Overcoming Barriers to Global Business Expansion

This project report highlights the impact of global business environment on company activities, whether positive or negative. It emphasizes the importance of implementing effective decisions and strategies to drive commerce and trade. The report also touches on the need to motivate employees in dealing with people from different cultures, formulating suitable plans to cope with complex situations, and taking unprogrammed decision processes for effective judgment.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Key factors which drive global commerce and trade...........................................................1
TASK 2............................................................................................................................................3
P2: Complexity of strategic challenges faced by company in global market.............................3
TASK 3............................................................................................................................................4
P3: Evaluate the influence of globalisation on organisation.......................................................4
P4: Influences of ethical and sustainable globalisation on organisational functions..................5
TASK 2............................................................................................................................................7
P5 Different ways of decision making work effectively at globalised level...............................7
P6 Various routes to internationalisation with key barriers........................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
There are large number of fast growing manufacturing small and medium sized
organisations in the United Kingdom which look further in order to expand their area of business
operations in different countries and cities as well. Generally, the firms conduct research and
formulate plans and strategies before thinking of expanding their business to different places as
different places have different cultures and norms which need to be understood by an
organisation if they want to achieve growth and success in new areas. Every country has their
own government protocols due to which company may find difficulties in setting up their new
branch. Rowlinson Knitwear, a UK company which deals in providing wide variety of clothing
products to people of UK. The project covers the factors such as cost, market and environment
which requires to adopt an effective strategy to face challenges in global environment. There are
various routes and ways for making business internationalisation (Ferraro and Briody, 2017).
TASK 1
P1. Key factors which drive global commerce and trade
Global business environment need to be considered while formulating strategy and
decisions so that business activities can be done in an effective and efficient manner. There are
several factors which direct the global trade and commerce in different ways and thus, they also
affect efficiency of company in better working too. Global business environment will provide
influence to company either in a direct or indirect way. For this, they will prepare some policies
as well as strategies. Such key factors are as follows:
COST: It refers to the value of money which is used in producing something in good
quality which attracts lots of customers to buy their products. In Rowlinson Knitwear, It involves
the cost which is incurred in production, research and marketing, etc. through which customers
pay attention towards company's products and services (De Jonge, 2011).
Direct cost: This refers to those costs that remain unchanged with the production of
products and services. Example of such cost includes factory rent, rent, insurance charges, etc.
Thus, the manager needs to control such cost in order to provide positive results to company.
Indirect cost: It refers to the expenses which are incurred to support the sales figure of
company's product through investing amount in advertising, maintenance and supervision, etc.

which help in making products more successful in the market. Such cost can be easily recovered
as incurring cost will indirectly bring positive outcomes to company.
Rowlinson Knitwear, a UK company which wants to expand its business to Africa, Asia
and North America. It requires huge investment due to which the company need to raise funds
from various sources such as financial institutions, banks, venture capital etc. The management
also required to reduce cost of operation due to which the company can able to offer products
and services to the people at an affordable prices. Through this, the company can easily attract
lots of customers from new countries.
MARKET
Market refers to the place where the buyers and sellers of a specific product or service
interact with each other in order to facilitate an exchange. There are different types of markets
where people come together to exchange the goods and services either physically or online.
Labour market: This is the market in which the people who can work with a motive of
earning income in order to enhance their standard of living. In Rowlinson Knitwear, it is related
with employment opportunities available in market so as to improve livelihood of people in the
UK.
Market for Raw materials: It refers to the materials which are used in production process
in order to produce quality products without wasting any material. Such materials are available
in market at reasonable prices which need to be acquired by company with a motive of
converting into finished goods for the purpose of sale in market (Colfax, Rivera and Perez,
2010).
Rowlinson Knitwear decide to expand its business to different countries therefore to run
business in new areas in more successful manner the management need to find out the locations
where they can easily get skilled and knowledgeable employees at low labour cost. They also
required to prefer such market where they can easily get raw material used in manufacturing
clothing products at reasonable prices which help in increasing their profit and revenue.
In Rowlinson Knitwear, the management of this company can expand its business with
the help of cost, resources and market so that it can provide its services to its potential customers
and fulfil their needs and demands.
ENVIRONMENT

