Global Business Environment Analysis: A Case Study of BMW Company

This report provides a comprehensive analysis of BMW's global business environment. It begins with an introduction to the global business environment, highlighting the key factors of cost, market, and competition that drive global commercial trade. The report then delves into the strategic challenges faced by companies operating globally, emphasizing customer expectations and financial considerations. It further explores the impact of globalization on organizational functions, culture, structure, and governance, including the importance of ethical and sustainable practices. The report examines decision-making processes in global companies and various routes of internationalization. The analysis includes factors such as competition, cost, market conditions, and environmental considerations, offering insights into the complexities of international business operations. The report uses the BMW case study to illustrate the application of these concepts, providing a practical understanding of global business strategies.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key factors of cost market and competitions which drive global commercial trade .......1
P2 Complexity of strategic challenges faced by companies during operate in global
environment............................................................................................................................3
TASK 2............................................................................................................................................5
P3 Impact of globalisation on organisational function, culture, structure and governance. . .5
P4 impact on sustainable and ethical globalisation on companies functions.........................5
TASK 4............................................................................................................................................6
P5 Decision making process of global companies.................................................................6
P6 Different routes of internationalisation ............................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment consist various internal and external factors which influences decision
making and operations of companies. These elements arises many challenges and opportunities
for organisations in context with social, political and economical terms. Similarly, global
business environment refers to place where small and big enterprises sell their commodities at
same place (Wetherly, 2014). This process arise competition in these firms in order to gain large
number of customers. Globalisation leads a company to sell or buy their commodities at
international market. Competition at global market as compared to domestic countries is more.
Therefore, managers need to analyse needs and demands of international market before
launching business at global level. With this assistance, a project has made on BMW Company
of UK. It produces cars and motorcycles in many countries. This firm seeks to expand its
business operations in international market so, its managers are required to analyse all major
factors of environment.
TASK 1
P1 Key factors of cost market and competitions which drive global commercial trade
Globalisation helps in removing barriers between two territorial regions which assist
companies to earn high productivity and proficiency. Through international market, enterprises
can sell or purchase their goods or services easily in other countries which helps in improving
sales performance as well. The major factors which impact on business of firms are needed to
understand by management of organisations (Wild, Wild and Han, 2014). These elements
include cost, market, competition, rules and regulations therefore; manager of companies
identifies these factors in order to control them. This would help in operating business activities
in a proper manner at global level. With this assistance, management of BMW Company has
evaluated that this firm fails to earn high return of investment. So, to improve its sales
performance they have decided to expand business at global level. In order to conduct business at
international level, its employers are required to formulate some effective strategies and policies
which help in conducting business in an appropriate manner. Furthermore, they have to analyse
following factors also:-
Competition: Launching business at global level gives many opportunities to companies. It
helps in conducting operation at large level. Therefore, today all enterprises whether big or
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small, want to take their business at international level. This would raise competition in
industries which are dealing in same sectors. Thus, in order to gain competition management of
companies used to formulate different strategies and policies which help in gaining competitive
advancement. In context with BMW, to expand business at global level it has made a joint
venture with Rolls Royce Plc. It helps in improving production better as well. Apart from this,
for gaining competition from rivals, an organisation needs to analyse factors like product
differentiation also. This process aid firms to manufacture wide range of products which are
different in terms of technologies used in. Along with this, they are required to adopt latest
technologies in operations which also proves beneficial to enhance production. Managers should
use special techniques to promote products or services in international and national markets.
Marketing techniques helps in attracting large number of clients also. Henceforth, globalisation
also reduces circumstances of trade barriers.
Cost: This factor of globalisation is also as important as other ones. So, mangers are
required to examine cost in an appropriate way. Operating business at international level help
companies to purchase resources like labours, raw materials and more easily as well as low cost.
Along with this, to gain large number of customers, firms like BMW are required to offer their
products on different rates according to economical condition of marketplace of those countries
where it sells commodities. Along with this, investment return rate is also a cost related term
which creates large impact on price of goods or services (Voegtlin, Patzer and Scherer, 2012).
When BMW faced economical crises like bankruptcy then its management has decides to launch
business in other countries. Furthermore, this firm has joined hands of foreign companies like
Chinese manufacturer Great wall Motor, Rolls Royce Plc and more. This process has helped
BMW to come over from economical crises as well as it gets much fund by joint venture.
Market: In order to globalise business, employers of a firm are required to determine
condition of marketplace where they want to launch their companies. Good economical situation,
high purchasing power of people as well as large number of competitors present at same
marketplace assist organisations to conduct business activities in a wide manner. Such type of
procedure improves revenues of this firm as well as business of BMW has become able to gain
sustainability at marketplace. Along with this, it also helps in selling or buying goods and
services to customers who are living at different places. Therefore, management of this firm has
identified all these factors before carrying out business operations at global level. But
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globalisation includes much risk factor also, sometimes companies fail to gain return on
investment. Understanding nature of market aid firms to formulate strategies and policies
accordingly which assist them to take more advantage in an efficient manner. Apart from this,
superiors of industries are required to analyse needs and demand of each clients of domestic area
as well as international one in order to gain their satisfaction (Solomon and et. al., 2014). This
identification aids them to fulfil requirement of each individual as well.
