Key Factors that Drive Global Trade and Commerce

This article discusses the key factors that drive global trade and commerce, including market, cost, environment, and competition. It explores how these factors impact the global business environment and the challenges and benefits they present. The article also highlights the importance of understanding the target market and the need for businesses to go global to enhance profitability.

Global Business Environment
In present time, key factors are basically seen as elements that helps a business organisation in improving much effectively
while operating at international level. With reference to the term globalization, it has been analyzed that driving factor for
global commerce and trade are basically helping business companies like Tommy Hilfiger in reaching to new heights in
specified time frame. In present context, it is being analysed that there are a range of key factors like cost, market,
environment and competition that drive global commerce and trade at the same time and these are discussed in a detailed
manner beneath:
Market drive of global commerce and trade :
 Common needs
 Global market guide
Cost drive of global commerce and trade :
 Sourcing competence
 Fleetly dynamic technology
 Production quality
Environment drive of global commerce and trade :
 Comparative radiation standards
 Common atmosphere and pollution related policies
 Permissive trade and investment
Competitive drive of global commerce and trade :
 Competitors at international level
 Mutual understanding among different countries
 Cost : This is being considered as a factor, which basically drives both global commerce along with trade. If it is
talked about Tommy Hilfiger, company has decided to decrease overall cost of all the expenses, in order to
enhance the profit margins. It is being found that, maximisation of profit can be done through enhancing overall
sales volume of products and services offered by Tommy Hilfiger. Along with this, it can be said that Tommy
Hilfiger cannot improve its sales at vast level while offering customers within a specific area or a country, it will
be required for the company to enhance the benefits through offering targeted individuals among foreign
countries as well. Investing among foreign countries could help Tommy Hilfiger in growing through enhancing
both trade and global commerce at the same time.
 Market : It is being found that, for a business organisation like Tommy Hilfiger, it is required to set the target
market so that enhancement could easily be done of both business and of customer base as well among foreign
countries. The consumer in today's times is more advanced in terms of education, income, and lifestyle. To
promote the products like clothes offered by Tommy Hilfiger within a foreign country, it will be required to
analyse the market on the basis of customers taste, income, and lifestyle. The luxury product selling in the
market of a domestic country can be a normal product in the market of a foreign country. Thus, the target market
of a foreign country should be analysed and then the product is required to be promoted as these directly impacts
upon both global commerce and trade as well.
Environment: The scarcity of a resource in a country can lead to an increase in its demand from a foreign country. This will
help the nation to maintain a balance between abundant and scarce resources. Countries with abundant resources can export
them to the countries with scarce resources. The increase in wealth of the foreign country will increase their standard of
living. This will lead to an increase in the demand of a product which is technologically advanced.
•Competition: It is necessary for the survival of Tommy Hilfiger, because the volume of sale can be increased through
evaluating strategy of the competitor and implementing various strategies as well for promoting the products along with the
services offered by Tommy Hilfiger in the foreign country. To gain a competitive advantage, it is necessary to go global and
e In present context, key factors are elements that are impacting heavily upon global business environment, which majorly
carries both benefits along with the challenges as well and these are given beneath :
In present context, key factors are elements that are impacting heavily upon global business environment, which majorly
carries both benefits along with the challenges as well and these are given beneath :
Basis Benefits Challenges
Cost Reducing the expenses, will directly put
positive impact upon both profit margins of
Tommy Hilfiger and it will also improve
economic conditions as well. With the help of
this, maximum benefits could easily be gained
by country in which Tommy Hilfiger is
expanding and to the company as well.
Utilising an optimised approach, is not that easy for a
company like Tommy Hilfiger as, it will require both
time and investment as well. This could be considered as
a challenge faced by Tommy Hilfiger and trading
conditions as well for a company.
Market Unrestricted trade and investment policies
along with the compatible technical standards
are said to be some of crucial benefits that will
offer both Tommy Hilfiger in reaching to new
heights and economic conditions of a company
will also improve as well.
If it is talked about, challenges then recession could be
considered as one of a crucial element that, might impact
heavily upon economic conditions of a specific country
in which, Tommy Hilfiger is performing its operations.
Environment Favourable conditions of weather in regards to
the produced product by a company like
Tommy Hilfiger, could help firm in enhancing
its profit margins and productivity as well.
Through this, maximum benefits could easily
be gained by a specific country.
Bad conditions or rapid climate changing environmental
conditions could easily impact negatively upon overall
conditions of the market.
Competition Through going at global level, Tommy Hilfiger
can easily approach to more number of
customers that will enhance their profitability
in much effective and efficient manner.
Any international supply chain management at global
scale can be considered as major strategic challenge of
globalization for Tommy Hilfiger. Due to this, manager
of Tommy Hilfiger will not be able to perform their
work effectively.
Key Factors that drive global trade and commerce Key Factors that impact upon global business
environment