It refers to the conditions or surroundings in which the business organisation operates
their business activities. The environment is complex and contingent in nature due to which the
company may face various challenges and problems and if the business organisation fails to deal
with such challenges in an effective manner then their existence in market may come in danger.
Internal environment: In Rowlinson Knitwear, it is related with internal factors which
affect the business operations either in negative or positive way. Such factors include customers,
suppliers and shareholders, etc. which play a crucial role in the growth of business. Thus, it is
important for manager to adopt effective strategies in order to deal with such conditions so that
working systems will not get affected (Cavusgil and et. al., 2014).
External environment: Small and medium sized organisations such as Rowlinson
Knitwear are affected from external factors such as political, technological, economic, social,
etc. Therefore, the manager is responsible to pay attention towards such factors and make
effective plans so that their desired goals and objectives can be effectually attained on time.
The management of Rowlinson Knitwear need to take decision regarding expansion of
business to such country where the economy are increases and purchasing power of people are
increased. This will help in achieving growth and success in new places within less time. The
management of this company can trying to expand their business in those nations where natural
resources are high and cheap. It help in expansion of the business and provide employment to the
citizen of that nation.
TASK 2
P2: Complexity of strategic challenges faced by company in global market
The company may face challenges while expanding their business operations to different
countries as every nation has their own culture and rules as well as regulations due to which the
survival in new market will be difficult for them. There are various challenges that company may
face like:
High competition: However, every company established in market with a motive of
earning huge profits through giving tough competition to their rivals. Thus it may difficult for
them to survive in new market due to high competition which may affect their sales figure of
their products in market (Lundan, 2010).

Example: Marks and Spencer are the one who attain large market share in UK due to which other
companies which deals in clothing product may find challenges to survive in market for longer
duration.
Laws and Regulations: Before thinking of expansion of business operations in different
countries, it is important for the manager of Rowlinson Knitwear to identify laws and regulations
which help them in establishing their business in new countries successfully. This will help
company in performing their business operations more smoothly and can achieve their desired
goals and objectives. For example: Imposing tax on clothing products may be different in
different countries due to which company may prefer to expand their business where the less tax
has been imposed on their products. The company also looks to such areas where there are huge
requirements of labour in order to provide them employment opportunities in their company
(Wild, Wild and Han, 2014).
Communication and cultural difference: As different countries carry different cultures
due to which the company may find challenges in making an interaction with people in more
effective way. Thus, it is required for company to have employees having good communication
skills and knowledge about different culture so that they can understand the interest and buying
behaviour of people. The manager needs to conduct a research of market before doing business
activities which help them in identifying the cultural differences of different countries through
which they can able to formulate effective strategies regarding same.
For example: shaking hands with the other person is a professional criteria and in other countries
it is not show as good sign and thus such things need to be considered by business in order to
expand their business operation more successfully (Werther Jr and Chandler, 2010.).
Having political risk: Word ‘political’ is being considered as the biggest risk for
international business as the government may change over a period of time due to which the
company may face difficulties in establishing new business operations in different countries. For
example: if the present government allotted land to Rowlinson Knitwear to open new branches so
if the government changes then it will be difficult for business to attain land as they need to gain
get permission from them as well.

TASK 3
P3: Evaluate the influence of globalisation on organisation
Corporate governance directs company to run business in more disciplined and smooth
manner. It includes of different principles, rights and laws which need to be followed by the
management of Rowlinson Knitwear. Globalisation impacts on this in different ways. While
expanding business at global level, the management need to first consider the views and opinions
of shareholders which help them in making an effective decisions.
Whenever the business decide to expand their business operations in other countries then
the working system may also affect due to which the company's structure are also influenced.
Thus manager need to consider all such factors related with globalisation which influences the
organisational activities either in negative or positive way (Gecevska and et. al., 2010). Thus an
effective decision and strategy should be formulated in order to perform business activities in an
efficient way. Some others factors which influences the business operation by globalisation are
as follows:
Leadership: Every company has an objective is to establish the new branches in different
countries with a motive of earn profits and attain strong image in competitive market.
Globalisation makes huge impact on the working condition of company in many ways as this
will restrict company to expand their business and may also force them to wind up their business.
Therefore, it is important for management of company to put efforts in conducting research
through which they can formulate and effective decision and strategies with the help of using
collected information and data so that they successfully operate their business in new places as
well. Leadership style of organisation help them to perform in right direction and enables their
employees to deal with complex situations (Wild, Wild and Han, 2014). Leadership skills brings
efficiency in work and motivate their employees to perform in an effective manner that will
brings positive result to company although they have a capability to accept changes in
environment through which the business can achieve strong position in market.
Culture and functions: Rowlinson Knitwear is a company which always looking to
expand their business operation to different countries and gives tough competition to big
companies. Their main objective is to earn huge profit through selling quality clothing products
which maximise the level of satisfaction of people. It is important for an organisation to motivate
their workers to work hard so as to achieve success in other countries as well. Different countries

