Global Business: Risks and Strategies for International Operations

Running head: GLOBAL BUSINESS
GLOBAL BUSINESS
Name of Student
Name of the University
Author Note

GLOBAL BUSINESS1
Executive Summary
Global business refers to the trade of the goods or services of the company internationally at a
global level and carrying out its operations across the borders. It is also known as globalization
because it involves carrying out international transactions of goods and services. International
transactions will include: people, resources and other physical resources and services such as
financial services and others. There are various risks associated with the same such as
operational risks, environmental risks, technological and various other risks. The Company
chosen for the purpose of this study is COSTCO wholesale which is engaged in providing
warehouse clubs. The company belongs to the retail industry and carries out the services
provided by the company includes merchandising activities, warehouse club and carry options.
The main aim of the paper is to help the business carry out its operations across the country at
global levels and the risks associated with the same. The paper has discussed about External
business environment, internal business environment, the strategy used by the company for
entering new countries for expanding its operations, implementation of the strategy for entering
new business markets and finally the paper has discussed about the conclusion. There are
numerous advantages and risks associated with the decision of global business. The paper has
discussed about the same.

GLOBAL BUSINESS2
Table of Contents
1. Introduction and Company background...................................................................................3
2. External business environment....................................................................................................3
3. Internal business environment.....................................................................................................8
3.1 Competence: Research and development..............................................................................8
3.2 Competence 2: Brand management.....................................................................................10
3.3 Competence 3: business model of COSTCO.......................................................................11
3.4 Competence 4: low price strategy and treasure hunt strategy of Costco Company............12
4. Entry Strategy............................................................................................................................12
5. Implementation..........................................................................................................................15
6. Conclusion.................................................................................................................................16
References......................................................................................................................................18

GLOBAL BUSINESS3
1. Introduction and Company background
Global business or international business refers to carrying out operations of a company
beyond the national boundaries and includes carrying out operations in many other countries
((Watson et al. 2018). It includes all the international transactions of goods and services such as
transfer of people, physical resources and many others and international services include
financial services and others. There are however many risks associated with the global business
such as the operational risks, financial risks and other risks. There are various modes of entering
in case of international business such as joint venture, acquisition, licensing and various others.
The company chosen for the purpose of this study is the COSTCO Company that is a
multinational Company of US and is engaged in providing services of warehouse clubbing,
merchandising and cash and carry services as well (citeseerx.ist.psu.edu 2019). The company is
ranked as second after Walmart in providing retail services. It belongs to threw retail industry.
The main aim of the paper is to discuss about the internal business environment, external
business environment, the entry strategy of the company and the implementation of the same
strategy (pure.au.dk 2019).
2. External business environment
Political factors
of the country
Laws operating
in the country
Economic
conditions of the
country
Social factors
existing in the
country
Ethical factors
or the existing
norms of the
country
The political Legal factors of a The economic Social factors Ethical factors

GLOBAL BUSINESS4
factors in any
country refer to
support of
government that
is available in the
company and the
political stability
and environment
in the country. it
directly affects
the operations of
the companies in
the country.
Political factors
may affect the
business
positively or
negatively. The
political factors
are providing
good
opportunities for
the company
country
determine the
operations of a
company and
may affect it
negatively or
positively. These
include the
regulatory
frameworks and
other laws for the
same purpose.
The Malaysian
trade and
enterprise a
government
agency of new
Zealand provides
information
about the
opportunities to
companies for
operations in
conditions in a
country refer to
the factors that
affect the
competitiveness
of the country’s
environment and
include factors
such as the
inflation rate, the
employment, the
wage rate and
others. The
economic
conditions of the
country are such
that it supports
the entry of
COSTCO
company into the
Country because
of the high cost
of living of
refer to all those
factors that affect
the personality,
lifestyle and
attitude of the
people of the
country. The
company will
have a difficulty
in operating its
store in Malaysia
due to
subscription
members shop
only model
because people
may not be
willing to pay
such a higher
amount as their
cost of living is
already high in
Malaysia. The
refers to the
beliefs of the
people of the
country
regarding ethics.
Some of the
common ethics
are integrity,
honesty and
others. The same
is to be
maintained by
the company
carrying out the
same. Malaysian
has ethics
committee in
order to look
after the ethical
issues of
corporations,
community and
other fields. The

GLOBAL BUSINESS5
because it will
help the existing
local brands of
the country to get
a platform for
sale and enhance
their sales
through this store
in U.S. The
company usually
occupies 60% of
the supplier
market such that
they can have
regular supply of
their products
from them and
therefore these
activities of the
company will
help in
improving the
conditions of the
Malaysia. The
government
looks after issues
related to human
rights,
intellectual
property rights
and other issues
for the
organizations
carrying out its
operations in the
country.
people. The
people of
Malaysia need
stores that will
meet their
requirements at
lower costs and
the company is a
bulk discounter
company through
its wholesale
activities.
Moreover, the
COSTCO
company will
help in
improving the
economic
conditions of the
people because
the company
aims at providing
employment
company is
however aiming
at improving the
customers
experience by
bringing a totally
new way of
shopping and this
will be achieved
through its
warehousing
strategy that will
help in providing
best quality
goods to the
customers
through a frill
free warehousing
option. The
company is also
aiming at
improving the
customers
company may
have to face
some problems
while operating
in the country
Malaysia because
there the people
are not
accustomed to
creating
membership
cards for
shopping and
their culture is to
simply go to the
shop and do their
work without the
need for any
membership
cards. However
this new model
of the company
that will be