Global Business Environment

This document discusses the key factors of cost, market, environment, and competition that drive global commerce. It explores the benefits and challenges associated with these factors and discusses the strategic challenges faced by firms operating in the global market. The document also examines the influence of globalization on organizational leadership, governance, culture, functions, and structure.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1) Examine the key factors of cost , market, environment and competition which drive global
commerce. Also state benefits and challenges of these factors. .................................................1
2) Discussion of strategic challenges faced by firm while operating in global market..............4
PART 2............................................................................................................................................6
1) Measure the influence of globalisation on organizational leadership, governance, culture,
functions and structure. ..............................................................................................................6
2) Determine the influence of ethical and sustainable globalisation on organizational
functions. ....................................................................................................................................7
3) Explain various ways decision making can work effectively in global market......................7
4) Study and articulate several routes to internalization an firm may use including barriers.....8
CONCLUSION...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Global business environment can be explained as environment in various sovereign
nations, with factors outside to the home environment of a company which affect decision
making process regarding how to use resources and capabilities. Global factor influence business
politically, technologically, legally and so on. It is very essential to understand this factors so that
effective business tactics can be build. For this report Tufwell Glass is taken in order to complete
the project (Becker, 2018). It is a small and medium glass manufacture company located in
Crawley. Management is formulating strategies in order to expand the business in global market.
This assignment covers impact of cost, market, competition and environment on global business
environment. Various strategic challenges faced by company is studied. Along with this
influence of globalization on firm's leadership structure, functions and culture is examined for
better results. However, various models (Hofstede's, McKinsey's 7S model etc.) are studied in
order to ruin the business smoothly in open market place.
PART 1
Scenario:
Employees has been hired as a promoters of Tufwell Glass which is a small and medium
glass manufacturer suited in Crawley. Top level management of Tufwell Glass is planning to
grow the business in the global market so as to raise overall productivity and profitability ratio at
a tremendous scale in cut throat competitive world. Company requires expert suggestion
regarding phenomena of globalization and issues crated by globalization while entering into new
market (Brenton, 2019).
1) Factors of cost , market, environment and competition on global commerce along with
benefits and challenges of these factors
In order to grow the business in intense competitive world it is very significant to study
certain key factors such as, market, cost, competition and environment. By doing so management
is able to frame strategies in order to cope up with this key factors. These factors act as a barrier
in the smooth functioning of the business. Along with this competitive advantages is not gained
against rivalry as these key forces interpret the business working at a tremendous scale in neck to
neck competitive world. Tufwell Glass deeply study cost, competition, environment and market
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factors so as to drive global commerce and trade (Chandler, 2018). Below are briefly illustrated
this key factors which are as follows:
Cost: In order to grow the business across the boundaries it is mandatory to set the cost
of the product nominal. There should not be any kind of negligence in terms of quality. Tufwell
is looking to expand the business in other nation in order to create tough competition for other.
Organization by designing the product of glass need to set the prices which is less then the
competitor's. This will firm to drive global commerce and trade. As well as loyal client can be
build for longer time duration. All this raises overall productivity and profitability ratio at a
tremendous scale.
The Impact that key factor have upon global business environment in terms of
benefits:
 By offering high quality product at nominal and affordable price it is easy to trade and
commerce worldwide.
 Good quality product at best prices helps to attract large section of the potential
customers towards it which raises trade and commerce globally.
 Firm is able to build strong base for the Tufwell Glass goods in open market place which
is beneficial for trade and commerce (Epstein, 2018).
 Tufwell can also have an easy access to technology in UK which can help the company in
reducing its cost of production so that it can offer its products at low prices.
 Tufwell can also have bigger market in which it can deal so that it can earn large profits.
The Impact that key factor have upon global business environment in terms of
challenges:
 New business with innovative ideas is daily entering the market which raises neck to
neck competition level as well as trade and commerce is on stake.
 Every business are conducting research and development work in order to come up with
those technologies where labour cost can be reduced due to it decline trade and
commerce ratio.