have their own culture due to which the company can faces difficulties in dealing with such
people. Thus, it shall required to motivate and educate their employees through conducting
training programs which help them in dealing with people in an satisfied way (Hamilton and
Webster, 2015).
Structure: The business structure are different in different countries which need to be
adopted by Rowlinson Knitwear in order to bring effectiveness in working system too. Structure
is that through which the business can perform in better way in order to bring positive outcome
to company. Rowlinson Knitwear need to follow the structure system of business in various
countries which help them to run business in ethical manner so as to achieve sustainability in
new areas as well (Werther Jr and Chandler, 2010).
Governance: It has been observed from last so many years that the standard of living of
people are improved due to large number of employment opportunities given by an organisation.
Although companies need to govern their activities in suitable manner which improves working
system of company and adopt suitable changes in order to enhance their productivity as well.
Globalization create affect and influence an organisation in positive as well as negative.
Internationalization can create and generate various ways to Rowlinson Knitwear doe the
expansion of the business of this company. Globalization leads to increased competition. This
competition can be related to product and service cost or price, technological adaptation, target
market and quick production by companies etc. When the company produce with less cost and
sell cheaper then it is able to increase its market share.
P4: Influences of ethical and sustainable globalisation on organisational functions
Effective ethical culture and sustainable globalisation will help the organisation to
implement a positive culture in corporate, financial strength and consumer confidence.
Rowlinson Knitwear is small medium sized organisation in UK which need to grow their
business on large scale hence there are various difficulties for them to capitalise on both ethical
factors and sustaining in business market (Kasemsap, 2014). Ethical influence on the corporative
culture make different affect which are as follows:
Positive corporate culture: Rowlinson Knitwear need to formulate an effective policies
and programs in an organisation which help them in maintaining a positive organisational
culture. This will help employees in building self confidence and trust on organisational
structure. The main motive of maintaining positive corporate culture is to improve the

performance of employees so that they can contribute more in achieving desired goals and
objectives. For this, they will prepare some policies as well as strategies. In this report, there is
discussion about many barriers which will be face by an enterprise at the time of
internationalisation. By overcoming from that obstacles they will easily improve their profits and
production. It enables them to take benefits from contenders at marketplace.
Consumer confidence: As Rowlinson Knitwear is small sixes business which provides
goods and services within limited areas. Thus the company may faces of confidence by the
customers through which they found difficulties in attaining stable position in market. Provide
wide variety of products with good quality bring confidence among customers which help them
in expanding their business operation in different countries in more effective and efficient
manner.
Reduction of financial liabilities: The company has to focus on reducing financial
liabilities so that they can implement new and innovative techniques which will be helpful in
operating business operations in more effective and efficient manner. The financial position of
company may also decrease due to high financial liabilities which cannot allow them to expand
their business operations in different countries (Laudon and Laudon, 2015).
Effect on recruitment and selection process: There are various legal practices which
need to be adopted while recruiting skilled and knowledgeable candidates in order to operate
their business activities. The company strictly need to follow guidelines, policies and various
laws which are implemented by UK government such as Labour practice(1996), Labour law.
Along with this, the company has developed Rowlinson Knitwear action team whose main
responsibility to recruit and select the candidate for specific job. Sometimes the other
organisation may appoint child labour to perform their work which are against the law due to
which the company need to eradicate such illegal activities through taking legal actions against
them.
Health and care: It also included in ethical issues. Rowlinson Knitwear is required to
implement corrective measures in order to maintain healthy and positive environment for their
employees so that the health of their workers are maintained. For example in a factory in
Vietnam Toluene(a chemical substance) level increases due to which the several health issues are
rises through which the company need to take strict action against it (Trompenaars and
Hampden-Turner, 2011).

TASK 2
P5 Different ways of decision making work effectively at globalised level
It is not much easy for an association to take an effective judgement. Numerous things
are connected with company which need to be considered by manager at the time of decision
making procedure. Higher authority needs to adopt some appropriate tools and methods in this
regards as it provide benefits to firm. Along with, they have to identify some bondholders for
business. In context of Rowlinson Knitwear, they want to internationalize their activities;
therefore, it is fundamental for them to concentrate on judgement procedure. Hence, an effective
and best decision will be taken. If it is advantageous then, it supports enterprise at marketplace
and in addition, they will be able to accomplish their targets and goals within limited period of
time (Louhiala-Salminen and Kankaanranta, 2011).
Therefore, superior of Rowlinson Knitwear identifies two effective way for this which
are discussed as below: Programmed decision making: In company numerous decisions take place in every day
and this has to be taken effectively so that it will cater maximum advantages to
affiliation. For this, superior needs to focus on some factors, for example: complaints of
clients, business modernization, operational activities of company and so on. It has been
analysed that, an appropriate judgement for association will aid them to maintain their
brand image at marketplace. As a result, they will be able to gain bet results which
provide growth and success to an enterprise (Tarique and Schuler, 2010). As the decision
are take after analysing the previous outcomes thus the chances of of getting success of
reaching business to different countries are more. Under the programmed decision
making, the management need to first consider the previous results and experiences and
on the basis of which decisions has to be made regarding expansdion of business to other
countries.
 Unprogrammed decision making: If circumstances of risk get higher then, many type of
uncertainties will be face by company. Thus, they need to take unprogrammed judgement
for business. This kind of decision assist to examine best outcome for enterprise and this
is based on logics. As there are lots of influencing factors which can affect the decision of
expanding business to other countries. Such factors includes political, economical, social,
technological etc. which may either restrict or allow them to follow their decisions. As

