Global Business Environment: Factors, Challenges, and Strategies

This report analyses the key factors of cost, market, environment, and competition that drive global commerce and trade. It critically evaluates the impact of these factors on the global business environment, including the opportunities and challenges faced by organisations. The report also explains the complexity of strategic challenges faced by organisations when operating in a global environment, supported by specific examples. It evaluates the influences of globalisation on organisational governance and leadership, structure, culture, and functions, and provides strategies to overcome the key barriers in doing business internationally.

Unit 18 – Global
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade.....................................................................................................................1
M1 Critically analyse the impact that key factors have upon the global business environment
in terms of opportunities and challenges.....................................................................................2
D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations................................................................................................2
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples...................................................................3
M2 Evaluate strategic challenges in context of risk and diversification strategies and the
supply chain flow. .......................................................................................................................5
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions....................................................................................................5
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
......................................................................................................................................................6
M3 Critically evaluate influences of globalisation in application to appropriate theories and
models relating to organisational structure and culture...............................................................8
D2 Critique strategies that can be adopted by organisations operating in a global business
environment, making valid and justified recommendations of how they should adapt their
organisational structure and decision-making processes.............................................................8
P5 Evaluate the different ways decision making can work effectively in a global context.........8
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers........................................................................................................8

M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome........................................................................9
Conclusion ...................................................................................................................................10
Reference ......................................................................................................................................11
INTRODUCTION
Globalization plays a very important role in global businesses, it helps to provide the
greater connectivity and it is used to describe that how trade and technology support the world to
be more attached and interdependent place (Alshare and Sewailem, 2018). Along with it captures
the scope of economic and social changes which have come about as a outcome. Global business
helps the company to expand their business globally by using different trade and technology
which helps to assist the interaction and integration among the people and organisation
worldwide. In this report SASOL is fast growing company, it is the energy and chemical based
company, along with they want to enhance their performance and expand their business in
different country. So they need to analyse the global market thoroughly before entering into a
new market (DubeNhamo and Chikodzi, 2021). It is related to the sales and production of goods
and services between the countries.
MAIN BODY
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade.
SASOL company need to analysing the global commerce and trade to expand their
business internationally and they have to focus on driver of globalization which are given below:
 Technological drivers- Technology play a very important role to connect the people and
countries, it helps to shaped the foundation for a creative glottalization (Gupta, Gupta
and Gupta, 2019). Advance technology support the company to expand their business in
international level, because digital technology support the company to attract the new
customer and build the strong relation along with it does not take huge investment.
 Political driver- Politics also support to build the globalization, because they allow the
company to start their business in different countries. Liberalised trading rules are assist
the market and decrease the tariffs. World trade organisation observing that all countries

to follow all traffic rules rightly, so that they are able to start their business in different
countries.
 Market drives- The local market have limited growth, but if they wants to expand their
business, then global business is the best way to increase their business ad improve their
performance to earn maximize profit. Global business support the market and customers
because they give thousand of variety to the customers.
 Cost drivers- Globalisation business support the people they get same products with
different price, along with they have thousand of choices. They give the greater
specialization enables to the lower average cost in less cost to the customers.
 Competitive drivers- Because of global business computation is increasing day by day,
now many domestic company have to face difficult to survive in the market. But
competitors are allows the organisation to purchase and sale their services international
which give many opportunity increase their profits (HIREMATH, 2021). Along with
computation between the countries are helps them to adopt the new technology which
support them to attract the new customers.
M1 Critically analyse the impact that key factors have upon the global business
environment in terms of opportunities and challenges.
If SASOL company start their business in global level then they get many benefits. They
are able to find batter opportunity which helps them to adapt the new technology and advance
technicology support the company to improve their performance. However they also impact
negative to company because doing business in different countries they face language and
careers barriers and different countries have different rules and regulations, so they need to
assure that, they make proper strategic planning before entering into a new market. This strategy
support the company to overcome the problems they faced in future.
D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations.
SASOL company have to face many challenges and opportunities, if they doing their
business globally. They have to face language barriers, tariff and export fees and many more
things which impact the performance of the company. Because different country have a different
policy and language, so SASOL company need to assure that they make proper strategies
planning before entering into a new market. However, global business also give many

