Forces Shaping Global Business Environment

This document discusses the forces shaping the global business environment and provides an understanding of the changing business environment. It also explores the application of relevant business models, such as PESTEL analysis and Porter's five forces. Additionally, it highlights the reasons why organizations engage in international trade.

GLOBAL BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
FORCES SHAPING GLOBAL BUSINESS ENVIRONMENT....................................................3
Forces that are shaping global business environment and understanding the changing business
environment.................................................................................................................................3
APPLICATION OF RELEVANT BUSINESS MODELS..............................................................5
PESTEL Analysis of the organisation.........................................................................................5
Porter's five forces.......................................................................................................................7
REASONS FOR ORGANISATIONS TO ENGAGE IN INTERNATIONAL TRADE................8
The businesses tend to expand internationally is because of the following reasons:..................8
ASSESSMENT UPON VARIOUS FACTORS..............................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
The most important aspect of any business that deals with various factors in the organisation is
known as business environment. Business environment is nothing but the surrounding and the
nature of the workforce as well as the norms and conditions of the organisation. The factors that
are associated with the organisation both internally and externally and few of such include
employees, customer needs and Expectations, supply and demand management, clients come
suppliers and many other (Khan and et.al, 2019). These contribute as direct and indirect effects
of the company where the business organisation’s environment and situation depend. The entire
report deals with the business environment and the factors that are associated with the company.
Bentley is one of the luxury cars companies in the world. The company’s headquarter is in
Crewe. The reason for Bentley to provide such luxury cars are because of the skills that have
been passed down from generations. The founder of Bentley Motors was Walter Owen Bentley.
The company today is in such a great position because of the contribution made by all the
commercial departments.
FORCES SHAPING GLOBAL BUSINESS ENVIRONMENT
Forces that are shaping global business environment and understanding the changing business
environment
The Bentley Company’s business is not confined to only one country. The company’s business is
all around the world. The company attracts new global talent by placing the requirements on the
HR department. This department will make sure that a mix of employees are available to handle
the global business.
The Trends that are associated in impacting the Global Business Environment are as follows:
Growing Urban population:
There is a rapid population growth in many countries and it is said to have an increase of 72% in
the coming 2050. Due to rise of urban population the demands of the people are also increasing.
There will not be a proper infrastructure that will be sufficient in order to cope up with the
population that is growing immensely (Kasemsap, 2018). An article identified two implications
which are formed as a result of rapid urban growth. Major influence upon the megacities which
consists of 10 million residents will have a greater influence of the growth in urban population

and the second one is that there will be a greater demand for the resources in order to have
proper infrastructural facilities followed by education and security.
Global Warming:
There is an extreme change in the climate and the weather conditions with increase in the sea
levels. Because of the increase in the levels of extreme whether it is a difficulty to carry on with
the traditional farming where the people demand more of resources. People will have to store the
existing resources of water which is used for the conservation and purposes where the fields and
the agricultural lands that are being taken care of in order to generate income will have to be
protected securely. Due to the weather changes there is an increase in the regulation towards
conservation and sustainability. Also with the rise of these implications there will be conflicts
around the world upon which there will be major changes of transformation (Lee, I. ed., 2017).
Demographic changes:
Most of the demographic changes that are listed in the report are related to the population. There
is a rapid growth in population and the existing ones are growing older. The latest reports by
various centres of excellence stated that there will be a lack in the labour forces where they are
turning to be beyond the law of employment regulation act that are imposed by the government
of particular countries. Because of these massive demographic changes there will not be any
skilled labour to meet the Expectations of the organisations. More than 90% of the companies are
changing their policies due to lack of labour forces. The implications that are associated with the
demographic changes are said to be tax imposed by the governments nowadays.
Political stability:
The business that is evolved in a particular country will tend to grow only when the nation is
politically stable. Even when the nation is politically unstable the firm management can run the
business profitably but there will be a number of risks that are associated with a particular
business and its operations. If the country is not politically stable then there will not be a charm
of carrying on with number of business processes (Fabus, 2018). A politically in-stable
government will be at risk of higher rates on business loans, higher insurance rate come up of a
higher cost, and there will not be a security for the employees and operations.
Domestic and Global Business Law:

There are many countries around the world that are appreciating and encouraging all the
businesses and even Start-ups. The governments that are dealing with particular businesses
around the world will maintain laws which will regulate the business practices.
Free trade and protectionism:
The free trade is said to be found in many countries where the exchange of goods and services
globally is done without government interpretation. There will not be any tariffs that are included
upon a particular product and the business can freely encourage trading.
Trade sanctions and barriers:
The trade sanctions are said to be one of the greatest barriers for the products that are imported as
well as exported. There will be a particular penalty that is imposed upon the products that are
imported from other countries. There are not many trade restrictions yet it is one of the crucial
and important aspect that is to be considered by the business upon dealing Globally.
APPLICATION OF RELEVANT BUSINESS MODELS
PESTEL Analysis of the organisation
ESTEL analysis is defined as a strategic tool in order to identify the political economic social
technological environment and legal factors that are affecting the organisations performance. The
PESTEL analysis deals with macro environment of the organisation where the organisation will
be able to focus upon the threats and the opportunities that will in return lead to the growth of the
company. The Bentley company's PESTEL analysis is as follows:
Political factors:
The political factors that are associated with any company along with Bentley play a significant
role in the organisational performance. Bentley company’s political factors determine the long-
term profitability in the country that it is operating. The financial operation of Bentley company
is said to be diversify and with its operation being capitalised to a particular limit. Political
sustainability is term to be an important factor that Bentley company has considered in evolution
process. Bentley company identifies the risk of military invasion which led to the important
framework development of the organisation. The taxation and incentives that are imposed by the
government are said to be paid at regular intervals of time.
Economic factors:

Economic factors that are associated with the company are set to be linked with the country's
economy as well as the resources that are allotted to a particular company by the government
policies. The macroeconomic factors such as inflation rate, savings rate, interest rate, foreign
exchange rate and economic cycle will alternatively determine the growth trajectory of the
company. Bentley company’s economic system he is determined to be one of the stable where
the government intervention is free. The exchange rates of the company will be determined and
will affect the product company will get affected by the GDP growth in the country which is
expected to grow in the near future to stop the interest rates of the company will directly affect
the individuals that are borrowing higher rates in the company.
Social factors:
The societal approaches upon the company determines the social factors that are imposed by the
company. The social factors include the culture beliefs attitudes and values that are imposed
upon the company by majority of population that hold as a community. Bentley companies try
hard to understand the customers and their hairstyles along with their education and believe such
that their product would suit the different segments of the society. The Bentley company mainly
focuses upon the demographics of the population and the class distribution to such an extent that
based on their viability and desire the product is being designed in the way they are to be.
Technological factors:
It is stated that there is a rapid increase in the technological factors all around the globe with the
hustle of facing more competition in the coming days. Technology has reached great heights and
people in the remote areas are getting connected with one another because of the latest
technological development that has occurred (Bhagra and Sharma, 2018). Many companies in
the automobile Sector got habituated to technological features that are getting implemented day
to day. Bentley company has received the greatest competition because of the increase in
technology in return gaining popularity in the industry. Technology impacts upon the revenue of
the company. The increase in technology will determine the rise and fall of profits and the cost-
effective policies that are to be employed by the company.
Environmental factors:
Environmental factors play a crucial role in the business organisation. There are different
environmental standards and protection acts that are imposed upon certain companies and
organisations. Bentley company deals with the current weather conditions where the ability to

manage is significantly impacted by the resources as well as a transportation facilities that are in
availability of the company. The climate change will directly or indirectly affect their trading of
the company and availability feature will be determined by the transportation facilities where
people from all over the world tend to come and visit the company in order to purchase the
product.
Legal factors:
In order to run an organisation, it is a basic essential to maintain all the legal it is of the company.
The PESTEL analysis emphasizes upon the legal factors which is a mandatory to be adopted.
Bentley company deals with the intellectual property laws where the data of all the employees is
being secured. The company maintains health and safety laws where management is engaged in
conducting an alternative check up on all the ethical and social responsibilities that are imposed
upon the employees. The elevation of cost is based upon the legal factors that the organisation is
maintaining. The employment law deals with the salaries of the employees where the Bentley
company offers its employees and its labour the amount that is due to them at particular intervals
of time.
Porter's five forces
Threat of new entrants:
Bentley company focuses upon innovation of new products which will bring customers to the
company and also give old customer a reason to buy Bentley Capital Limited products. The
company is involved in building economic sales which will result in low fixed cost per unit.
Bentley company is considered to be a dynamic industry where the building capacities and
spending money on research and development is said to be more therefore there will not be any
new entrance likely to enter the dynamic industry. The company deals with extraordinary profits
which will push down new entrants in the industry.
Bargaining power of suppliers:
The company builds an efficient supply chain where multiple suppliers deal with the purchases
and the transactions. The company first experiments upon the product design and its cost is
determined by the value that it gets adopted to the environment of business. the dedicated
suppliers of the firm will create such a scenario that the manufacturers will significantly not
bargain upon the product.
Bargaining power of buyers:

