Cameco Corporation: Globalization Impact and Strategic Directions

Desklib provides past papers and solved assignments. This report analyzes Cameco's global strategy.

IMPACT AND STRATEGIC DIRECTION

1
TABLE OF CONTENTS
INTRODUCTION............................................................................................................................. 2
LO1 AND LO2................................................................................................................................. 3
GLOBALIZATION......................................................................................................................... 3
DRIVING FACTORS OF GLOBALIZATION.....................................................................................4
IMPACT OF DIGITAL TECHNOLOGY ON GLOBALIZATION...........................................................6
ABOUT CAMECO CORPORATION............................................................................................... 7
PESTLE ANALYSIS OF CAMECO...................................................................................................7
CHALLENGES OF GLOBALIZATION AND STRATEGIC CHALLENGES FOR CAMECO.....................10
RECOMMENDATIONS TO OVERCOME THESE CHALLENGES.....................................................11
LO3 AND LO4............................................................................................................................... 13
STRUCTURE, CULTURE AND GOVERNANCE OF ORGANIZATION..............................................13
MCKINSEY 7S MODEL...............................................................................................................14
HOFSTEDE DIMENSIONS OF CULTURE.....................................................................................15
ETHICAL AND SUSTAINABLE FACTORS TO BE CONSIDERED BY CAMECO.................................17
IMPACT ON DECISION-MAKING PROCESS................................................................................18
ANALYSIS OF STRATEGIC EXPANSION ROUTES........................................................................18
CONCLUSION............................................................................................................................... 20
REFERENCES.................................................................................................................................21

2
TABLE OF FIGURES
Figure 1 FORCES OF GLOBALIZATION.............................................................................................5
Figure 2 PESTLE ANALYSIS..............................................................................................................9
Figure 3 FIVE PILLAR CORPORATE PILLAR STRATEGY...................................................................13
Figure 4 STRUCTURE OF CAMECO................................................................................................14
Figure 5 MCKINSEY 7S MODEL.....................................................................................................15
Figure 6 HOFSTEDE DIMENSIONS OF CULTURE...........................................................................17

3
INTRODUCTION
The global business environment is defined as the environment which differs in different
independent countries and is characterized by the factors which are extrinsic to the home
environment of the organization. The internal and external business environment can have
both positive and negative impact on the decision-making capabilities of the organization.
Therefore, it can be said that the success of any business organization is dependent majorly on
the forces which are arising as a result of the external environment of the organization. This
report has been aimed at analyzing the impact of the organization's strategic capabilities by
using various models such as PESTLE analysis, McKinsey's 7S model and the Hofstede
dimensions of culture among others. this analysis is being performed with reference to the
Comeco corporation.

4
LO1 AND LO2
GLOBALIZATION
The term Globalization is being extensively used for describing the changes in the world
economy and society which have occurred as a result of the increase in cultural and trade
exchange. In reference to the economic context, it represents the effects of trade practices
amongst nations. The globalization makes the product services people and facilities more
accessible to the world. Globalization is used for defining how the people, business and
countries are being interconnected all across the world (Beck, 2018). The various forces such as
transportation, global finances and technology facilitate in crossing the cross traditional
boundaries for people, ideas, goods and services.
The major characteristics of globalization are borderless trade activities, increased adoption to
cultural diversity, connectivity, mobility and also changes in the information technology. The
increase in interaction, interdependence and integration amongst the various people all across
the globe is also referred to as globalization. It is just not related to the trade activities but also
includes the methods which have been adopted across the industries for activities such as
production, delivery and sales of goods and capital across borders (Steger, 2017). By expanding
the business operations on a global level, the firm can seek increase and better finances for its
operations and can also get benefits in terms of technological advancements both in production
and marketing. The availability of low-cost resources such as raw material and labour is also
promoting globalization.
It is also known that globalization has both advantages and disadvantages with itself. It provides
various opportunities to the business organizations for ensuring economic growth and
therefore, improving the quality of work and life of the employees of the nation. Globalization
also has many challenges associated with itself with regards to the environment, economies