Environment: To open business at international level, employers of a firms need to concern
on welfare of environment too this is also the major key factor in such procedure. It enables them
in improvising corporate social responsibility (CSR) with stakeholders of companies in which
such companies are conducting their businesses. This process makes them to become social
responsible which helps in utilising resources properly and gain profitability in an appropriate
manner. CSR activities are generally used to integrate objectives of economic, social and
environment with operations and productions of company. Along with this, such procedure helps
in reducing high turnover of employees also. Managers of enterprises should concern on rules
and regulations of host and foreign countries too. Political factors also impact on business
operations of organisations. These factors act as barriers in trading and commerce therefore;
employers are requisite to concern on legislations and compliance their business accordingly.
Furthermore, using techniques like PESTLE/PEST, Porter's five forces and SWOT are used to
analyse all factors which helps in carrying business of a company at international level in a
profitable and legal way.
Henceforth, managers, leaders and superiors of BMW cooperates each other to make an
analysis of all key factors that lead this business to next level (Simic and Dimitrijevic, 2012).
Evaluation on impact of globalisation on business helps in formulating strategies and policies in
an efficient manner. Along with this, they are required to use effective marketing techniques in
order to promote business in all associated countries.
P2 Complexity of strategic challenges faced by companies during operate in global environment
In today’s competitive world, every kind of organisations seek to move on one step
forward from rivalries. In order to achieve this goal, they take their business at international level
by implementing latest technologies. Along with this, managers of these reputed companies like
BMW adopt effective managerial skills and leadership qualities in order to influence workers
towards achievement of goals. They put their effort into production of high quality of products
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and services as well as make necessary changes according to requirement of marketplace. This
process helps in enhancing productivity as well as profitability of a firm by increasing its sales
performance at international market. Therefore, globalisation not only improves condition of
business of a company but also increase country’s economy (Savrul, Incekara and Sener, 2014).
Apart from this, due to large impact of economy, government of such territorial regions make
flexible taxations and removes some trade barriers also which helps companies to gain large
number of national and international clients. Regulatory bodies give their support in promoting
import-export trade commerce which will prove beneficial in creating effective relationship
between countries as well.
Furthermore, in order to advertise business products and sell or purchase commodities,
enterprises use various applications of internet. It aid them to do business online through
customers can get complete information about products of companies as well as can order online.
Therefore, BMW has considered launching its business in other countries like German and India.
Because these countries have mixed economy in which trade barriers are much less as compared
to other regions. Along with this, India has diverse culture due to which interest of each society
has different. It proves beneficial to foreign companies to take their business over there and sell
their commodities in a profitable manner.
Organisations have faced many problems along with various benefits while operating
business in international market which can be explained as:
Customer expectations: It is the major factor that required to manager of a firm to
consider much. They need to identify desired and expectations of customers first while operating
business at global level (Ramamurti, 2012). Generally, when people buy goods and services of
international products then their expectations become much high. Therefore, completing
requirement of them as well as getting satisfaction is a major challenge for such companies. In
context with, BMW its each product is of high quality. Thus, its management has got much
success in getting high satisfaction of customers.
Cost: Capital is an essential and most important factor of company. Employers and
superiors of enterprises should consider on financial situation of business first. They are required
to plan strategies like how much ample of amount organisation is required to carry out business
at global level. Along with this, superiors need to raise funds from various sources which aid in
making business globalise in a proper manner.
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TASK 2
P3 Impact of globalisation on organisational function, culture, structure and governance
Companies governance is a type of process done by managers and leaders in order to
control all associated functions in an accurate manner (Lee, Olson and Trimi, 2012). While
operating business at global level, superiors, employers and stakeholders as well as employees
too much affected by change management. Thus, companies need to concern on managing the
same. Structure and organisational culture are also impact much by globalisation in negative and
positive way both. When a global takes its business at international level, then to carry all
functions accurately managers are required to make necessary modifications. It includes changes
in organisational culture by introducing diversities, new technology and more. This process helps
in performing new activities in a profitable manner.
Along with this, managers need to provide proper direction to employees as well as
necessary training to them. This would help in enhancing skills and knowledge of workers so
that they can perform in a required manner. Therefore, BMW Company has recruit new
engineers and managers in various departments. This would help in improving production and
making good variety of products to sell in international market.
P4 impact on sustainable and ethical globalisation on companies functions
Ethics meaning is defined as values as well as norms which are associated with
corporation on which organisation's management personnel have to review strongly. Hence,
company have to adopt adequately all values as well as ethics in corporation at such point when
they start dealing at a globalised leve (Zhang and Huang, 2012). Hence, managers are suppose
to make every ethical of organisation within nature so that effective and better working could be
enhanced. Because of globalised marketing lead to raise numbers of marketplace segments
which deal with different ethical issues.
