Global Business Environment Assessment 1

This report discusses the context of international business and business environmental analysis and organizational strategy. It also provides a brief introduction to China as a developing country and applies various business environment models such as PESTLE, Porter's Five Forces, and Hofstede. The report also examines the barriers experienced by foreign businesses in China and provides strategies and recommendations for Marshfield Bakery Plc to succeed in the Chinese market.

Business Environment
Assessment 1

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
An inclusive introduction to the context of international business and business environmental
analysis and organizational strategy............................................................................................3
Brief introduction to the selected developing country (A developing country of your choice).. 4
Application of theories of business environment on the selected context/Country (PESTLE,
Porters Diamond, Value Network, Porters Five forces, Hofstede, etc). .....................................5
Critical evaluation of opportunities and challenges that are present and how to manage aspects
of corporate governance, business strategy and cultural sensitivity when doing business in the
selected country supported by relevant examples........................................................................7
Discuss and analyse the different barriers experienced by foreign businesses in the selected
country supported by different examples. ...................................................................................8
Provide appropriate strategies and other relevant recommendations to enable the company to
succeed in the selected developing country.................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Global business environment may be undertaken as the state of affairs into several
autonomous territorial divisions and the factors exogenous towards home atmosphere of firm that
influences the decision making upon resources utilisation and abilities. Additionally, it is the
acknowledgement of business domestically and globally. Moreover, global business is regarded
as the business entity that facilitates their facilities across the world to its clients. In addition to
this, its key target of international business is to obtain the maximum profitability through
utilising various means of marketing such as an advertisement, promotional strategies and
utilisation of internet. For this report, the selected organisation is Marshfield Bakery Plc is the
known bakery business. It was developed in year 1984 and founded by Lynne and Paul White.
Moreover, this mainly deals in premium and effective quality cakes within United Kingdom.
Areas included in the present report are brief introduction about international business, business
environmental analysis and organisational strategy and chosen developing country. Moreover,
application business environment models, opportunities and challenges and different barriers by
performing business internationally. Apart from this, some strategies and recommendation are
also provided in this report.
MAIN BODY
An inclusive introduction to the context of international business and business environmental
analysis and organizational strategy.
International business is considered as the acknowledgement of business domestically and
globally. Moreover, global business is regarded as the business entity that facilitates their
facilities across the world to its clients. In addition to this, the key intents of international
business is to obtain the maximum profitability through utilising various means of marketing
such as an advertisement, promotional strategies and utilisation of internet. Additionally,
business environmental analysis is regarded as the study of both external and internal
environmental factors which are associated with ventures with an intent to identify how those
factors impacts the business. Organisational strategy is undertaken as the longer period plans
which allocates how firm plans for using their resources in order to assists its goal. Organisations
such as Marshfield Bakery Plc apply those strategies to aid them in meeting its objectives and
form strategic plans.
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Briefly discussing the chosen developing country
China is by and by an upper-focus pay country. Additionally, it is a creating influence on
other making economies through trade, adventure, and considerations. Enormous quantities of
the confusing improvement challenges that China faces are relevant to various countries,
including advancing to another advancement model, speedy developing, fabricating a monetarily
wise prosperity structure, and propelling a lower carbon energy way. Following certifiable GDP
advancement of 8.1 percent in 2021, improvement has been proposed to move back to 5.0
percent in 2022. The gauge depicts the positive changes in current: Interior involvement has
been lowered with downfall of the financial environment along with the assertion in the war
affected country Ukraine. In like manner, COVID attacks have become more normal and all
over. China is at this point experiencing the greatest COVID wave since the completion of the
public lockdown in March 2020.In the substance of these shocks, the experts have revealed a
basic delivering of procedure. The 2022 monetary arrangement leaves space for a money related
expansion in up to 2.7 percent of GDP. Bets are determinedly on the disadvantage and
consolidate a shockingly noteworthy overall stoppage, a more long getting through product
esteem shock, and more serious financial strain among property engineers. China similarly
remains at risk for re-uplifting COVID eruptions, which could provoke enormous financial
unsettling influence. In a weakness circumstance, monetary improvement could move back to
4.0 percent in 2022.
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China's bakery sector has been developing rapidly lately, upheld by the country's rising
working people, advancing Westernization of lifestyles and diets, and extending interest for
supportive food decisions. Euromonitor International checks retail arrangements of arranged
items (packaged and unpackaged) in China at $34 billion of each 2020, containing nine
percentage of overall retailing bargains. The result of this has been Chine becoming second-
greatest warmed items retailing industry only below (at $67 billion). Also, the improvement
potential for China's baked good shop region is unmatched, by looking at the high number of
citizenz and the comparatively lower utilization. Per capita usage of arranged things is at this
point 7.2 kilograms (kg) on an annual basis, stood out in comparison to the twenty two kilogram
and forty kilogram in the US. Euromonitor International guesses in context of retailing
arrangements of warmed stock within the selected country will create to $53 billion by 2025, a
53-percent bounce on the basis of now level.
