Strategic Management in Globalization

This assignment delves into the complexities of global business strategy. It examines various factors driving globalization, including economic integration, technological advancements, and cultural exchange. The analysis explores how businesses adapt their strategies to navigate the global landscape, considering aspects like market entry modes, competitive advantage, and operational structures. Furthermore, it investigates the role of sustainability in shaping global business strategy, emphasizing responsible practices and ethical considerations.

GLOBAL BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Techniques of analysing the business environment..............................................................3
1.2 Analysing the micro environmental factors..........................................................................4
1.3 Analysing the macro environmental factors.........................................................................5
1.4 The impact of international business environment on an organisation.................................6
TASK 2............................................................................................................................................6
2.1 The extent of globalisation on organisations........................................................................6
2.2 Benefits, opportunities and challenges of globalisation........................................................8
2.3 Structures of organisations operating in international markets.............................................9
2.4 International operations of an organisation.........................................................................10
TASK 3..........................................................................................................................................11
3.1 The moral and ethical questions faced by organisations in an international environment. 11
3.2 Conflicts between corporate strategy and ethical and social responsibilities.....................11
3.3 Legislation, regulation and guidance relating to corporate social responsibility................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
Illustration Index
Illustration 1: Factors of Globalisation............................................................................................8
Illustration 2: Global structure.......................................................................................................10

INTRODUCTION
Global business strategy is termed as a set of action plans that are highly beneficial in
achieving greater form of results from international market. The process of expanding the
business in global market has helped many organisations and corporate to gain higher level of
profits and establish strong position (Teece, 2010). Similar to this, the report is providing
information about the significance, structuring and implication of global business strategy for an
enterprise that are to be addressed and evaluated by their management in order to attain the entire
kind of opportunities and to direct the business to a greater level of achievements. '
TASK 1
1.1 Techniques of analysing the business environment
It is necessary for an organisation and their management to lead the business to better
heights and mark a strong presence in their targeted market. For this, the management team of
business needs to address the whole information about their aimed market and their effectiveness
in accomplishing the targets. In that context, they must follow and adopt the structure of
techniques which are useful in analysing the fruitful information about the business which are as
follows: Environmental analysis and diagnostics – This technique is effective in assessing better
content for developing and creating a global business strategy. The main concept of this
technique is to analysis the entire structure of the organisational environment which
includes internal and external state of elements (Olson, Slater and Hult, 2005). Environmental Audit – The process of environmental audit starts with conducting
internal and external audit which is to be effectively processed and executed in order to
gain the best form of results. This technique is facilitating the management team in
addressing the entire kind of internal and external factors that are useful in determining
the dimensions of global strategy. PESTLE – It is one of the most preferred method for assessing the number of factors
supporting and opposing the business in international market. In includes the factors
related to the political, economical, social, technological, legal and environmental aspects
(Peng, Wang and Jiang, 2008). This helps the organisation in determining the level of
impact they are going to face in global market.

 ‘Five forces’ analysis – This method is specified as the most trenchant technique for
addressing the forces that are impacting the international business of the organisation
either in negative form or in positive manner. It comprises five forces which are:
◦ Impacts of entrants of participants in the market
◦ Bargaining power of buyers
◦ Bargaining power of suppliers
◦ Competitive rivalry
◦ Threats of substitutes
For instance, McDonald's generally adopts the PESTLE method and environmental audit
in order to determine the whole group of opposing and promoting factors. Both of these
techniques helps the cited company in creating, developing and implementing a strong and
perfect set of global strategy.
1.2 Analysing the micro environmental factors
The set of internal factors that are impacting the international business strategy and the
market of the organisation are termed as micro environmental elements. It is necessary for an
enterprise and their management team to describe a perfect global strategy by assessing the level
of micro environmental factors present in their business (Robinson, Sherwood and DePaolo,
2010). For instance, the following are micro-environmental factors that are addressed by
conducting an analysis in context of McDonald's: Stakeholders – The group of business participants and their involvement in he business
functions are directly linked with the effectiveness of enterprise to achieve greater set of
values and implement better business strategy. The stakeholders are the members of
business which include the shareholders, suppliers, trade unions, ministers, partners, etc. Competitors – They are determined as the most impacting factors of micro environmental
business which generally influence the business and their profit earning capacities. It is
necessary for an enterprise to evaluate the number of competitors present in their market,
their offered products and their competing level (Cullen and Parboteeah, 2009). Customers – It is ascertained as the main micro environmental factor that are directly
linked with the business capabilities of earning profits and gaining higher level of
response from the market. The involvement of customers and their overall attraction
assist the organisation in achieving greater forms of results and success.

