Global Business Environment Report: Allan Reeder Case Study Analysis

This report provides a comprehensive analysis of the global business environment, focusing on the key factors driving globalization, such as cost, market dynamics, and PESTLE analysis. It examines the strategic complexities that organizations face when operating globally, including international trade laws, environmental impacts, global supply chain management, and economic considerations. The report uses Allan Reeder, a London-based dairy supplier, as a case study to illustrate these concepts, assessing its financial capabilities, market opportunities, and the challenges it faces in expanding its operations internationally, particularly in South Asia and Africa. The analysis covers various aspects of globalization, including the impact on organizational structure, culture, and decision-making, and provides critical evaluations of the challenges and opportunities presented by the global market. The report also discusses specific issues like WTO agreements, environmental concerns, supply chain management, and the impact of economic crises on global business. The report concludes with a strategic overview for Allan Reeder to leverage globalization for business expansion.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Analysing key factors driving globalisation...........................................................................3
Determine the strategic complexities associated with operating in a global environment.....5
Evaluate how operating in a global market influences an organisation’s structure, culture and
functions.................................................................................................................................8
Evaluate the influence of globalisation on organisational decision making and strategy....10
CONCLUSION..............................................................................................................................13
REFERNCES.................................................................................................................................14

INTRODUCTION
Global business environment is a aspect that is related to developing a understanding of
environment of various countries that are part of sovereign countries and consist of factors that
are exogenous for the domestic environment of a organisation (Banka, 2017). It has a impact on
the decision making process, use of resources and capabilities that are part of this external
environment. Present report is based on Allan Reeder that is a one man start up, started in the
year 1971 and they are today London's one of leading suppliers of dairy products. Present report
is based on a brief analysis of the factors that are driving globalisation and determination of
strategic complexities that are related to having operations in global environment. Further there
is discussion of how global market is having influence on the culture, structure & functions of a
organisation.
Analysing key factors driving globalisation
Globalisation is a scenario that is taking place with developments that are taking place
across different parts of the world and this process has been accelerated with the exchange of
culture of between different economies across various countries (Chasdi, 2017). This process is
related to the flow of goods & services, information that takes place and is a exchange process
that gives rise to the concept of globalisation.
The political aspect of globalisation is related with how these process are considered and
can be used to deal with some political issues like sovereignty principle and the increasing effect
of intergovernmental organisation. It also helps in future prospects for global and global flow of
migration, regional governance.

Social dimension of globalisation is related to work & life of people, society and their
families. There are certain issues and concern that are used to understand the effect of
globalisation on working conditions, employment, social protection and income.
Culture aspect of globalisation is related to exploring of cultural flows & intensification
across globe. Globalisation is related to reinvigorating the niche culture and not eliminating it.
Key factors affecting the process of Globalisation:
1) Cost: Cost is a one of the most important aspects that has a impact on the functioning of
a organisation. It can be said that there are some situations where there is consideration of
the available financial resources as while expanding to other different parts of world there
is requirement of adequate financial resources in order to make investments. For
example: In Allan Reeder there is a high cost burden as they are having limited
availability of net assets and high liabilities. So , there in case of present scenario it is not
feasible for Allan Reeder to expand in other countries because of non-availability of
suitable financial resources (Hamilton,and Webster, 2018). But apart from this they
have prospects of forming strategic alliances with other brands of same industry that can
help them in reducing the overall financial burden. Such as their partnership with
Samsara is also a great opportunity that can help them in the process of optimization use
of resources (Globalisation and economic nationalisation in ASIA).
Illustration 1: Financial data of Allan Reeder for year ending
2018
From the above mentioned graph it can be observed that they posses assets worth 7.72
million in year 2019 and net assets are valued at 5.57 million according to data of year 2020.

Their turnover is 33.81 million & the debt equity ratio is valued at 27.87 % that has enhanced
from the year 2017. This financial information indicates that presently Allan Reeder is nor
financial competent enough to expand to other different countries (Stan, 2016).
2) Market:
There is always presence of threat and opportunities in the external environment of the
organisation or the market where they are having their target segment of customers. This part of
the external environment consist of integrating the organisation and improving the process of
communication.
3) PEST Analysis:
Pestle analysis is a tool that is used for the purpose of making a detailed assessment of the
external environment that consist of some specific factors that can have a impact on the
functioning of a Allan Reeder as mentioned below:
Political factors: Political factors are those that are having impact on the organisation and
are part of Political environment of a country (Trad, 2019). In case of Allan Reeder this
organisation is having presence in London so some of the political factors that have to be
considered include political stability, corruption level, trade regulations, pricing regulations and
taxation policies of the country to which they are willing to expand.
Economic: Economic factors are those that are part of economy of a country and consist
of factors like interest rate, inflation rate, savings rate, foreign exchange rate. Further the
prevailing labour cost & economic growth rate has also to be considered in order to understand
the growth prospects in the country to which Allan Reeder is willing to expand themselves (
Pestle analysis of UK, 2017).
Social factors: Social factors are having relation to the culture of society. It includes
class structure, demographics, attitude of people, culture, entrepreneurial spirit that is prevailing
in other countries. All these have to be considered in order to develop a detail overview by Allan
Reeder of the perception and value of future prospective customer (Pestle analysis of UK,
2017).
Technological factors: Technology is changing very fast across different parts of the
world. Technology has complete changes the way organisations are functioning in presently
scenario (Feinman, 2016). There are some technological factors like structure of value chain,

