Global Business Environment: Factors, Challenges, and Strategies

This article explores the global business environment, including the key factors driving global trade and commerce, strategic challenges faced by organizations, and the impact of globalization on governance, leadership, functions, culture, and structure of organizations. It also provides insights into diversification strategies, risk management, and supply chain flow. The article uses Deliveroo as a case study to illustrate the concepts discussed.

Global Business
Environment
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Key factors driving global trade as well as commerce..........................................................1
M1 Critically analyze the impact that key factors have upon the global business environment
in terms of benefits and challenges..............................................................................................2
TASK 2............................................................................................................................................3
P2. Complexity of strategic challenges organization faces while operating in a global
environment.................................................................................................................................3
M2 Critically analyse strategic challenges in context of risk and diversification strategies and
the supply chain flow...................................................................................................................5
D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations...............................................................................................5
TASK 3............................................................................................................................................6
P3. Influences of globalisation on governance, leadership, functions, culture and structure of
organisation..................................................................................................................................6
P4. Influences of ethical and sustainable globalisation...............................................................8
M3 Critically evaluate global market influences in application to appropriate theories and
models relating to organisational structure and culture...............................................................9
TASK 4............................................................................................................................................9
P5. Different ways decision making can work effectively in global context..............................9
P6. Routes to internationalism...................................................................................................10
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome......................................................................11
D2 Critique strategies that can be adopted by organisations operating in a global business
environment...............................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
2

INTRODUCTION
Global business environment is defined as environment in different countries, with factors
that arises while running a business and affected the productivity. This can be classified in to
external and internal environment that uses to develop the business activities and managing all
performance. The companies have no control over external environment, so their success
depends on how firms ready to accept environment whereas, internal environment can be
introducing changes if any problem is arising in running business (Bititci, Cocca, and Ates,
2016). This type of environment influences the fundamental of business and create challenge to
operate business at global level. For expanding knowledge about global business environment,
Deliveroo has considered which is a multinational company operating in the food delivery sector
headquarter in London. The company was founded in 2013, has already expanded in to nearly
800towns and cities across 12 countries. The management understand the requirement of
customers and offer kind of products. The company is planning to more expand its business at
global level and become a leading organization in changing environment. The task include a
study of the reasons that drive globalisation as well as the strategic complexities that come with
functioning in a global setting. Furthermore, it assesses the effects of globalisation on numerous
organisational aspects. It also includes a variety of internationalisation paths.
TASK 1
P1. Key factors driving global trade as well as commerce.
Globalization is defined as main aspects for business organization which used to operate
the business and develop understanding to grow it continuously by integrating with countries and
people. Globalization is defined as practice of integration as well as interaction with countries,
people, organization, and worldwide. This can be considering as important practice for business
organization where management formulates effective plans and implement while operation that
can help to develop organizational productivity. The companies also need to focus over
digitalization and relationship with other country that can support to establish a business in
changing environment and increase performance (Boddewyn, 2016). Few factors that have
potentiality to drive global; commerce and trade are the following:
Level of economic factor – This can be explained as cost factor which is related to cost
or global scope economies. Globalization practices allows Deliveroo, to run business in free
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trade area, maintaining economic union, and economic integration that can organization to
operate a business in changing environment and maintain higher productivity and profitability.
The products and services providing by chosen organization in international market could be
high prices as increasing inflation rate that increases profitability.
Trade and investment opportunities – This factor is related to market that uses by
management to conduct market analysis and make decision to invest more and increase trade. In
relation to Deliveroo, management formulates plans to go internally by influencing number of
investors and increasing trade agreement with government approval. This can help to operate a
business in changing environment and maintain higher performance (Chandwani, Agrawal, and
Kedia, 2016).
Technological advancement – This factor is related to technology and innovation that
can be used to influence number of people and increase organizational performance. In relation
to Deliveroo, new technology, digital payment, robotics delivery and others could be introduce in
changing environment that can help to drive global trade and commerce.
