Global Business Environment: Analysing Key Factors and Strategic Challenges Faced by Organisations

This report analyses the key factors of cost, environment, market, and competition that contribute to global commerce and trade. It also explains the complexities of strategic challenges faced by organisations when operating in the global business environment, supported with specific examples. Additionally, it evaluates the influence of globalisation on organisational governance, leadership structure, culture, and functions, and the influence of ethical and sustainable globalisation on organisational functions. The report concludes with an evaluation of different ways of decision making that can work in the context of the global business environment.

Global Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK...............................................................................................................................................4
Analysation of key factors of cost, environment, market,competition that contribute to global
commerce and trade....................................................................................................................4
Explanation of complexities of strategic challenges faced by organisation when operating in
global business environment supported with specific examples.................................................6
CONCLUSION ...............................................................................................................................9
TASK 2............................................................................................................................................9
INTRODUCTION ..........................................................................................................................9
Evaluation of influence of globalisation on organisational governance and leadership
structure, culture and functions ..................................................................................................9
Evaluation of influence of ethical and sustainable globalisation on organisational functions .11
Evaluation of different ways of decision making that can work in context of global business
environment...............................................................................................................................12
Determination and articulation of values routes to internationalisation of organisation that
adopt different barriers .............................................................................................................13
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Global business environment refers to environment of different countries which consist
uncertainty for business (Akhtar and Sushil, 2018). It is important for managers of company to
identify these risk and threat present in market in order to ensure success and growth of their
business. This project report includes analysation of Deliveroo which is a UK based organisation
which is delivering food to their customers. It was established in the year 2013 in UK by Will
Shu. This project report includes Analysation of key factors like cost market, competition,
environment that drive commerce and trade. It explain complexity of strategic challenges face by
companies while operating in international market.
TASK
Analysation of key factors of cost, environment, market,competition that contribute to global
commerce and trade
Globalisation can be described as process with which world can be interconnect that
leads to increasing trade and cultural exchange. Globalisation has increased production of goods
and service at marketplace (Anderson, Busagara and Bahati, 2017). It leads to free flow of goods
and service among different countries that increase international trade and allow an organisation
to operate in different country that provide them more opportunity for growth. It allow free
movement of capital, good, services and provide more recognition to a company.
Different level of economic integration:
Economic integration can be described as arrangement between different countries that
consist reduction or elimination of trade barrier with coordination with monetary as well as fiscal
policies. It aims at reduction of tariff and non tariff restriction that results in increase in trade
between agreement. There are different types of economic integration which are mentioned
below:
Free trade area:
It is one of form of economic integration that focus on reduction of quotas and tariffs that
helps in restriction of trade (Belyaeva, 2018). It is emphasis entirely on increasing exchange of
goods and service and also articulate on transnationalised production chain, labour mobility,
trade in services. There are some limitation that are imposed on business through rulers of origin
in which goods are produced in one of member countries and are allowed to flow freely.

Customs union:
Transationalization of national production structure across different regional space that is
a the stage for purpose of deepen regulatory demonisation and present in common stance to their
extra regional market. It results in formation of custom union that rely upon common external
tariff. Key attraction among regulatory convergence is different participating economies that
reduce in challenges. With monitoring and taxing of external inputs that can be used for
production of goods and service that circulate within the region.
Single market:
It is another approaches where there is creation of oligopoly practices that results in
profitability of entrepreneurship and also in international marketplace. It is place for single
market business that consist selling of uniform products (Berman and Dalzell-Payne, 2018). It is
one of marketplace where there is high competition in market among different marketing players.
Trade and investment opportunities:
Global business environment consist different trade and investment opportunity for
business at marketplace. There are different opportunity in business environment that assist
Diliveroo to get growth and success in market. Global business environment promote free trade
and investment among different countries and also provide assistance to business for financial
and strategic management. In international market, a company needs to focus on expanding their
trade activities and also get investment opportunity to business that provide them more benefits.
It is good situation for economy of a country and allow companies to expand their operation.
Technological advancement:
Technological advancement is one of important component in competitive business
environment. It helps business to attract more and more customer towards them by providing
them effective services (Chasdi, 2017). Delivroo is an organisation that is using different types of
technology in their organisation that helps them to get success in market in global business
environment. There are different software for customer relationship management that helps them
to maintain and grow positive relationship with customers in their organisation. It play important
role in business as it allow them to apply for big data management which helps to maintain
customer database. It also provide competitive advantage to company as helps company to
differentiate their products and service from other marketing players. These technology helps