technological diffusion that can impact the functioning of Allan Reeder (Allan Reeder Limited,
2018 ).
Critical analysis:
Above discussed are the factors that are part of extremal environment that have to be
considered by management of Allan Reeder in order to develop a detailed overview of factors
that can help in understand the threats & opportunities that are part of external macro
environment. Economies around the world is changing very fast. This is because of the process
of integration that is interconnectivity & interdependence that has lead to enhancing of power
since past few times. All these factors have a contribution towards creation of a connection
between different driving factors of globalisation (Allan Reeder Limited, 2018 ). Allan Reeder
has to make strategies to deal with the threat of competition, inadequate availability of financial
resources strategically so that they are able to extend to their target countries that is countries of
south Asia and Africa.
Determine the strategic complexities associated with operating in a global environment International trade law is governing the regulation of trading of goods & services by
WTO that is World trade organisation.
WTO agreements: It is the the only global organisation that is dealing in rules of trade
across nations. It is a rule based member driven organisation that was founded in year 1994.
Members of WTO are working towards having commitment to follow all the imposed
restrictions & tariff barriers, non tariff barriers to trade (Lechner, and Boli, 2020). WTO is also
making commitment towards other areas like protection of IPR, areas of trade, agriculture norms,
food safety, subsides and costumers valuation.
GATT: It is applying to trading of goods where members agree to not to make any
discrimination between imported products. They are also making agreements to not impose any
tariffs beyond the negotiation level. It also consist of a general exceptions clause.
TBT applies to different technical regulations and not to make discrimination against
import of various WTO members and imported products. It consist of areas such as trade
restrictiveness & discrimination.
TRIPS applies to enforcement and protection of all Intellectual property rights.
 Environmental impact of globalisation: Globalisation has a fast recanting consequence
on the lifestyle of people. It has lead to more consumption of products and this has a

impact on the ecological lifestyle. There is a significant affect on the external
environment such as moper fuel is being used in transportation , there is landscape
intrusion and noise pollution. Increase in transportation has a strain on all the sources of
non renewable energy like gasoline (Ayhan, 2018). Industrial waste is increasing and oil
has been spilled such in 2010 by British petroleum, chemicals are being dumped in
ground that has led to growth of plants and noxious weeds. All these have lead to a high
negative impact on the process of globalisation.
 Global supply chain: Global supply chain management consist of planning the
functioning of entire supply chain so that there can be optimization of customer service.
It is related to integration of the suppliers network, manufacturers and retail. In case of
Allan Reeder to achieve successful integration it is very important to consider prospects
like information flow (purchasing of orders, notice shipping & invoices), finances
investment, refunds and payments) and last is materials (includes both finished and raw
materials) with the help of coordinating them more effectively. Main challenge for Allan
Reeder so as to deal with supply chain process and focus has to be made towards
maximization of the effectiveness of financial benefits from above analysis it is clear that
they posses limited availability of financial resources. Economies of globalisation: In the past there have been many changes that have
impacted the world economies it consist of Asian financial crisis that occurred in the year
1990. this crisis lead to revealing of inadequacy in regional organisation and there was a
criticism focussing on non legalistic institutionalism for all global organisations. Another
major has been the crisis that took place in the year 2008, it was Linked to the “sub prime
mortgage crisis”. It leads to decline in the per capital income and GDP and was supported
by macro economic indicators like oil consumption, trade, unemployment and industrial
production (Pauwels, 2019). Economy of UK has majorly recovered but still there are
some financial calamites for some countries and they are trying to recover. Allan Reeder
has to make a detailed evaluation of the economic status of these countries before
establishing themselves as these instances have lead to a major effect on the changing
world economies.
 For example: In case of Allan Reeder there can be use of openness of the international
economy so that there can be proper integration among markets. Technological advances

