Strategic Challenges in Global Business Environment: CAMECO Report

This report provides a comprehensive analysis of the global business environment, focusing on the case of CAMECO, a South African energy and chemical company. The report begins by analyzing the key factors driving global commerce and trade, including cost, market, environment, and competition, and how these factors influence business expansion. It then evaluates the strategic challenges faced by organizations operating in a global environment, utilizing a PESTLE analysis to examine political, economic, social, technological, environmental, and legal factors. The report assesses the influence of globalization on CAMECO's organizational culture, structure, functions, and governance, and further evaluates the impact of ethics and sustainable globalization on CAMECO's operations. The report also explores decision-making processes in a global context, identifies routes for internationalization, and evaluates the key barriers faced by international businesses, offering recommendations for effective strategies. The report's conclusions highlight the importance of adapting to the global environment and the integration of ethical and sustainable practices for long-term success. This report is a valuable resource for understanding the complexities of global business and provides insights applicable to other companies seeking international expansion.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
TASK 2 ...........................................................................................................................................1
TASK 3............................................................................................................................................1
P3. Evaluating influence of globalization on CAMECO.............................................................1
P4. Evaluating influence of Ethics and Sustainable Globalisation on CAMECO's Functions....3
M3 Impact of factors on decision making in global context.......................................................4
TASK 4............................................................................................................................................4
P5. Different ways in decision making can work effectively in global context..........................4
P6. Routes for internationalisation which organisation can adopt including key barriers...........5
M4. Evaluation of the key barriers of international businesses and recommendations made
thereof..........................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
A business cannot operate in vacuum, it is constituted by underlying environmental
factors that are internal as well as external to the organisation affecting its decisions and
operations directly or indirectly. Global business environment is one which consists of
surroundings present among economies along with factors that may be exogenous to an
organisation's home environment. This report gives a detailed account of global business
environment in the context of CAMECO, an energy and chemical organisation headquartered in
South Africa. Through this, the report aims to look at the key drivers of globalisation, the
strategic challenges related to CAMECO as well as evaluates the influence of globalisation on
CAMECO in terms of culture, functions, structures and governance. Thus, providing appropriate
recommendations for the same.
TASK 1
P1. Analysing key factors of cost, market, environment and competition that drive global
commerce and trade
Global business environment is the overview of various countries where different factors
affect the business in order to expand their business globally. It include various factors
surrounding business environment that affect the operations or decision making process.
Globalization is described as a phenomenon where countries and people interact or integrated
with each other so many things become globalized. Where people comes under the contract and
similarly countries deals with each other under the contract is called globalization. It include that,
countries coming together for the big deal in the economy which make is make international
trade easy.
Driving factors of Globalization:
 Cost:
It is associated opportunity of global scope or economic scale along with this it reflect the
efficiency of different cost. Cost of development of products, manufacturing, sourcing and great
part of the world assure to be important for the global strategies. For the expansion of their
business in the global market, organisation need to reduce their product and then introduce
globally with the help of cost effective strategies. For the successful expansion business need to
introduce their product in the global market which suit the culture and value of that particular
1

country where they wanted to expand. CAMECO's manager have to develop various strategies
that will the organisation to identify the opportunity cost to expand their business globally.
 Market:
Market is the factor that affect the global market because for the globalization organisation need
to identity the market current trends and demand of product. It will help the business to identity
consumer's demand that will be satisfy the organisation through fulfil the requirement. If
company identify the need of market, so it become easy for the business to develop their further
strategies according to it. For the development or growth in the global market, manager of
CAMECO need to analyse market trends, demand of customer related to specific product or
feature and then analyse it. Manager have to develop various strategies regarding their expansion
in global market. For this they have to spend huge amount on their research & development part
for the identification of market and they reach according to each action.
 Environment:
For the expansion of business in the global market, firstly organisation have identify or measure
the trade limit for the expansion in foreign country. Management need to find out the
opportunities and threats for the expansion and then analyse it. After considering business
environment and all factors manager of CAMECO build strategies to increase their profitability
by expanding their business in the global market. Before that manager need to identify or
measure the culture of that country and analysis it whether the expansion is beneficial or not.
 Competition:
With the help of globalization, competition will increase in the sector of retail or manufacturing
business. Rivalry firms also going to entered in global market after seeing the growth in this
market to earn higher revenue. So manager of the CAMECO have to develop various strategies
which make them capable to survive in the market for the long term. Manager develop various
strategies which include lower price policy, unique feature, innovation and use of high
technology. These factors affect the business to increase their demand of product in the global
market which automatically increase the productivity as well as profitability.
It has been concluded that, global business environment affect the business as well as for
the expansion company in the global market for the profitability. Business have to analyse or
identify the factors which affect the most and it is beneficial or not because expansion in foreign
market increase the productivity as well as profitability.
2

