Global Business Environment: Factors, Challenges, and Impacts on Organisation

Global business
environment

Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1- Analyse the key factors of market, cost, environment and competition which may drive the
global trade and commerce..........................................................................................................1
M1- Critically evaluate that how the key factors influence the global environment of a
business........................................................................................................................................2
P2- Discuss the strategic challenges faced by the organisation when they operate in a global
environment.................................................................................................................................2
M2- Analyse the challenges and risks faced by the firm when they operate in the global
market..........................................................................................................................................4
D1- Critically evaluate the opportunities and challenges faced by the organisation in the global
business environment...................................................................................................................4
P3- Evaluate that how globalisation affects the governance and leadership, culture, structure
and functions of the organisation.................................................................................................5
P4- Analyse the impacts of sustainable and ethical globalisation on the functions of the
organisation..................................................................................................................................6
M3- Critically evaluate the influences of globalisation when the firm is applying an
appropriate models and theories which relates to the organisational structure and culture.........6
P5- Analyse the different ways of decision making that can work effectively in the global
organisation..................................................................................................................................8
P6- Determine the various routes adopted by an organisation to internalise and also explain the
key barriers...................................................................................................................................8
M4- Critically evaluate the key barriers to do the business internationally in the market..........9
D2- Criticise strategies which can be adopted by the organisation to operate in the
international market.....................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Globalisation refers to the dispersion of goods, technologies, information or services across the
world. Generally, it is the term which states that the products or services are spreading
internationally in the market which may gain a competitive edge across the developed nations
(Bidegain, 2020). Through the globalisation, it benefits the firm to be more cost-effective and
can attract more jobs. As there are many firms surviving internationally in the market, it is not
necessary that all the firms are getting positive effects from this. It can benefit the company to
reduce the operating costs by manufacturing in abroad and can buy more cheaply raw materials
as in comparison to their market.
MAIN BODY
P1- Analyse the key factors of market, cost, environment and competition which may drive the
global trade and commerce.
There are some factors which maintain the global trade of the organisation and these are detailed
below-
 Cost globalisation drivers- The price is the only factor which every consumer focuses
on and takes decisions about their purchasing. It becomes more complex for the firms
when they compete in the global market. To survive in the national market, the company
has to maintain their price as low as compared to their competitors.
 Consumer market drivers- It is the market where the firm expands or contracts. If the
firm is continuously surviving in the market, then it would become a competitive edge in
the market. But if the firm is not surviving in the market, it may lead to failure. The firm
has to connect to the remote areas of the globe to penetrate in the international market
(Cherunilam, 2020). The organisation has to emerged to the needs of their customers and
has to satisfy through distribution channels which may increase their global success.
 Competitive drivers- If the firm has to remain competitive in the market, they has to
intensify their marketing strategies which brings new products faster than ever before.
The firm has to give focus on the risks involved in competing and make more advanced
stage as compared to their competitors. They has to make strategies of creativity or
innovation which provides a special features to their product. If the firm invests in

research and development of their product and offers them into the global market that
may lead to raise their goodwill across different nations.
 Environment drivers- The key factor of environment impacts positively as well as
negatively to the global trade and commerce. If the firm produces eco-friendly products
or services, it may support the development and economic growth of the environment. As
if the firm takes use of inputs such as energy, water, etc., it can improve their access to
new technologies which makes their product more effective as compared to others.
M1- Critically evaluate that how the key factors influence the global environment of a business.
The key factor of market manages the global trade and commerce of business and raises the
opportunities for growth and global expansion for the firm. If the firm makes their price low as
compared to others, it may help them to compete in the market and the environment factor also
provides eco-friendly goods or services to the firm which makes them as distinctive as others. To
survive or penetrate in the market, SASOL Ltd has to connect to the needs of the customers in
the remote areas and has to meet them through their distribution channels which may increase
their success in the international market.
P2- Discuss the strategic challenges faced by the organisation when they operate in a global
environment.
There are some factors which influence the organisation to trade across the national borders
which remove to encourage the interconnectivity of production processes and capital markets
and goods and services among various nations (Darics and Koller, 2018). Through PESTLE
analysis, SASOL Ltd. can identify these barriers and can develop their market on the global
level. The discussion of PESTLE analysis of SASOL Ltd. are-
 Political complexity- The political factor consists of government stability, tax policy,
trade blocks and competitive regulation. Through this factor, SASOL Ltd face political
challenges and tries to remain stable in the long term. They tries to maintain their
competitiveness and expand their business operations regionally as well as
internationally in the market. But it should be make sure that they has to use fair play for
their products and can make their products or services easily accessible through various
distribution channels.
 Economic complexity- It is the big challenge to survive the company in the global
market, as the firm requires the moderate inflation rates which helps the firm to grow