CAMECO Corporation PESTEL Analysis and Globalisation

The report provides a detailed PESTEL analysis of CAMECO Corporation, examining the political, economic, social, technological, environmental, and legal factors that affect its business operations globally. It then explores the challenges of globalization and how they can be overcome, including the impact of technology on globalisation. The report concludes by highlighting the importance of adapting to changing market conditions and cultural differences when operating in foreign countries.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P 1 Key factors of cost, market environment and competition that derive global commerce and
trade.............................................................................................................................................1
LO 2.................................................................................................................................................3
P 1 Complexity of the strategic challenges faced by organisation when operating in global
environment.................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Globalisation is the process of spreading the business, its products, technology,
information and jobs across the national boundaries, and in which national and regional
economy, society and culture become integrated to work together (globalization,2019). Report is
based on the CAMECO company which is world's largest fast growing energy and chemical
company based in South Africa. It is world's second largest uranium producer which have 18%
of world production.
Report will include the key factors of cost, market environment and competition that
drive the global commerce and trade. It will also include the strategic challenges faced by the
organisations when operating in a global environment. It also describe the influences of the
globalisation on the organisational governance, leadership, structure , culture and functions.
Further more it will include the evaluation of the influences of ethical and sustainable
globalisation on the organisational functions. And this report will explain the different ways of
decision making that can work effectively in global context. And also include the various routes
to internationalisation an organisation may adopt.
LO 1
P 1 Key factors of cost, market environment and competition that derive global commerce and
trade
Globalisation is the process which increase the trade around the world. In which the large
companies are especially include to producing and trading the goods in many different countries
(Beck, 2018).
Driving factors of the globalisation
There are variety of factors that contributed in the process of the globalisation. Some of
the most important driving factors are given below:
Technological change – Rapid changing technology and progress has made change in the
transportation cost and made communication easy, and latest rapid growth in the internet drive
and create global e-business and force the organisation to work globally (Cullingford, 2017).
Cost – Cost and the sourcing efficiency are different from country to country and the big
organisation take the advantage of this cost. That the CAMECO company company expand its
business where cost of the country is low that will help the CAMECO to establish its firm easily
and also help in product and energy which need high amount of cost.
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Political – Political region of the country force the organisation to work in another country. The
country which reduce or eliminate the barriers to trade in goods, services, labour and capital
attract the organisation to work in their country (Factors That Have Contributed to
Globalisation,2018). Whose country's political framework is good for expanding business and
trading, organisations wants to work in that country.
Differences in the tax system – Different country have their different taxation system like lower
import and export system. Interest rate, lower labour unit cost are the favourable condition to
production that encourage the CAMECO which require high amount of labour unit and have to
import and export of the raw material, to expand business globally (Baylis, Smith and Owens,
2017).
Impact of Digital technology on the globalisation
There is a strong impact of the technology on the globalisation. Advancement in the
technology reduce the cost of transportation and communication across the nation and this
encourage and facilitate the organisation like CAMECO in global sourcing of the raw materials
and other inputs. Information technology has eliminate the barriers of time and cost to dealing
with other country (Impact of the technology on globalisation, 2015.). This digital technology
provide the ease to CAMECO that buyer and seller can transaction any time anywhere and even
investors too that will help the CAMECO company to deal with 5tyhe investors and clients and
that can increase the revenue of the company.
PESTEL analysis of the CAMECO
PESTEL analysis is strategic management tool that help the CAMECO to understand the
impact of the macro/external environment and can make better decision regarding global
business (Crane and Matten, 2016).
Political Factors – Political factors play vital role that can impact the CAMECO in its long term
profitability in certain country. Political stability, pricing policy, wage legislation, taxation will
influence the CAMECO to work in other country. Political stability helps the company that it not
have to change its business policies frequently, low taxation and wage will help the company to
import and export and in interest rate and also company can get the high amount of labour in
low wages. This will increase the chances of get success in other country and smooth running of
the business.
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Economic Factors – Growth of the any business largely depends on the economic condition of
the country. Country whose economic condition is good, labour cost, high unemployment rate,
efficiency of the financial market will help the CAMECO company in providing the finance and
investors for the company, can easily get the labours and land for establishing its business that
will give the ease to earning and gaining the profit and production (PESTEL / PEST Analysis of
Cameco,2019).
Social Factors – Education level, gender, culture, attitude can affect the CAMECO, that if
education level is high company can get the good expert employees that can manage the
chemical and energy firm. Culture of the country, how company understand the customers will
affect the organisation in establishing its business globally.
Technological Factors - Technology will lower the cost of the production. As CAMECO is
energy and mineral company which requires the high efficiency of the technology that can
transform the raw material to the final product, can deal with the clients and other organisation at
any time that will help the CAMECO to grow more. If there is no availability of the technology
CAMECO can not work effectively (Cameco Corporation PESTEL & Environment
Analysis,2019).