 Suppliers – It is witnessed that the suppliers' powers, participation level and their overall
quantity in the organisation is highly linked with the efficiency of the business to gain
desired set of objectives (Eshun Jr, 2009).
Like, McDonald's Research team is highly concerned on implementing an international
strategy which is based on providing different, unique and delicious food products to the aimed
market by assessing the requirements of customers. Along with this, they have effectively
managed their relation with the team of stakeholders and suppliers by conducting and organising
regular meetings and conferences.
1.3 Analysing the macro environmental factors
Macro environmental factors
It includes the factors that are related with the external environment of the organisation
and has an indirect impact on their business. The set of macro environmental factors in context to
McDonald's business are the following aspects: Economic factors – It is determined that forces that creates consequences for the business
in terms of economic conditions and level of organisation are referred to as economic
factors (Slack, 2015). McDonald's international business is mostly affected by the
variation in the inflation rate and foreign exchange rate. It influences their operational
cost of conducting the business functions. Demographics – The area where the business conducts its practices and operations are
highly linked with the abilities of accomplishing proposed set of goals and objectives.
Like, McDonald generally prefer and establish its outlet in areas where they can target
the customers easily like in malls, near parks, colleges, etc. In addition to this, the likes
and dislikes of their customers are to assessed by the McDonald in order to place better
range of products that can be adopted by their aimed clients. Legal – The legal implication and regulatory framework of the country in which the
organisation has established its business is specified as the opposing factor (Haley and
Haley, 2013). It forces pressure on McDonald to maintain a level of proper functioning
and covering structure of better working. Like, Beef products of McDonald is banned in
most of the countries Political and social conditions – It is addressed that the political stability among the
countries are the main reason that primarily impacts the business of foreign company. In

addition to this, the factors like social statements and standard of living are the also
determined as the forces that affects the business of McDonald's and other organisation.
 Technological changes – The rising adaptability of advance, environment friendly and
innovative technologies has forced the organisation in investing greater level of funds to
maintain the level of new and modern set of technology (Stonehouse and Houston, 2013).
1.4 The impact of international business environment on an organisation
There are various factors that impacts the global business and the international marketing
strategy of an organisation from greater form of aspects. In that respect, the following are the
impacts of international business environment over the organisation like McDonald: Competitors – The level of competition faced by the foreign organisation from the
existing competitors in the market are generally referred as the threats to the business. As
the number of companies offering similar range of products are acquiring their market
and thus reduces the revenue earning capabilities (Werbach, 2013). For instance, the
increasing market boundaries of food sector has attracted many businesses like
McDonald, Burger King and KFC. Changes in taxation policy – It is determined that the implication of types of taxes
generally increases their operational cost and eventually, forces the products price of the
business. Like in case of McDonald, the rise in products' price decline their level of
customer's attention and results in falling of customers ratio for the business (Grant,
2015).
 Changes in cultural tastes – The business of the foreign company is directly linked with
the likes, dislikes, preferences, tastes and needs of their aimed clients. Thus, changes in
these aspects forces great level of impact on the organisation, as they are unable to make
frequent changes in the offered range of products.
TASK 2
2.1 The extent of globalisation on organisations
In current era of globalisation, an organisation needs to adopt various set of strategical
and innovative approaches in order to gain fruitful form of results and achieve the entire types of
desired objectives. Moreover, the introduction of globalisation has generated many changes for

