Business Report: Global Environment and Tommy Hilfiger's Strategy

This report provides a comprehensive analysis of the global business environment, focusing on the impact of globalization on Tommy Hilfiger, a prominent American clothing brand. It examines various organizational factors influenced by globalization, including corporate governance, leadership, organizational structure, and organizational culture. The report further explores the influences of ethical and sustainable globalization on organizational functions and uses Lewin's Force Field Model to analyze the driving and restraining forces affecting change within the company. Additionally, it delves into effective decision-making strategies in a global context, addressing key barriers such as language and cultural differences, local competition, communication, tariff barriers, and geographical diversity. The report concludes by outlining different routes to international business, such as franchising and partnerships, that Tommy Hilfiger can adopt to expand its presence in the global market. The analysis highlights the importance of adapting to global standards, understanding cultural nuances, and making strategic decisions to ensure success in the international business landscape.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO3..................................................................................................................................................1
P3 Globalization Impact on Various Organisational Factors......................................................1
P4: Influences of ethical and sustainable globalisation on organisational functions..................3
LO4..................................................................................................................................................5
P5: Different ways decision making can work effectively in a global context...........................5
P6 Routes to International Business:...........................................................................................7
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
The Global environment refers to the broad- gauge environment in which various
countries operates together. It includes a broad range of factors due to which company get
influenced which are working in different time zones, geographic location, understanding of
cultural norms and acclimating to regional nuances. Also, in global world situations can change
quickly due to crisis, political unrest, weather, technological and legislative changes, exchange
rate fluctuations, and inflation.
Tommy Hilfiger is an American clothing brand which manufactures apparels, footwear
and fragrance. It was founded in year 1985, now it has 1400 stores in more than 90 countries. Its
revenue generation is around 6.7 billion. CEO of the firm Daniel Grieder was appointed in year
2014.
This report highlights leadership,structural, cultural influences of globalisation on
Tommy Hilfiger. The impact of sustainable and ethical globalisation and overcoming the same
by appropriate decision making and Internationalisation of business by adopting various routes
and overcoming the hurdles is also being mentioned.
LO3
P3 Globalization Impact on Various Organisational Factors
Globalisation is integration of world's economy and their reliance on each other for
growing their business at global level. It has various impacts on Tommy Hilfiger on the basis of
its culture, structure, policies, strategies, etc(Arvis and et.al., 2018).
Corporate Governance & Leadership: As Globalisation influences the company's governance
mechanism and various other systems such as accounting, marketing, etc. Tommy Hilfiger has to
work and plan in accordance to the comparison of other country's scheme of corporate
governance. They can do this by investigating the parameters institutionally and adopt the
schemes for nourish their business. As the various aspects of governance influence the design the
of governance mechanisms of Tommy Hilfiger in context to its duality, composition of various
products, inbreeding and also effected its market disciplines as now it has to disclose the facts to
each and every country with which it deals for smooth running of business globally. By close
study of different countries leadership and management style, it can lead over the targeted
market as the skills of every country is different in accordance with their beliefs, culture, value,
etc. it would be beneficial if it appoints the person for leadership from its origin only.
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Globalization has a wider impact on the governance strategy as the firm working with the
existing strategy has drawbacks as the global market is increasing day to day. Different approach
must be provided by the leaders which can increase the strategic development of the
organisation. Tommy Hilfiger's strategy must be improved which can help it to grow in wider
context(Delić, Perić and Koprivnjak., 2018).
Organisational Structure: To survive in the global market Tommy Hilfiger has to structure itself
in order to fit in. The management team has to put emphasis on global standardisation and
international responsiveness so that they can lead the targeted market. If the structure of the
organisation is flat, the planning process of any strategy or task along with its decision making
will rests at the same level, that is the whole of the process and functioning remains in the hands
of one level which in result will give non- effective output at global level which will be very
difficult for a company to survive in the global market. But, in case of tall structural organization
that is Tommy Hilfiger, the decision making process is done by the efficient team which is
appointed at the higher level of management. Due to this hierarchy level the planning,
implementing and decision making process becomes easier and more efficient.
Culture & Functions of Organisation: Organisational culture includes the core values,
ideologies, ethics, behaviours, opinion, etc. which follows in the whole organisation including
the employees for meeting the short-term and long-term objectives and goals of the organisation,
it helps in regulating the code of conduct of employees. Organisational culture is the vital and
central work for the leaders of Tommy Hilfiger, and they comply with it, through policies
formulations and implementation of the same. National Culture also influences the culture, as the
new employee enter into an organisation with his own view point, assumptions and values,
which ultimately become the backbone of the organisation by default.(Hamilton and Webster.,
2018).
