Global Business Environment Report

This report analyzes the global business environment, focusing on Siemens AG, a multinational electrical and electronics enterprise. It examines the impact of key factors like cost, market, environment, and competition on Siemens' operations. The report also explores strategic challenges faced by Siemens in international trade law, supply chain management, and cultural differences. It further evaluates the influence of globalization on Siemens, identifying key barriers to international business and providing recommendations to overcome them.

Unit 18: Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
1. Critically analysis the impact of key factors such as cost, market, environment and
competition on the global business environment in term of benefits and challenges.................1
ACTIVITY 2....................................................................................................................................2
2. Critically analysis the strategic challenges faced by Siemens and other organisations in
relevance with risk and impact of international trade law, complexities of the international
supply chain management...........................................................................................................2
ACTIVITY 3....................................................................................................................................4
3. Critically evaluate global market influences on Siemens and other organisation which
theory and model.........................................................................................................................4
ACTIVITY 4....................................................................................................................................8
4. Critically evaluate influence of globalisation on Siemens and other organisations by
analysing key barriers to do business internationally and make recommendations to overcome
.....................................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Operating business at global level aids in raising market share, reducing costs and gaining
competitive outcomes. With the help of global businesses, goods produce at large scale in
international market. Hence, international market helps to utilise resources in all over the world
and gain more profits and revenue (vom Brocke, Zelt and Schmiedel, 2016). Companies use
financial and technological resources to expand business at global level. Present study based on
Siemens AG which is electrical and electronics enterprise and its turnover is £53 billion. It is
multi-national company which operates in more than 190 nations.
In order to focus on the present study, it covers critical analysis of impact of key factors
such as cost, market, environment and competition. Furthermore, strategic challenges also assess
that faced by Siemens and other enterprise with identify relevant risks which impact on
international trade law. Moreover, theories and models in organisational structure explained
which is relating to culture.
ACTIVITY 1
1. Critically analysis the impact of key factors such as cost, market, environment and
competition on the global business environment in term of benefits and challenges
There are several factors exists that create impact on enterprise In order to develop
business operations in global business environment. They are as follows: Cost: In international trade, cost is one of the important element that create major impact
on Siemens. This is because, it contains exchange of goods and services between
different countries so that it consider several elements that contribute major part to gain
benefits. Work remains to be done with trade costs which integrate nations completely.
Benefit to the chosen company is they can gain competitive advantages in global trade.
Foreign competition also helps to reduce price for consumers (Blevins, Moschieri and
Ragozzino, 2016). However, cost of living is also disadvantage in the country to lead
with international market. For instance, lack of cost create negative impact on the
business operations and it influences negatively. At global level, the chosen business
need to place more cost investment to gain benefits. Market: As critical evaluation, market provide place where Siemens can perform their
functions and operations. Economic growth for reduce poverty in the country also
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implemented which imposed and analysed impact of new tariffs in developing nations. In
the UK, Siemens consider new global strategy so that all activities determines to call
upon potential growth. Hence, it requires more products and services that can be supplied
in the country. Benefit of this factor is that country can meet with local people needs.
However, more investment required and expenses incurred within the nation (Cavusgil
and Knight, 2015). In UK, trade relatively unharmed so that cheaper imports and exports
positively influence to the industry. As a result, the country can secure deal with other
businesses. Environment: In the UK environment, Siemens established with accomplishment of
more targets for growth and profits. Hence, it is the best to understanding local needs and
culture. Siemens operates in the country with 30 businesses so that profitability and
growth of the enterprise continuously growing. On the other hand, in Siemens group
increasing number of businesses enhance competition. Therefore, it is one of the major
challenge in front of the business (Baller, Dutta and Lanvin, 2016).
 Competition: Within the UK, high competition exists which create major impact on
Siemens. The company has established global centres of excellence which serve for
specialist needs in entire group. They are also work with full spectrum so that products
and services of the business offered by another elsewhere. The chosen organisation has
main aim to rich towards global market so that deliver in overall group helps to meet with
own customers' demand and requirements (Arvis, Ojala and Kiiski, 2018). For instance,
General electric, 3M, Phillips, etc.