Application of theories of business environment on the selected context/Country (PESTLE,
Porters Diamond, Value Network, Porters Five forces, Hofstede, etc).
For expanding their business internationally, it is important for Marshfield Bakery Plc to
analyse the business environment of chosen country that is China. So, for it they may utilise
some business environment models. Some of the models are described below:
PESTLE ANALYSIS
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 Political factors: The main governmental element which needs to be considered by
businesses before expanding their organization to China is the strict governing rules and
regulations of the company. Socialism is the selected political ideology adopted by the
government in China which means that the intervention of the government in daily
business activities is high. This can have negative consequence on international
businesses entering the China market.
 Economical factors: The recent trade war between the China government and Us
government is an international significant economic factor affecting the corporate
environment in both China and US. Additionally, BUYING power of customer is
continuously enhancing and at similar period the cost of labour are few of the lower
within the world. As an outcomes, international firms profitability from hiring Chinese
staff as more as selling to respective company clients.
 Social factors: The cultural values states a huge part of social trends within China.
Moreover, the factors like population growth, family size and others describes how the
marketplace performs as well as an outcomes this also assures that societal values are
kept into line with the requirements of culture. Another positive aspect is that the level of
scholar knowledge is also high with ninety percent of the huge Chinese demographic
having basic literacy skills.
 Technological factors: The rising utilization of digital technology and internet for
buying products and completing online shopping is the technological factor affecting the
corporate environment of China. According to data, China has high number of
individuals using Internet for various activities reaching number of four hundred and fifty
million. This is a positive factor because it can help businesses understand online buying
pattern and take accurate decisions regarding further expansion into the country.
 Legal factors: Main area where legal barrier arise in extent of expanding to China
regulation as well as their several peripherals like intellectual property rights, customer
rights, tax policies and so on. Therefore, this helps in enhancing any new business online
within particular marketplace.
 Environmental factors: China is presently known to be the much polluted countries. As
an outcomes of it various sector have to spend extra upon protecting standards of
environment for manufacturing. Moreover, it in turn reduce the cost of production and
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minimised profitability margins. Therefore, China’s immediate concern might be with
dismantling systems which negatively impact its environment as well as assuring a viable
state for its several sectors.
PORTER’s FIVE FORCE ANALYSIS
 Competitive Rivalry: The overall competition in the baking industry when expanding to
China is high. The reason behind such high level of competitive intensity is because there
are many businesses active in the Chinese baking industry. Some of the examples are
Toly Bread Co., Ltd., Orion China, Bimbo China, Ganso Group Co. Ltd. and Dali Food
Group Co., Ltd.
 Barriers to Entry: This part of the competitive forces analysis looks at the challenges
present in the industry to identify the level of threat posed by new organizations entering
the industry. In case of the baking industry in China, the primary factors which act as a
barrier to new organizations are local regulations on foreign business and setup. This acts
as the primary factor affecting the growth and entry of foreign business in the country. In
this way the barriers to entry in China are high leading to reduction of threat posed by
new entrants disrupting the baking industry. In addition to this another factor which
affects growth of new entrants in China are the complicated legal systems present in the
country negatively affecting easy of doing business.
 Bargaining power of buyers: This area of the competitive analysis revolves around
understanding the ability of buyer to impact on pricing of the organization. In case of the
baking industry in China the bargaining power of consumers is high. The reason behind
high bargaining power of consumers is the presence of many competitors providing
consumers many options. In addition to this Chinese consumers also have the option of
purchasing local traditional desserts instead of purchasing western baking goods for
tasting sweets and sugary food.
 Bargaining power of Suppliers: In case of the baking industry in China the bargaining
power of suppliers in China is low. The justification for low bargaining power is the
presence of many suppliers across China offering same quality of raw material to
enterprises leading to more alternatives form where various raw material needed for
developing food product can be purchased. In addition to this, there are many alternatives
to supplier sin China because of of strong transportation and distribution network which
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enable suppliers from different regions to quickly reach manufacturers and
establishments leading to higher alternatives and lowering their bargaining power.
 Threats of substitutes: In case of China the primary substitute for western baking goods
are the traditional and local sweet dishes and desserts which are already popular in the
country such as Tanghulu. Fried Durian, sugarcoated Haws on a stick. This acts as
suitable substitute for Western baking goods which increases the threat of substitute to
high level.
