Globalization Impacts on Business: Coles Supermarket Case Study

This report delves into the effects of globalization on business, focusing on Coles Supermarket in Australia. It explores outsourcing, offshoring, challenges, opportunities, and the role of international managers.

Managing Across Borders
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Table of Contents
Executive summary.........................................................................................................................3
Introduction......................................................................................................................................4
Topic: Globalization and its impacts on today’s business...............................................................5
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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Executive summary
The report has been drafted to focus on the concepts and various aspects of globalization. The
report will study influence the phenomena of globalization have laid upon today’s business. The
report has focused on the business functions and processes of Coles Supermarket in Australia.
Further greater insights will be developed on the contribution made by the practices of
Outsourcing and Offshoring to globalization.
The business managers are required to inculcate the practices of globalization into the business in
order to increase the benefit and profits accrued from the business processes. The concepts of
globalization provide with several opportunities, challenges and problems to the business
managers. The report will identify such challenges and opportunities in regards to Coles
Supermarkets. Coles practices the outsourcing and offshoring in the business processes of
Information Technology.
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Introduction
The report will study concepts of globalization and the influence it makes on the business of
business and processes of today. The report will also lay emphasis on the contributory factor
played by the practices of offshoring and outsourcing in the global business environment. The
report has considered the business processes and function of Coles Supermarket in Australia.
Globalization can be interpreted as a concept which debars the social, economic and political
boundaries of the business environment. It is the global phenomena that have enabled to increase
the business across boundaries in a global context. Globalization enables to develop strategies
and market policies that increase the market share and opportunities for the business
organizations.
Globalization develops such market and economic strategies and policies that increase the
market opportunities in national and international terms. These policies further enable to
improvise the development in inferior and under developed economies. It also focuses towards
uplifting the principles of living and standards of economies. Globalization has incorporated
various ancillary practices and strategies that have played a major role in enhancing the
economies and business markets (Bell, 2012). The concepts of outsourcing and offshoring can be
considered as major market players for the developments of globalization. Outsourcing is the
practice of transfers or recruiting the business processes to a third party outside of business. It
aids in incorporating the features of expertise practices and specialized strategies for the
particular business processes outsourced. Coles supermarkets are indulged in outsourcing the
business processes of Information Technology in order to achieve economies of scales.
Globalization has not only provided with increased benefits and market share for the national and
international markets. It has also contributed to several and extensive issues with its
incorporation in the business. The need for the hour is the managers undertaking the fuller
advantages of these business developments and developing solid and sound policies to out due
the challenges and problems brought in by the concepts of the globalization (Baylis, et. al.,
2017).
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Topic: Globalization and its impacts on today’s business.
Globalization has been initiated in the ancient times of the economy. It was functioned by the
movement of transportation and development in the communication systems. These
advancements in the economies enabled to transfer the knowledge and business practices from
one state to another. Globalization enables to increase the efficiency and effectiveness of the
business processes and practices. The concepts of globalization have provided with the benefits
of the increased consumer base and market share for multiple companies and organizations.
Globalization in the business and world economies has been facilitated by the strategies and
organizations like multinational Trade Policies, World Trade Organization and United Nations
etc. At Coles, supermarket globalization has impacted empirically towards the business
processes and the market share owned by the company globally (Chatterji, 2017). The
advancements of globalization have increased the market presence and have built up a brand
image for the supermarket chain. It has aided in providing with the competitive advantage of the
business in the cut throat competition of today’s economy.
Globalization has impacted on the contemporary business in numerous counts and terms. Firstly
it has increased foreign investment in economies and flow of economies currencies. With
increased international trade and exchange of goods and services, the flow of foreign investments
has multiplied. Multinational corporations are engaged in expanding the business and trade in
overseas. Organizations like Coles have expanded business and its trade in international
economies. The organizations like expanding business into developing economies which has
provided with opportunities to invest at higher rates of returns. From the time period of 2001 to
2008 it was identified that globalization contributed majorly 26% of the economic development
and growth in the developing economies (Massini and Miozzo, 2012). Secondly the concepts of
this development have impacted upon the cost structures and financial returns on the business
organizations. The business has been provided with the opportunities to retrieve the resources at
lower costs form the developing countries. The decreased costs and finances have resultant in
greater share of profit and return. Furthermore it also allows for foreign direct investment in
greater numbers and scales. The organizations have achieved economies of scales by outsourcing
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the business processes in economies that provide with cheaper labour, raw material and other
ancillary business activities.
Globalization has also impacted in the terms of increased market opportunities and business
developments. The increased international trade and market places have resulted in mergers and
joint ventures. Coles operates with the dimensions of joint ventures in some parts of the global
economies. This aids in shared profits and costs for the business activities and trades. The
international organizations indulge in joint ventures with the local and known brands of the
economies. The local brands enable to create the market place and standing for the foreign
business organizations (Steger, 2017). It has also provided with economies for scales for the
business of today. The organizations indulge in selling the goods and services in the increased
market places; this creates for greater market opportunities. This facilitates economies of scales
as the production of large numbers of goods is undertaken and further greater profits are
incurred.
