Digital Technology's Impact on Global Business: A Case Study

This report provides a comprehensive analysis of globalization and the significant impact of digital technology on global commerce and trade. It defines globalization, highlights key factors driving it, and delves into the transformative role of digital technology. A critical analysis is presented, incorporating a PESTLE analysis to evaluate the strategic challenges faced by businesses in the global environment. The report offers recommendations to overcome these challenges, emphasizing the importance of aligning with legal systems, training personnel, and monitoring micro factors for opportunities and threat mitigation. Ultimately, the report concludes that globalization is crucial for business expansion and profitability, with PESTLE analysis serving as a vital tool for navigating international markets.

Table of Content
• Introduction
• What is Globalization?
• Key factors to drive global commerce and trade
• Significant impact of digital technology
• Critical analysis
• PESTLE Analysis
• Evaluation of strategic challenges
• Recommendations to overcome the challenges
• Conclusion
• References

Introduction
• Global business environment defines the nature of
international trade business which is evolving in a
significant way which helps in shaping the nature in
changing global commerce (Tasheva and Nielsen, 2020).
• Global business means selling goods and services in
different countries across the globe for gaining more reach
and growth.
• International business gives more scope for expanding
business in new markets which helps in gaining competitive
advantage in different countries.

• Globalisation can be defined as the spread of different products, information, jobs and technology
across national cultures and borders.
• This means free movement of products, people and services of a company in international
markets for more growth and for increasing productivity.
• It enables companies to sell their goods and services in different countries to reach different
segment of customers which also increases the image of the brand in global market.
What is Globalization?

Key factors to drive global commerce and trade
• Globalisation is directed by several gradual and new development changes in the
economy. Many companies choose to expand and grow business operations globally
for large market share and for increasing sale of products and profitability. Some
important forces are described below:
• Technology advancement – It is one of the most important factor which drives
globalisation and helps in growing in different sectors of economies across the world.
New technology and better communication system helps Sasol limited in exchanging
goods and services, ideas, resources easily irrespective of any geographical location.

Key factors to drive global commerce and trade (cont..)
Increase in the demand of consumer – With increase in the living standard and income level, the demand for
different variety of products has increased which helps in improving the sale of company. Sasol limited focus on
increasing the demand of products to create brand image in the international market as consumers are well aware about
the products and services available in different countries.
High competition – Organizations try hard to achieve competitive advantage in the market for achieving success and
growth of the company. Increased competition in the domestic market forces company to operate globally. Sasol faces
competition from several companies and focus on selling good quality products for customers to expand market share
in different countries.
Economies of scale – Due to rise in competition, companies try to reduce the cost so that they achieve economies of
scale in the market. Sasol limited focus on producing similar product in large market to reduce costs and for sustaining
in the competitive market. The company needs to invest large amount of money for promoting products globally.

Significant impact of digital technology
Digital technology is defined as a process of compressing huge
amounts of data and information on small data storage devices which
can be easily transported and preserved. With the advancement in
technology through digitalization has positively affected globalisation
because it increases the speed of transferring data from one place to
another. Technological improvements helps companies to increase their
share of market size and economies of scale in global market. Digital
technology helps in reducing the transportation and communication cost
across different nations and thus assist in sourcing raw materials and
other inputs globally.
.

Critical Analysis
As a consequence of technology advancements, globalisation has been efficiently enabled at a
quick rate. It is amongst the most crucial factors in the globalisation stage. Technological advancements
force organisations to increase its overall economies of scale whereas the significantly generating the share
of the market. Also, by utilising informational technology, all these producers and consumers could easily
construct agreements inside a moment and places that satisfies its respective requirements. This will allow
them to accomplish their tasks more easily and effectively. Programming techniques, internet sites, as well as
software could enable organization divisions raise its functions toward the new stage. As a response,
adopting use of digital technology has now become vital for firms seeking a global edge over its competitors.
It moreover helps them promote innovative thoughts to the individual functional units.

PESTLE Analysis
Sasol is an integrated chemicals and energy based company which
produces oils and fuels, polymers, chemicals, gas and fertilizers
products in the market of South Africa. The company uses pestle
method to identify the impact of different external factors and helps
in taking correct decisions regarding strategic plans. The factors are:
•Political
•Economic
•Social
•Technological
•Legal
•Environmental

An analysis of key driving factors of
globalisation
There are many factors which increase the globalization
where every people can effectively sell and purchase products
and service from one country to another country. In case of
SASOL Ltd, the key driving factors of globalization are
described below:
• Containerisation
• Technological change

Evaluation of strategic challenges
There are many challenges that companies face in international market which affects the
business operations and growth.
• High investment – Expanding business in international markets is quite expensive
for Sasol limited, as the company needs to invest a large amount of resources and money in
designing and applying an effective strategy of globalisation. Because of globalisation the
company has to invest huge amount of time, resources and capital which includes paying
taxes, signing contracts and hiring people.

Recommendations to overcome the challenges
The challenges that various multinational companies are facing and is
affecting growth of the company, so to overcome these challenges it is
recommended that Sasol company must align with the new legal and law
system so that the operations of the business is carried in a smooth and
deliberate manner. It is also been analysed that company needs to train and
recruit people that have strong awareness about both local and global
processes so that company can work efficiency and effectiveness. And is is also
recommended to the company to consistently keep a eye on micro factors that
helps in providing opportunities for expanding in international market and to
reduce the measure of threats which can obstruct the brand image and
profitability.