Business Environment Analysis for SMEs

This assignment involves analyzing the business environment of Small and Medium-Sized Enterprises (SMEs) in selected regions, including the Czech Republic and Slovakia. The analysis will cover significant attributes of the business environment, such as market orientation, innovation capability, and business performance. It will also explore the role of cloud computing adoption in global business and the potential of e-commerce for SMEs. Additionally, it will examine the social responsibility of international businesses and their impact on sustainable development.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key factors of cost, market, environment and competition that drive global commerce and
trade........................................................................................................................................1
TASK 2............................................................................................................................................4
P2 Complexity of strategic challenges faced by organisation while operating in global
environment............................................................................................................................4
TASK 3............................................................................................................................................5
P3 Influences of globalisation on organisational governance and leadership, structure, culture
and functions..........................................................................................................................5
P4 Influences of ethical and sustainable globalisation on organisational functions..............7
TASK 4............................................................................................................................................7
P5 Different ways decision making can work effectively in global context..........................7
P6 Various routes to internationalisation which can adopt by organisation, including key
barriers....................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The term global business environment entails with the reality of a nature of international
trade; it is evolving in a fundamental way which results of numerous forces shaping the nature
and dynamics of global commerce. It can be viewed context of sharing increasingly integrated
environment. In present scenario, every small and large business entity is willing expand their
functional areas into other countries due to technological advancements, intercultural
effectiveness and competitive dynamics as these drivers assists to conduct international business
(Apăvăloaie, 2014). Along with this, engaging in businesses growing profits needs organisations
to consistently define themselves as a global traders in this globalised world. The present
assignment is based upon Granite Properties which is real estate small enterprise in UK; now the
firm wants to enlarge its business at international level and for the same they are required to
analyse all essential of external environment. Although, it will also define the key challenges that
are faced by a enterprise. Furthermore, readers will also come to know about impact of
globalisation on organisational governance and leadership at global context.
TASK 1
P1 Key factors of cost, market, environment and competition that drive global commerce and
trade
The global business environment consists with the environment in several nations with
elements exogenous to the domestic environment of business organisations that can influence
decision making on resources use and capabilities. Here, several factors which have a huge
impact on maintaining business at global level in large context. It is necessary for managers to
determine these elements and then develop strategies to control them so as to operate business
activities in suitable manner (Axelrod and VanDeveer, 2014). Employer of Granite Properties is
going to spread its business activities United states. For this purpose, firms are required to
formulate policies and strategies which enables to compete with all external forces.
Granite Properties is a small business unit which deals in real state business by having a
revenue of $153.3 million. There are over 143 employees are currently working with the
company. In addition, new hiring in this commercial real state manager are paired with a tenured
field buddy who provides them tours for firm's properties. Along with this, the prime objective of
this business is to deal with commercial clients as well as general residential as it deals over the
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property spectrum. The Granite properties mainly sells luxury homes, agricultural properties and
offices etc. In order to positioning itself in market, small business can attract their clients who are
looking for a certain type of property. The company is trying to expand its business in US with
an aim to gain high competitive advantage.
Henceforth, to demeanour business at global level, there are certain requisite constituents
that must be considered by the management which defined as beneath: -
Competition – As the organisation is going to enlarge its business in global environment
and there are several rivals who are operating their business in similar industry. Therefore, in
order to manage such competitiveness and remaining successful employers have to focus on new
and innovative products; it results attaining and retaining customers for long term period. In
addition, Granite Properties can also acquire latest technologies which able to generate high
quality products in order to enhancing market share of the firm. The nature of an economy,
society as well as cultural is totally differ from each other which hinders affiliation (Belás and et.
al., 2014). As the mentioned organisation is expand its business in United states, thereby it needs
to analyse the main competitors which might be affect working activities and practices.
Circumstances in trading at international market are getting lesser because here are tend people
are acquiring new tools and techniques. This can aids a firm to do business in more effective and
efficient manner. Along with this, assessment of market competition also helps to modify
business principles as per the time changes to grab attention of target audiences. Furthermore,
US is a rising nation so as regulatory bodies promotes promote FDI which supports MNCs to
become successful.