International managers are required to acquire several integrative business policies and strategies
in order to stay ahead of the game. The managers require understanding the economies both
nationally and internationally. It is required to develop an empirical understanding of the market
forces operating the international markets. The international managers are further required to
acquire significant information about the business policies and market opportunities provided in
the international market regarding the business models and concepts of the current business
(Chatterji, 2017). In-depth and aggressive research is required by the managers in order to
identify the scope and demand for the business processes in economies overseas. The
international managers further must be well informed and acknowledged about the business
policies and strategies currently operating in the international markets. The managers will be
provided with guidance and detailed knowledge for strategy development and execution in the
foreign business environment.
Managers further must be acknowledged with the trends and demands that have developed in the
international market. This enables to identify the demands and expectations of the consumers
form the business trade and products developed. The organization thus produces such goods and
services that are in accordance with demands and expectations of the consumers (Baylis, et. al.,
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2017). International managers must study the market internationally and nationally to identify
any developments and advancements in the business processes and activities. The contemporary
business environment in addition to the practices of globalization has provided with ample
developments for the business processes. Excessive integration and application of information
technology and developments in the communication services are required to be implemented in
the business processes and activities by the international market.
Developing effective and result in oriented market strategies and policies is required by the
international managers in order to stay ahead of the other business leaders and managers. The
managers are required to timely identify potential market and target market for the business
products and services. This will enable to develop the required products and services in time and
captivate the developed and emerged market area. Further, the managers are required to integrate
the norms and concepts of social and economic welfare. In order to increase the business profits
and growth of the business, the managers must not deploy unethical or immoral practices into the
business trade and concepts (Beck, 2018). The international managers are required to understand
the impact business practices and policies lay on the reputation and image of the brand.
Deploying social welfare and consumer centric policies at the business functions and processes
enables to improvise the brand image and business reputation globally. Coles has aimed at
incorporating and deploying specific percentile of the business profits and revenues towards
creating education opportunities for less privileged and under advantageous sectors of the
society. This has impacted the brand reputation and image in the global context.
With the incorporation of globalization in the business international managers are required to
develop new rubrics for strategizing and implementing the business policies and strategies in the
global context. The managers are deploying the concepts of innovation and modern day
developments into the financial landscapes and managerial bodies of the business (Baylis, et. al.,
2017). International managers are therefore deploying and executing numerous skills, policies,
managerial practices and organisational aspects in the contemporary business environment.
Outsourcing can be referred to the distribution of a business function or process completely or
partially to a third party outside of business. Outsourcing is processed in order to achieve
expertise production and deploy specialised technical know-how of the business processes.
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Outsourcing enables to achieve economies of scales and creates greater profits for the business.
As outsourcing deploys the entire business process or function to a different business entity,
specific business performance and profits are achieved. This is majorly due to the presence of
specialised and expertise knowledge elements of the required business process. Coles
supermarket is engrossed in the outsourcing the Information Technology business processes and
other back office functions such as payments and accounts. The outsourcing for Information
Technology department opted in order to reduce the costs and ancillary finances for the business.
Coles has also practised the functions of Offshoring. It is referred to as relocating the entire
business process or function to another country outside the current business economy (Wheelen,
et. al., 2017). Offshoring is practised in the business functions such as manufacturing, consumer
care etc. Outsourcing and Offshoring at Coles incorporated various opportunities and challenges
for the with respect to globalization.
Outsourcing the business process of information technology at Coles increased the business
profits and revenues for the business. Information technology is a development anticipated by the
forces of globalization. Information technology provides with several technologies in order to
reduce the process costing and finances (Zhang, et. al., 2017). Undertaking the information
technology within the business resulted in increased cost and finances for the business. The
department required for increased training cost for the employees in order to roll out the
technologies towards the business processes. It also required for extensive learning and
understanding of the various software and system incorporated by the information technology.
To overcome these challenges and difficulties Coles undertook outsourcing of the information
technology department. Outsourcing enables Coles to reduce the process costs and finances. It
also aided in the administration of the already lengthy business processes and functions
(Ozdemir, 2017). Outsourcing also increased the efficiency and effectiveness of the information
technology department. Outsourcing the business process to PH Limited enabled to deploy the
services with increased efficiency. The outsourcing created an opportunity to focus on the core
business processes and activities. The business managers were provided with increased
opportunities to undertake effective and aggressive market research and participate in the
research and development of effective strategies.