company to understand requirement of customers by using their data and allow company to
develop products as per requirement and preferences of customers.
Cost of globalisation Market condition:
Globalisation is one of important opportunity to business as it allow them for purpose of
expanding their business operation in different countries. In order to expand their business
operation at international level, business needs to bear different cost. Import and export practices
are expensive that require huge amount of investment (Ebneyamini and Bandarian, 2019).
Operation and function of company that is performance by management and staff are more
costlier as in order to conduct operation business needs to pay different types of imports and
export taxes, duties which increase cost of company. In order to set up business in abroad,
company needs to hire employees in international market which also increase their cost of human
resources. In order to open business in another company, they needs to bear cost of establishment
of new office and other things. Technology and other things also increase cost as adopting of
new technology require huge cost in initial stage. Company also needs to follow all rules and
regulation to be conducted in different countries.
Explanation of complexities of strategic challenges faced by organisation when operating in
global business environment supported with specific examples
Market condition
Marketing condition can be described as factors that create influence on housing
marketing in specific areas like living cost, supply and demand, demographics, mortgage rate
and others. Marketing condition play important role as it create impact over different things of
business like property that people wants to buy and cost bear by companies. It create impact over
economy of a company like cost of goods and service, unemployment rate, influence over real
estate market (Fraedrich, Althawadi and Bagherzadeh, 2018). Deliveroo is operating business in
international market where there are free trade practices and provide opportunity to business for
long term growth and success in market. It is important for company adopt strategy management
and apply marketing strategy for purpose of analysation of marketing condition. It is essential for
managers of an organisation to identify right approach in market place with development of
business plan which provide them assistant for analysation of marketing condition that fulfil
demand in different types of countries. Companies in international business environment needs

to implement different business model which helps company like Deliveroo to increase
productivity of company.
Competitive environment
Competition is one of threat for business as it create impact over business of profitability
and market share of company. It does not allow company to expand their business share and also
to get success in market. In order to understand competitive environment, business managers can
conduct porter's five forces model which are mentioned below:
Porter's five forces model is a tool that was introduced by Michel E porter for analysing
competitive forces of a industry and helps them to develop a corporate strategy (Gogokhia and
Berulava, 2021). Explanation of this industry in context of Deliveroo is mentioned below:
Rivalry inside industry: Rivalry inside industry occur due to numbers of marketing
players existed in an industry. There are many competitors of Deliveroo in market like
DoorDash, Ubereats and others who are providing same services to their customers. Delivroo
differentiate their service from other marketing players by adapting quickly changes. There are
different strategies to be adopted by these companies to capture more marketing share. So, there
is high threat to Deliveroo from this factor.
Bargaining power of suppliers: Deliveroo is an food delivery company which is
focusing on providing different offers to customers. There is no limitation of restaurants in
market of UK and as a results there are numbers of suppliers present in market of UK for
Deliveroo. This organisation can pic any of these restaurant for purpose of supply of products
and service. So, there is low threat for Deliveroo from this factor.
Bargaining power of buyers: In a growing market, consumer can purchases products
from numbers of company (Hacioglu, ed., 2019). There is no switching cost for customer to shift
to competitors and compare to products and service for company. There is transparency for
prices of products of different countries with which consumer can purchase and compare these
products and as a result, it increases bargaining power of customers for Deliveroo.
Threats of substitute: Threat of substitute for a company crate significant impact over
their profit and growth. Food requirement of people can be easily satisfied by companies as
different companies are providing food to their customers. There are different types of substitute
available in market of UK which make it easier for customers to shift to other brand. So, it create
high threat for Deliveroo.