has lead to lowering of transportation cost and communication. Further there has been
lowering of cost of processing of data & information storage (Blanton and Blanton,
2016). This can be used as a economic sources that can be further adopted for the purpose
of achievement of cost effectiveness for implementation of their expansion strategy.
 Further there has been certain strict regulations that has lead to transportation deal with
legislations and acted as a barmier in their process of expansion. Haier is a china's
appliance maker brand has established in UK and is willing to popularise in other parts of
world. International pressure and entry in WTO agreements has forced China to remove
formal barriers for foreign products (Allan Reeder Limited, 2018). Chinese leaders are
using government policies to deal with non tariff barriers for foreign trade. Such as China
national tobacco group is still controlling 90% of tobacco market. They have to deal with
the Punta Del Este declaration for implementation of WHO framework in relation to
Tobacco control.
Critical evaluation:
From the above discussed aspects it can be said that Allan Reeder can take benefits of
three major aspect of globalisation to deal with the challenges because of international trade
restrictions. These includes stabilisation situation of macro economy in present context, second is
the liberalization of process & their is the transitions of market that is taking place in
international economies. Further Allan Reeder can make use of new forms of capitalism and
stages of imperialism in the new era of globalisation (Sovilj, 2019). Another advantage can be
top get their brand patented so that it can help in protecting it from getting imitated for a coming
time period of 20 years.
Evaluate how operating in a global market influences an organisation’s structure, culture and
functions
Culture:
Allan Reeder has a culture that is completely driven by high customer services and high
quality of products. There is following of management and business in their all their transactions
to ensure that there is high quality of products that are being offered to their customers.
Leader:

Allan Reeder as the leader of this organisation is using a participative style of leadership
where all the decision are made after consulting employees across different parts of the
organisation.
Hofstede's model:
It is a cultural model that is having relation to using some solution ideologies for
understand different cultural dimensions of a organizations as mentioned below:
1) Masculinity vs Feminity:
This element is related to responsibility and power to all the female staff members as
compared to all male members of the organization (BATAKA, 2020). In Allan Reeder team
members consist of female and male staff members. They are willing to built up a culture that is
related to giving equal respect to both categories of staff according to their potential and
competence.
2) Power distance:
This aspect is related with the delegation of responsibilities & power in a organization. In
Allan Reeder there is no use of delegation for the purpose of taking major decisions in the
organization. All the decision making power is with Allan Reeder and other four member's who
together constitute the top management of this organization.
3) Individuals vs Collectivism:
This aspects is having relation to one individual taking all major decision of the
organization and collectivism is related to taking group decision (Jacobsen 2018). It is very
important in organization to participate in decision making process so that there can be creativity
and innovation in Allan Reeder.
4) Uncertainty Avoidance:
This factor is related with all conflicts to be solved as soon as they are arsing to make
adequate providing for minimization of risk. Allan Reeder as the sole owner of organizations
makes provisions of all future risk that can arise in their organization such as they have a proper
system of GPS tracking and temperature monitoring. They also have HD Dash cams to have
immediate footage of all incidents and building of a safety program to reduce accidents. There is
also a temperature monitoring system so that 500 dairy products are according to right
temperature storage. All these instances ensure that there is very high uncertainty avoidance
index in Allan Reeder.

McKinsey Seven S model:
It is a tool that is adopted for the purpose of analysis of seven dimensions that are discussed
below: Structure: It is a aspects that is representing way organization has been divided and used
for organization of various functions. There is functional divisional structure where
departments are divided according to specific function such as marketing, finance,
operations, transportation etc. Strategy: It is related to plans that are used for developing a competitive advantage. The
core values are related to providing high quality products to customers. System: It is regarded as the process that has been adopted by a organization, In Allan
Reeder there are own distribution centers from Heathrow airport that is helping them in
serving all the business that consist of coffee shops or restaurants. They posses a system
of high efficiency where Ben the manager of this organization have a high focus on
keeping their overall base of customers very satisfied. Such as they are making regular
field enquirers related with communication of any changes or instant delivery updates so
that if there is any changes in the schedule that can be intimated to customers very fast. Skills: skills are referred to as competence and capabilities to perform various assigned
functions of business. In Allan Reeder there are different individuals who have been
appointed as departmental head so that they are able to perform their assigned
responsibilities in a more effective manner. Staff: In Allan Reeder there are four main petitions that are part of a organization and all
functions have to be managed by the top management team that is two marketing
managers and a managing director. Style: Style is used for representing how a organization is managed by top departments of
the organization. In Allan Reeder there is use of leadership qualities & traits as a
approach by Allan Reeder to effectively communicate the vision to achieve high
customer vale in their overall functioning. Shared values: This is the core aspect that is related to following of all norms and
standards to guide employees & their way of contributing. Leader Allan Reeder plays a
very crucial role in this aspect by making sure that each employee is aware of ultimate
objective that has to be achieved by this organization.