Market factor / Condition - This factor is driving trade and commercial activities by
behaving positively towards changes that can help to operate the business effectively. For
operating a business in global market there is need to conduct market analysis for the purpose of
knowing customer preference and target audience that directly affected business. Deliveroo is
using this factor to provide products in international market by knowing customer preference and
taste that can help to increase organizational sales.
Competition Environment/ factor – The factor is driving competition in commerce and
trade where it formulates effective planning and strategies to go internationally. The factors
which drives competition by formulating strategies, practices, strategies and actions competing
business which creates inter dependency within geographical market. Deliveroo is planning to
expand business in global market by using this factor that impacts positively on business
organization effectively (Coltman, and et. al., 2015).
M1 Critically analyze the impact that key factors have upon the global business environment in
terms of benefits and challenges.
From the above, it has been analysed that the Level of the economic factor, trade and investment
opportunities, technological advancement, market factor / Condition, and competition is defined
as a major factor that has created the challenges for Deliveroo to operate its business globally.
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The impact of factor on the global business environment is positive that’s supports to develop
organizational performance (Hunt, and Raman, 2017).
TASK 2
P2. Complexity of strategic challenges organization faces while operating in a global
environment
To operate a business there is need to focus around environment and its related aspects
which supports to develop the organizational performance by managing all functions and
activities. The companies have a major role to expand their business in global environment as it
conducts external environment analysis and follow it effectively. Deliveroo is large size food
delivering organization that sales different types of products at different location, now company
is planning to expand its business in global market. So that, a PESTLE analysis is used to take
right action such as:
PESTLE analysis
PESTLE analyse is a key tool that enables by organization to evaluate the potential
opportunities with changes that arises while running the business. The PESTLE Analysis of
Deliveroo is defined below:
Political Factors: Political considerations affecting businesses include government
stability, law and order, taxation, and regulatory changes. Every organisation, great or little, is
impacted by political upheavals. The level of effect might vary, for example, Deliveroo's
business has been impacted by changes in government laws following Brexit, which has had a
negative impact on the company because it has become more difficult to operate in the
worldwide market. On the contrary, if the government regulations is favourable to businesses
then it would be opportunity for chosen organization to operate a business and growing globally
(Khan, and Khalique, 2014).
Economic Factors : Government policies, inflation rates, unemployment rates, interest
rates, and exchange rates are all key economic issues influencing small enterprises. In the United
Kingdom, mainly SME sectors have emerged, which have taken a larger role in the competitive
climate, accounting for about 60% of all larger enterprises. Having average inflation and
favourable interest rate in different country where Deliveroo is planning to enter, could be
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opportunity to grow business. Increasing rate of interest and currency rate could be challenging
for Deliveroo to operate their business in international market.
Social cultural factors: Demographic shifts, product attitudes, population growth, and
lifestyle choices all have an impact on corporate operations. These factors have an impact on
Deliveroo, and it is one of the elements that the firm is monitoring. According to lifestyle where
company provide products accordingly that helps to increase demand of food products in
international market. Oppositely, it can be threat for chosen organization follow nrw lifestyle and
changing attitude of resident in particular country (Lamm, Tosti-Kharas, and King, 2015).
Technological factors: In terms of research and development, Different technologies, as
well as technological advances, have all had an impact on business. To penetrate the worldwide
market, Deliveroo must adapt to technical advancements in marketing channels, food
preparation, and delivery time, which could be a chance for the company to expand
internationally. The organization can face threat of increasing investment and resources to
conduct market research Deliveroo that directly affected business negatively and reduce sales.
LEGAL Factors: These are the rules that the government enforces in order to keep
organisations uniform. All of the countries' laws and regulations are considered legal factors.
Deliveroo is managing their operations and business activities by following the employment,
health and safety, data protection, financial management, anti-discrimination and other laws
which affected business positively while going to internationally.
Environmental factors: It covers the country's weather, climate change, pollution,
waste, and carbon consequences, among other things. Deliveroo intends to break down
environmental boundaries by taking environmental efforts and participating in CSR activities
that will help the company succeed in the worldwide market. Deliveroo can facing the issue
while going globally in case of not focusing over environmental changes.
