Global Business Environment Task

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RUNNING HEAD: GLOBAL BUSINESS ENVIRONMENT
Global Business Environment

Global Business Environment
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Introduction
Yummy Food limited operates in fast food industry and based on Hong Kong. The company
is operating well in the domestic country and wants to expand their business in a global
market. This report includes analysis of the company using Pestle analysis tool and
considering that opportunities and challenges that the company will face in near future in
order to expand its business to global platform. The company can expand to Malaysia and in
order to expand challenges in international supply chain are explained and diversification and
risk strategies that the company can use in order to manage its supply chain at the global
level. Further, by applying McKinsey 7S model and Hofstede dimensions culture model the
influence of global business practices on the organization structure and operations is
analysed. At last recommendations are given about strategic routes that the organization can
use and the strategies that the company can follow in order to cope up with the challenges of
operating at the global level.
Globalization
According to Hill (2015), Globalization is considered as the growing interdependence of the
world’s economies, populations, culture, technology, flows of investment, people and goods
and services. Globalization is all about being together. As it empowers each country to
produce products that they are specialize in by using least amount of resources. The concept
of globalization gives competitive advantage to market, businesses and customers (Hamilton
and Webster, 2018). Businesses face many challenges while opting for expanding in other
countries.
Driving factors to Globalization
Globalization of production and market transform the ways in which nations interacts. Many
businesses nowadays are multinational businesses, that operates in more than one country and
globalizations provides this opportunity to businesses. Due to that multinational companies
able to survive in the market for long run.
The powerful force that drives the world towards a converging commonality is technology. It
has proletarianized, transport, communication and travel. As due this everyone everywhere
require things that they heard, experienced or seen via technologies and this resultant in

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emergence of global market. This driving force helps the multinationals to get benefit from
enormous economics of scale in distribution, production and marketing. With globalization of
market gone are the days when prices, profit margins at the global level were higher than the
domestic market. The globalization of market is in hand (Naz and Ahmad,2018).
The four main drivers of globalization are market, production, government and technology.
These external factors impact on the condition of companies and have potential of
globalization. Some of market drivers are transferable marketing and common customer
needs. Whereas emergence of global market for products that are standardized has enabled
corporations to cater demands in the new market by offering existing products (Behringer
et.al,2018). Trade liberalization is one of the drivers due to that export and import of services
and goods become cheaper and that promoted globalization. Other factors are stage of
development, demography and location, factors of production differ from country to country
due to that companies globalize production processes. Further, rapid changes in technology
improve the global connectivity. Mainly the most changes take place in terms of use of
mobile phones and internet to connect people. Hence, the drivers of globalization are
technology, market, production and government.
Analysis of Environment
The internal environment or condition of the company can be analysed through SWOT and
PESTLE. In order understand the environment in which the company is going to operate
pestle analysis of Malaysia fast food industry is done. Further strengths and weaknesses are
identified through SWOT analysis.
Strengths: Yummy food limited has ability to compete with the big players in the food
industry such as McDonald as the company offers hygiene and quality food to its customers
due to that satisfaction amongst customer is high. The services of the company are
experienced by China’s elite group and attract high class people due to that the company’s
market share is increasing in Hong Kong.
Weaknesses: Yummy food ltd. has not that big infrastructure and need to focus on
expansion of its business. Further, the food menu of the company has limited items in
comparison to other competitors this might be a drawback if the company is not able to
customize it as per the demand of people of Malaysia (Rashid et.al,2016).

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Opportunities: The opportunities that are prevailing at the global platform from which the
company can take advantage include varieties of products can be offered by the company by
targeting the changing needs of customer. This helps the company to widen its product mix
and to target the right market. Further, Yummy food ltd has opportunity to diversify its
product portfolio, broaden its menu and can take advantage of chaining habits and lifestyle of
people.
Threats: The changing taste of people and trend of organic food leads to threat to major
players. Further, the companies that are operating in fast food chain industry is facing stiff
competition from each other. Yummy Food Ltd will face issue in order to grow and survive
in this competitive environment. Further, changing policies and strict rules are made for
food industry in order to ensure food safety and food hygiene.
PEST Analysis
Political factors
 Stable political system
Less interference of government in the food
industry rules and regulations (Koberg and
Longoni,2019).

 Pro-business government mentality
Economic factors
 The increasing number of tourism in
Malaysia can prove to be advantageous for
fast food industry. As 64,000 tourist landed
in the country on daily basis (Crane
et.al,2019).
 The economy of the country is growing at
the rate of 5% per annum (Crane et.al,2019).
 Stronger exchange currency
Social factors
 Increasing population of youth leads to
more consumption of fast food
 However, 50% of people are Islamic so
preference and taste of people are
different (Koberg and Longoni, 2019)
 Shift of people to health concerns
Technological factors
 Malaysian people are becoming technology
oriented
 Increasing number of internet users and IT
gadgets