Market: In order to survive for longer time period it is very essential to expand the
business in appropriate market. Tufwell Glass is thinking to expand the business in other country
so it is mandatory to scan the market place before entering with the product. Management should
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deeply examine the taste, preferences, demand , geographical area and so on before entering with
the designed goods in the new nation in fresh market place.
The Impact that key factor have upon global business environment in terms of
benefits:
 Firm is able to achieve set goals and objectives in the set reframe as well as drive
commerce and trade (Fabus, 2018).
 By scanning the market place before entering with product organisation is able to create
challenging benchmark for others and enhance ratio of trade and commerce.
 The company can have an access to a large marketplace in UK where the people have
high purchasing power and can afford goods provided by Tufwell Glass.
The Impact that key factor have upon global business environment in terms of
challenges:
 By not ascertaining the market for the product it is not easy to trade and commerce in the
international market.
 Commercializing the Tufwell Glass goods in wrong market in new country turns out to
be huge financial loss to the organization.
 Globalisation is making the entry of companies into UK easy which is increasing
competition in the market and can have a negative impact on Tufwell Glass.
Environment: To be successful in the market it is very compulsory to study the environment
both internal (labour availability, raw material, creditors etc.) and external (political, legal, social
etc.) environment. By this management is able to draw conclusion accordingly for the betterment
of both firm and product. If the designed product is matching with the environment of the other
nation then it become easy to drive trade across the globe.
The Impact that key factor have upon global business environment in terms of
benefits:
 Preparing the goods by studying the environment factor provide more productive results
and enhances commerce and trade ratio.
 The sales ratio of the product in the new country raises as they are full-filling the
expectation level of the nation.
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 The environment of UK will help Tufwell to produce its products quickly as the
availability of skilled labour along with technological advancements is more.
The Impact that key factor have upon global business environment in terms of
challenges:
 Ignorance of environment factor decline the trade and commerce ratio in the other nation.
 By not framing strategies to over the environmental factor product of Tufwell Glass can
be traded and commerced in the other nation (Falkner, 2017).
 The environment of UK is highly competitive which means the company will have to
adopt such strategies which can help in reducing its costs so that it can compete
efficiently in the market.
Competition: Top level management required to design tactics to compete with rivalry so that
business idea of expanding in other country can be executed smoothly. On regular basis creative
idea is entering into the market and intense competition is build. Tough Competition boost
Tufwell Glass to come up with best product so that it can be traded and commerced for huge
revenue.
The Impact that key factor have upon global business environment in terms of
benefits:
 Motivates both employees and employer to work day and night to grow and expand the
business successfully in various nation.
 Competition give birth to innovation which raises trade and commerce across the
boundaries which is a positive mark for the company.
 The globalization increases competition for Tufwell Glass which also help it in utilizing
its available resources more efficiently so that products at low prices can be produced to
be made available to customers.
The Impact that key factor have upon global business environment in terms of
challenges:
 In order to compete with rivalry huge financial amount is needed.
 Tremendously resources are wasted in order to be in the leading position as well as
competition factor creates huge problems in the path of expansion of business (Gosovic,
2019).
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 The increase in competition due to globalisation can also lead the company to adopt
unethical practices so that they can reach to a large number of customers.
Before expanding the Tufwell Glass business in new nation it is very important to study
Pestle (Political, economical, social, technological, environmental and legal). Below are the key
factors that drive globalization as well as key challenges created while operating worldwide are
illustrated briefly:
Political factor: It is very important to examine the political condition of the nation
before entering into the nation. Country having stable political condition provide huge growth
and expansion opportunities to the business while, fluctuating political condition is not good.
Tufwell Galss is expanding it's business in UK which is political stable in nature and supports
new business to grow at a tremendous scale. However, Brexit might affect the ciompany's
expansion as the availability of cheap labour will reduce because most of the labour of European
Union are available at cheaper rates.