Cost – It is considered as one of the most important factor of globalisation which should
be determine timely. As a small business owners, they are required to prepare certain pricing
strategies and policies to respond towards target market. Thus, there should be provided
qualitative items at lower rates to people in order to grab the attention of target audiences; it also
enhances sales and profitability of the firm. Thus, it can be said the pricing policy of an
organisation helps to improve the client base of companies as they can easily gain high
competitive edge. However, cost decisions are also based upon investment returns that will
highly affect value of products and services in direct and indirect manner (Belás and et. al.,
2015). While considering costs, managers also have to recognise income level of people, it
means whether people of specific nation are able to huge money to purchasing goods.
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Henceforth, analysation customers' purchasing power helps firms to develop pricing strategies
accordingly, Granite Properties is using competitive pricing strategy for enhancing its sales in
comparison of its competitors.
Market – To globalise a business, it is required for companies to identify their target
audiences so as to satisfy their needs and wants in the best possible manner. As a firm is
expanding in US, several risk factors are occurred that can affect the revenues and functional
area of the company. Identification of target market supports Granite Properties to survive for
long term period. It has been assessed that needs and demands of each individual is differ from
each other. For this, business organisations have to conduct a market research in order to clearly
analyse the demands or requirements of customers and then try to satisfy them in the best
possible manner. Suppliers, customers, government, speculation and expectations are the major
factors of market which must be considered by an entrepreneur. For example – suppliers
increases their costs then it affects sales and profits of an organisation.
Environment – In business environment, there are several factors which needs to be
considered by a firm while operating at global level. While globalisation means to a process by
which firm wants to expand their business in other countries with an aim of increasing client
base. Global business environment involves internal and external factors, as they must be
analysed properly so as to raise market share. To determine extrinsic surrounding of a country ,
management can conduct a PEST analysis, Porter's five forces analysis and so on; this will
contribute to run a business unit significantly and proficiently (Carneiro and Brenes, 2014).
Internal environment involves – employees, management, organisational cultural etc. whereas
external environment refers political, economical and technological aspects. For example – if
political condition of a country is stable then any business can easily grow and diversify at there.
Digital revolution- It indicates to the advancement of technology from analog electronic
and mechanical devices to the digital technology which are available in current time. Basically it
refers to the use of advance technologies like social media, web advertisement and others. These
all are beneficial for creating awareness about the goods and services which are provided by the
company.
Distribution system- It refer to distribution channels which are used by the management
of a company to provide and deliver the goods and service to its target audience. There are
different channels of distribution like producer, wholesaler, retailer etc. when these organisations'
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operate their business at global level then they can use different types of distribution like, direct,
indirect, intensive, selective and exclusive distribution.
Therefore, it is necessary for entrepreneur of Granite Properties to considered each factor
which will support it to promote business in other countries. Market circumstances or barriers
can be vary according to taxation policies and this is known as main obstruction. For instance -
if tax rates are higher then the demand of goods and services also get reduced; this will put a
huge impact on growth and viability of every business.
TASK 2
P2 Complexity of strategic challenges faced by organisation while operating in global
environment
Indeed, even as a private company works at some level in the worldwide economy, and
the destiny of world financial aspects may eventually affect how you work together. While the
world appearances worldwide natural issues, your little bit of the ecological framework assumes
a part. Outside rivalry impacts neighborhood aggressiveness, and security is a need that
difficulties each entrepreneur. To keep up corporate suitability in the inexorably worldwide
commercial center, management should consider the difficulties and how to address them. The
business field has turned out to be progressively globalized (Cavusgiland Knight, 2015).
Governments have teamed up to progress in the direction of all the more commonly helpful
exchange approaches in numerous examples to advance cross-fringe business trades. The
Internet has made a virtual worldwide commercial center, which permits even independent
companies to effortlessly and moderately access a worldwide commercial center.