P4: Influences of ethical and sustainable globalisation on organisational functions.
Globalization can be define as the process which can be undertaken by organization to expand
their business internationally. In this firm needs to rephrase their policies according to the place
or nation. This can help firm in growing and establishing their business in the new market. They
also have to engage in deep market research. In order to expand globally firm needs to have an
idea about the consumer, taste and preferences. This can help them in establishing their business
in global market. It will also help them in building their image in global market. Expanding
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globally needs more amount of capital. Firm needs to make strategies to expand globally. It
supports local communities in creating the best possible future for them, and build human, social,
and financial capital at the local, national, and global levels(Issa and et.al., 2017).
Tommy Hilfiger management's decision making and functions are influenced by this
approach by fulfilling corporate social responsibility, making products accessible to all,
providing opportunity to all stakeholders, clothes are made from materials that are part of
sustainable loop and production facilities are designed to reduce waste, pollution and regenerate
natural system, develop facilities where water, energy and chemicals are sustainably managed,
reduce greenhouse gas emissions, reduce packaging, Operate with sensitivity and planetary
boundaries from where it buys and sells(Miklian and Schouten., 2019).
Applying Lewin's Force Field Model in order to analyse driving force and resisting force
as well as well as influence of ethical and sustainable globalisation in functions of Tommy
Hilfiger and how it influences decision making: In Lewin's model there are forces driving change
and forces restraining it. Where there is equilibrium between the two sets of forces there will be
no change.
Forces for change include:
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Restraining forces (making change harder)
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Tommy Hilfiger can feel force to change if there is requirement to do so and if
management feels to do so but it also has to face resistance to change by the employees and
uncertainties displayed by different stakeholders involved. Decision making should be done
keeping in mind various resistance and force factors to the change. In order for change to occur
the driving force must exceed the restraining force therefore Tommy Hilfiger have to define
driving force in best possible manner and explain it to every stakeholder involved to minimise
the effect of restraining force(Moomal and Masrom., 2015.).
LO4
P5: Different ways decision making can work effectively in a global context
Decision making is an important task performed by top management for a firm's future &
the risk doubles when decision is to be taken with global context. There are various factors
which affects effective decision making with global context- time zones, languages, cultural
norms world crisis, political unrest, weather, technological and legislative changes, exchange
rate fluctuations inflation etc. These all are to be kept in mind by management of Tommy
Hilfiger. Key barriers and the ways through which decision-making can be done to overcome
these barriers are:
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Illustration 1: lewin's force field model
(Source:Lewin's Force Field Model (Change
Management).2018)

Language and cultural difference: Language barrier can be faced by organization who are
going to expand their business internationally. This is the most common barrier which has been
faced by firm. The firm can get above these challenges such challenge Tommy Hilfiger can
have a team of employees who are from any country which meeting is held and can recruit local
employees in the country it is operating. It can also hire experts which are fluent in writing and
understanding different languages for effective operations in foreign market(Nacu and
Avasilcăi., 2014).
Local competition: One of the other challenge which can also be faced by organization who are
expanding locally is local competition. They have to make strategies which should include deep
market research relating to the strategies made by the local company. In this way company can
establish its market share in new local market. However Tommy Hilfiger can work on constant
improvements on their products & can try to improvise by adding new designs and employ
proper marketing strategies keeping in mind taste and preferences of target audience in different
countries(Oetzel and Miklian., 2017).
Communication and Technology: Tommy Hilfiger also needs to develop new technology and
various communication strategies that can help them in establishing their market. This can help
them in growing. They can make use of various communication strategies that can assist the firm
in establishing their market share. & communication between different departments should be
made strong for quick and effective decision-making(Peng., 2016).
Tariff Barriers and Administrative Policies :Tariff barriers are taxes and duties imposed on
imports, bureaucratic rules and administrative procedures restricts operations globally. The
various organizations who are expanding globally can also face barriers like tariff and trade
barriers. They need to develop strategies in accordance with the tariff policies which has been
formed by the government. This can help Tommy Hilfiger in growing and increase their profit
share in market. This can also help them in attracting new consumers and customers. & should
fulfil corporate social responsibility along with providing employment in host country to
maintain good relations with government to avoid negative impact in countries in which they are
operating.