due to such factors, there are lots of conflicts arises which need to be tackles on time in
order to restrict their affects. Thus it requires immediate actions in order to cope up with
such factors.
Henceforth, when an organisation is going to globalise their business then they have to
take decision and its nature will be unprogrammed. Because, it will be based on logic as well as
facts so that work will get done effectually. In context of Rowlinson Knitwear, they have to
utilize unprogrammed decision method which is connected to enhancement of activities.
Therefore, it is required for superior to take logical decisions so they will promote an effective
working. If judgement is much efficient then, this will aid them into long term survival an
affiliation at international marketplace. The manager is using unprogrammed decision process as
it helps them to take an effective judgement.
P6 Various routes to internationalisation with key barriers
Globalisation is an effective procedure by which operational activities of business will
conducted at huge level. This is considered as most significant methodology for company
because with aid of this, firm will improve their revenues. It enables them to maintain
sustainability at marketplace and assist to take benefits from contenders. Along with, some sort
of risk will be connected to an enterprise which need to be considered by superior. Rather than,
with help of diversification, employer of Rowlinson Knitwear will develop new market and item.
Along with, if they want to internationalize their business then, they will take support of many
technique, such as acquisition, merger etc. These method will help firm to increase their business
operations and in addition customer base (Peng, 2016).
Rowlinson Knitwear wants to expand their business in India and for this, merger is an
appropriate option for them. By doing business at global level, organisation will easily enhance
their revenues and market share. But, many kinds of barriers will be examined at that which are
described as below:
 The foremost barrier for an enterprise is know as globalisation cost because of if they
want to do business at international level then, they require more finance; therefore,
entire work will get done in an appropriate as well as effective manner. It is required for
an enterprise to analyse that nation where they can invest easily and gain maximum
results. Hence, manager of Rowlinson Knitwear find out India because in this interest

rate of FDI is much less. Cost is major aspect which is restrain company so it is must for
them to overcome from this obstacle and to reduce it they will opt merger.
 Another obstruction is known as culture because it will differ from nation to nation. This
will affect growth and development of organisation and along with their profits also.
Hence, it is needed for an employer to consider this aspect at the time of decision making
process so that they will be able to survive at marketplace for maximum period of time.
To overcome from this type of barrier, it is required for manager to adopt culture of
country where they are going to enlarge their business. As a result, they will complete
operational activities effectively and efficiently (Simic and Dimitrijevic, 2012).
 Technology is another obstruction which will restrain success and development of firm
either in a direct or indirect manner. It is essential for superior to adopt new and latest
tools and methods so that they will provide best goods and services to clients. It aids to
motivate staff members regarding their work. As enterprise is using technologies in
business which help them to attain desired targets and goals within limited period of time.
As a result, production and in addition profits of firm will easily get improved.
Political instability is an another obstruction for an association because if there is continuous
alterations in rules and policies of country then, it will not be easy for any affiliation to conduct
business effectively. Therefore, it is fundamental for manager of Rowlinson Knitwear to
analysed that political stability of India is much stable. So that, firm will operate their business at
that nation and as a result, entire operational activities will get done appropriately.ted to
enhancement of activities. Therefore, it is required for superior to take logical decisions so they
will promote an effective working. If judgement is much efficient then, this will aid them into
long term survival an affiliation at international marketplace. Additionally, globalisation will
provide affect to functional or operational activities of company as well.
CONCLUSION
It has been concluded from the above project report that global business environment
makes huge impact on the business activities wither in negative or positive way. Therefore it is
important to implement an effective decision and strategies which brings positive result to
company. In order to expand business to different countries, there are different barriers and
difficulties the company faces which restrict them to survive in new market of different

countries. There are various key factors which help company in driving the commerce and trad
of company in different ways. Therefore the organisation need to motivate their employees so
that can deal with people of different cultures. The management of company need to formulate
suitable plan in order to cope up with complex situation and put their maximum efforts in
bringing optimum solutions to overcome difficulties so that they can expand business at global
level. By overcoming from that obstacles they will easily improve their profits and production.
It enables them to take benefits from contenders at marketplace. Along with, manager is using
unprogrammed decision process as it helps them to take an effective judgement. Additionally,
globalisation will provide affect to functional or operational activities of company as well.
REFERENCES
Books and Journals