Economical factor: Wages, governmental wages, interest rates , taxes etc. are examples f
economical factor. Tufwell Galss frame tactics to overcome the barriers of economical factors so
that employees can be boosted to work effectively and efficiently. To grow the business in global
market it is the core element which need to followed so that there is no government interference
in the business operation activity (Grayson and Hodges, 2017). The purchasing power of people
in UK is high which will help Tufwell to provide its products to customers even at higher prices.
Social factor: Here, are some of the examples of social factor such as, traditions,
customs, beliefs etc. all this need to be followed so that Tufwell Glass can expand the business
smoothly in the open market place. Along by this more and more customer base for the product
can be raised and huge profit can be maximized easily. Violation of social factor gradually
decreases the market value of Tufwell Glass goods in the new nation. The people in UK have
high standard of living and they often wish to decorate their houses with decorative glass
products which will help Tufwell Glass to expand in UK profitably.
Technological factor: In order to compete with competitors in new nation Tufwell Glass
need to adopt modern plant and machinery in the operation activity. By this strategic challenges
faced by organization can be resolved easily. Also, business can easily expand in other nation
over the years and can maximize huge profit. Tufwell Glass can have easy access to advanced
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technology at lower price that will help the company in reducing its cost of production so that the
profits of the company can increase.
Environmental factor: Before taking the decision of expanding the business in other
nation environmental factor must be determined. Changing climate, population, pH level of
water and so on need to measured. By this a rough idea will be accumulated weather the product
will be able to succeed or not. The environment regulations of UK are changing frequently with
more use of computer technology so that the pollution in manufacturing stained glass can be
reduced. This will help Tufwell in improing its glass production process and reduce its costs.
Legal factor: As business of Tufwell is expanding in other nation so it is compulsory to
adopt all the legal norms of that country so that employees can be assured that they are not
manipulated in any aspect. By this growth and expansion of business become smooth and easy in
new market in new country. Tufwell needs to follow CSR in its policies so that it can grow
sustainably in the UK market.
2) Discussion of strategic challenges faced by firm while operating in global market.
In intense competitive world businesses faces various strategic challenges which restrict
them from growing in other nation successfully. Some of the strategic challenges are discussed
below : International trade law : These are the set of laws and agreements which helps in
governing the trade and commerce done by companies in different countries. The rules of
WTO which are codified in three agreements namely General Agreement on Tariffs and
Trade (GATT), General Agreement on Trade in Services (GATS) and the agreement on
Trade Related Aspects of Intellectual Property Rights (TRIPS) helps in regulating the
trade of businesses in international markets. These help in regulating the products and
services offered by the companies in international market. Tufwell Glass when expanding
in UK will also have to follow the international trade laws so that it can work legally in
the international market. Economies of globalisation : As the globalisation is increasing the flow of international
capital, cross-border movement of products and services etc. have increased. This means
that Tufwell Glass will have to change its strategies in such a way that can help it in
dealing with increasing competition due to globalisation. This will help the company to
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survive sustainably in the global market environment and attract the attention of
customers by offering them better products at lower prices. Environmental impacts : The increase in globalisation is increasing the consumption of
goods and services at the international level which is also increasing the depletion of
natural resources. This has increased stress on companies to adopt environment friendly
strategies so that no harm is caused to the environment. Tufwell Glass can adopt CSR
policies so that the environmental impact can be reduced by its expansion in UK.
 International supply chain management : Managing the supply chain in the
international market poses a challenge for businesses as the availability of raw materials
from the suppliers need to be managed which will help the company to manufacture the
goods and services as per the demand in market. Tufwell Glass needs to have strong
supply chain management in the international market so that it can provide customers
with products on time and as per their demands.
Diversification refers to as present business branching out into completely new business
opportunity. In cut throat competitive world business gets diversified in order to grow,
maximization utilization of resources, to escape from unattractive industry environment. In order
to overcome strategic challenges numerous diversification strategies is adopted such as,
horizontal diversification, conglomerate diversification, vertical diversification and concentric
diversification. Tufwell Glass is adopting horizontal diversification as in this business is
offering new product or services which appeal to the companies existing consumer base. By this
enterprise is able to gain competitive advantages against rivalry in cut throat competitive world.