Ethical globalization:
It is a procedure that is related to sharing of information according to goods & services
produced by a organization (Figge, Oebels, and Offermans, 2017). Allan Reeder has made sure
that they are giving adequate consideration to all ethical measures by proximity feature,
temperature monitoring techniques to ensure highest quality measures for their customers,
building up of safety program for their employees are used for ensuring that they are fulfillment
of all their technical responsibility towards all their associated stakeholders.
Sustainable globalization:
sustainable globalisation is a concept that is related with performing all business activities
to maximise the suitability measure of a organisation. In Allan Reeder, this concept is related to
maintaining of a structure at global level that is not posing any harem to external environment
and use of limited availability of resources.
Evaluate the influence of globalisation on organisational decision making and strategy
Decision making is a necessary activity that has to be considered by every leader in a
organisation. In case of Allan Reeder there is a requirement to understand certain important
aspect that can help in the process of decision making getting more effective:
Strategic capabilities: This aspects is having relation with utilisation of the available
resources in most optimum manner. In Allan Reeder there has to be focus on the core values like
high commitment to customer services and offering high quality products whirl they are willing
to be a part of globalisation as a process.
Leadership: There are some leadership capabilities that have to be used by leaders in
organisations to ensure that there is proper assignment of all responsibilities. Allan Reeder
himself as the sole owner of this brand have followed all business and management techniques to
ensure that overall staff has high commitment towards excellence and optimisation of customer
services.
Risk management: Allan Reeder has made sure that they are able to manage all
anticipated risks by having a proper system of communication and timely delivery. They have
proximity features and real time tracking that is helping this brand in operating with more
effectiveness. They have a installed system of temperature monitoring and a safety program for
their drivers that makes use of cameras to support them. They have formed partnership with

Samsara in order to reduce all types of risk of unfortunate incidents but at same time focussing
on keeping their cost low.
Internationalisation Routes:
There are some routes that can be adopted by Allan Reeder in their process of
diversification & expansion to other different countries apart from UK as mentioned below: Licensing: It is a method where organisation can grant a license to any other existing
other new organisation who is interested to establish the brand. In case of Allan Reeder
this method can be used where right a license can be provided by sole owner Allan
Reeder to any existing brand of their target country (Navarro 2020). This method of
internationalisation is suitable enough as it requires very less amount of financial
investment and can be adopted to enter into a new country. Joint ventures: It is also a very popular method that is used by many organisations where
there can be formation of joint ventures with other existing brands which are part of
target country. It is a very effective method that can be used by Allan Reeder to make
collaborations with existing brands of countries other than UK. It will help them in
getting the benefits of existing brand image of the brand as people of a different country
might not trust a new brand very easily and this type of joint ventures can help in getting
mutual benefit for Allan Reeder and the existing brand ( Allan Reeder, 2020). Exporting: This is a method where by a organisation is not willing to establish
themselves by having any physical outlets instead they are just catering them markets by
exporting their products to the target countries. Allan Reeder can use this approach but
there has to be a careful consideration of all international trade policies and legislation of
the target country that have to be complied in detail in order to export their products (
Allan Reeder, 2020).
Barriers to international trade:
Tariff is a tax that is imposed on imports and is collected by federal government. It
consist of duty tariffs and import duties that are related to limiting of overall imports and
increasing revenue.
Quota:

This factor is related with the limit on a certain product type that is being importing in a
particular country. There is effect of tariffs and quotas that can be imported on domestic
producers that arise as a result of foreign competition.
Non tariff barriers:
These consist of quotas, regulations and is related to quality of products that can lead to a
impact on the overall imports (Balli, Pericoliand Pierucci, 2018). One of the most Common non-
tarriff barriers consist of the product standards. For example in UK there is a prohibition on use
of unpasteurised cheese and is a rule made for protection of people's health from America.
From Above made discussion it can be said that in Allan Reeder the organisation can
expand them to countries of south Asia by use of a licensing method such as in country like India
this method can be adopted and license can be provided to any other brand of similar industry so
that they are able to initially develop a trust among Indian consumers and after that if
achievement of success then there can be establishment of a independent outlets.

CONCLUSION
From above discussed information it can be said that external business environment
consist of many different factors that can have a positive and negative impact on the functioning
of organisation. There is a need to make detailed analysis in order to develop a detailed overview
of all threats & opportunities that are part of this external environment. Apart from this there is
always a concept of ethical & sustainable globalisation that has to adopted by organisations.
There must also be use of Hofstede's model and McKinsey's 7s model that can be used for
developing a detailed overview of different aspects of culture of a organization. There are many
routes for internationalization and barriers that have to be taken into consideration to develop a
overview of process of globalization that can be adopted by a organization.

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