Global Business Environment Solved Assignment (Doc)

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Describing some key factors of Cost, market, environment and competition that drive
global commerce....................................................................................................................1
M1 Critically analyse the impact that key factors have upon the global business environment
in terms of benefits and challenges. ......................................................................................3
D1 Critical analysis and evaluation of marketing function and its interrelationship with other
functional units in organization..............................................................................................3
P2. Strategic challenges faced by Tommy Hilfiger................................................................4
M2 Critical analysis of the strategic challenges in context with risk, diversification strategies
and supply chain flow.............................................................................................................5
CONCLUSION................................................................................................................................6
References........................................................................................................................................7

INTRODUCTION
Global environment means that when the business working at global or international
level, there are some external as well as internal factor that affect it in negative as well as
positive way. In the same way, report main aim is to describe the global environment of the
business. The chosen firm for this report is Tommy Hilfiger which is the top brand of clothing,
footwear, accessories and home furnishing at global level. The report will describe the drivers of
the globalization which affect the commerce in negative way and then presents some challenges
which the company may face at the time of operating at global level.
P1 Describing some key factors of Cost, market, environment and competition that drive global
commerce
While operating at global level, the company affected from different factor of
globalization which are as mention below:
Cost: Cost is one of the key factor of globalization that affect Tommy Hilfiger in
negative way. The globalization of customer need and the opportunity for the scale brings
fundamentally changes the economics of many industries. It is evaluated that economies of scale
and scope, exploiting differences in factor cost while developing the products is determine as a
greater importance of global strategy. But at bottom side, a single market will no longer large
enough that will support the competitive strategy at global level (Ghisellini, Cialani and Ulgiati,
2016). On the other side, the new economies of scale and scope shape the strategy in global
industry, it will be more hard for the new entrant in order to develop the effective competitive
threat. Therefore, the prices of the products of the firm also varies from country to country and
this also change the people's perspective which may cause negative impact upon the business.
While, Tommy Hilfiger also changes its price as regional level and even it also uses
differentiation strategy to stay head in this competition.
Market: It is another factor or driver of globalization in which sudden fluctuation the
market or industry affect the business in negative way. Such that multinational companies want
to raise their profit and it also provides an opportunity in order to overcome the barrier. Apart
form this, new or advance techniques also affect the market scale into negative way and as a
result, it is essential for the firm to adopt these techniques in order to stay competitive in the
world. High profit and a string market position and market access in the global market also affect
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the business while dealing at international level. In the same way, if the society does not feel
comfortable with the distribution of market income due to globalization taxation and transfer the
payment will be used so that it will used to achieve the socially desirable distribution. In addition
to this (Hamilton and Webster, 2018). To overcome such problem, the company has to make
different strategy that assist to cope with such problem. When Tommy Hilfiger deals at global
level then it has to determine the market strategy so that it will be stay competitive and top at
global level.
Environment : Business environment get influenced by external or internal factors of the
market. Internal factors are employees, customers, suppliers, etc. all such internal factors affect
the business opportunity (Ahmedova, 2015). On the other side, external factors are consists
technological, legal, social, environmental such opportunity and developing factors are directly
affect the business opportunity and developing result that better understands the opportunity and
task to gain the business more challenging. That better understands the opportunity and gain the
business objectives along with that it makes the process for effective result outcomes. Other
factors of environment that might affect the overall business that is legal influences that affect
the business into many several aspects. Environment of business can be affect the business into
two factors internal or external.
Competition : The level of competition in the market can affect the company in positive
or negative manner. Perfect competition is the situation when company does not face any
negative effect the existing business due to low market power. For example : Tommy Hilfiger
itself is the huge brand in the fashion clothing industry (De Mooij, 2018). But In the contrary, In
imperfection competition where the fewer competitors and each business has the ability to
differentiate its product or service in a way other than by price.
The impact of competitive environment is most challenging factor which involves the
threat of regulatory and licensing demands. Likewise, in order to sustain in the competitive
business environment company has to make some unique approach to gain the business results
and target opportunity and gain. Direct competition like ZARA, H&M which sells the same
products those are in the same level of competition level which is also very risky and uncertain.
Competition driver of factor get also influenced by the social and technological trends which is
the another less effective and low impactful decision-making approach. Business environment
directly or indirectly affect the business into different context.
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M1 Critically analyse the impact that key factors have upon the global business environment in
terms of benefits and challenges.
In order to critically evaluated factors that directly or indirectly affect the business into
different context. In order to critically evaluated the performance activity that helps to gained the
business opportunity and develop the better outcomes and performance. Business environment
eventually affect the long lasting working gain opportunity that effectively calculate the business
gain. On the same side, technological factor is such a driver that somehow motivate the work
and business opportunity in different context and manner (Epstein, 2018). In order to define the
international business environment Tommy Hilfiger should need to be considered different
opportunity and gained. This is the tough that builds up the positive work outcomes to gain the
business challenges. In its traditional form of business trade it certainly manage the work
opportunity and maintained the business opportunity and task. In order to critique the business
environment there are uncertainty involves in the market which can be the good news for the
firm or bad.
D1 Critical analysis and evaluation of marketing function and its interrelationship with other
functional units in organization.
Marketing department plays an important role in fostering the revenue generation and
growth of Tommy Hilfiger company. The following are its interrelationships with other
functional units in the organization-
Marketing with operations- Marketing and operations posses direct relationships with each
other as the marketing function enables demand generation and operations is responsible for
supplying the products to fulfil that demand((Hojnik and Ruzzier, 2016)). Also, the marketing
department informs the operations department regarding the changes in quality and consumer
tastes which helps the operations department to accordingly make the changes and modify the
Tommy Hilfiger products.