Bentley company is set to deal with a large customer base where there will be helpful in many
ways. In order to reduce the bargaining power of buyers the company provides opportunities to
streamline sales. To minimise the bargaining power of buyers, Bentley company is involved in
coming up with new product every now and then.
Threat of substitute products or services:
Bentley company is more of a product-oriented company than being a service-oriented one. It
focuses upon understanding the need of the customer rather than worrying about the customer
buying behaviour. To minimise the threat of substitute of its products the company has increased
its product cost where the other companies will not be able to reach.
Rivalry among existing competitors:
Bentley company has succeeded in establishing a sustainable differentiation that will
differentiate its product and share among the other companies in the automobile industry. By
building this scale it can compete in a better possible way without any rivalries among the
existing competitors.
REASONS FOR ORGANISATIONS TO ENGAGE IN INTERNATIONAL
TRADE
The businesses tend to expand internationally is because of the following reasons:
To reduce dependence on local market:
When the business is trying to expand in the local market which is struggling because of the
economic crisis, the businesses tend to expand globally where they can reach unlimited
customers and can serve in the areas where money is available to spend. There can be different
cultures which will add diversity to the number of purchases that can be made.
Increase chances of success:
There might not be proper sale in the local market because of the pricing strategies. The same
pricing strategy can be applied when the business is expanded overseas and there will be an
obvious increase in the number of sales. In a country like UK trade and investment are said to be
one of the profitable measures for a business to expand in all the ways of increasing growth
trajectory.
Increased efficiency:

The efficiency in the trading policies will increase and will reach a level of getting smoother in
the ongoing circumstances when the benefits of the economic scales can bring profitable
opportunities globally. A report states that there can be a gradual increase and 34% more
productivity that can be obtained while trading overseas than trading locally. Therefore, in order
to increase the efficiency of a particular vision as the companies tend to expand globally.
Economic advantage:
Economy of a company depends upon the currency the particular country is using. While trading
overseas there will be an impact of tariff barriers which are to be excluded since the currency and
the charges that are involved will be of higher amount. There will be difference in the currency
therefore while trading in country where the economy is of a subtle raise, there can be an
economic advantage that is achieved.
ASSESSMENT UPON VARIOUS FACTORS
Market is considered to be an abode of buying and selling process where exchange of goods and
services takes place. There are different characteristics that are associated with market structure.
The marketing structure firstly focuses upon producing identical goods and services. The Bentley
marketing structure influences the behaviour of automobile industry to a large extent. It affects
the supply of different products to all the commodities. There is a high supply commodity with a
range of competition where different companies in the automobile industry try to dominate each
other. Bentley company has employed a Monopoly market structure where the barriers are said
to be perfectly competitive and Bentley company is said to be one of the greatest outstanding
barriers for all other competitive organisations.
Long run and short run changes:
Bentley company focuses upon the capital-intensive industries over the long run where there is
time to expand and shrink operations (Hamilton and Webster, 2018). When there is a high
demand with the same amount of flexibility that is offered by other automobile industries then
there will be a short run where the company will not be able to capitalise on changes. Features of
current International economy:
Microeconomics versus macroeconomics:
These are regarded to be the two branches of economics where the macroeconomics deals with
all the overall functioning activity of the company where as a micro economics deals with the
internal concepts like market equilibrium perfect competition and elasticity of the company. The

macroeconomics of an correspond to microeconomics up on dealing with changes in the Global
market.
International trade:
Economic exchange of goods and services internationally recourse to the international trading
process which is said to be a comparative advantage to the company Bentley. The new
innovations and the transportation facilities lead to a lower cost and faster speed worldwide
which has contributed to one of the components of international concept. International Finance
this particular component deals with the investment forms where buying and selling of currency
is employed and the countries intervene to pick their exchange rates.
CONCLUSION
The entire report concludes upon explaining the important aspect of any business that deals with
various factors of the organisation which is known as the business environment. The report states
that there are certain norms and conditions that surround and organisation and that to be
particularly dealt with full stop the organisation that is adopted in this regard is Bentley. The
report explains the forces shaping global environment where the business is operating and the
forces that are shaping are explained in a way that will bring for the growing urban population
global warming and demographic changes. Application of relevant business models are being
explained in the report like PESTEL analysis and Porter five forces which will help to imagine
the steps and the strategies that are adopted by Bentley company in operating globally. The
reason for organisations to engage in international trade is being explained by bringing the
factors like reducing dependence on local market and increasing chances of success which are
perfectly put forth. An assessment upon various factors that deal with micro and macro-
economics are being explained in the report.

REFERENCES
Books and journals
Khan and et.al, 2019. Perception of the selected business environment aspects by service firms.
Journal of Tourism and Services. 10(19). pp.111-127.
Kasemsap, 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Lee, I. ed., 2017. The Internet of Things in the Modern Business Environment. IGI Global.
Fabus, 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE GLOBAL
COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS (DB): CASE STUDY
SLOVAKIA. Journal of Security & Sustainability Issues. 7(4).
Bhagra and Sharma, 2018. Changing paradigm of employability skills in the global business
world: A review. IUP Journal of Soft Skills. 12(2). pp.7-24.
Bhagra and Sharma, 2018. Changing paradigm of employability skills in the global business
world: A review. IUP Journal of Soft Skills. 12(2). pp.7-24.
Hamilton and Webster, 2018. The international business environment. Oxford University Press.
Online
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