International Business Strategies: Case Study of CAMECO's Global Reach

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IMPACT AND STRATEGIC
DECISIONS
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Table of Contents
INTRODUCTION............................................................................................................................. 3
LO1.................................................................................................................................................4
KEY FACTORS DRIVING GLOBALISATION....................................................................................4
IMPACT OF DIGITAL TECHNOLOGY UPON GLOBALISATION.......................................................5
LO2.................................................................................................................................................7
PESTLE ANALYSIS OF CAMECO...................................................................................................7
STRATEGIC CHALLENGES IN GLOBALISATION............................................................................9
RECOMMENDATIONS TO OVERCOME CHALLENGES...............................................................10
LO3............................................................................................................................................... 11
EVALUATION FOR THE IMPACT OF GLOBALIZATION ON THE ORGANISATIONZATIONAL
GOVERNANCE, LEADERSHIP, STRUCTURE, CULTURE AND FUNCTIONS...................................11
EVALUATION OF INFLUENCE OF ETHICAL AND SUSTAINABLE GLOBALIZATION ON THE
FUNCTIONING OF ORGANISATION.......................................................................................... 14
LO4............................................................................................................................................... 15
EVALUATION OF DIFFERENT WAYS IN WHICH THE DECISION MAKING CAN WORK
EFFECTIVELY IN GLOBAL CONTEXT...........................................................................................15
DETERMINATION AND ARTICULATION OF THE VARIOUS ROUTES TO INTERNATIONALISATION
AN ORGANISATION MAY ADOPT, INCLUDING KEY BARRIERS..................................................15
CONCLUSION............................................................................................................................... 17
REFERENCES.................................................................................................................................18
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INTRODUCTION
Globalisation implies the free movement of goods, services and personnel from one country to
another. This report will focus on the international expansion plans of CAMECO which is a
South Africa based chemicals manufacturing company. Under the leadership of its new CEO,
the company is registering fast growth. CAMECO has already expanded its operation in Canada,
Australia, Gabon and Mozambique and is planning to expand in other regions of the world. This
report will discuss the basic concept and of globalisation and the challenges to be faced by the
corporations while entering a foreign country. The report will identify the key factors which
drive the globalisation process and how these factors influence the working of the company.
The strategic challenges faced by the company will be analysed by the help of the PESTLE
analysis of CAMECO. Later, the report will also discuss the structure, culture and governance at
the organisation and its impact on the globalisation process.
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LO1
Globalisation is the process unification of work markets, people and companies. With the
emergence of the latest technology in transportation and communication mediums the
companies are expanding at a much faster pace into diverse markets (Lee and Carter, 2011).
Globalisation is not restricted to the economic and financial interaction between countries; it
also involves a social and cultural exchange between nations. The removal of cross border trade
barriers by the companies has also played an important role in the development of global
markets.
KEY FACTORS DRIVING GLOBALISATION
COST
A difference in the cost is the most important factor which is driving the globalisation process.
There is a basic difference in the cost of manpower and raw materials in different counties and
CEMECO wishes to expand in the emerging economies of the work to take benefit of these
situations. Some companies also outsource their work in the countries where the services are
available at a lower cost (Mangan et al., 2016). While expanding in a foreign market CAMECO
has to invest additional resources in the form of transportation and distribution cost but these
expenses are offset by the low-cost labour and raw material available in these countries.
MARKET
The market condition also works as the key driving factor in the globalisation process. With
access to the information from all over the world, the demand patterns of the consumers have
also changed and CAMECO has to create the product offering suitable to meet the changing
demand of the consumers. While making an expansion plan, CAMECO needs to analyse the
detailed market situation of the country and different factors making an impact on the business
of the company so that successful entrance in a foreign market can be ensured (Powers and
Loyka, 2010).
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ENVIRONMENT
The macro environment around the company becomes a reason to drive globalisation. The
external environment of the company comprises of the economic situation in the country,
political situations, social and technological situation. For example, the company where the
political situations are stable and the government of the country welcomes foreign companies
to establish their business units in their country; it creates a positive environment for the
company to expand (Qureshi, 2011). When the economic condition of the country is strong the
people have high disposable income and there is a great opportunity for CAMECO to expand in
such countries and take advantage of favourable trade conditions.
COMPETITION
The competition faced by CAMECO in the home market makes the globalisation process
attractive options. A company struggling in the home market may perform better in a foreign
market where the demand for the products and services offered by the company is higher. The
companies also wish to expand because global companies give tough competition to the local
companies by offering goods and services at lower cost (Aghdaie and Alimardani, 2015). These
multinational companies are able to achieve the economies in scale due to favourable trade
conditions and smaller companies also wish to achieve this economy in scale to ensure their
survival in the market.
