doing business. On the contrary,Stanković and Novaković
(2019)has critiqued about global business failure is due to lack of planning. The companies
objective is to go global with access to new customers and capital. With perspective of keeping
up with competitors, some organizations enter foreign markets with absence of solid plan of
action. In this aspect, market research is not performed in appropriate aspect whereas differences
in local and international strategies have been assessed and pondering variance in costs for doing
businessoninternationalaspect.Therearevariousorganizationswhichpulledoutof
international markets because of absence of plan.
AsperviewsofIgbinakhaseandNaidoo(2019),internethasbecomemodeof
organization for trading throughout the world. Priorly, it was highly expensive but in the present
scenario, there is not even requirement of physical presence in country with context to do
business. It could be international company with its own effort. It might be related to matter of
cost as it is cheaper for doing business in abroad due to less production cost and repay its
employees in affordable manner. In the similar aspect, business expansion would lead to enable
for producing more units. The more units of production will reduce lower per unit cost. This
4
could lead to raise profit margin and best via selling to more customers or raised volume, which
could come through expansion in more countries.
However,Clayton and Clopton (2019)has critiqued that there is inability for adapting
local marketplace and culture which might lead to global failure. The organizations which enter
international markets and fails for using local suppliers, talents and business partners which
outcasts local community in government officials and residents. In this aspect, culture also
influences business and people who views business models and product in different manner
throughout the world. Simultaneously, poor market acceptance also leads to global business
failures as planning and good solution does not signify that every foreign market would accept it
whereas many people don't purchase certain brands or product concepts as customers in other
part of world. There are various organizations which have struggled for developing promotional
campaigns which hit advantages that directly appeal to local culture and way of life along with
people.
Theme 3: Recommendations
AccordingtoMillar,GrothandMahon(2018),ithasbeenrecommendedthat
organization must undertake with culture general approach as universal dimensions must be used
for defining each culture and to become familiar with all underlying features of culture as
specific concept. There must be appropriate evaluation and understanding of culture of particular
nations which gives invaluable insight before setting business. However,Trad and Kalpić (2019)
has recommended that to know national culture along with dimensions it undertakes about deep
dive in culture as it informs about management structure of company, reward systems, global
strategy and risk aversion.
RESEARCH METHODOLOGY
Research type:It is referred as strategies, techniques and processes utilised in data
collection or with appropriate evidence with perspective of analysis in order to uncover
innovative information and to create better understanding of particular topic. Generally research
type is classified in two categories which are qualitative and quantitative research (Zhang and
Roe, 2019). Qualitative research seeks for answering question related to behaviour of people and
gives in depth information relates to human behaviour. In the similar aspect, quantitative
research reflects phenomena through gathering numerical data which is analysed mathematically
5
with basis of methods. The sources of quantitative data are surveys, observations and secondary
data and sources of qualitative data are interviews, post cards, focus groups, observations and
secondary data as well.
In this study, researcher has applied both research types as in this environment, numbers
arehighlyvaluedandprovidesdetailedreasonaboutparticularbehaviour.Itquantifies
behaviour, opinion along with other defined variables for generalizing outcome and formulate
facts along with uncover patterns in research. However, qualitative data gives insights about
problems and develops ideas with context of potential quantitative research and uncover trends
in opinions and thoughts along with deep diver into problem.
Research approach:It is referred as process and plan which comprises steps of broad
assumptions about detailed method of data analysis, interpretation and collection. Mostly it is
based on nature of research problem which is being addressed (Leatherdale, 2019). The
approaches of research are categorised in 2 methods which are inductive and deductive.
Inductive approach starts with theories and observations and proposed at end of process of
research as outcome of observation and involves to extract pattern through observation and
development of explanations and theories for those patterns with series of hypothesis. Deductive
approach lays emphasis on causality and begins with hypothesis on basis of existing theory and
then research strategy has been designed for testing hypothesis. In this study, researcher has used
of inductive approach because it does not imply with disregarding theories to formulate
questions of research and objectives as well.
Research philosophy:This is the method which provide a way to researcher in order to
gather data so that through proper analysis such information will get used in the study. It deals
with the source, nature and development of knowledge so that proper focus has been developed
for conducting effectual research study (Research Philosophy, 2019). There are generally four
popular methods which includes Pragmatism, Positivism, Realism and Interpretivism.
In this present study researcher has chooses Interpretivism method in order to
collect effectual data. This is the method where researcher collects small samples which is
in depth and proper investigation has been conducted which get occurred in reality and
which is fully understandable.
Research design:This is the method which include set of procedure for collecting and
analysing measures which identified in research problems. It is also considered as the type of
6
Desklib Logo
You are reading a preview
Upload your documents to download or

Become a Desklib member to get access