Global Business Environment Assignment: Sasol Limited
Added on 2021-02-20
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GLOBAL BUSINESSENVIRONMENT
Table of ContentsINTRODUCTION...........................................................................................................................3PART A ..........................................................................................................................................3LO1..................................................................................................................................................3P 1 Key factors of market, environment, cost which drive global trade and commerce.............3M1................................................................................................................................................5LO2..................................................................................................................................................6P 2 Complexity of strategic challenges .......................................................................................6M2 Critical analysis of strategic challenges with regard to risk and diversification of strategiesin flow of supply chain................................................................................................................7D1.................................................................................................................................................8PART B............................................................................................................................................8LO 3.................................................................................................................................................8P3 Impact of globalisation on organisational culture, structure and functions ...........................8M3..............................................................................................................................................10P4 Ethical and sustainable factors of globalisation affecting organisational decision-makingprocess and strategy...................................................................................................................11LO4: Impact of globalisation on decision making and business strategy......................................12P5 different ways of decision making .......................................................................................12Various methods of decision making ........................................................................................13P6 Various routes of internalisation ..........................................................................................14M4 Critical evaluation ..............................................................................................................15D 2..............................................................................................................................................16CONCLUSION..............................................................................................................................162
INTRODUCTIONGlobal business environment refers to predominantenvironmentin which a companyoperates. Brand image is the concept of global environment which is influenced by culture, geographic locations, economic status, politics and technology (Nohria, 2017). The study is dividedinto two part where first part will outline driving factors of globalisation and impact of digitaltechnology on globalisation. Further, assessment will present Pestle analysis of Sasol which is afasted growing chemical and energy organisation. The part 2 of report will outline couture,governance and structure of organisation with the helps of McKinsey 7’s model. Also, the studywill evaluate sustainable and ethical factors which are considered by Sasol Limited in Globalmarket. In last, it will derive strategic expansion routes for Sasol Limited and its advantages anddisadvantages.PART A LO1P 1 Key factors of market, environment, cost which drive global trade and commerceConcept of globalisationGlobalisation is a procedure of interaction and integration of people, government andcompanies across the globe. The concept is growing because of advancement in communicationtechnology and transportation. Increasing globalisation has demonstrated support to internationaltrade which is leading to growth of diverse culture, idea and international trade (Laszlo andZhexembayeva, 2017). Globalisation concept can be divided into three types that social, politicaland economic where political factor comprises amount of Cooperation among differentcountries. Driving factors of globalisationMarket: Market is the driving factor of globalisationwhich is focused needs ofcustomer, marketing, distribution channels, customer demand and leading countries.Market of exploration is risk to expand and meet and also the firm is limited todistribution channels and mining. Market will be supporting factor for chemicalcompany because the firm develop its local and regional suppliers via entrepreneurialdevelopment programme. Internal trade will also assist Sasol limit in meting customerdemand by providing electricity products in backward regions. Apart from this, the firm3
will be able to focus on transferable marketing which is the best way to reach globalmarket channels and customer needs. Environment: This driver in global business environment comprisegovernmentalregulation, country policies and rules. In accordance with Sasol will have to focus onmanaging change in mining and exploration practices according to country guide. Thisfactor leads to uncertain and drastic changes in working practices of business like, safetyis the top priority of company and focus of firm is on managing safe workplace andstrong leadership (Mohamed and Lashine, 2013). For example, firm has complied toLegislation of Air Quality in South Africa, emission standards, etc. Cost: Cost is the driving factor of globalisation which outlines experience curve, countrycost, skill and productivity. Further, it includes product development cost and life cycle.Cost is the most influence factor of global business environment which impacts logisticsand sourcing ability of business (Clift and et.al., 2017).In increasing globalisation eracost most, influential factor as product development requires cost investment, change inlogistics and sourcing requires market research and implementation of new technologiesand resources.Economies of scale – Many economists believe that there has been an increase in theminimum efficient scale linked with few industries. If this scale is enhancing, a local ordomestic market may be regarded too small for satisfying the selling needs of theseindustries. Many developing or emerging nations have their own multinationalcorporations. Difference in Tax system – The desire of organisations to benefit from lower unit labourcosts and other favourable manufacturing factors has motivated nations to attract foreigndirect investment. Large number of countries have involved in tax competition betweeneach other in a bid to win profitable foreign investment projects. International business and trade – In their chase of profit and revenue growth, manyglobal brands and businesses have invested significantly in expanding globally. Theorganisations focus on increasing the number of customers by expanding the businessinternationally which significantly helps in increasing the market share of theorganisations. Significant impact of digital technology on globalisation4
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