ACTIVITY 2
2. Critically analysis the strategic challenges faced by Siemens and other organisations in
relevance with risk and impact of international trade law, complexities of the international
supply chain management
In international environment, Siemens may face several challenges and risks which may
impact on trade and outcomes. Complexity also increases with international supply chain
management that reduce effectiveness of the enterprise. Strategic challenges can be define as
pressures which exert and decisive influence to gain future success. Siemens has occurs several
problems that create major impact on its functions and operations (Lewis, Gertsakis and
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Sweatman, 2017). Following are certain strategic challenges occur in front of the selected
business: Ethical business practices: There are more substantial challenges faced by Siemens that
is ethical business practices. In certain areas of labour, product safety, environmental
stewardship, corruption, etc. elements which helps to gain success of global players. For
instance, Siemens brand image bringing more unique concept in business to relatively
common and favourite business terms (Laudon and Traver, 2016). Maintaining the
highest ethical standards also consider for local consideration which operate in the nation. International trade law: Another significant hurdle is developed as ability to efficiently
incorporate in new regions with value chain and corporate structure of Siemens. In global
expansion more enormous capital investment required with more investment in many
cases. Therefore, international trade laws of the particular country must follow to reduce
problems and risks in the business. In this regard, it is essential follow these rules and
regulations (Wood, Logsdon and Davenport, 2015). Public relations: Public image and branding consider as critical components in the
Siemens. Building public relations is potential that helps to deal with enormous
challenges. The chosen company deal with multi-national operations and functions so
that they are connected with several shareholders. It is more efficient to concentrate on
keep economies of scale with specialisation. Hence, Siemens can shipped their products
anywhere in the world. Complexities in international supply chain: In order to meet with needs of range of
global market. It can be stated that companies need to report and deliver value in overall
group. International supply chain create several complexities in international supply
chain so that it increases problems and issues as well. Hence, the organisation can easily
meet with their targets and goals to achieve effectiveness (Dyllick and Muff, 2016). In
respect to do best, local level of needs must be understand which would be beneficial to
focus on overall expertise. Siemens has established global centres of excellence so that
they can serve with specialist needs in entire group. Attracting talented people is one of
the major issue in inter culture competence for developing effective global strategy.
 Legal and regulatory structure: In every nation certain unique laws and regulations
exists that are determined to govern business. Siemens need to get access to legal
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expertise that assists to understand laws and comply with applicable regulations.
Therefore, it is important to focus on legal and regulatory climate in the particular
industry. Before entering into new market, information can be factored to take strategic
decisions to expand globally (Hitt, Li and Xu, 2016). Within the global business, there is
wide competition so that several activities helps to offered particular part of the business
for something offered.
ACTIVITY 3
3. Critically evaluate global market influences on Siemens and other organisation which theory
and model
In order to consider organisational structure and culture impact in global market
influence, it can be stated that following are different theories and models can be applied in
business:
McKinsey 7s model
McKinsey 7s model developed in 1980 which is considered and help and widely used by
academics and practitioners. In Siemens, this model applied as valuable tool and design used to
facilitate organisational change, help to implement this strategy, facilitate merger of organisation,
etc. The goal of this model is to show 7 elements in the company that are explained under here: Strategy: Strategy is the plan which developed by a firm to achieve sustained competitive
advantages. Therefore, Siemens can easily compete in the market. Sound strategy is one
of the important consideration which articulated for long term and helps to accomplish
competitive advantages with reinforced strong vision, mission and values. In UK,
strategy helps to provide strong results which can be aligned with other elements. Structure: Structure represent way in which businesses consist division and units that are
organised and includes information that are accountable. In Siemens structure is the
organisational chart of the firm which can be visible and easy to change elements in
successful framework. Subordinates candidates must inform to their immediate
supervisor so that appropriate structure will be followed in the business. Systems: Furthermore, systems are process and procedure of Siemens which reveal as
daily activities of the enterprise. Therefore, it considers that how decisions are made
successfully. Systems are areas in which firm determines how business done and focus
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for managers in organisational change. As a result, in 30 businesses, the chosen enterprise
make changes with new activities and tasks. Style: Within the chosen business, style consider way where company is managed by top
level managers so that actions take with their symbolic value (Meyer and Peng, 2016). In
addition to this, management style of Siemens of company leaders must be assess in
effective manner. Staff: Staff element is considered with different types of employees in the organisation
which need to recruit, trained, motivated and rewarded. As a result, it considered to focus
on effectiveness of different people in business. With the help of staff members'
participation, the chosen enterprise will able to gain more benefits easily. Furthermore,
staff members of the selected business must trained and motivated towards goals and
objectives of the enterprise. Consequently, it helps to communicate more benefits among
people (Hitt, Li and Xu, 2016). Skills: Skills are the abilities that perform by employees of the enterprise. They are also
considered capabilities and competences in organisational changes. New strategy and
structure must be ascertained in the selected enterprise to perform very well. It helps to
Siemens to reinforce with goals and objectives that can be accomplish effectiveness at
workplace. As a result, it communicates more creative work in the business to really gain
targets.