opportunities to the company such as they give a great platform to expand their business and
improve their performance, which helps the company to achieve their target and earn maximize
their profit (Hult, Gonzalez-Perez and Lagerström, 2020).
P2 Explain the complexity of strategic challenges faced by organisations when operating in
a global environment supported by specific examples.
Doing business in internationally is uncertain in nature, because now one knows what
happen in future people like their product or not. So SASOL company need to analyse the
external environment and it is uncontrollable, so company have to make a proper strategic
planning to handle the situation according to their needs. If in case they are not able to make
proper strategic plan, they have to face many problems because they are not able to manage their
actives properly. PESTEL analysis play a crucial role to analyse the external environment, it is
the mostly used techniques which is used by the company to know the right position of the
organization external environment which is related to the foreign markets. Along with it helps to
identify the opportunities and threats which is faced by the company in future.
 Political factors- After selecting the country SASOL company need to assure that they
analyse the government policies of those country because different country have different
polices like rules and regulation, income tax and so on, They have to find that what
policies they follow, how much tariff tax they need to pay and what presently local tax
argument they apply and how they impact their business. Although SASOL company
wants to assure that, it pays all taxes and tariff fees they take, so that it can set their target
and make their program accordingly (Jafari and Othman Soleiman, 2020). The company
manger have to assist the group meeting for setting the long- term- target which helps
them to face unsure challenges. political environment is unstable it is not in control. They
are significantly influence on companies and they face difficulty to mange their work.
But sometime it impact positive to, they give many opportunities such reduce the amount
of taxation.
 Economical Factors- It is related to those factors which are based on economic such as
explosion of price and deflation and others. Ahead goes into a new global market SASOL
company wants to assure the current and prediction interest rates of the nation, although
they have to doing the proper research which is related to the current level of inflation of
the expected country and analyse what is the local employment and unemployment levels

per working capital and how they are modified. If they are able to focus and handle this
thing then, they are able to set up their business into a new market.
 Social factors- SASOL company have to insure that they are not doing any such activity
which impact negative to society. They have to fulfil their social responsibility rightly, so
that they are able to attract the customer. Along with they want to analyse the local life
style of the people and trends of the country, this analysis support the company to make
their strategy according to their customer taste and preferences and build the new relation
between the customer. They focus on level of consumerism and understand the popular
mental attitude towards on it.
 Technological factors- Technology plays a crucial role to spread out their business and
help them to make some innovative and creative plan. They can use online website to
connect with their new customer and give online services like free delivery, free online
offer, online transition and so on. Although they can make their own app which helps
them to boost their brand and assist to convey with their consumer through this online
app. Along with they have to identify the market demand and analyse that what
techniques and tools they uses and what was the position of mental property issues for the
local environment.
 Legal Factor- Different country have a different law and rules and regulations, so
SASOL company have to focus that they are not doing any such activates which impact
negative to the company law. They have to focus that they are not break the rules and
regulation of those country otherwise they have to face problem to setup their brand
image in local market (Jin and Hurd, 2018). Legal component shows the laws and the
rules and regulation of the location for the company. Legal environment are related to the
political environment. They need to assure that if the government change any policy or
law, so they can able to mange their activates according to them. This things are very
necessary because if in case company are not able to carry out this rules and regulation in
proper manner, so it will impact negative to their action and public image.
 Environment Factor- Environment safety is the main concern for any business and
different country have different environment rules and regulation, so SASOL company
need to ensure that they have to avoid any such activity which impact negative to the
environment. Along with they need to make their strategy according to the environment