Strategic challenges
The strategic challenges faced by Deliveroo company while it operating business in
global environment that is defined below:
Government restrictions: In any country government is having major role as it frame
certain regulations and policies by seeking towards economy that impacts over business activities
and performance. For example, Australian government has made restriction over import and
export of food items that directly impacts on business negatively. Deliveroo faced the challenges
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of government restriction while operating its business due to government restriction that directly
affected business negatively (Owolabi, and Makinde, 2012).
International economic factors- For operating business in international market there is
need to emphasis on economical factor that directly affects business. For example, rate of
inflation and interest in Australia is higher and customers changing their buying behaviour then it
could be high challenging situation for Deliveroo to operate their business.
M2 Critically analyse strategic challenges in context of risk and diversification strategies and the
supply chain flow.
From the section it has critically evaluated that Deliveroo wants to expand its business in
other country by following diversification strategies that can help to bring change and develop
organizational productivity. PESTLE analysis is used to analyse external environment that could
be opportunity and threat for organization to bring improvement in existing working and
managing performance. The management conduct environment analysis and formulate strategies
to go internationally. Risk and diversification is defined as major strategy that identify by
management, helps to manage the business activities and performance (Rohlfer, and Zhang,
2016).
D1 Critically evaluate the global business environment, including the opportunities and
challenges faced by organisations.
Global business environment refers to changing environment which adopted by management
for the purpose of developing business organization and managing changes. To operate and
expand business there is need to conduct analysis of environment that can help to explain
challenge and opportunities arises in organization. This directly affected the business
productivity and profitability. Deliveroo is following all factors relates to global environment
that has provided support to improve business and managing changes effectively. On the other
side, PESTLE involves various factors that occurred in business expansion activities created
opportunity and challenges for running business. This supports to increase business expansion
and profitability.
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TASK 3
P3. Influences of globalisation on governance, leadership, functions, culture and structure of
organisation.
Globalization has become familiar word for business concern where companies are getting
expansion opportunities by entering in new country and market. To grow a business and
managing all functions there is need to focus over globalization as it brings changes in existing
products and practices that supports to develop business performance. Deliveroo is multinational
company that has power to influence number of customers by satisfying their needs and in
changing environment. The management has followed McKinsey’s 7S model to influencing
culture, structure, leadership and operation under globalization:
Strategy (Governance) – This is part of organizational plans, formulated by management
after analyzing the situation of a company and maintaining a competitive edge against rivals in
changing environment. In context to Deliveroo, managers have adopted competitive pricing
policies for their better quality of products and services that gets customer attracted. The
manager and employees attend training sessions to provide knowledge and use new technology
to deliver the best food items (Tian, and Martin, 2014).
Structure: This defines the culture of the company that follows by employees while
running their business and increases performance. For an organization, it is important to follow
appropriate structure as it helps to manage work properly. In relation to Deliveroo, a manager
has followed a divisional structure wherein, roles and responsibilities of employees divided
accordingly and requirements of the international country. This can help to develop
organizational performance.
System: This could be seen as a pattern that relates to workplace and supports to
development of organizational productivity. Deliveroo is planning to expand their business in
international market by increasing sales and best quality of product which supports to improve
performance.
Shared values: This involved in soft approach that create core value for organization that
bring improvements in entire performance. The leader and management of Deliveroo, emphasis
over enthusiasm together with good behaviour that motivate people to work collectively.
Skills: This involves abilities and skill used by individual to accomplish their business
goals. To expand a business at other location, skill is considered as important factor that uses to
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managing all functions. In relation to Deliveroo, leader possess communication, leadership,
collaboration, time management and decision making skills that can help to develop
organizational productivity effectively (Ueda, Ida, Kadota, and Tozuka, 2014).
Style: This concerned to leadership style that is adopted by leader at workplace to
achieve business goals. In context to Deliveroo, leader has followed democratic leadership style
by engaging all people in expansion activities by creating positive relation that can help to grow
business effectively.
Staff: It showcase number of staff who indulged in organizational activities to attain
success and growth. Having productive and professional staff in different department created
opportunity to establish a new branch by selecting right place that can help to develop
organizational performance at international level.