 Shred values: Shared values are norms and standards that guide employee behaviour and
company actions. This is because, it considers more effective consideration of rules and
regulations in Siemens that helps to accomplish positive results at workplace.
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Hofstede's dimensions of culture
As critically evaluate that Siemens consider different dimensions of culture that assists to
accomplish effective results with effective consideration. They are considering achieving
affordable and reliable power supply that increases number of jobs for some personnel. In
addition to this, with financial and local investments, they are focusing to gain more effective
results at workplace (Pinfield, Salter and Bath, 2016). There are 6 dimensions to define culture
that are as follows: Power distance index: Power distance index considers extent in which inequality and
power are tolerated. With this aspect, inequality and power are viewed from the point of
followers at lower level. High power distance influence in Siemens culture accepts
inequality and power differences that encourages bureaucracy. Low power distance index
indicates that culture encourages organisational structure. Hence, corporate structure
refers in different department in the company. Each of the department usually perform
specialised functions (vom Brocke, Zelt and Schmiedel, 2016).
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Illustration 1: McKinsey 7S model in Siemens
(Source: Amazon McKinsey 7S Model, 2019)

 Collectivism vs. individualism: Individualism vs. collectivism dimension consider degree
in which societies integrated into particular groups. Therefore, it perceived obligation and
dependence in groups. In Siemens, it influences with individualism that indicates greater
importance for attaining personal goals. Therefore, self image determines for I context.
Collectivism indicates that there is greater importance on goals and well being in group.
Hence, self image defined as we (Meyer and Peng, 2016). Uncertainty avoidance index: High uncertainty avoidance index influence low tolerance
for uncertainty, risk taking and ambiguity. The unknown minimised with strict rules,
regulations, etc. On the other hand, in Siemens low uncertainty avoidance index indicates
high tolerance. Femininity vs. masculinity: Masculinity vs. femininity dimension also referred as tough
vs. tender. As a result, it considers preference of society in achievement, attitude towards
sexuality behaviour, etc. (Blevins, Moschieri and Ragozzino, 2016). Masculinity comes
with different characteristics such as distinct gender roles, assertive and concentrated
material on achievement with wealth building of Siemens. Femininity consider with
characteristics such as fluid gender roles, modest, nurturing, etc. Short term vs. long term orientation: Long term orientation shows focus on future and
involvement with short term success to achieve success. It emphasis on persistence,
perseverance and long term growth of Siemens. In addition to this, short term orientation
shows focus on future development with involvement and delivering of short term
success. Hence, it emphasis on present than future.
 Restraint vs. indulgence: Indulgence vs. restraint dimension considers extent and
tendency in society to fulfil its desired. Indulgence indicates that society allow relatively
free gratification that are related with enjoying life and having fun. Furthermore, in
Siemens restraint influences that society suppresses gratification of needs and regulates
with social norms (Acs, Szerb and Lloyd, 2017).
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ACTIVITY 4
4. Critically evaluate influence of globalisation on Siemens and other organisations by analysing
key barriers to do business internationally and make recommendations to overcome
In Siemens and Siemens, globalisation leads to increase competition in businesses.
Competition can be related with products and services in which cost and price is associated. In
addition to this, target market, technological adaption, etc. Following are certain influence of
globalisation on Siemens and other organisations: Increased competition: More foreign investment flowing in the countries so that it allow
to Siemens and General electric to enter in market where they operate. Greater awareness: Greater awareness and reactions to customer needs develop so that
consumers is very selective on such essential quality, service and price (Dyllick and
Muff, 2016). Economies of scale: With selling across many continents, business can easily acquire
economies in large scale of production. It helps to make very competitive business. Location flexibility: Furthermore, many modern production techniques and service
provision allocated anywhere. It allows gaining advantages at low cost labour and other
resource charges in the chosen enterprises (Kirton and Trebilcock, 2017).
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Illustration 2: Hofstede cultural dimension in Genral Electric
(Source: What is the Hofstede’s Cultural Dimensions Theory? 2019)

 Increased merger and joint venture: Globalisation also influence because it allowing
access to bigger markets and associated cost advantages. As a result, it helps to Siemens
and General Electric with positive consideration.