the entire economy and their participants. In that context, the following are to be considered as
the extent of globalisation on organisation and their related aspects: Competitive Advantage – The adaptability of globalisation has allowed every
organisation to increase it markets boundaries and expand their business in foreign areas.
This has gained them the advantage of attaining the profits from competing with the other
firms (Omar and Sawy, 2013). International Trade Agreements – The policies and regulations defined by the ITA are
extremely focused on improving the business for the foreign companies to gain higher
form of results and overall achievements by establishing their presence in global and
emerging markets. Changes in technology and transport – It has been discovered that adaptability of
innovative techniques and advance engineering has forced the management team of
overseas businesses for implementing changes in their present strategy of executing the
task (Cockayne and Mears, 2011).
 Cultural exchange – As specified in the structure of globalisation that an organisation can
easily develop and enhance their market aspects by assessing the culture values, beliefs
and understanding. This would help them in analysing the cultural differences of various
areas.

Illustration 1: Factors of Globalisation
(Source: Loorbach and et.al., 2010)
2.2 Benefits, opportunities and challenges of globalisation
Benefits of globalisation Economic growth – The adaptability of globalisation has highly assisted an organisation
to gain better level of revenues and profitability. As expanding the concentrated allows
them to target more clients and acquire larger share in the market.
 Free trade – Globalisation enables a local company to enlarge its trade in other countries
without any documentation or paying extra money. It helps the company to develop
frequently and effectively (Pettinger, 2012).
Challenges of Globalisation Labour drain – Globalisation enables workforces to move more freely in international
market. Moreover, some countries discover such activities to be difficult for holding the
best team of skilled workers, who are drawn by higher wages by some other company.

 Political Instability – The most drastic challenge for an organisation was to implement
the changes as per the variation and implication of government regulation or the case in
which the ruling party is changed, thus, this alteration could affect the business.
Opportunities of Globalisation Less cultural diversity – The process of globalisation has led an increase in the economic
and cultural system. With globalisation the organisation faces less cultural diversity,
moreover, it is gives more options for the market people.
 Lowers the operational cost – It is ascertained that globalisation allows the foreign
company to establish its market in international market which also allows them to take
benefits of resources present over that location (Althonayan and Sharif, 2010).
2.3 Structures of organisations operating in international markets
There are two types of organisation which are generally adopted and followed by the
business and their management which are:
 International division – This structure has domestic structure which is formulated on the
basis of hierarchical implications. It assumes that an organisation should focus their
attention on grouping teams of skilled and experienced associated which are effective in
doing business operations and functions overseas so that the typical business lines can be
transcend (Azar, 2011). This teams are mainly assigned with the task such as:
◦ Market assessments.
◦ Placing agreements with export/import regulations
◦ Conducting shipping operations.
◦ Identification of local representatives
◦ Establishment of dedicated sales offices
◦ Production facilities
 Global functional structure – This kind of structure is mostly adopted by the companies
that are limited to certain level of production. Their aimed market approaches and
specified business functions that are to be executed are also controlled to a specific
aspect. The team are defined as per the defined set of business functions and operations
(Kearns, 2010). For instance, IKEA has adopted global structure in international market
in order to manage their business functions.

Illustration 2: Global structure
(Source: Amit and Zott, 2012)
2.4 International operations of an organisation
It is determined that an organisation has to ascertain the kinds of international operations
which are to be effectively maintained and operated by them in order to attain better set of values
and customer's retention. For instance, the international operations of IKEA and McDonald are
to serve the range of products and services as per the requirements and needs of their targeted
clients (Hillier, Grinblatt and Titman, 2011). In addition to this, the following are the
international operations which are to be considered in the context of an organisation like
McDonald and IKEA: International business conduct – It is essential that a domestic business should be
effective in executing the entire set of business operations by analysing the market
demands and required supplied for the product served by them. Competition in different markets – The rising competition allows the business to develop
their market and attain better form of success. It is evident that an organisation
performing and processing business in international market has to assess the best
structure for completing their defined task and operation in order to lead the sector (Ross,
Weill and Robertson, 2006).
 International brand development – An organisation should also direct its attention on
creating a stronger brand in order to gain customer attention and position itself as a
trusted brand.