safety, so that they are able to fulfil their social responsibility and support them to save
their time and cost. They can accommodate Eco- friendly techniques which assist the
organization to minimize the waste and earn more revenue. Now customers are
demanding eco-friendly products they ensure that which product they use is not harming
the environment, so SASOL company grab this opportunity and use eco- friendly
techniques and use biodegradable packaging to pack their product which can be reusable
easily and this techniques help them to attract the new customers.
M2 Evaluate strategic challenges in context of risk and diversification strategies and the
supply chain flow.
Strategy management play crucial role to handle the uncertain risk, many companies are
using this strategy to achieve their goals in proper manner, strategy management support the
company to make their plan efficient, so that it will helps the company to accomplish the long-
term and short- term goals. SASOL company need to make proper strategy planning for
analysing the future threats and opportunity which is beneficial for doing international business.
The conventional supply chain support the company to handle the tough situation and overcome
the problem of risk. Along with strategic management helps to manage the data which is related
to carrying the raw material or other inputs which assist the company to manage their activity.
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
Globalisation play a important role in companies it help to find the lower- cots ways to
produce their products and maximize their products. Globalisation increase the global
computation which helps to drives the price goes down and creates the huge variety of choices
for the consumers (Kasemsap, 2018). Because less price helps the company to attract the new
customers. Globalisation support the company to build connection with different culture and
support the company to hiring the best candidate (Zaralı, Ocal and Aslan, 2021). Culture support
the company to choice the right candidate for the right jib and attractive new customer in new
market. Although globalization effect the SASOL company in both ways positive and negative,
it helps them to adapt the new techniques which support them to achieve their target more
effectively. SASOL company have to make proper strategies to handle the uncertain situation,
they have to do proper research which is related to current market situation, customer taste and

preferences before entering into a new country. Globalisation helps to spread the innovative and
relative ideas.
Hofstede's culture dimensions theory is a tool which is used by the company to understand the
various culture of different countries (Khajeheian, Friedrichsen and Mödinger, 2018). So
SASOL company use this tools to enter into a new market. It is the process which helps to divide
the National and international culture, it is based on six categories which helps to explain the
culture which are given below:
 Power distance index- It helps to measure the distribution power of the people in
different culture or nation. Although dementation is related to the top level and lower
level, SASOL company have to accept the culture inequality and try to encourage the
bureaucracy which helps the company to show the high rank of authority. However the
index goes down it means they are not able to maintain working environment of the
company
 Masculinity vs Feminity- It is the process which refers to effects the difference in
gender male and female value. SASOL company need to assure that they give equal right
to their employees whether is male and female. So that they are able to set up their
business in new market.
 Individualism- There are many organization believe in team work, whether many popple
work together and archive common goals. SASOL company need to maintain the
working environment, so they are able to adapt the different culture, along with they need
to assure that they are doing work together to achieve their target more effectively and
efficiently.
 Uncertainty avoidance index- It helps to addresses the uncertain situation which is gives
by employees. SASOL company use this index to analyse the patience level of the
employees in every situation whether is positive or negative. So that they are able to
handle to working environment of the company when they start their business in new
country (Zachariadis, Hileman and Scott, 2019).
 Long- term orientation- SASOL company make their strategic planning for long- term
period because typically company need to observe the performance of the employees and
provide training according to their performance. So that they are able to getting batter

opportunity future which helps the company to develop their ideas and achieve their
targets.
P4 Evaluate the influences of ethical and sustainable globalisation on organisational
functions.
Sustainable and ethics globalization is important for the company. SASOL company need
to follow the ethics and vale in their organisation, so that they are able to maintain working
environment of the company (Kokodey, Gnezdova and Lomachenko, 2018). Good ethics support
the company in financial departments to assure they give all taxes without doing any mistakes.
Mckinsey’s seven model helps the company to divide their work in different departments , so
that they are able to manger their activity and improve their performance and find the best
possible way to resolve their problems. Although it helps to find the threats which impact the
company for future changes and to handle the situation SASOL company need to focus on this
seven models which are listed below:
 Strategy- SASOL company wants to make proper strategic planning which helps the
company to complete in the market and they need to analyse the customer taste and
preference to make their strategy according to customer demand.
 Structure- After making proper plan, SASOL company need to organise their strategy,
so that they are able to make proper structure which helps to analyse daily activity and
structure, which support to divide the work in right way and company are able to change
their strategy according to situation (Waller, 2018).
 Systems- This process helps the company, systems support the company to find that how
business is done and they would be focus during the time of structure changes.
 Skills- SASOL company need to assure that they provide proper training to their
employees to develop their skills and knowledge, so that they are able to perform well in
tough situation and achieve their target efficiently.
 Staff- SASOL company analyse that when the open their businesses in new country, so
how much employees they require to set up there new business. Because employees play
a important role in the organisation to achieve their target.
 Style- They have to choice which style the choice to share the information and good
leader helps the company to manage their work properly and motivate the employees to
achieve their target.