In addition, for modifying existing performance and bringing changes in current working
culture, executives of Deliveroo must adopt Hofstede's cultural dimensions that includes the
followings:
Individualism versus collectivism: Deliveroo places a strong emphasis on collectivism,
with all employees encouraged to participate in events and embrace appropriate cultures from
around the world, which benefits both the workforce and the company.
Uncertainty avoidance index: This culture is showing ambiguity and uncertainty, used
by companies to operate their business in other country. In relation to expanding business by
Deliveroo, low index level of manpower indicates high tolerance and acceptance of uncertainty
(Wang, Rieger, and Hens, 2017).
Masculinity versus femininity: This strategy is related to masculinity and femininity
that used by organization for the purpose of developing business performance. In relation to
Deliveroo, femininity has followed by managers that can help to reduce discrimination and
biasness from the working that increases performance.
Pragmatic versus normative: In Deliveroo, normative approach is preferred by
management in order to deliver valuables, employment rights and skilled people that can help to
increase business performance.
Restraint versus Indulgence: The management of Deliveroo, selected indulgence for
providing freedom of conducting activities and speaking to improve communication at
workplace.
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Power Distance Index: This refers to power index that is adopted by executives of
Deliveroo for reducing inequalities and managing changes that encouraged power between team
members and develop organizational performance.
Hence, analyzing the dimension of culture leadership, structure, values and strategy that
assists management of Deliveroo to make modifications in existing work culture as per the short
term as well as long term orientation that provides positive outcomes.
P4. Influences of ethical and sustainable globalisation
Ethical globalisation refers to area of applied ethics, combination, interaction and
transforming information which is used by business concern for running their business and
managing the functions. Deliveroo needs to focus on working standard, human rights, equal
opportunity to all people and maintaining positive behaviour of employer and employees which
can help to run business at international market by managing all functions and activities
(Woerkom, and Zeijl-Rozema, 2017).
Sustainable globalisation representing a fundamental transformation in how people
approach their business in global world and manage the activities. For running business and
expanding it, it is important to focus over sustainability as it helps to improve insights to increase
business activities by improving customer base. This concept is used by firm to developing
competitive environment and attaining the business objectives. Deliveroo is multinational
company that sales range of food products and services in changing environment to influence
customers. The company is planning to enter in to global market by creating sustainable
globalization such as minimum wastages, recycling resources, using scare resources
appropriately, managing climate change that can help to maintain operation in international
country. This helps to influence people that organization is doing welfare of residing people and
offering better quality of products which could be opportunity to grow business.
The influences of sustainable addition to ethical globalisation on functions of business are
as follows:
Finance: To entering in to emerging market, management of Deliveroo needs to arrange
fund from different sources that can directly affects business. To manage funds management
need to use available resources optimally and bring changes in their existing sales that can help
to operate business in international market ethically and sustainably. In case funds is not properly
managed then could be challenging in expansion.
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Marketing: To influence number of customers internationally, marketing is considered
as an important function that targets customers and develop the organizational performance.
Deliveroo can use marketing channel such as social media, digital marketing, print media and
others that might influence the globalization and affected business.
M3 Critically evaluate global market influences in application to appropriate theories and models
relating to organisational structure and culture.
The management of Deliveroo has critically evaluated the changing environment and new
marketplace wherein, products and service are launched to develop business performance. The
Deliveroo has followed McKinsey 7S model, Hofstede culture to managing changes while
running business at other place o country. This will help to manage the function and business
activity by entering global market.
TASK 4
P5. Different ways decision making can work effectively in global context.
In running and managing business activities there is need to focus over task and decision
making activities which is performing by management for the purpose of developing business.
Effective decision making organization become successful in changing environment as it
conduct environment analysis and make decision to bring new products and services. The
sustainability of business activities is important which is focusing by management to grow their
performance. Deliveroo is multinational food providing company that uses different ways to
make appropriate decision such as:
Visionary – This refers to long term goals which is decided by organization after
analysing environment and market that directly affects business. If goals of company are not
clear, then it will be difficult for organization to make decision. In relation to Deliveroo,
management plays important role as it decides the vision by getting information and bring
changes in their working that can help to operate the business in international market. This
provides effective outcomes by formulating plans that leads to reach long term goals of
organization.