Threats of new entrants: New players in industry create impact over organisation as
these players can easily expand their operation. In case of Deliveroo, it is not easier for
companies to create a strong network which can be a threat for company. So, there is low threat
of this factor for company.
PESTEL analysis:
It is a framework that is used by companies for purpose of analysing different macro
environmental factors. These factors create impact over business of Deliveroo and explanation of
these factors in context of companies are mentioned below:
Political factors: Political factors are those which can be described as regulation of
government. There are different types of corporate laws which is to be followed by Deliveroo
while operating in UK (Kasemsap, 2018). There are various changes occur in regulation of
business due to Brexit and global pandemic situation which is strictly followed by this company
for smooth flow of operation.
Economic factors: Economic factors are those which consist interest rate, wages rate,
inflation rate and others. There is increase in wages rate in UK which increase cost of operation
of Deliveroo. Economy of UK is facing crisis due to which there is reduction in purchasing
power of people. It create impact over sales of Company and create situation of loss for
company.
Social Factors: Social factors are related to culture, values and belief in UK which create
impact acceptance of products in a country. There is increasing awareness of health among
people of UK due to which they are preferring to eat home made food products. They also prefer
to order food from company which is adopting all hygiene regulation for which it is essential for
Deliveroo to adopt all these regulation.
Technological factors: Technological factors are those which are related to
technological advancement, up-gradation and other things which results in increasing cost of
company. It is essential for a company to adopt latest technology which provide them
competitive advantage in market (Keivanpour, Ait Kadi and Mascle, 2017). Deliveroo is an
organisation which is adopting latest technology as for ordering food from this company, they
needs to take help of software.
Environmental Factors: Environmental factors are those factors which consist
pollution, climate condition and weather condition. Due to increasing awareness of environment,

it is essential for managers of Deliveroo to adopt all government regulation related to
environment which create positive image of company in minds of their consumers and also
reduce interference of government in their operation.
Legal Factors: Legal factors are related to different types of laws and regulation to be
consider by companies by operating in a country. Deliveroo is an organisation which is adopting
all health and safety, employee safety and other legislation in an environment which provide
them benefit.
CONCLUSION
From above mentioned project report, it can be concluded that global business
environment provide opportunity to a business as it allow them to sell their products and service
to other countries that increase their sales, market share and profit. A company needs to bear
huge cost while expanding their business and also needs to face more competitions as many
players are providing their service in international market. Different tools are used by companies
for identify factors present in macro environment like PESTEL analysis.
TASK 2
INTRODUCTION
Global business environment is one where different companies are providing their products. It
provide various opportunity to business as they can expand their business to other country which
increase their sales and marketing share. It also provide opportunity to company to earn more
profit (Khajeheian, Friedrichsen and Mödinger, 2018). This project report includes study of
Deloveroo which his a food delivery company. It is providing its products and services in
different countries. This project report includes evaluation of influence of global market on
structure, functions and culture of organisation. It also evaluate influence of globalisation on
organisational decision making and strategy.
Evaluation of influence of globalisation on organisational governance and leadership structure,
culture and functions
McKinsey 7s model:
McKinsey 7s model is one of tool that can be used by companies by McKinsey in the
year 1980. It is a model that is used by companies for purpose of analysation of effectiveness of