IMPACT OF DIGITAL TECHNOLOGY UPON GLOBALISATION
The new technologies in the logistics and the communication systems have facilitated the
globalisation process. CAMECO has a centralised management system in which all the major
policy decisions are taken in the head office and the details are communicated to the country
heads of these organisations. This ease in communication has been possible with the
emergence of digital technologies (Brondoni, 2014). The managers at the head office of
CAMECO can also video call the local managers and can communicate over different issues in
management. Change in consumer choices also needs to introduce the latest technology in the
production process and CAMECO needs to collaborate with the technology companies from
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different countries of the world to develop the required technology and satisfy the current
customer demands.
Improvement in the logistic facilities facilitates international trade and raw materials and
finished goods can be easily transported from one country to another at a lower cost. The
shipments can also be tracked through GPS technology. The improvement in logistics
technology facilitates the movement of raw material which is available at a lower cost in a
country (Bende-Nabende, 2017).
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LO2
PESTLE ANALYSIS OF CAMECO
POLITICAL
CAMECO has to face a number of political factors while starting the business in a foreign
country. The business of CAMECO is associated with the energy and chemical, therefore, the
company may have to face some restrictions from the government and it is necessary to study
the policies and procedures followed by the company in order to conduct the business
successfully in a foreign country (Buchalter, 2012). A variety of administrative clearances are
required by the company while developing the basic infrastructure. The basic infrastructure
may include water, electricity, internet connectivity and other facilities which are required by
the company to run effectively.
ECONOMIC
The economic situation in the country where CAMECO is targeting to expand plays an
important role in its profit-making capability. If the economic situation of the company is stable,
the people will have larger purchasing power which helps in increasing the revenues of the
company. On the other hand, if the company is facing a recession and economic slowdown the
company will find it difficult to earn adequate profits from the business (Ferraro and Briody,
2017). The emerging economies of the world like China and India are continuously developing
and there are great opportunities for CAMECO to take the benefit of this high growth.
SOCIAL
The socio-cultural factors also need to be analysed carefully in order to expand successfully in a
country. The marketing functions of the company are strongly affected by these socio-cultural
factors. While designing the marketing company the local sentiments and cultural taboos need
to be studied deeply so that a strong connection can be made by the customers (Obstfeld,
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2015). The colour design, theme and the language used in the website and other marketing
tools of the company play a key role in creating strong brand awareness.
TECHNOLOGICAL
Technological advancement is an external factor to the company but it has a strong impact on
the operation of CAMECO. The company has to invest its resources in order to use the latest
technology. Using the most advanced technology helps the company reduce the cost of
operation and the customers also experience better quality in the products and services offered
by CAMECO. The company should invest in the research and development activities so that the
latest advancements in the field of energy and chemicals can be adopted (Voegtlin et al., 2012).
In addition, using the latest technology also creates a stronger brand image of the company.
ENVIRONMENTAL
The environmental factors associated with the operations of CAMECO include the impact of
industrial activities on the immediate environment and the impact of natural disasters such as
floods, earthquakes and tsunamis. CAMECO needs to assess all these factors carefully so that
strategies can be made to take a precautionary measure and minimise damage caused (Wild et
al., 2014). The company should also make policies to safely dispose of the harmful chemicals
wastes produced from the factories of the company and make adequate arrangement to
minimise the use of energy in the operations of the company.
LEGAL
The legal factors making an impact on CAMECO are associated with the employment policies in
a country and the rules and regulations by the regulatory authorities. The workers should be
provided with a safe and secure work environment and adequate safety arrangements should
be there to face any emergency situation in the factory (Mangan et al., 2016). The workers
should also be given adequate rests between the works. In addition, during recruitment, every
candidate should be given equal opportunities to get employment and any discrimination based
on the colour, religion, gender or physical disability should be discouraged.
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STRATEGIC CHALLENGES IN GLOBALISATION
To operate in diverse markets CAMECO has to face different situations where the managers
need to think in a strategic way to find the solution for problems. Below mentioned are some of
the strategic challenges faced by CAMECO in the context of globalisation:
HUMAN RESOURCE MANAGEMENT
Managing human resources well is at the core of driving the success of CAMECO. When the
company starts operating in a foreign country it needs to employ the local workforce. Managing
workforce form a different cultural background creates a challenging situation for the
managers. To manage the workforce effectively, the leadership needs to stick to the mission
and vision of the company and try to align the workforce with the long term objectives of the
company (Buchalter, 2012). the leadership should also be empowered with the necessary tools
to succeed in a global environment.
RISK MANAGEMENT
Risk management is associated with the different kinds of challenges which need to be faced by
the company in order to survive in the competitive market. The competitors in the business
may produce a similar product in a lower price range which creates a risk of lost sales and the
company need to plan effectively in such situations (Mangan et al., 2016). The risks are also
associated with the rise in the prices of raw materials which makes an impact on the prices of
the final products offered to the end consumers. All these factors need to be assessed carefully
to ensure effective performance of CAMECO.