TASK 2
P2. Evaluating the complexity of strategic challenges faced by organisations when operating in a
global environment, supported by specific examples
 Political Factors:
It includes government stability, policies, tax policy, labour laws, foreign trade policy etc. these
factors help the CAMECO to identify these factors which affect the productivity as well as
profitability.
 Economic Factors:
This factor affect the organisation as well as it's profitability and it include the economic growth,
inflation, exchange rate, disposable income etc. Manager of CAMECO have to analyse and then
take further decision according to it.
 Social Factors:
It include the attitude or buying behaviour of the customer and it include the growth of
population, career attitude, age discrimination etc. CAMECO have to analyse these factors and
then build strategies according to it which is beneficial for the business and increase profitability
as productivity.
 Technological Factors:
This factor help the organisation to increase their profitability by use of new technology in the
production increase the productivity. Manager of CAMECO use the latest technology to for the
development of product and it will reduce the cost as well as time in the production process.
 Environmental Factors:
It include the climate changes, environmental low, employment legislation etc. It is mandatory
for the organisation follow these legislation. Manager of CAMECO have to ensure that company
follow the all acts and lows related to the business.
 Legal Factors:
It include the Health & Safety, equality in the work place, employees rights etc. It is beneficial
for the employees where organisation have to protect worker's rights. CAMECO follow these
law which increase the employees satisfaction and is affect the production and profitability.
Organisation face the lot of issues when they are going to achieve their vision, mission,
objectives of the business. It will happen because of the inefficient of their strategies because of
that organisation not able to perform their task. Even it will affect the whole operational function
3

of CAMECO. To face issues, manager need to develop various strategies regarding operations,
promotions, selling & distribution etc.
TASK 3
P3. Evaluating influence of globalization on CAMECO
Organisational Culture, Structure, Functions and Governance:
A global organisation is one which is involved in conducting international trade among
various parts of the world (Axelrod and VanDeveer, 2014). In the present case scenario,
CAMECO has proven itself to be a global organisation with its rapidly growing energy and
chemical operations around the world. The company has been successful in expanding its
operations to Mozambique, Canada, Gabon and Australia with a hope to venture into more
countries as soon as possible. Being operative in so many organisations itself has its own
perquisites and shortcomings.
As the business is that of a global level, CAMECO cannot follow a particular set of rules,
work culture or policies and procedures to look after the implementation of its objectives within
the organisation among various economies (Black, Morrison and Gregersen, 2013). This is due
to the fact that Mozambique, Canada, Gabon and Australia, all have different work habits,
cultures as well as environment. Based on such factors, their functional responsibilities also tend
to differ.
In addition to this, the prevalent International Trade Law also plays a crucial part in
moulding the structure of CAMECO like any other global organisation. Cultural, Economic,
Political and Societal Factors are some of the main variables that govern the International Trade
Law (Blok and et.al., 2015). This is due to the fact that such factors are the cause of variations in
attitudes toward work and life, as a whole, that are identified in a given economy. As different
economies have different laws regarding labour, code of conduct, workers' rights and protection
of human as well as animal rights, International Trade Law helps bringing about uniformity
among CAMECO's operations all around the world. This is achieved by ITL by generalizing the
rules to such an extent that help in easy implementation of such policies and procedures all
across the globes in addition to their followed values and ethics. Therefore, one can say that
Globalisation introduced the practice of standardization with the advent of international laws and
4