Along with this, globalisation leads towards instability which generate the fear of
reducing sales as well as number of loyal customers. As due to enhancement of global
competition increases inexorably in labour rights, wages, business environment and employment
practices. Due to increasing tendency towards uniformity, norms, practices and standards are
defined so as to enforce with respect to the whole world. Despite these advantages, business
globalization does present some challenges which are defined as under: -
Customer expectations – It is one of the important challenge for organisations who wants
to expand their business at global context. Sometimes, clients expectations remain so high when
they purchase items from other areas, customers want new and attractive products that gives
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them higher level of satisfaction (Cohen and Kietzmann, 2014). As per the time passes, buyers
demands are also getting change and it is too difficult for small business entities to recognise
their requirements in the best possible manner. Such type of examination are so complicated in
nature because formulation of strategies and policies need high amount of capital. Henceforth,
administration of Granite Properties should conduct a market situation analysis so as to increase
business areas in other countries. It will support them to determine the demand of soft toys at
there so as to grab better future opportunities.
Cost – It is one of the significant issue that is being faced by companies who operates
business in international market. Whenever any business performs at global level, range of its
goods and services is increased automatically due to higher operation costs. In order to save
money, people tend towards online shopping as it is much effective and will provide more
discounts and offers. Execution of an outlet or store in a specific area requires availability of
huge capital rather than expand business through online (Crane and Matten, 2016). Mentioned
organisation, Granite Properties enlarge its functions into US and it needs appropriate funds in
order to complete all business practices, i.e. recruitment of skilled workforce, infrastructure
management, marketing strategies, organise a market research and so on. It generate several
issues and affect working activities of the company so that superior has to develop effective
strategies and implement the best one among them that will provide maximum benefits to the
company.
Compliance and regulations – The rules and regulations of every business organisation
is differ from each other, thus businesses have to understand laws and legislation of every nation
in which it will operate. Due to political instability, government varies its laws and taxation
policies that can affect the working activities and operations in direct and indirect manner. For
example- as a developed country, US has its own strict policies regarding the types of business
practices that must be followed by all businesses which operates in other countries.
Environmental impact – Recycling is rapidly growing and becoming a common business
practice for US companies; thus as an entrepreneur should realise the impact of their behaviour
on global environment. Implementation of incorporate effective recycling programmes as they
are just convenient and cost prohibitive. Government is also make certain policies in order to
protect environment from global warming (Doh, McGuire and Ozaki, 2015). If an organisation is
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not producing by considering environment, this can affect their working activities in diverse
manner.
Political risks- When a company operate its business at global level then it make
expansion of it businesses in different nation. There are different kinds of political complexities
are generating in the countries like political stability, change in trade policies, trade restrictions,
competition regulations, patent rights, consumer protection laws and others. These all issues and
complexities are occurring in the global business environment.
Currency rates- It is an another factor which create problems at global level when the
firms operate its business at international level. Currency rates basically indicates to an
exchange rate at which one currency will be exchanged for another. It can be the rate at which
currency from one nation can be bought and sold in the currency of another country. If the
currency of a nation at regular basis then it create complexities to launch or expansion the
business of the company.
TASK 3
P3 Influences of globalisation on organisational governance and leadership, structure, culture
and functions
All business organisation requires to follow up certain laws and legislations in a defined
sense of purpose and direction. Organisational governance supports to more control on
management and provides employees a clear job role, whereas outside the organisation it
provides it informs others a view of how it functions. This standard is created in order to make
necessary improvements in organisational structure or framework. On the other hand, corporate
governance also insists with a procedure that must be follow by management so as to put control
on business practices (Epifanova and et. al., 2015). When firm is going to enlarge its functional
areas then its decisions and management get affected and it is good for long run survival of the
firm. While affiliation at global level, entrepreneurs also determine the associated stakeholders in
order to improve goodwill effectually. Along with this, the firm is running its activities at
broader contrast that will enhance profits and revenues; it results accomplishment of goals and
objectives in a certain time period. Manager is also required to provide proper guidance to
employees as they can perform all tasks in best possible manner, otherwise it will adversely
affect the firm. Globalisation allows businesses to regulate as well as run their business in other
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countries, but for this they need to clearly analyse all those factors which have great influence on
functional areas.