Marketing with Human Resource- For successful marketing activities the department requires
a team of professional marketing personnels which is fulfilled by HR department of Tommy
Hilfiger. HR managers design the job description and hire the candidates as per the required skill
by marketing unit of the company.
Marketing with Finance- Marketing department can fulfil its promotions and sales activities
with the availability of adequate budget made by Finance department. Also, the finance
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department of Tommy Hilfiger helps the marketing team to set up the prices of products by
allocating different direct and indirect costs and helps to determine the returns and profitability
as well.
P2. Strategic challenges faced by Tommy Hilfiger
Language and cultural difference : Language barrier is the most common challenge which
almost all country faces who are doing their business globally. The challenges which company
face due to language barrier are miscommunication or misunderstanding in face to face meeting
and conference calls. In order to overcome such challenge company tries to have one employee
which belong to the particular market or country in which meeting is held. As the company
operates in different markets. As a result of which company has to face many cultural barriers
and language barriers. Though the company tries to have recruit local employees in the company
depending upon the market in which the company is operating. The company make sure that the
involve such promotional activities which does not hurt beliefs and values of any group(de Jong,
2017).
Regulatory issues : The company is operating in about 30 countries therefore in order to operate
in number of market company has to look at various regulatory issues such as laws of particular
country, their policies and regulations. Fro example UK has some laws related to import
licenses, safety regulations and law related to domestic business standards. The safety regulation
of UK aims to check that whether the products used in making of clothes and footwear it should
be of as per safety regulations. Similarly various countries has various laws which company has
to take care of.
It has been noticed the Tommy Hilfiger, Spanish version will experience change in
government in near future therefore company should be careful with the laws which will be
made by new government in order to avoid negative impact of it.
Local competition : The company is facing huge competition in the fashion industry. Top
players of market such as Ralph Lauren, Perry Ellis, Burberry are giving a tough competition to
Tommy Hilfiger(Deng and et.al., 2017). The company is also facing competition due to increase
of new entrant in market which is providing products at low price. However the company is has a
good CEO score with 87 while the other two companies Ralph Lauren CEO is with rank 67 and
Perry Ellis is with rank 93 which is highest among three.
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Communication and Technology : As the technology is changing rapidly company has to face
many technological challenges. For example transfer of technology is one of the major issue of
company in cases such as entrepreneurial finance, mergers and acquisitions and risk management
. As there is no culture of technology transfer as a result of which company does not transfer
technologies or license technologies due to the threat that competitors will be increased.
Tommy Hilfiger is using technology which is still on the nascent stage therefore
company has to increase their attention in improving technology as the competitors in the market
is making best use of advance technologies.
M2 Critical analysis of the strategic challenges in context with risk, diversification strategies and
supply chain flow
The following are strategic challenges in context with risk, diversification and supply chain-
Variability in demand- It includes changes in demand due to several market conditions which
may posses risk to the Tommy Hilfiger company through its impact. The turning down of
demand of the company products due to changes in trends, competitor's prices and other
effective marketing strategies by competitors can cause loss for the company due to lower
demand of its products in the market. But on the other hand her the demand can fall in favour of
Tommy Hilfiger favour as through effective marketing strategies or any other promotional
activity which will be beneficial for company.
Threat of competition from different companies- Wile diversification of the business in
different markets can lead to the high intensity of competition for Tommy Hilfiger company
from other local and domestic companies or the existing market leader in that particular market.
This will turn out to be a tougher challenge to perform and beat the rivals in a new market and to
increase the company sales revenue((Ghisellini, Cialani and Ulgiati, 2016)). On the other side if
the company uses a better marketing strategies and promotion activities that can influence the
customers and turn up to the brand will turn out top be great opportunity for the business as to
achieve the growth and share in new market.
High level of middleman- In case of supply chain if there are high levels of mediators or
middleman between the company and the product delivery to consumer the higher will be the
commission to these people and lower will be the revenue and profitability for the company. On
the other hand if Tommy Hilfiger have number of networks in distribution system then it will
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help the company's product to reach in different parts of market and can increase the sales
revenue as well.
CONCLUSION
From the above report it is summarized regarding the analysis of the key factors such as
cost, market environment and competition that drive the global commerce and trade for the
organization. The report mentioned the analysis of the key factors that posses impact on global
businesses in terms of benefits and challenges. The report also stated the critical evaluation of
marketing function and its interrelationship with other functional units of the company. Further
the report explained the complexity of strategic challenges faced by the company along with the
evaluation of different challenges in relation with the risk, diversification and the supply chain
flow of the company.
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References
Books and Journals
Ahmedova, S., 2015. Factors for increasing the competitiveness of small and medium-sized
enterprises (SMEs) in Bulgaria. Procedia-Social and Behavioral Sciences, 195, pp.1104-
1112.
de Jong, P., 2017. The TommyTwist: an innovation roadmap and design proposal for Tommy
Hilfiger to integrate wearable technology in their product.
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
Deng, P., and et.al., 2017. Chinese investment in advanced economies: Opportunities and
challenges. Thunderbird International Business Review, 59(4). pp.461-471.
Epstein, M. J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Ghisellini, P., Cialani, C. and Ulgiati, S., 2016. A review on circular economy: the expected
transition to a balanced interplay of environmental and economic systems. Journal of
Cleaner production, 114, pp.11-32.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hojnik, J. and Ruzzier, M., 2016. What drives eco-innovation? A review of an emerging
literature. Environmental Innovation and Societal Transitions, 19, pp.31-41.
Netland, T. H., 2016. Critical success factors for implementing lean production: the effect of
contingencies. International Journal of Production Research, 54(8), pp.2433-2448.
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