Global Business Environment

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Factors of cost, market, environment and competition that effects global trade and commerce:
................................................................................................................................................3
LO 2.................................................................................................................................................4
Challenges faced while globalising.......................................................................................4
LO 3.................................................................................................................................................6
How globalisation effects organisational governance and leadership, organisational culture,
organisational structure and functions of an organisation......................................................6
Sustainable and Ethical globalisation influencing functions in an organisation. .................8
LO 4.................................................................................................................................................9
Various ways of decision making that will help in globalisation..........................................9
Various routes for internationalisation of a organisation by considering several barriers. .10
REFERENCES..............................................................................................................................12

INTRODUCTION
The surrounding in which a business organisation runs its business is said to be business
environment. Environment of business includes politics, cultures, economics and technologies
(World Commission on the Social Dimension of Globalization, 2004). In order to make
strategies for a business all these factors are analysed first. The company needs to know what
kind of global environment is it entering into. In context to following report, CM Downton Ltd.
is analysed. It is a logistics and supply chain company. In 1955 Downton was introduced as an
independent logistics firm. In this report it is discussed about the factors which drive and
influence globalisation. Sustainable and ethical globalisation, and its effect on decision making.
LO 1
Factors of cost, market, environment and competition that effects global trade and commerce:
When entities of different countries join hands to pursue trade and commerce together the
process is called globalisation. Globalisation effects functions like marketing, finance, operations
and distributions. Factors such as cost, market, competition and environment also effect
globalisation. The ways in which these factors can be initiation of globalisation is mentioned
below:
Market Factors: Market factors comprises of demand supply, equilibrium, products, prices etc.
Many a times these factors lead a company to globalise (Hirst, P., Thompson, G. and Bromley,
S., 2015). In context of Downton, market factor that led to its globalisation is exports and
imports or foreign trade. When other companies globalise Downton generates a need to move to
foreign market to. So other companies globalising and expanding their business has worked for
Downton to do so too.
Cost Factor: There is always a difference in price charged foe same good in different countries.
This difference occurs due unavailability of some products in some countries. Due to lack of
supply of such goods prices rise. The reason behind this is global sourcing. This means the
producers find out where to get raw materials for lesser prices and start producing goods there in
order to lower cost of goods. Downton is using cost factor and entering into countries with low
labour costs.
Environmental Factor: All the factors which are included in surrounding where a business
operates include environmental factors. They are a sum total of technological, social, legal and

political factors that affect a society norms or policies of a business. Downton is affected by
political and legal factors. It needs to take care about all rules and laws while venturing into a
country.
Competition factor: Competition is also a key factor why companies globalise. Many
companies find out that their competitors are globalising and decide on globalising too. Seeing
their competitors crossing sea companies find ways to do the same (Hall, S., 2018.Can, Ş., 2019)
(Alalou, A., 2020). In context of Downton Xpo logistics, Purolator, Wincanton plc, CEVA
Logistics are its major competitors.
Downton is now focusing on expanding its business into global market. Digital
revolution is a great opportunity for company to venture into different markets. There are various
opportunities for which company needs to spend in its research and development. By doing so
and investing in new technologies company can easily challenge its competitors in foreign
markets.
Globalisation is a process in which an organisation develops international influence and
starts expanding their businesses in international context. This bring a number of changes for
every business. This also took place with Downton. However, being a logistic firm, the changes
were different from other sectors. The competition immensely increased which resulted in
Downton to lower its prices along with providing good quality of service to stay in competition.
Company had to change its promotional strategy in order to reach bigger population for which it
used social media platforms. It can also use the technological advancements to make its social
media application which will help it to connect with its customer well and also stay up in
competitive market.
Downton have been assigned as third party logistic by a number of firms. It is a privately
owned company and all its shares were purchased by Emerge Vest. Digital revolution has
brought a number of opportunities for business as well. E-commerce have led to rise in logistics
scope which have proved to be beneficial for Downton.
Downton has a different set of problems it faced because it was a logistics firm. They take
many assignments which are unique in nature. This also include some events which require
proper warehouses setup in different regions, generation of a logistic pathway for a short period
of time. When Downton works on such projects its goodwill is on stake. If anything goes wrong
it may hamper the project as well as company's name in market. Also completing task on time