policies that abide an organisation operating globally to follow a definite code of conduct which
is a basic necessity for any business entity belonging from any part of the world (Buckley, 2014).
Globalisation has also led to the creation of economic interdependence among various
functions internal to the organisation as well as those which are of cross-cultural and
international nature. Economic Interdependence has managed to create economies of scale or
cost-effectiveness for CAMECO. This is due to the fact that the business is primarily based on
energy and chemical operations which require usage of resources that may be available only in
selective areas, hence it becomes important for the business to take care of its costs to extract
resources from such economies and utilise them to their full potential(Crane and Matten, 2016).
Natural Resources are rare to be found, on the other hand, technology has become so advanced
that it has resulted in the promotion of imports and exports among different sovereigns.
CAMECO has harnessed these capabilities provided by both technology as well as opportunities
by establishing itself worldwide in order to provide its customers with best quality chemical and
energy products.
Thus, one can say that globalisation has had a positive influence on CAMECO as far as
its organisational structure, culture and functional capabilities are concerned.
P4. Evaluating influence of Ethics and Sustainable Globalisation on CAMECO's Functions
Ethics are an integral part of any organisation, be it global or domestic. An Ethical
Organisation knows its way around challenges and opportunities in a legal, tactful and
unquestionable manner which can be really helpful in the long-term for the business entity
(Dyllick and Muff, 2016). CAMECO, being a producer of energy and chemical based products,
has to follow a definite code of ethics which help in the proper presentation, accounting as well
as communication of its workings to the internal as well as external stakeholders. It is also
worthy to note that in present case scenario, business ethics are important as any change
occurring in the environment may have far-reaching consequences on the related organisations
(Global, 2014). Thus, it helps in direction of the business based on appropriate solutions
regarding dilemmas and issues faced by businesses such as CAMECO itself. With an ongoing
convergence between ethics and decision-making practices undertaken by the management of
organisations worldwide, companies such as CAMECO are able to take much more better and
informed strategic policies and judgements that help in achievement of CAMECO's goals and
vision to become a global producer. Hence, one can say that Ethics has influenced global
5

businesses such as CAMECO quite affluently so much so that the company's thinking ability as
well as goals are conceived around such principles of ethics.
Sustainable Globalisation is a term that has become quite popular in the present world. It
is a complex yet sustainable process of improvement and development which is achieved by a
business affected by globalisation (Hamilton and Webster, 2018). Since its inception,
Globalisation has led to a rapid increase in the economic growth of businesses and sovereigns
alike leading to the introduction of World Trade, Foreign Direct Investment (FDI) as well as
cross-border expansion. In the context of CAMECO, natural resources are the main source of
their products which are not present in abundance in the environment. These include energy-rich
resources such as Fossil Fuels as well as Chemicals such as Metals and other minerals. Hence, an
extraction of such raw materials would result in an adverse impact on the environment for not
only the business but also for other habitants of the planet. Hence, it is important to ensure that
no imbalance in the nature occurs due to the extraction of such materials by CAMECO (Lasserre,
2017). Here, the most important question that needs to be answered is how to use the resources
extracted and in what manner so as to ensure sustainability as well as conservation of
environment. CAMECO's functions also includes production and conversion of raw materials to
energy and chemical based products. Therefore, the business also needs to ensure that there is no
decrease in the quality as well as productivity of CAMECO. Therefore, just resource distribution
is the key to sustainable globalisation.
M3 Impact of factors on decision making in global context
positive impact for global business is as follow.
 In a global market, Company should need to produce products that can match with the
global standards decided by industry. This help Cameco to develop goodwill for their
business (Lewis and et.al., 2017).
 As day by day when the goodwill of the company increase it also help the company to
make their customer more loyal. This also help them to earn more profits.
Negative impact is as follow.
 When the business expand to other countries the expenses related to their operating
activities should also increased. So Cameco has to face expenses that can reduce profits.
6

TASK 4
P5. Different ways in decision making can work effectively in global context
Organisations that operates its business at global level found difficulties in operating its
business effectively by maintaining coordination among its different departments as well as
branches. Hence, there always remains a requirement of formulating decision in effective manner
so that work can be performed toward the accomplishment of organisational goals. Therefore for
formulating effective business decision CAMECO must focuses toward coordinating with other
branches that are place in different nations (Meyer and Peng, 2016). This help in analysing the
changes that are taken place in global business environment, because the CAMECO is thinking
to expand in several nations so it will get benefited with the information gathered through several
nations about global business practices. This also support in performing proper planning for
operating business effectively. Following are some factors that must be considered while
forming up decisions at global level:-
 Cost of investment:- This is considered top be one of the major factor that must be
considered by CAMECO while formulating decision for global business practices. As
company is required to invest some amount of money to set up its business and start
operating its business activity at international level (Nohria, 2017). Therefore it is the
responsibility of CAMECO's managers to analyse the cost required for establishing
business, fund required for promotional activities etc.
 Risk present:- Before entering into new nation to set up business it is the responsibility of
CAMECO manager that it perform market analysis and then determine several threats
and opportunities that may influence the business operations. So that after determining
the risk factor CAMECO can formulate their policies and strategical decision in a manner
that support in avoiding the risk which may harm organisational practices and image in
marketplace (Saleem, 2015).
 Need & Demand of customers:- It is also one of the crucial factor that have an huge
influence over the decision making process of an organisation. The managers of
CAMECO must try to focus toward determining the need and want of customer at aboard
or potential country in which it want to enter. So that proper decision can be formulate
regarding the target and positioning strategies that support in maximum customer
7