company with seven elements like skill, system, share values, style, staff, strategy, structure and
others. Explanation of these components in context of Deliveroo is mentioned below:
Structure: Structure can be defined as way in which company can be organised as a
chain of command as well as accountability of relationship that form organisational chart.
Deliveroo is adopting divisional organisation structure which allow company to get benefit of
specialisation (Kokodey, Gnezdova and Lomachenko, 2018).
Strategy: Strategic is designed a business plan that helps a company to formulate action
for purpose of getting competitive advantage. Deliveroo is adopting different marketing strategy
which gels them to complete with other marketing players in market.
Systems: System consist technical infrastructure of an organisation that helps to develop
workflow and decision chain in company. Deliveroo is adopting proper management of
resources and workflow as they work in a systematic way where proper hierarchy structure is
followed in company.
Skills: Skills can be described as capability and competencies that allow employees to
attain their objectives. Skills and talent among employees of Deliveroo is important which
provide them success in market and also improve their productivity of company.
Style: Style can be described as attitude of senior employees of a company that develop
code of conduct in a way to interaction and making decision that form leadership style. Managers
of Deliveroo is adopting democratic leadership in their organisation which is important in order
to get new ideas for success of company.
Staff: Staff is a management of talent and human resource that are working for
attainment of company (Nelson, 2018). Deliveroo is a company which is adopting skilled and
talent human resources and understanding their needs which allow them to contribute with their
full efficiency.
Share values: Values, mission and objectives are work as foundation of company that
play important role in design of organisation. Deliveroo is aiming to enhance satisfaction of their
employees and wants to be a leading organisation in marketplace.
Hofstede Model:
Hofstede cultural dimension theory is one of theory that was introduced by Geert
Hofstede that is used for purpose of understanding difference in culture across different countries
and also to identify different ways for business across culture. It is a tool that is used for purpose

of differentiating different culture, dimension of culture and also helps to assess impact over
business setting. Explanation of this model in context of Deliveroo is mentioned below:
Power Distance Index: In this component, managers of Deliveroo needs to consider
extent to which inequality as well as power can be tolerated in their organisation (Nudurupati,
Garengo and Bititci, 2021). High power index is situation there there are more differences among
inequity and power and lower power index is one that promote flat and decentralised
organisation structure in company.
Collectivism Vs. Individualism: It is one of component that consider degree to which
societies are integrated into groups. Deliveroo is an organisation which is focusing on
collectivism where company is more focusing on goals and objectives of group members.
Uncertainty Avoidance Index: It includes extent to which uncertainty and ambiguity are
tolerated. There is high uncertainty avoidance index to be followed in Deliveroo where there are
low tolerance of uncertainty and ambiguity.
Femininity and Masculinity: It is one of dimension that differentiate between tough vs
tender. Deliveroo is followed both of femininity and masculinity in balanced way.
Short term Vs. Long term orientation: It is a determine which consider extent to which
people view time horizon. Focus of Deliveroo is to attain long term goals of company which
emphasise long term growth.
Restraints Vs. Indulgence: This dimension consist extent to which society fulfil desire.
Delivroo is providing indulge indicate in which they allow people to have fun and enjoy in an
organisation which make their employees happy and satisfied.
Evaluation of influence of ethical and sustainable globalisation on organisational functions
Globalisation can be described as growing economic interdependence of different
countries in different countries which increase volume and variety across border transaction for
products and service and allow free flow of capital and technology (Shageeva, Erova and
Prikhodko, 2017). Sustainable globalisation can be described as breakthrough as well as
fundamental transformation of ways in which people are approaches ways of doing business. It is
adapting different approaches and considering long term image over action of people to a larger
eco-system in which human are part and recognise values for use of natural, demonstration
respect for all people on planet, local communities for creating best possible future.