Guardian- This can help to make right business decision by managing work effectively.
The guardian is having major role who make decision on the basis of collected data, information
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and strategies which is formulated by managing all functions. This can help Deliveroo to grow
their business at international market and support their business effectively.
Sources of fund – To grow and expand business in international market there is need to
arrange fund which is used to buying raw material, arranging staff, using marketing channel to
reach targeted customers, and taking government approval that supports management of
Deliveroo to develop organizational performance and increase business globally. The sources of
funds are bank loan, sale of assets, friend and family.
P6. Routes to internationalism.
The goal of each organization is to expand its business at new location and market that can
help to attracts the number of customers and develop organizational performance. While
operating a business, there are many barriers could face by Delieveroo while going international
such as:
Managerial barriers: To run a business in global market people management and
resource management is major barriers that directly affect the business. Deliveroo is food
delivery company that can face the management challenge and crate issues in running business.
Financial barriers – To start and growing any business activities and function it is
important to arrange fund that can help to operate a business regularly. Deliveroo faced the
financial barrier as it needs to adequate amount of fund to invest in research and marketing
which created issues to go in international market.
In order to remove or eliminate the internationalism barriers, various routes are available
for the entity to expand the business internationally. Some of them are as evaluates:
Joint venture – This can be explained as contractual agreement that is done by two
parties for combining their resources and ideas to expand their business operation in other
country that can help to grow a business continuously. Deliveroo is large size organization that
can form joint venture with another organization which is already settled in international market.
This would help to increase productivity, sales, and profitability percentage by entering in to
global market and run business effectively. The advantage of joint venture is to share skills,
funds, and assets to increase business activities at global level. The disadvantages is both
businesses are equally liable to bear profit and loss.
Franchising – This can be considered as agreement where an organization gain rights of
running business with brand of others that can help to improve the brand image and maintain
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higher performance. The management should have proper skills and ability to work collectively
and deliver same products that can help to increase performance. Deliveroo can opt this route to
expand its business globally by using franchise that can help to increase organizational
performance while going to internationalism. The advantages of franchise are requirement of
minimum investment and official permission to operate business in global market. The
disadvantage is it requires again approval after paying renewable fess that reduce profitability.
From above-evaluated routes, Deliveroo is recommended to use the Joint venture route in
order to go internationally as it will help to enter in to the international market by eliminating
barriers that would help to increase organizational performance and productivity.
M4 Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome
The above section is critically evaluated by management of Deliveroo as faced management
and finance barriers that directly affected the business. For reducing barriers effective strategies
formulated by managers that can help to operate business in international market. Joint venture
and franchising is useful ways that could be used by company to overcome issues.
D2 Critique strategies that can be adopted by organisations operating in a global business
environment
It has critically analysed that Deliveroo followed McKinsey model by identifying strategy,
managing change, effective culture and structure that could support to develop organizational
performance and attain competitive advantages.
CONCLUSION
According to the above assignment, it can be concluded that environment of business
influenced by internal and external environment that directly impacted on business activities. For
an organization it is important to conduct environment analysis and make right decision by
driving trade and commerce at global level. Government restriction and economical changes
faced by company that created issues in operation. There are various routes to go internationally
such as franchising, and joint venture that could be used by Deliveroo to run their business in
global market.
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(Bititci, Cocca, and Ates, 2016) (Boddewyn, 2016) (Chandwani, Agrawal, and Kedia, 2016)
(Coltman, and et. al., 2015) (Hunt, and Raman, 2017) (Khan, and Khalique, 2014) (Lamm,
Tosti-Kharas, and King, 2015) (Owolabi, and Makinde, 2012) (Rohlfer, and Zhang, 2016) (Tian,
and Martin, 2014) (Ueda, Ida, Kadota, and Tozuka, 2014) (Wang, Rieger, and Hens, 2017)
(Woerkom, and Zeijl-Rozema, 2017)
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