Unit 11 The Benefits and Drawbacks of a Global Business Environment
Added on 2020-10-05
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Business DevelopmentData Science and Big DataPolitical Science
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Unit 11 – ResearchProject
Table of ContentsTASK 2............................................................................................................................................1Communicate research outcomes for intended audience...........................................................17Reflect on the effectiveness of research methods applied.........................................................21Consider alternative research methodologies............................................................................21CONCLUSION..............................................................................................................................22REFERENCES..............................................................................................................................23
Title- The benefits and drawbacks of a global business environment. A case study onMarks and SpencerTASK 2Introduction The evolution of globalisation has transformed world economy and businessenvironment. It has provided a platform for companies to engage in global trade. Furthermore, ithas allowed them to integrate with each other and do business in different markets and offeringmore variety of goods and services to people (Schroeder, 2016). They are able to identify needsof people and enter in that market accordingly. By using technology enterprises are working incommon way. They have applied a single approach of doing trade globally. Also, globalisationhas eased the flow of business trade. By providing goods at large level, there is high rise inrevenues and profits. Alongside it, people are now getting variety of products to choose from.So, due to this their taste and preference is changing with new products. In addition to it,globalisation has impacted on organisations growth both in positive and negative manner.BackgroundIn present times, it is very essential for businesses to trade globally in order to sustain forlong time. Also, with this they collect information which is analysed to determine needs ofdifferent people. There are been high rise in global competition due to use of technology. Theretail sector is emphasising on internet to offer goods and services to people. besides this,organisations are acquiring with small companies to enter into market (Patra and Krishna, 2015).This has enabled them to analyse market condition so that they can successfully operate there.However, huge investments are been made to expand and advertise products at large level. It isdone to attract more people and compete with other. However, many organisations bring changein market trends. So, this attracts other firms as well to operate in that specific market. It thenresults in rise in competition. Aims and objectivesAim – To analyse the benefits and drawbacks of a global business environment. A case study onMarks and SpencerObjective-To evaluate impact of global business environment on Marks and Spencer.To analyse factors that lead to rise in global competition1
To examine impact of global business environment on financial condition of retail sector To recommend strategies to minimise impact on growthResearch questionWhat is the positive and negative impact of globalisation?What are the factors that leads to rise in competition at global level?How firms can mitigate negative impact in global trade?Rationale of study The aim of doing this research is to identify both benefits and drawbacks of globalisationon Marks and Spencer. In addition to it, study will help in finding out how different countries arebenefited due to rise in global trade and what is its impact on economic growth.Significance of researchThe outcomes of this study can be used by other retail companies to analyse whether theyhave been benefited due to globalisation or not. Also, it will be easy for other firms to developstrategies that how they can expand in different markets. Besides this, it will help in givinginsight about what strategies can be implemented to tackle business global environment.Moreover, other companies will develop strategies accordingly. However, it will providefinancial data to investors that will help in investing in firms. Literature review Impact of global business environmentAs said by Deresky, 2017, in present times, companies are emerging in different markets.It has resulted in rise in competition in the markets. Also, due to globalisation economic growthof developing countries has improved. LPG is a concept which has revolutionised the way ofdoing business. The overall operations and function of companies are modified. Consequently,people are now able to get variety of products. There has been change in trends and their needs.According to Lee and Gereffi, 2015,it has been difficult to identify whether global businessenvironment is been beneficial for companies or not. This is because some businesses havegrown rapidly whereas others growth has declined. There is rather a thriving doubt that thisconcept may be good for some countries but not for others. The impact can not be measured orevaluated. But it has been analysed large companies are dominating global environment.2
As elucidated by Najam, Runnalls and Halle, 2016, globalisation is a concept that hastransformed economies. It has opened gates for companies to increase their range of trading. Ithas resulted in their growth and development. They are able to target and attract large number ofpeople worldwide. It has led to increase in sales and customer base. On contrary Andersson and et.al., 2017, due to rise in competition many smallbusinesses are not able to survive. Besides this, the quality of products is degraded as firms arefocusing on generating more revenue. Mudambi and et.al., 2017, said that there are various benefits which firm has gained inglobal environment. First is it has removed barriers of trade such as tax, tariffs, etc. Another is ithas boosted economic growth of poor nations by offering them goods at low prices. Also,information is now exchanged more easily which has benefited in developing products andtransfer of technology. In addition, globalisation has created an open and free environment fortrade. Organisations are able to gather data and information and then produce products. Anotherbenefit is operations are carried out at large scale. This has resulted in reducing cost andenhancing quality. Companies are able to hire more qualified and skilled workforce which hasenabled in developing a diversified culture. There are many international organisations formedsuch as WTO, NAFTA, etc. which has allowed enterprises in free trading. By outsourcing goodsthere is reduction in cost of production. Firms are getting more return on investment. But on contrary Alon and et.al., 2016, argued that there are many drawbacks ofglobalisation. It has impacted on growth of enterprises in negative way. Due to expansion offirms, competition within market has increased; this is major drawback in business environment.Due to it, there is high downfall in sales and profits. Thus, many firms are not able to survive forlong time. Moreover, products provided are of low quality as compared with other markets.Many MNC are highly damaging and exploiting natural resources of nation.Impact of global business environment on financial condition of retail sectorGlobalisation has highly affected the financial condition of retail sector. In this bigcompanies have highly benefited due to expansion. They are able to generate more income byoffering goods in markets. But on other hand small companies in retail sector are not able tocompete with big firms. So, there financial condition is highly impacted. 3
Factors leading to rise in global competitionIn the view of Bocken, Rana and Short, 2015, globalisation has been a boon tobusinesses as well as consumers. It has influenced western economy as a whole. Manycompanies have taken advantage of it to grab opportunities. The major impact of global businessis rise in competition. It has enforced firms to develop new strategies and plans to compete in themarket. There are some factors as well which has led to rise in global competition (Factorscontributed in globalization. 2018). They are described below :- Use of technology –In era of technological advancement, businesses are using technology inautomating their operations. By using this they have expanded in different countries. This is themajor factor due to which global competition has raised. It has enforced organisation to competewith one another by improving quality of product (Andersson and et.al., 2017).Alongside it,transfer or exchange of technology has enabled them to work with other companies. Therefore, ithas resulted in increase in global competition. Furthermore, they are able to communicate ineffective manner. Hence, data and information is gathered and market condition is analysed.Economies of scale –The developing and emerging economies of countries has generated vastopportunities for business to operate there. It has allowed country to transform their domesticmarket into international one. Moreover, firms are able to find develop trade relation with localcompanies. It has benefited them in analysing needs of people and offering products. Besidesthis, MNC’s is focusing on economies that are struggling. Therefore, they have started operatingthere.Role of government –Another driver is role of government in global trade. The emergingcountries government has allowed foreign direct investment (FDI). It has enabled organisation toenter through it. Also, policies related to trade tariff are been modified and formulated which hasease way of trading with other countries (Mudambi and et.al., 2017).Furthermore, import exportlicensing and foreign exchanges controls are gradually been made easier. So, it has openedborders for companies to trade easily. Also, for social and economic welfare and growthgovernment is opening border for companies to enter into market. Supply chain and logistics –This driver is playing significant role in increase in globalcompetition. Now, each country is highly and effectively connected with one another. So, it isallowing companies to outsource their products easily. It has resulted in decrease in cost ofproduction. So, import and export of raw materials is done in effective way. 4
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