As well as huge profit is maximized for further growth and development (Gunningham and
Sinclair, 2017).
PART 2
1) Measure the influence of globalisation on organizational leadership, governance, culture,
functions and structure.
Globalization is stated as process of interconnectedness of companies, people and
government across the globe. There are distinguish benefits of globalization which are, high
quality product, more foreign trade, raises standard of living, lower cost of living, waste
deduction from greater economic efficiency. Globalization has created huge impact on
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companies lordship, culture, governance and functions in both positive and negative way. This
can be explained with the help of Mckinsey's model.
In the year 1980 this model was developed by business consultant Robert H. Waterman, Jr and
tom Peters. In this model there are 7 element which are categorised into hard and soft elements.
Hard element (Strategy, structure and system) while soft element covers (shared values, skills,
style, staff) are elaborated as under:
Strategy: As everything is becoming globalised Tufwell Glass is formulating strategies
in order to gain competitive advantages it's rivalry (Hamilton and Webster, 2018). By scanning
all internal and external environment tactics need to be farmed in order to grow the business
globally. It means that the company must formulate strategies which helps the company in
gaining a competitive advantage. In Tufwell Glass these strategies can be effectively
implemented by adopting democratic leadership so that employees can be encouraged to
participate in decision-making. Also the structure, culture and functions of the company must be
aligned so that the strategy can be implemented effectively.
Structure: Organization is framing tactics as per globalized scenario so that set goals
and objectives can be attained easily. Proper structure is adopted so that information can be
transferred from one person to another easily. By implementing appropriate hierarchy the
globalization negative aspect can be resolved easily. The resources of the company needs to be
organised so that they can be effectively used which will help it in optimizing its processes. The
organisational governance and leadership plays an important role in efficiently utilizing the
resources.
System: Due to raising globalization Tufwell Glass is adopting model in order to run the
business smoothly. Management keep eye on the daily activities so that influence of
globalization can be eliminated in the initial stage and best results can be attained. Business
processes and technical platforms must be aligned in such a way that products can be produced at
minimum costs which helps the company to become competitive in global market.
Shared values: Despite of raising globalization organization should not change their core
value in order to compete with it. The success of the Tufwell Glass is possible they share values
among their team mates and boost them to work effectively and efficiently to survive in
globalized market. The leadership style determines how the employees are motivated to achieve
the goals of the company so that its vision and mission are achieved.
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Style: Democratic leadership style is adopted by Tufwell Glass in their working premises
in order to compete with the changing environment. Globalization is influencing the working of
the business greatly. In democratic style is adopted so that co-workers can suggest their valuable
though in the decision making process. By this act employees can be assured that they are
valuable asset of the firm and work hard to meet global requirements (Kara and Fırat, 2018). It
also determines the way in which the staff members interact with each other and with other
stakeholders.
Staff: To meet the global demand it is very essential to train the employees. Various
training and seminars are provided to the co-workers so that productive results can be
accomplished. Their skills are nourished in order to cope up with factors of globalization so that
set goals and objectives can be attained. Tufwell Glass must pay its employees with good
remuneration so that they can become loyal towards the employee and can help in achieving
company goals.
Skills: Work is assigned to the staff members according to their skills so that in the set
deadline work is completed. By this it become easy and smooth for organization top level
mangers to handle the things in organized manner. To grow the business in era of globalization
sub-ordinate should be multilevelled so that allotted task can be attained and tough benchmark
can be created for other. Efficient allotment of work among the workers will help Tufwell Glass
to achieve its objectives of globalisation.
2) Determine the influence of ethical and sustainable globalisation on organizational functions.
With the increase in globalisation various companies have entered in the global markets
which means that a country has companies belonging to different countries, having different
code of ethics, structure, culture etc. This increases the requirement of ethical globalisation
which will ensure that ethical code of conducts are followed by the companies so that they can
be both socially and environmentally responsible. This will help in the economic development of
the country and also no harm will be caused to its citizens or environment. Ethical practices help
in demonstrating between right and wrong so that morality is followed in the company which
will ensure good for all the stakeholders.