Furthermore, in contrast of leadership there is required an efficient and well experienced
leader who has a good knowledge of how to perform business activities at global context. In
small business units, leaders have knowledge of global environment as the person develop and
formulate strategies and policies accordingly (Ferraro and Briody, 2017). Globalisation is a wide
concept which unfolds companies start to grow outside from national boundaries to international
market. It also involves tapping human resources in several countries which requires an
individual who can manage other people and guide them accordingly so as to perform all tasks
and activities in a systematic manner.
On the other hand, globalisation also affect the varies in working cultural because of
changes in market trends and customers needs. Business entities should recognise them and
make changes in working practices so as to meet market requirements and accomplish
individuals' desires. As per the case scenario, Granite Properties has started its business into
other nation and for this it requires to examine the cultural, corporate governance and leadership
requirements. All these aspects, provide relevant guidance to individuals as they are enable to
promote a better workplace. It also has been assessed that globalisation impact on overall
corporate framework in positive and negative manner. Alongside this, while thinking at global
level businesses also have to modify their working styles and generate a time span; it reduces
future risks that is associated with business standards and principles. Therefore, it is necessary
for employers determine things in a suitable way so as to improve the decision making process of
the firm which results completion of working tasks in a short span of time. Globalization create
impact on the organisation's structure in various ways. Internationalization impacts almost every
aspect of business in these days. Communication and technology make it more effective to blend
cultures, firms will change along with the business landscape. As it happens, organisational
planning, leadership an structure all are affect with it.
P4 Influences of ethical and sustainable globalisation on organisational functions
Ethics are treated as norms and values which associated with firms and insists with how
people make decisions and lead in business. In other words, ethics relates with a distinguish
between what is right and what is wrong for individuals as well as whole society. For business
units, it is essential to make a critical review of all aspects which links with external environment
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(Huhtala and et. al., 2014). As Granite Properties wants to operate in foreign market thus it
should trying to maintain its standards or principles so as to attain and retain maximum number
of customers. By doing activities in legal or ethical manner helps in raising the market area of the
company in a certain time period. While doing business in developed countries, the number of
market will be automatically spread and at this time they also might be faced various troubles.
In this relation, firms are required to follow up all ethics, otherwise business practices
will get hampered. Managers also have to create several strategies and policies which forces
leaders or employees to work effectively. It results, to improves the brand image of the firm
among customers in a epochal manner. In order to gain maximum competitive competitive
advantage, companies have to remain sustainable in global environment. This will contribute to
take benefits from external rivals in a certain time period. Henceforth, the firm has to reach target
audiences by creating several strategies and policies which are enable to deal with circumstances
or obstacles while selling products and services. Therefore, the influence of ethics and
sustainable tourism has a great influence on functional areas of business organisations as they
can accomplish goals and objectives at global level. Organisational ethics refers to the ethics of
the company like culture, working environment, politics and power etc. organisational ethics
express the values of an organisation to its employees . In the company, if the management of the
company properly operate the business of the firm, then it positively affect the organisation. For
example, if they provide an effective working environment to the workers then they do work by
suing their more efforts and effectiveness. It help in increasing the profit and enhancing
productivity.
TASK 4
P5 Different ways decision making can work effectively in global context
Decision making process plays a crucial role in small business as they can work
efficiently in international environment. But it is not so facilitate make a proper judgement as the
nature of needs and wants of people is differ in each region. Numerous things and aspects are
taken into account by the superior while making any business decision. Along with this, higher
authorities should make certain plans and influence overall workforce to follow it so as to
improve work efficiency.
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As the firm, Granties properties wants to expand its business in US so that its managers
needs to take decisions on the basis of consensus. For this purpose, they should discuss and
debate so as to reach on a mutually agreeable conclusion. Although, to arrive high market share
decision making is one of the important aspect that helps people workforce to perform efficiently
and effectively (Kasemsap, 2015). In this role, managers also have to consider al employees so
as to take better suggestions in order to grab better future opportunities from target market.
Below is described the main ways of decision making, such as-
Programmed decision making: In small business enterprises employees make
judgements on the basis of pre-gathered data and information so as to attain business goals in
more adequate manner. Basically, the nature of program decision making technique is planned
and focuses on grabbing better future opportunities in future. Therefore, such conclusions are
highly useful for employer so as to maintain goodwill and brand image. It positively affect on
global commerce because if he employees of the company make judgement with the help of pre
collected information then they will make focus on the growth and development on future
opportunities.