TASK 3
3.1 The moral and ethical questions faced by organisations in an international environment
It is determined that an organisation has to direct its attention on defining the level of
business ethics and the entire set of morale values in order to develop a trusted brand image in
the international market. In that context, the management team of such organisation has to
introduce and implement effective form of international business strategy and accordingly,
execute the organisational operations and overall functions (Fisher, Craig and Bentley, 2007).
Like, McDonald has faced a great issue of offering beef meat products in Asian countries where
the most of the culture beliefs avoids it. Thus, this reduces the brand value and customer's
attention from McDonald and they have to change the ingredients of their products and have to
relaunch the products.
Moreover, the ethics of the business depicts that an organisation should be clear, specific
and centred on their business commitments and promises made to their stakeholders, market and
other related aspects. This would allow them to gain proper set of profits and revenue. It is vital
that business ethics should be to protect the customers from any harmful activities, making them
aware about the products they are buying, acknowledge them the benefits and disadvantages of
the products, etc (Langenberg, 2007). In addition to this, the organisation should be specific
about their social and corporate responsibilities.
3.2 Conflicts between corporate strategy and ethical and social responsibilities
The main purpose of an organisation to expand its market in international area is for
achieving form of revenues and mark a stronger presence in their working sector. The corporate
strategy is basically aimed on increasing the level of monetary funds available with the firm.
Along with this, they target is to enhance the participation of investors and shareholders that are
maintaining their relation with the organisation. Moreover, international market serves them
numerous opportunities to execute the corporate strategy (Oltra and Luisa Flor, 2010). But, it is
necessary that they should assess the kind of ethical and social responsibilities the international
business is going to concern on while processing their business operations and executing the
task.
It is contributed that business ethics are concerned on building trust, developing justice
and creating variety of aspects such as the expectations of society for compensation, promotion,

public relations, consumer autonomy and corporate behaviour in foreign market. On the other
hand, social responsibility is the set of activities which evaluates the process of capturing the
whole set of customer values, reduce the level of issues and conduct effective processes that are
to be addressed by international companies in order to decrease any harmful resulting from their
organisational activities and to create economic, cultural and environmental values for their
business (Teece, 2010). Thus, these procedures acquires greater funds of the business and
reduces the profitability ratio of the organisation.
3.3 Legislation, regulation and guidance relating to corporate social responsibility
In order to implement a better and effective set of corporate social responsibilities, an
organisation should direct its attention on structuring of legislation, regulations and guidance
specified in their business sector. It is addressed every organisation has a different set of
corporate and social responsibility which is defined and stated as per their concentrated market
and customers (Peng, Wang and Jiang, 2008). For instance, Kellogg's has to determine their
corporate and social province by considering the structuring of legal framework, regulatory
bodies and guidance ascertained in the food sector. Moreover, the following are the major
aspects that are to be considered in determining the set of corporate social responsibility: Role of National Governments – The recent implication of policies and procedures
implemented by the government and political parties has defined a proper dimensions of
structuring the corporate social responsibility by an organisation. The role of government
is highly focused on controlling the business operations conducted by the organisation in
a systematic manner, so that no harmful issues can be addressed either on the
environment or on the customer.
 Codes of Practice – It includes the legal enforcement on the businesses to place better set
of operations and business functions in order to achieve greater set of values and trust
among the aimed clients. This assigns the managerial aspects to conduct a control on the
practices and business operations that are to be placed legally and perfectly.
CONCLUSION
From the report, it has been articulated about the significance of implementing strategies
for acquiring great values from establishing the business in the international market. The global
market gives numerous forms of opportunities to the newly established international businesses

who are likely to gain larger share of the market and position as the most effective firm in the
sector.

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