Environmental Factors – Environmental factors like weather, climate change can affect the
CAMECO to run its business. As CAMECO is a chemical and energy firm that will have to take
of the laws and regulation of the of the environmental pollution, if it does not take care of the
environment, it will affect the country's environment that even due to this government of that
country can cancel the licence of the CAMECO (Crane, Kawashima and Kawasaki, 2016).
Legal Factors - Legal factors such as consumer law, health and safety law, employment law
and many more, CAMECO have to consider these laws, if does not it can lost the trust of the
employees. Have to take licence to producing the chemical and energy, If it does not follow all
these company can close in very short time.
LO 2
P 1 Complexity of the strategic challenges faced by organisation when operating in global
environment
Expanding the business across the nation means reaching new clients, customers and
boosting the profit. Going global is usually beneficial for the company but it brings some
challenges as well. CAMECO will have to plan and addressed the main hurdles need to be
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successful (Khan, 2018). Biggest strategic challenges faced by the organisation when going
global are:
Foreign laws and regulation – Understanding of the foreign laws and regulation is the main
key for governing the target market. For the CAMECO it can be a big challenge to understand
the foreign countries laws and regulation to establishing its business. All the trading laws,
taxation, employment and labour laws etc. are different from country to country if there is high
trading and taxation policy so it become difficult for the CAMECO to business, it is chemical
and energy firm which requires export and import of the raw materials and trading the goods. If
the taxation is high it have to pay high amount of tax and also pay high tax for import and export
of the products, thus production rate will be increase and then the rate of the final products will b
high. This affects the CAMECO business and also affect the overall profit of the company (11
Biggest Challenges of International Business in 2017,2017).
Currency rates - Fluctuation of the currency rate is on one of the challenge for the CAMECO.
For producing the uranium and energy it need high amount of the investment, if the currency rate
of the country is higher than the origin country will affect the CAMECO that it will have to
invest double the amount and if there is low currency rate then company do not need to invest
more amount but it the government and other investors of there country can not invest more as
this chemical and energy firms required. It also become challenging for the COECO to set its
payment and pricing policy according top the currency rate.
Communication difficulties and cultural differences – Good communication is the heart of the
every global business, so the communication and the culture is the big challenge for operating
the business globally. Every country has there own communication language and culture, it is the
challenge for the CAMECO company to understand the domestic culture of there country and to
have the conversation with the clients, customers and colleagues (Song, Sun and Jin, 2017). Non
verbal communication can not make the business effective and break the deal. For hire the labour
CAMECO company need to understand the culture and language, If they hire the local labour
and employees company management will not be able to understand their problems and can not
solve their problem, employees may leave the company as well. Because of this communication
barriers CAMECO will not be able to make clients and customers and can not operate smoothly.
So communication is one of the biggest challenge that CAMECO company can face when
operating globally.
4

Political risk – Unstable political region or the changing government also bring the changes in
policy and regulation of the company as well. Different country's government have their own
different policies which a CAMECO have to0 follow it can not deny to adopt them. Frequently
changing government is big challenge that every type CAMECO have to plan its strategies and
production accordance with new government (Payne and Askeland, 2016). In some political
policy some specific type of the business are banned or some political region not allow the
foreign organisation to operate in their domestic region. There are many political challenges that
can have to face by the CAMECO to expand its business in global market.
CONCLUSION
From the above study it can be concluded that globalisation is the process of operating
the business internationally in the foreign country and increase the market size and profit of the
organisation. CAMECO which is chemical and energy firm based on South Africa also planning
to expand its business in many countries. This report has presented the key factors of the cost,
market and environment which force or attract the CAMECO to work in another country to
expand business that helps the company to earn more and make place in the global market as
well. It also concluded that While operating the business globally is profitable but there are many
challenges as well which organisation have to face before and operating its business in foreign
country. Ethical and sustainable globalisation also influence the culture, structure and leadership
function of the organisation that it have to make changes according to the country. It has
concluded the different ways of the decision making that can for effectively in global business or
determined the various routes to internationalisation, an organisation may adopt.
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REFERENCES
Books and Journals
Baylis, J., Smith, S. and Owens, P. eds., 2017. The globalization of world politics: An
introduction to international relations. Oxford University Press.
Beck, U., 2018. What is globalization?. John Wiley & Sons.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Crane, D., Kawashima, N. and Kawasaki, K.I. eds., 2016. Global culture: Media, arts, policy,
and globalization. Routledge.
Cullingford, C., 2017. Globalisation as education? Images of other countries. In Globalisation,
education and culture shock (pp. 35-48). Routledge.
Governance, Public Administration, and the Challenges of Globalization. In Globalization and
the Challenges of Public Administration (pp. 5-31). Palgrave Macmillan, Cham.
Payne, M. and Askeland, G.A., 2016. Globalization and international social work: Postmodern
change and challenge. Routledge.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews.80. pp.276-
289.
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