Examination of barriers present in context of managing corporate governance biliousness
strategy and company sensitivity in China
Corporate Governance: The concept of corporate governance is defined as the idea that
business organizations need to build rules and regulations to ensure that they are operating in an
ethical environment. It also helps business achieve better strategically results. In case of the
respective company, the usage of corporate governance is essential in attaining better results
when considering internationalization because it provides them an opportunity to ensure ethical
operations of the company. In case of China expansion of Marshfield bakery corporate
governance plays an important role in ensuring that the company is able to comply with legal
factors of the country while also maintaining its ethical nature.
Business strategy: This is refereed to as the strategic direction taken by the organization
in order to expand its business operations and achieve higher profitability. In case of expansion
of Marshfield Bakery's expansion into China there are various internationalization strategies
which can be adopted by the firm in order to successfully establish itself in the Chinese market.
This includes directly exporting products, franchising, Licensing Arrangements, Mergers and
Acquisitions. Marshfield bakery needs to ensure that the internationalization strategy of the
company is in line with its overall business strategy , organizational vision and mission. This
ensures attainment of business objectives and provides clear direction for moving forward.
Cultural Sensitivity: The concept of cultural sensitivity is important for international
expansion of businesses. This is because maintaining cultural sensitivity helps businesses create
better brand image in culturally different regions so that they survive in the market for a longer
time. In case of China Marshfield bakery faces huge challenge in terms of cultural sensitivity as
the Chinese culture is drastically different from culture in United Kingdom. In case of China
power imbalances is tolerated and hierarchical structure is preferred while UK is more
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egalitarian cultural various. China also values long standing traditions and past costumes more
significantly when compared to the British. In this way Marshfield bakery needs to ensure that
they adapt their organizational practices and norms to suite Chinese culture and create brand
image familiar to Chinese to appeal to consumers and employees.
Discuss and analyse the different barriers experienced by foreign businesses in the selected
country supported by different examples. Cultural Barrier; The culture of UK and China is completely different. The consumer
buying patterns and preferences are also different in China and UK. This leads to failure
of many foreign businesses in China as they fail to recognize the importance of becoming
culturally sensitive. An example of failure of brand in China because of cultural
difference in China is shoe line launched by Nike. The shoe line was designed with
specific Chinese characters on left and right heel of the shoe to symbolise wealth and
fortune. The Chinese characters combined symbolize wrong meaning which lead to
failure of the brand.
 Bureaucracy and legal Barrier: The legal environment of China is highly complicated
with red tapping in the country affecting daily businesses. This also affects foreign brands
and their success as they have to deal with strict laws in the country. Acquiring the
localized licensing and legal document, tax written record, etc. also cause a momentous
postponement in opening commercial enterprise China. This further affects business of
foreign organizations in China along with their survival.
Provide appropriate strategies and other relevant recommendations to enable the company to
succeed in the selected developing country.
For succeeding within chosen developing country that is China, respective organisation have
to undertakes some strategies and follow recommendations for their business growth. So, the
strategies are Franchising strategy as in this the sale of the rights are transferred due to the
domestic franchiser so that all the functions of the expansion. Also, it has been recommended to
them are they have to adopt all legal policies of China. In addition to this, it has to opt advance
technologies for gaining more profits and productivity.
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CONCLUSION
As per the above report, it has been concluded that global business environment plays
crucial role while entering into other developing countries. Moreover, it is the acknowledgement
of business domestically and globally. Moreover, global business is regarded as the business
entity that facilitates their facilities across the world to its clients. In addition to this, its key
target of international business is to obtain the maximum profitability through utilising various
means of marketing such as an advertisement, promotional strategies and utilisation of internet.
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REFERENCES
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Hampden-Turner, C. and Trompenaars, F., 2020. Riding the waves of culture: Understanding
diversity in global business. Hachette UK.
Jiang, M. and et. al., 2020. Sustainable development of the business environment in smart cities:
a hierarchical framework. Kybernetes.
Kačerauskas, T., 2019. Ethics in business and communication: common ground or
incommensurable?.
Kasemsap, K., 2017. Mastering entrepreneurship education in global business.
In Entrepreneurship: Concepts, Methodologies, Tools, and Applications (pp. 2013-
2040). IGI Global.
Nambisan, S., Zahra, S.A. and Luo, Y., 2019. Global platforms and ecosystems: Implications for
international business theories. Journal of International Business Studies, 50(9),
pp.1464-1486.
Rimita, K., Hoon, S.N. and Levasseur, R., 2020. Leader Readiness in a Volatile, Uncertain,
Complex, and Ambiguous Business Environment. Journal of Social Change, 12(1), p.2.
Online
https://www.fas.usda.gov/data/china-s-rising-bakery-sector.
https://www.worldbank.org/en/country/china/overview.
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