Ethics have to be followed by BMW in an effective way. As this firm's practices get
affected. For developing an image and goodwill in front of clients, management require to
formulate as well as adopt proper techniques so that it can improve better functionality.
Globalization is sustaining when an company effectively raise effective market share for which
they can beat a market effectively. BMW has to taken into consideration both globalization in
effective manner. So that they would be able to deal at a marketplace appropriately. Effect of
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sustainable and ethical globalisation made a vital impact on the operations of company which are
very fruit for appropriate work pattern.
TASK 4
P5 Decision making process of global companies
Decision making is the toughest task of a company. Managers take entire responsibilities of
a company in order to make judgement for affiliation (Laudon and Laudon, 2015). Their
decisions are impact on functions of whole working system and performance of organisation. In
a company there are numerous things are happened in which managers have to make decisions
like how this process will be going on. Along with this, they are required to keep in mind some
main things that are interest of stakeholders, participation of whole employees and performance
of system while making decisions. However, in a firm decisions can be classified on the basis of
problems occurred in the enterprise that is structured which occur on daily basis and unstructured
that cause when firm carry its operations on another level. These can be elaborated as:-
Programmed decision making: In an organisation, programmed decisions are taken to solve
structured or standard operating problems at low level. Managers used to take decision only one
time when the program is created (Kasemsap, 2014). It includes decision in resolving frequently
occur situations as well as problems obtain at regular basis.
Non-programmed decision making: These decisions are unique and generally ill-structured.
Therefore, these processes are needed to be handled by judgement and logical techniques. Non-
programmed decisions include circumstances of high risk and many uncertainties thus, these are
used when to solve unstructured problems.
Globalisation is an important procedure in which management of a company requires to take
non-programmed judgement. Such decision process helps managers to take initiate actions in
business which improves entire activities in an efficient manner. Along with this, it enhances
profitability of companies also as well as maintains their position at international marketplace for
longer period of time.
P6 Different routes of internationalisation
In order to enter into international market, employer of a company must consider the
importance of globalisation (Ferraro and Briody, 2013). It is a procedure that mainly used to
carry out operational activities in a wide manner. Along with this, it makes owners able to
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generate more profits as well as increase market share. Through this process, managers of a
company get success to achieve set goals in a limited period of time. Globalisation helps firms to
take better competitive advantage benefits from rivals. As discussed earlier, apart from many
benefits this process includes much risk factor also. Therefore, superiors of organisations like
BMW need to consider this element also while planning to take business in abroad. To reduce
risks, managers need to focus on production level; they should introduce latest technologies in it.
New techniques help them to produce more effective and innovative products in order to gain
high satisfaction of customers.
Business developer of BMW Company is going to expand its organisation in more
countries now. Therefore, they need to focus on the major routes of internationalisation. It helps
them to merge with other foreign companies of same field so that they can gain enough capital to
generate best quality of products like cars and bikes (Black, Morrison and Gregersen, 2013).
Taking considerations on various ways of globalisation aid companies to opt best one out of
these. With this assistance, some challenges and opportunities faced while constructing a firm
internationally stated as beneath:-
1. The main factor needs to consider by owners of companies is capital. In order to
accomplish their set targets and goals, managers are required to arrange proper finance.
Along with this, they should opt best techniques which help in utilising available
resources like manpower, raw materials and more in an appropriate manner.
2. Employers of BMW are needed to develop diversities in organisational culture. HR
managers should recruit best engineers, expert and high qualified employees so that they
can work in an effective way. Furthermore, managers should provide them special
training through they can gain abilities and knowledge to work on international level.
3. In order to open outlets in international marketplace, firms like BMW adopt latest
technologies. This process helps in carrying out operations in an adequate way.
Furthermore, using such technologies aid employees and employers to accomplish
difficult task easily (Alqahtani and Saba, 2013). This procedure assists companies to
manufacture products high innovative superior needs to utilize those methodologies
which help them to motivate effective working at workplace.
4. Changes in political rules and taxes are considered as a barrier in international trade and
commerce. Instable government policies create many problems and challenges in
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conducting business operations properly. Henceforth, management of BMW has
conducted many operations in order to find out and examine political rules of countries
where it has expanded business globally is much stable. Due to stable government of
German, this firm has conducted its business over there because in an easy and effective
way.
CONCLUSION
From this discussion on globalisation, it has concluded that business environment at
international level is termed as component which impacts on operations of firms in a large
manner. By taking business at global level, a company can generate high revenues. For this
process, a firm requires to adopt effective management techniques. These managerial techniques
assist in analysing business needs properly as well as key factors which impact on operations of
firms in a large manner. Along with this, it has also evaluated from this report that in order to
gain competitive advancement industries are required to develop strategies, high leadership
qualities and effective techniques in production and operations.
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REFERENCES
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