Unprogrammed decision making: Such decisions are taken when the chances of risks
are much higher along with several external issues and barriers. As per the changes in market
trends, sometimes small businesses have to make changes in their decisions so as to overcome
with a specific situation. These decisions are based upon logic and predictions in order to contain
and reduce market risks (Kolk, 2016). It can be create sometimes positivist and negative impact
because the information does not pre gather so it is not sure that these decisions can be beneficial
for the future growth and development of the company.
However, globalisation is treated as an imperative procedure and at this time
management have to acquire programmed and unprogrammed decisions so as to take best one
alternatives among all the options.
P6 Various routes to internationalisation which can adopt by organisation, including key barriers
The core concept of globalisation is treated as an activity which supports to broaden
organisational activities. Its aim is to increasing revenues and profits which results to accomplish
high competitive edge across the world. Beside this, several risks are associated with it which
must be assessed by the superior in order to attain goals and objectives in a certain time period
(Peng, 2016).
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Granite properties is willing to extend its operational and functional area in UK which is
a developed nation and will provide numerous benefits to the firm. Firm can acquire the concept
of merger and acquisition with other small business in similar industry; it will support to expand
market share of the company. Henceforth, in this connection several routes of
internationalisation are described as under: -
 Evaluation of organisational cultural entirely one of the important thing that assists firms
to recognise the needs and wants of customers, certain policies and procedures of other
nation. It helps in increasing sales revenues and sustain higher growth to the firm in a
certain time of period (Savrul, Incekara and Sener, 2014).
 Another way of internationalisation, is to use distinctive tools and technologies which
helps to improve the market share of the company across the globe. Although, employers
have to utlise such methods in order motivate effective working practices. Granite
Properties is using new and innovative tools for production in order to raise the output
level.
 Instability in politics is viewed as one of the important barrier and continuous alterations
will generate problems for the business. Thus, small business entities require to determine
the political condition of the nation in which it will be operate. It is viewed that political
environment of US is much stable rather than other developed countries; it increases the
chances of spreading firm's growth. In this relation, Granite properties starts its working
practices over there.
 At last, small businesses also have to assess the availability of adequate finance so as to
do all tasks and activities in the best possible manner. As the mentioned firm is going to
expand its business in US and for this there is required enough finance for doing effective
promotional activities (Wild, Wild and Han, 2014). Henceforth, lack of appropriate
finance is also an important barrier that will assists at the time of merger and acquisition.
 Joint venture is a business entity which is created y two or more parties, generally
characterised by shared partnership, shared returns and risks an shared governance. It is
another way through which the organisation can make expansion in the business of the
company. Granite properties also can used this to expand its business in various nations.
In this method, the company can launch their business with those firm which is well
establish in a particular nation and provide it needed resources.
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 Partnership is another strategy and way which can be used by the management of the
company to expand its business at global level. It is a formal arrangement by tow or more
than two parties to manage and operate a business and share its profits. There are
different types of partnership, in some , all partners share liabilities and profit equally
while in others partners have limited liability. Granite properties can use this way to
make expansion at global level. This organisation can make partnership with same
industry firm and launch its business in that nation.
CONCLUSION
From the above discussion, it get comprehend that globalisation plays a crucial role in
growth and success of all business entities by influencing their operations and working activities.
It leads to increasing market competition which is related with product and service cost, target
market, quick response, technological adaption by firms etc. Along with this, one of the most
significant impact of globalisation is rapid use of new techniques in order to exploit new
opportunities. As the use of internet and E-commerce procedures hold potentials for small
businesses as they can easily attain their goals and objectives in a certain time period. While
performing in international markets, superiors have to consider certain major factors, such as-
cost, competitiveness, environment etc. Globalisation has several challenges, i.e. Compliance
and regulations, environmental impact, cost and customer expectations. Thus management is
required to analyse these components so as to make necessary decisions. In order to remain
corporate sustainability, small business units should follow all business ethics and principles so
as to get high competitive edge.
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REFERENCES
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Epifanova, T. and et. al., 2015. Modernization of institutional environment of entrepreneurship
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