There are various ethical issues that are faced by the companies due to globalisation like
privacy concerns, discrimination in organisation, increase in competition etc. Tufwell Glass can
deal with these ethical issues by promoting equality and diversity at workplace which will help
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the company to retain its employees. Though the competition has increased which is a negative
factor for the company but it also helps the company in brining innovation in its products
through which greater satisfaction of customers can be achieved.
3) Explain various ways decision making can work effectively in global market.
There are various styles of leadership that can be followed by the companies so that they
can take strategic decisions which will help the companies to expand in the global market inn an
efficient manner. Some of the leadership styles that can be used in Tufwell Glass are :
 Democratic leadership : Under this leadership the leaders of the company encourages
employee participation in decision-making so that efficient decisions can be made which
will help the company in gaining a competitive edge in the global market.
 Autocratic leadership : Under this leadership style the leader makes all the decisions
related to all the aspects and does not include the employees in decision-making. This can
help in making fast decisions but does not encourage employee engagement.
Tufwell Glass should follow democratic leadership in the organisation so that it can
effectively expand in the global market. It also helps the company to introduce innovative
products in the market that can help it in achieving maximum customer satisfaction.
Strategy diamond is a method that can be used to analyse, visualise, summarise and share
the strategy that is to be followed by the business. The democratic leadership style is an effective
way in which the strategy that is adopted by the company can be conveyed to the employees that
will help in application of the strategy in company. Tufwell Glass can use this diamond so that
the application of strategy for proper expansion of company in global market can be done.
4) Study and articulate several routes to internalization an firm may use including barriers.
There are various ways in which companies can expand their businesses in other
countries and can become global. Some of the ways which can be adopted by Tufwell Glass are : Franchising : It is an effective way of market expansion in which the franchisor grants or
licenses some rights and authorities to the franchisee so that the franchisee can operate
the business under the brand image and can also use the processes that are used in the
company so that identical goods and services are produced.
 Acquisition : It is other method of market expansion in which a company purchases more
than 50% of stake so that the ownership can be gained by the acquiring company. This
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helps the acquiring company to have access to the resources of the acquired company and
can also offer its products in the market of the acquired company.
Tufell Glass can apply the method of acquisition in order to expand in UK. The company
can acquire other company that operates in the same industry and is affordable for Tufwell Glass.
The company needs to evaluate certain factors so that acquisition can help the company to
expand in UK and also gain a competitive advantage in the market.
The advantages of using acquisition method is that Tufwel Glass can speedily expand in
other market. It can also have a ready-made access to market share which will help it in offering
its products in the market. However there are certain barriers in this method like the uncertainty
of failing due to lack of financial sources and the increase in costs due to acquisition which will
increase burden on the company.
CONCLUSION
From the above discussion it can be ended that distinguish factors such as, market, cost,
competition and environment need to be analysed so that drive global commerce and trade.
Along with this benefits and challenges are discussed so that tactics can be framed accordingly in
order to overcome challenges prevailing in the open market place. McKinsey's model, Hofstede's
etc. model are studied deeply in order to run the business smoothly without government
interference. Along with this numerous ways of decision making can work effectively in global
market is evaluated in order to accomplish productive outcomes. Pestel analysis is studied in
order to resolve strategies challenges faced by organization while operating in global
environment.
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REFERENCES
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global warming. Routledge.
Epstein, M. J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Fabus, M., 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE GLOBAL
COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS (DB): CASE STUDY
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Falkner, R., 2017. Business power and conflict in international environmental politics. Springer.
Gosovic, B., 2019. The quest for world environmental cooperation: the case of the UN Global
Environment Monitoring System. Routledge.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make
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Gunningham, N. and Sinclair, D., 2017. Leaders and laggards: next-generation environmental
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Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
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