MARKETING AND BRANDING
Marketing activities also create a challenging situation for the marketing managers while
working in a global environment, The Company should not rely on using the same
advertisement campaign for all the markets and should prepare a customised advertisement
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for different countries (Bende-Nabende, 2017). The branding of the company can be mixed with
a local touch by using the indigenous language.
CATERING TO DIFFERENT MARKETS
CAMECO should understand that the things which work in the domestic market are not
guaranteed to be successful in some other country also (Buchalter, 2012). The perception and
preferences of the customer need to be analysed deeply to cater to the needs of diverse
markets. Launching similar products in different markets may not work always and there is a
need to develop localized products to satisfy the diverse customer demands.
RECOMMENDATIONS TO OVERCOME CHALLENGES
To overcome the challenges discussed in the report, below mentioned are some suggestions
which can be used by CAMECO to perform better in the international markets:
 The company should use the latest technology in the product, marketing and logistics so
that it can improve the product quality and reduce the cost. The new technology in
communication helps in the smooth operation of the CAMECO in a foreign nation and
can create a better connect with the customer (Buchalter, 2012).
 Before entering a new market, CAMECO should try to understand the social and cultural
peculiarities in a nation and design the marketing plans to address the diverse needs of
the local population. The company can also perform some market research to
underhand customer demand in a particular market.
 The company should also be open to forming any strategic alliances with the local
players. These alliances help the company understand the local preferences better and
use these inputs to improve the quality of products and services offered (Mangan et al.,
2016).
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LO3
EVALUATION FOR THE IMPACT OF GLOBALIZATION ON THE
ORGANISATIONZATIONAL GOVERNANCE, LEADERSHIP, STRUCTURE, CULTURE
AND FUNCTIONS
CAMECO makes sure that the company and its employees take social responsibility and
maintain ethical behaviour. The company ensure fulfilment of high standards in quality, safety,
health and environmental protection with compliance of all the laws and rules that are
necessary to operate its business according to the country in which they are working.
CAMECO provides its employees with the leadership needed to guide and inspire the
employees. The inspiring and guidance ensure long term success of the company and
simultaneously promote the objective of profitability and growth in an ethical manner.
MCKINNEY’S 7 S MODEL
This model was developed by McKinney in 1980s. This model can be used as a tool for strategic
planning in CAMECO. This model focus on the human resource rather than the production of
capital, infrastructure and equipment to improve the performance and efficiency of the
organisation. The model is based on 7 elements of the company: structure strategy, skills, staff,
style, system and shared values, and if all these elements are put together they can help in
improving the performance and efficiency of the company. The model categorises these 7
elements into two categories that are soft Ss and hard S's. Hard s includes strategy, structure,
system and soft s includes style, staff, skills and shared values.
Strategy- the company defines and executes a strategy that helps it to achieve the long term
objectives and which is in alignment with its vision, mission and values. CAMECO has set its
strategy to challenge the market environment. Their aim is to fulfil the long term fundamentals
that are affected by increasing population and growing demand for electricity. Nuclear power is
the source of energy that fulfils the demand of electricity and is safe and reliable without
creating air pollution.
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Structure- this represents the organisational way to define its business divisions and units. The
structure of superiors and subordinates, who is accountable to whom, this structural element is
most easily visible and changeable. CAMECO has a hierarchal structure of governance where
there are CEO and team of board of directors who take the decisions.
Systems- this means defining the policies and rules of the company for its daily functioning and
decision making activities. Systems explain how the business works. CAMECO believes in
following the soul of rules and not the words.
Skills-skills are the abilities of the personnel in the organisation, for the growth and expansion
of a company the skills of employees need to be developed so that they can achieve efficiency.
Staff- this element is focused that how many and what type of employees will be needed by the
organisation. The procedure of CAMECO’s recruitment, training, motivation and rewarding is to
be decided.
Style – means the way the company is managed by the top level managers, how the top level
managers communicate with others in the organisation.
Shared values- this is the core of the Mckinsey 7s model. Shared values mean the rules or the
norms that provide guidance to the employee behaviour and the actions of CAMECO and hence
shared values are the foundation of the company. (Hanafizadeh and Ravasan, 2011).
Hofstede model of cultural dimension
This model is given by Hofstede. This model of cultural dimension states that there are 6
cultural components that affect the working of any organisation. Every company who has its
global presence have to deal with the cultural impact of the respective country (Cateora et al.,
2011). These 6 components are –
Power distance index- Power index represents the hierarchal distribution of power the higher
power distance index the higher centralisation and long hierarchy. The low PDI represents that
in the company superiors and employees are considered as almost equals. As CAMECO is
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