Considerable Diversities: There are various cultural diversity and culture which pose special
problems for international marketers. For establishing business in international market Tommy
Hilfiger have to deal with global level of consumers. They need to understand that the different
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people have different needs, taste and preferences. Also while expanding business firm needs to
have an idea of the culture, values, attitude and thoughts which are followed by people living in
that area. This can support Tommy Hilfiger in establishing their market share and growing.
(Qiang., 2017).
Geographical diversity and exchange rates: Trade in foreign countries at far distance itself
practically difficult. Exporting and importing products via sea route and making arrangements
for effective selling involves more time and risk. Tommy Hilfiger can segment and select
international markets carefully and then take decisions regarding exporting or producing in
foreign countries. Every nation has its currency that is to be exchanged with currencies of other
nations & these are traded every day and rates are subject to change. In case of extraordinary and
unexpected moves in currency, exchange rates between two courtiers create serious settlement
problems therefore Tommy Hilfiger can choose market keeping in mind performance of the
currency(Rothlauf., 2014.).
P6 Routes to International Business:
For expanding the business environment Tommy Hilfiger needs to focus on following
key points which will help the firm in establishment of company in the international business.
Franchising:
Franchising refers to the selling a brand name to the outer market which can help the
brand to expand in the global context. A brand must have a familiar name in the market which
will help the brand to establish easily. The one who buys franchise needs to pay certain amount
to the owner and shares certain amount of profit with the owner.
There may be barriers which will affect the franchising like certain government norms of
international agencies which do not allow for safe and secure expansion(Seck., 2016).
Partnership:
Partnership refers to the pairing up with the other market personnels which can help
Tommy Hilfiger to raise the standard bar with the help of other in international market and
sharing profits with the partner. Partnership is safest as it can affect directly the other person
therefore they might give equal support in running up of business.
Barriers to partnership can be variations in exchange rates as the other person might be
gaining more of profit in global context.
Join Ventures:
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Join ventures can be expanding hands with the other brands to sell both the brands
product in international market this can help Tommy Hilfiger to expand a brand name in the
international business environment. This can adjust the profit sharing of 50% with the business
partners.
Barrier to join ventures can be the norms which can vary in the working conditions in
international business and the norms and regulations which are already exists in the existing
firm(SHAH., 2015).
Online Business:
Online business can help the organization to establish in a international context it is safe
and easy to achieve platform where Tommy Hilfiger is not reliable on any other for the business
expansion it gives a direct approach to the clients and help in understanding better.
Barriers to online business is the brand name if the irrelevant product is delivered brand
image gets affected.
Buying a Company:
Studying international market and establishing a firm in other market by stratergesing is
an easy way a company can enter an international market, with the help of brand name and brand
image it is easier for Tommy Hilfiger to open a new outlet in the new market which can bring
out the sale and increase the market image of the brand. This is the easiest way to enter a new
market(Sirin., 2017).
Barriers can be in laws and regulation imposed by the local government and to meet the
demands of the local market. By seeking the demands of the local customers firm needs to know
the demands of people. Local market will oppose and can the hinder the performance of the firm.
Relative barriers to the organization are:
Natural Barriers:
These are physical or cultural barriers. Which can affect the performance of the firm.
Natural barriers like language, culture etc. which can affect the growth of the company. this can
resist the organization to grow in further context. Natural barrier can affect in trade practices ,
irrelevant communication, cultural barriers can affect the working environment of the firm.
Taxation Barrier:
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These are tax imposed by the country on the import of goods from different country, rate
of taxes may vary from country to country as every country has different taxation policies. These
barriers can affect Tommy Hilfiger to extent their hands in the market(Yoon., 2018).
Trade Barriers:
Non Tariff Barriers are the barriers which are imposed by country to limit the import this
is done on a legal note to have a clear trade practice. This also limits the amount of the goods
which can be imported in the country ex- America restricted the textile trade practices which can
increase the local trade.
CONCLUSION
From the above study it can be concluded that globalisation plays an important role in the
mechanism of the company. By evaluating the international market the company can avail
strategies which help them to grow their substantiality in the foreign market. With the effective
use of different routes business can be easily expanded to the other countries. By designing
adaptive and dynamic management company can grow effectively and attain the huge profit
margins among the other rivals.
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