 Shared value- This process support the company to develop their competitive position
and maintain good relation between the customers.
M3 Critically evaluate influences of globalisation in application to appropriate theories and
models relating to organisational structure and culture.
SASOL company wants to maintain their organizational structure, so that they are
ready to handle the tough situation which they faced in future. Scientific theory helps the
company to suggest the best way to accomplish the objective of the company.
D2 Critique strategies that can be adopted by organisations operating in a global business
environment, making valid and justified recommendations of how they should adapt
their organisational structure and decision-making processes.
Company have to make effective strategic planing which support the company to expand their
business. Company structure is those process which helps to assign the duties for the employees
and support the company to handle the tough situation.
P5 Evaluate the different ways decision making can work effectively in a global context.
Good decision- making skills is very beneficial for every organisation, because it helps
the company to handle the tough situation, so manger need to develop the decision making skills
which helps to taking the effective decisions and give positive impact for the company. Effective
decision making helps to choose the best alternative to handle the problem.
 Identify the decisions SASOL company need to find the problem, so that they are able to
find the clear solution.
 Second step they need to collect the relevant information before taking any dictions.
Because without information manger are not able to take batter decisions.
 Third find the best alternative after find the problem, they have to choice best alternative
to doing their business internationally.
 Take action, after completing all steps SASOL company needs to take action what they
imagine (Nuttall, 2020).
 Last appraisal the decisions and consequences, after implements the decisions, manger
need to assure that they observes all things effectively (Kwok,Watabe and Koh, 2022).

P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.
Before entre into a new market, company need to assure that they serve the local market,
so that thy can select the best possible way to achieve their target. They have to choose the route
according to their business stage. If SASOL company have many options which helps to expand
their business internationally which are listed below:
 Select the Export system- If company wants to start their business instantly then this
process they can use it is very ordinary strategy to internalize the company and less
demanding. Indirect export are not in demanding but still it is important for all
internalization strategise.
 Foreign direct investment- Another strategy to enter the global market is direct
investment, this strategy SASO company have option to doing partnership with those
company which are already operate their company in abroad (Ross, 2018).
 Licensing strategy- This scheme wants large investment, because it is international
engagement of two or more parties are combine and agree for the license but one
problem in this strategy that, abroad company is not a part of the parents company.
 Build joint venture with the company- Joint venture is related to doing business
between two or more companies within the given period for a common purpose. This
strategy is great for doing worldwide business, because they support the partner, who are
knowledge of the foreign market.
There are some important barriers while facing the company at international level such as
Language Barriers, Culture differences, Managing the global terms
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome.
If SASOL company wants to start their business globally, then they have to face lots of
barriers which impact negative to their performance. To resolve this problem company have to
analyse the local market, so that they can understand the taste and performance of the customers.
Along with they need to adapt their culture which helps them to attract the new customers.
Although they have to give proper training to their employees top resolve the problem of
language barriers. If they hire the local guide, then helps them to set up their business, because
they know the situation of market.

Conclusion
In this report it discuss the topic of global business environment. If any company wants to
expand their business globally, so they need to assure they doing proper research of those
country market which they choose. If they are not doing proper research before entering into a
new market, then they face many problems which impact negative to their performance and they
face difficulty to achieve their target. In this report it that what routes company can choose to
start their business globally and what barriers they face and how they resolve this barriers.

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