satisfaction which in turn help in achieving sustainability at marketplace (Salvatore,
2015).
 Supply chain and production network:- In order to perform operations effectively at
global level an organisation have to maintain networks through which transactions can be
flow effectively that leads to accomplishment of organisational goal. Hence, while
formulating decisions for global operations, manager of CAMECO must focuses toward
taking decision regarding the maintenance of proper supply chain networks for delivery
of product or services to customers.
P6. Routes for internationalisation which organisation can adopt including key barriers
When any business is trying to expand its business at global level, it must focuses toward
analysing several entry modes and then adopting one which is most suitable that also support in
overcoming barriers associated with business expansion (Shenkar, Luo and Chi, 2014). After
entering into nations like Gabon, Canada, Australia and Mozambique, CAMECO has decided to
expand its business operation in Kazakhstan that has large number of uranium for obtaining
millions of crude oil barrels to export. Hence in order to expand its business in this country there
are several expansion route present from which CAMECO can opt that support it in achieve
higher growth by avoiding risk factors. These entry routes are explained below:
Franchising:-
It is defined as the process where a business setup its branch over several geographical
places which are managed over same management procedures and policies. In this franchisees
have to pay some amount to franchiser in order to take up the permission to use trademark in
order to deliver services. By using Franchising as a option, CAMECO can offer its product or
services within the market by using business format and system. It is most beneficial option as
this can minimise the risk of failure within business. But the major barrier in this is that the cost
of buying franchise is relatively higher then expected and profit earned under the name required
to be shared on percentage basis with franchisor. In order to overcome this CAMECO can keep
the profit margin lower in initial year to avoid loss and profit shares.
Joint Venture:-
Another mode that can be used by CAMECO to enter into global market is joint venture
which is a kind of agreement between two businesses regrading sharing of their resources in
order to attain specific goals. By entering into new market with this strategy, CAMECO will get
8

an opportunity regarding the market access by using resources and workforce of its partner that
remain up to the time till which CAMECO be able to set up its business. But the major
drawback of this is that CAMECO has to work according to its partner in term of operations and
decision that may create disputes among them. In order to avoid this risk CAMECO managers
can held meeting on regular basis and try to focus over taking decision mutually (Zsambok and
Klein, 2014).
Direct export:-
It refer to the process in which product or services are directly delivered to the customer
over several geographical area without having any physical existence over that particular area.
By adopting this strategy to enter into new country CAMECO will be benefited with avoiding
the cost of agent. In addition to this it also help in having direct interaction with customer but the
major drawback of this is that direct marketing requires more money, energy, power and time to
achieve sustainability at marketplace. In order to avoid this risk CAMECO can maintain their
networks with wholesaler as well as retailers of particular country so that their would be ease to
deliver the product or services to customers.
M4. Evaluation of the key barriers of international businesses and recommendations made
thereof
From the above analysation it has been found that joint venture is best method to adopt
for entering in new market for CAMECO as they would get a clear picture about the type of
strategy to be adopt for targetting and delivering services to customers. This help in achieving
success at global market and also in achieving cross-border expansion that would bring
CAMECO one step closer to its vision of becoming a global producer of energy and chemical
based products.
CONCLUSION
From the above discussion, it can be concluded that globalisation is an important
deciding factor for CAMECO in terms of its culture, structure as well as organisational
development in a sustainable manner. Apart from this, the global business environment has a
different set of requirements that need to be filled by an organisation such as CAMECO so as to
bring uniformity among its operations and promote expansion in various countries. Hofstede's
Dimensions as well as PESTLE Analysis are also an important part of Global Business
9

Environment that help in understanding the macro-economic factors of CAMECO as well as
cross-cultural communication of societal values and beliefs.
10