5
and the welfare of the workers (Pieterse, 2015). The business aim at shifting or expanding their
business operations among various countries with the objective of taking advantage of lower
labour and material costs in certain countries as compared to the others.
DRIVING FACTORS OF GLOBALIZATION
Globalization is driven by the rapid changes in the world economy along with the new
developments in products and services. Organizations prefer to expand their global markets
and thereby increase the overall sales and profits. The increasing use and adoption of the
communication systems is also a major factor driving globalization. In this technologically
developed scenario, the internet facilitates in distributing the information to the target
audience.
Some of the major factors driving globalization can be as follows:
Figure 1 FORCES OF GLOBALIZATION
Source: Curran and Eckhardt, 2017
ADVANCEMENT OF TECHNOLOGY
The rapid development in information technology and telecommunications has led to an overall
increase in economic activities. The technological advancements have led to the growth of
numerous sectors of the economy all across the globe. The improvements in the
communication network have also helped in the exchange of goods, ideas, resources and

6
services across nations (Curran and Eckhardt, 2017). Thus, it can be said that advanced
technologies have led to the development of economic globalization.
REDUCTION IN CROSS TRADE BARRIERS
In the earlier decades, the countries had imposed trade berries on the movement of services
and goods across the nations. The nations have imposed quotas and tariffs on the import of
goods and services within the country. The business global environment is also largely impacted
by the rapid changes in the regulations imposed on businesses in various countries. These
factors limit the international trade practices (Shareef et al., 2016). The government of several
countries is relieving the trade restrictions imposed on cross border activities. This is influencing
free trade within economies and is contributing towards the increase in the growth rate of the
overall economy.
INCREASE IN CONSUMER DEMAND
The demand from the end consumers of products and services act as a major driving force for
globalization. With the increase in standard of living and the increasing level of income, there is
a gradual increase in the demand of the advanced products by customers. The awareness about
the use of several products is also increasing amongst the different consumer segments
(Gulbrandsen, 2019). This leads the multinational corporation to determine the needs of the
domestic market and also simultaneously work in collaboration with the domestic players to
ensure that the customers are satisfied.
HIGH COMPETITION
The ever-increasing competition is a major driver which is helping to bring in globalization. The
organizations develop new and innovative products with the objective of ensuring that they
gain a competitive advantage within the market. The increasing number of players in the local
market has a huge impact on the level of competition within the market (Abe, 2016). By

7
becoming a global player, the organization can ensure that the local competitors do not have a
major impact on the decision-making process of the business and that they have to compete
only with the global players. Thus, the companies expand their business operations cross
border with the sole objective of expanding their market share in the global market.
IMPACT OF DIGITAL TECHNOLOGY ON GLOBALIZATION
The concept of globalization has gained traction after the rapid advances in technology and the
increasing adoption of digital technology. Advancements in technology have been a major and
a contributing factor which is driving globalization all across the nations. Lack of technological
infrastructure increases the need of the business organizations to expand globally, which
further ensures that the economies of scale are increased for the business organization and
also that the organization reaches a market size which is required for reaching to the breakeven
point. The digital technology has also facilitated trade activities amongst the major players
through the use of e-commerce (Marin, 2017). The business organizations can grow in new
dimensions as they can set up their business and trade despite the geographical boundaries.
The digital technology has also helped in establishing virtual businesses. Thus, it can be said
that digital technology has also to a larger extent facilitated communication amongst the
suppliers and the consumers.
Technological advancements have also ensured that the cost of acquiring raw materials and
other inputs by the organizations and the cost of transportation and communication have been
reduced. The introduction of the concept of patented technology has also gained traction in the
global market (Najam et al., 2016). The organizations which have a patented technology can
easily exploit the foreign market without much competition. The global village has emerged as a
result of digital technology. This has helped in reducing the place and time barriers which might
arise during a transaction. The buyers and sellers can easily convey the information pertaining
to a transaction and can transact in any part of the globe at any given point of time. The
emergence and adoption of digital technologies have also impacted investments.

8
The digital technology initially emerged in the highly developed nations which had higher
purchasing power and higher wage rate for employees. However, gradually this technology is
also widely adopted by the developing countries (Crane and Matten, 2016). These countries
could benefit by use of technology in production along with low wage rates. Despite the many
advantages of digital technology on globalization, its use is also expected to hamper the
employment opportunities existing within the organization.
ABOUT CAMECO CORPORATION
Cameco Corporation was established in the year 1987 and is headquartered in Canada. The
company is majorly involved in production and selling of Uranium worldwide. The operations of
the organization are being conducted majorly in two business segments namely the fuel
services and uranium. Under the uranium segment, the organization is involved in the
exploration and trading for the uranium products (About, 2019). The fuel services segment of
the organization is engaged in the refinement, fabrication and conversion of the uranium
concentrates. The organization also indulges in the sale and purchase of the conversion
services, reactor components and also the fuel bundles. The fuel services and uranium are
being sold to the nuclear utilities.
PESTLE ANALYSIS OF CAMECO
A PESTLE analysis is considered as the most popular technique of analyzing the business
environment of any organization. It aims at analyzing the external factors which are expected to
have an impact on the operations of the organization. Following is the pestle analysis of
Cameco Corporation:

9
Figure 2 PESTLE ANALYSIS
[Source: Moutinho and Phillips, 2018]
POLITICAL FACTORS
Cameco Corporation entered into a partnership with the aboriginal communities. The
organization needs to be prepared for changes in government as it would lead to changes in the
priority of the sector. The organization should enter into collaboration with the pressure
groups and non-government organizations with the objective of ensuring that the community
and corporate goals are fulfilled (Brutschin and Jewell, 2018). However, the collaboration of the
organization with aboriginal’s community had made it difficult to determine the changes in the
pattern of resource allocation by the government.
ECONOMIC FACTORS
The organization is assumed to be largely impacted by the intervention of the government for
formulating and implementing the strategies. Comeco has been largely helped by the
government as the government has increased its investment in developing the core
infrastructure facilities. The liberalization of the trade policies would be beneficial for the
organization for investing in cross border activities (Fukaya, 2017). Also, the organization would
be largely impacted by the changes in the exchange rate and inflation rate.
SOCIAL FACTORS

10
As the education level is high in areas of operation of Cameco Corporation, it can establish its
own research and development unit which would be helpful in ensuring the growth prospects
of the organization in the long run. The organization should focus on understanding the
attitudes and norms of the society so that it can serve its customer in a better manner (Coates,
2018). Also, the organization must not interfere in the health and safety issues, as the cost of
failure would be very high.
TECHNOLOGICAL FACTORS
With the rapid developments in technology, the product life cycle is shortened and thus, the
suppliers are able to make new products very quickly. Therefore, the marketing department
must ensure that a variety of products is promoted and the suppliers remain happy. In the
energy and chemical sector, the technology implemented is still slow and there are very fewer
chances of innovation in the particular sector (Pelizza and Bartels, 2016). Also, if the safeguards
for intellectual property rights are high than the probability of players investing in research and
development would increase substantially.
LEGAL FACTORS
There are numerous legal regulations which need to be followed by Cameo Corporation such as
the environmental laws and regulations, protection of the intellectual property rights, business
laws, health and safety laws and the employment laws within the country ( Cavico et al., 2018).
ENVIRONMENTAL FACTORS
Being in the energy sector, it is very essential for cameo to ensure that its supply chain is highly
flexible. The environmental agencies are conducting regular scrutiny which is increasing the
costs of operations for the organization. The organization can also aim at leveraging renewable
technology.

11
CHALLENGES OF GLOBALIZATION AND STRATEGIC CHALLENGES FOR CAMECO
It has been extensively argued by various industrialists that the expansion of the business
operations globally leads to the generation of unfair trade exchange amongst the smaller and
the larger economies. The multinational corporations have much higher financial leverage and
therefore higher value (Jones and Weder, 2017). These corporations can declare the
advantageous terms of exchange, which further have an impact on the profits and benefits of
the developing nations. The globalization of the business operations also raise questions about
the decreasing food safety, increase in consumerism, unethical labour practices and damage to
the environment among others.
The most widely faced challenge by the multinational corporations is pertaining to the ethical
business activities in areas such as corruption, product safety, labour and regulatory
compliances. In the legally less developed economies, bribing the government officials is a
major problem which has a huge impact in seeking good business terms. It is the need that a
few businessmen indulge in locally accepted practices due to the increased pressure (Bretos
and Marcuello, 2017). The business organizations also face challenges in incorporating the
value chain and corporate structure within the new regions. In the case of cross border
expansions, there is an immense need for developing a strategic business unit and also fulfilling
the huge capital requirements needed for the same.
The business organizations also face huge challenges in developing public relations and the
image of their brand in a new area. The business challenge must be capable enough of incurring
the capital expenditure and localizing the message in the country or geographic area of
expansion. The establishment of the new business organization also requires investments in the
human capital (Gilberthorpe and Hilson, 2016). This means that the organization should find an
individual who is capable of depicting a set of capabilities and strategies such as business
network, language, and culture and management style for ensuring long term organizational
success. Also, different countries have different laws and regulations which govern business