Key barriers to do internationally International company structure: Siemens and General electric has aim to compete
globally so that they need to face challenge. One of the main fundamental consideration
is structure of the enterprise and location of team. Effective multinational structure assists
to make diverse global presence (Arvis, Ojala and Kiiski, 2018). The chosen companies
operate in international brand so that structure of the company is affected by structure. Foreign laws and regulations: In order to getting company structure at particular place,
it is essential to follow foreign law and regulations as well. In this regard, it is essential to
understand it to govern target market. With respect to tax implications with trading laws,
legal requirements is central function for successful international business (Brannen,
Piekkari and Tietze, 2017). Therefore, foreign laws and regulations are one of the major
key barriers to operate internationally. International accounting: International accounting is one of the main legal areas which
consider performing functions in international business. Tax compliance is most crucial
aspect so that challenges occurs to multinational enterprise which is liable for corporation
(Baller, Dutta and Lanvin, 2016). Due to different tax systems, rates and compliance
requirements, Siemens and General electric get affected. Cost calculation and global pricing strategy: Setting price for products and services can
present challenges to do business. It is one of the major consideration of strategy where
cost is remained competitive to ensure profits. Cost calculation and global pricing
strategy give benchmark in the business that is essential to ensure appropriate work
(Wood, Logsdon and Davenport, 2015). Currency rates: In order to setting price and payment method, it is major consideration
for currency rate that is fluctuates and more challenging to solve international business
issues. Monitoring exchange rates is central part of strategy in all international enterprises
(Meyer and Peng, 2016). Global economic volatility can helps to make forecasting that is
difficult at unpredictable levels. It is one of the greatest barrier that impact on Siemens
and General electric.
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 Political risks: In international market, political risk is also major aspect that create
impact on emerging market. Considerable opportunities for expansion of global
enterprises that is established with several challenges. Before consideration expansion, it
is essential to solve issues and problems with policies and practices that is problematic in
emerging market (Hitt, Li and Xu, 2016). Growing trend towards economic nationalism
also assists to make current global political landscape towards international businesses.
Recommendations Harnessing local market expertise: Moving into new market requires local knowledge
that assists to operate business in different areas of the world (Cavusgil and Knight,
2015). Providing valuable insight also helps to increase knowledge and understanding of
Siemens and General Electric. Knowledge and practical experience helps to demonstrate
commitment and respect for local culture. Cultivating partnership in the region: Local partnership is good way that helps to build
business and develop international program. In this regard, Siemens and General electric
need to take their business with partnership in particular region. As a result, they can
easily solve international barriers and gain desired outcomes in the business (Lewis,
Gertsakis and Sweatman, 2017). Navigating new legislation: In the global market, there is no secret so that number of
different legislation helps to conduct business. Understanding these laws and regulations
applied in practices in developing success of Siemens and General electric in UK market.
 Managing expectations: Furthermore, it is essential to manage expectations of different
customers so that company can deal with effective aspect. In this regard, it is essential to
communicate more benefits to take appropriate decisions with shareholders. Managing
expectations carefully helps to fundamentally deliver business with long term goals
(Laudon and Traver, 2016).
CONCLUSION
From the above report, it can be concluded that global business environment create
several opportunities to perform several functions in international areas. In this consideration,
effectiveness can be increases to Siemens to perform several functions in different areas of the
world. Furthermore, it summarised about McKinsey model of 7S which includes several
elements and influence to international market. Apart from this, General Electric is one of the
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major competitor which shows Hofstede model of cultural dimensions. At last, it articulated
about barriers to international trade and suggestions to overcome it.
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REFERENCES
Books and Journals
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Baller, S., Dutta, S. and Lanvin, B., 2016. Global information technology report 2016. Geneva:
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Hitt, M.A., Li, D. and Xu, K., 2016. International strategy: From local to global and beyond.
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Kirton, J.J. and Trebilcock, M.J., 2017. Hard choices, soft law: Voluntary standards in global
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Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Lewis, H., Gertsakis, J. and Sweatman, A., 2017. Design+ environment: a global guide to
designing greener goods. Routledge.
Meyer, K.E. and Peng, M.W., 2016. Theoretical foundations of emerging economy business
research. Journal of International Business Studies. 47(1). pp.3-22.
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Pinfield, S., Salter, J. and Bath, P.A., 2016. The “total cost of publication” in a hybrid open‐
access environment: Institutional approaches to funding journal article‐processing
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vom Brocke, J., Zelt, S. and Schmiedel, T., 2016. On the role of context in business process
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Online
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methodology.net/amazon-mckinsey-7s-model-2/>.
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