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Outsourcing and offshoring are further developed by the practices of globalization. These are the
developments supported by the trends of globalization. Outsourcing is more engrossed with the
concepts of increased business efficiency and effectiveness (Chatterji, 2017). The business
organizations such as Coles supermarkets have developed strategies to outsource the business
process to a third party in order to achieve business success and profitability. Globalization has
developed new concepts of offshoring outsourcing which integrates the multiplied advantages
and benefits of both outsourcing and offshoring. It denotes to outsourcing a particular business
process in a different location or economy. It is practised extensively in the supermarket industry
of Australia. The organizations such as Coles are engaged in offshoring outsourcing the
consumer care services and feedbacks to different economies. The difference in costs of labour
and other raw materials facilitates the concepts of relocating and outsourcing. With the
enactment of globalization, outsourcing has turned out to be a much cheaper form of business
activity (Steger, 2017). In developing economies such as South Asian economies the labour is
provided at cheaper costs and the business policies are liberal in order to attract increased foreign
direct investments.
Globalization has also created an opportunity for the free flow of trade and business operations
from one economy to the other. With more liberal trade policies and structure, it is accessible for
companies from different economies to merge and perform as a single unit. As an impact of
globalization business organizations today outsource their business processes to a particular
other business entity (Luthans and Doh, 2018). This business is only engaged in receiving the
outsourced functions and provides expert services at lower costs as provided by the outsourcing
business itself.
Globalization has resulted in the development of various challenges and problems for the world
economy today. The business environment today is observing threat to the intellectual property
and sensitive data or information for the business. Outsourcing requires sharing the business
details and essential information with the third party. Outsourcing possesses a threat to the
business as it is possible for the business to lose over the integral and essential information in the
hands of a third unauthorized business party. Globalization has required to the business of Coles
to check for the possible areas of data threat and loss in the process of outsourcing. Further
globalization has also depicted a major challenge in the face of the contemporary business
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environment in the name of underemployed business processes (Rugman and Verbeke, 2017).
The business processes the activities of outsourcing may not deploy 100% attention and efforts
towards the outsourced process of a single business. It may face the challenge of dissatisfaction
in the consumers and decreased amount repetitive business sales. Outsourcing results in delayed
decision making and more presence of inaccuracies in the business operations.
Concurrently it has been observed that globalization has reduced the trade and operations
restrictions for the business entities. Globalization has given birth to liberal trade policies and
procedures across various economies in the light of business expansion and increased integration
of various economies. Globalization has emerged as a source of increased employment and
greater earnings of the business organisation in the global context (Charles Jr, et. al., 2017). In
the context of globalization Coles is in the advantage to procure the raw materials and required
sources at cheaper costs and at higher rates of returns.
Owing to the different business scenarios and economies in the international market outsourcing
also possess a threat of legal disruptions and hidden costs in the process. Coles experienced the
legal cost of US $56 billion in order to execute the outsourcing of the Information Technology
Department. It was observed that Coles had undergone several aggressive and interrogative legal
procedures for sanctioning the outsourcing decision. Globalization has also emerged as a
contemporary development that has challenged the management and the administration of the
business organizations and processes. The activity of globalization has led to reduced control and
administration of the outsourced business processes. Coles witnessed a fluctuation in the budgets
and business processes. It was observed that the predicted budgets and estimated costs were over
run and impacted on the business earnings and revenues empirically. Outsourcing in the era of
globalization has resulted in increased costs and deferred losses for various business processes
(Reader, 2017). Coles confronted a greater number of challenges and issues when the process of
information technology was outsourced. The challenges and pressure faced by the business
impacted on the competitive advantage and business objectives empirically. It was observed that
globalization has impacted on the business processes and activities today majorly.
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Conclusion
From the above discussion, it can be interpreted that globalization is a global phenomenon that
has altered the business activities and processes. Globalization has advanced the business
processes and activities in extreme depths. The concepts have arisen the needs and requirements
of the practices such as outsourcing and offshoring. It can be determined that with the
introduction of globalization the business and economic boundaries have been demolished and
has created an atmosphere that has enabled to realise the maximum potential of the business
activities and various processes.
Further, it can be understood from the discussions above that Coles has witnessed empirical and
justified benefits form the practice of outsourcing, offshoring and globalization. By outsourcing
the business function of information technology Coles was enabled to focus on the core business
processes and objectives (Massini and Miozzo, 2012). It was also aided in the process of
international business management and administration. The concepts of globalization have
enabled Coles to achieve economies of scales and increase the market share and consumer base
for the business.
The report has laid emphasis on the skills and knowledge required by the international business
managers in order to stay ahead of the competition and achieve greater success in the
international business market. It is observed from the above discussions that globalization has
improved the business and economic scenarios for the companies worldwide. Concurrently the
concepts globalization has also incorporated various disadvantages and demerits for the business
in the terms of increased business costs and advances, decreased managerial and administrative
control of the business etc.
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References
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