Ethical and sustainable practices in globalisation includes wider market use. It strengthen
process of decision making and also harnessing latest technology. It allow people to manage ling
with global economy. In order to improve sustainability business needs to adopt different
strategies as they needs to improve quality of their services and also needs to build strong
relationship with suppliers. They also needs to improve human resource management along with
requirement of change in organisation. Company also needs to implement changes in order to
increase diversification of activities and also ensuring effective training of human resource.
Adoption of these ethical and sustainable practices allow business to effectively utilise
different resources in company which save their cost as company saves wastage of resources of
company (Trad and Kalpić, 2017). Adoption of these practices allow company to improve their
productivity and also allow them to involved in healthy competition which is important for
purpose of improving their productivity.
Evaluation of different ways of decision making that can work in context of global business
environment
Globalisation can be described as removal of different types of trade barriers that are
across national borders and also allow integration of capital market, production process, flow of
different financial resources, knowledge, labour, culture, technical innovation and others. There
are different types of strategies can be used by companies in international market for purpose of
expansion of products and service. Strategies can be described as scope and direction of
organisation for long term that attain advantage in changing environment. Strategic capability on
the other hand described as resources and components that is used by companies in competitive
business environment (Trad and Kalpić, 2019). It helps to identify strength and weakness of
company which is a source of competitive advantage of company. There are different types of
decision to be made by companies in international market. Deliveroo needs to take decision for
which types of internationalisation they needs to adopt for purpose of expansion of their business
like import, export licensing, franchising and others. Business also needs to made decision for
types of leadership style adopt by them. They needs to make decision for handling risk present in
international environment as risk in international market is more in compare to domestic market.
In order to handle risk, managers to needs to analyse risk present in market with use of different
tool like porter;s five forces model, PESTEL analysis and others.

Determination and articulation of values routes to internationalisation of organisation that adopt
different barriers
Internationalisation refers to extending current business in other country markets in order
to increase their customers and sales in effective manner. Various type of routes are available
which helps companies in order to choose their suitable route which helps them in their
internationalisation process (Woerkom and Zeijl-Rozema, 2017). Key barriers to
internationalisation refers to various factors that create problem for the company in order to enter
or expand their business in new market or country in effective manner. In contexts of Deliveroo,
various types that its management can choose in order to expand their business into new
countries and the key barriers that create problems for them are as follows:
Method of internationalisation
Licensing is a business arrangement, wherein an established company give authority to
another company to temporarily access its intellectual property such as brand name, patent, trade
secret etc. by issuing a licence. In simpler terms, it is a business alliance wherein a brand rent its
intellectual property in exchange of specific royalty to enter into a new market. Deliveroo wants
to expand its business globally can use this arrangement to attract and cater new customer base.
This can profits Deliveroo as they can easy access of expertise and experience.
Franchising is a business practice wherein a specified company grants licence to another
firm to use its brand name and business model in exchange of fee in order to establish its
organization as an independent branch (Wood and Logsdon, 2017). For instance, Domino's
allows another firm to use its brand name and trade secrets, infrastructure in exchange of fees.
Deliveroo can use this arrangement if it wants to expand its brand name. It is beneficial for
Deliveroo as it can save its time for other key operations besides supervising franchisee.
Joint Venture is a commercial agreement wherein two or more organisations come
together to combine their resources for the accomplishment of a specified task. Big corporations,
partnerships and limited liability companies all can be used to enter into a joint venture. It
provides various benefits such as shared investment as well as expenses and to increase their
intellectual property gains. Deliveroo can enter into in this arrangement if it wants to share its
resources with other company and want to gain new market penetration and avoid competition in
industry.

Barrier in international business:
Language barrier: Language Barrier are needed to be tackled efficiently and in sensible
manner especially in international trade. This can be termed as linguistic difference between two
countries. It causes distraction in communication channels, misinterpretation and
misunderstanding between people of Deliveroo.
Managing global team: it is difficult for a business to manage team in a virtual
environment as in international business different team are working in different countries and in
order to coordinate managers of company needs to manage team in global environment. It is a
complex process of managers of Deliveroo to manage team at global environment.
CONCLUSION
From above mentioned project report it can be concluded that global business
environment is not only providing opportunity to business but also threat. It create influence over
culture, functions, organisation governance, structure and other functions of business. Business
at international level also influenced with differer types of ethical as well as sustainable practices
and also maintain healthy competition among firms. There are various types of decision to be
take by companies while expanding their business operation like relate to risk management,
development of strategies, resource utilisation and others. Different methods of
internationalisation are exist which is to be adopted by companies like licensing, franchising,
import and export and others. Different barrier are also occur in business which is overcome by
companies by developing strategies.

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