Globalisation: Strategic Challenges for SASOL in a Global Market

This report provides a comprehensive analysis of the global business environment, focusing on the concept of globalisation, its driving factors such as containerisation and technological change, and the impact of digital technology. The report uses Sasol Limited as a case study, examining its operations in 33 countries and the strategic complexities it faces. A PESTLE analysis is conducted to evaluate the political, economic, social, technological, environmental, and legal factors affecting Sasol's business in Angola. The challenges of globalisation, including legal and regulatory structures and foreign worker exploitation, are discussed, followed by recommendations for strategic improvements. The report concludes by emphasizing the importance of understanding the global business environment and offers insights for businesses operating internationally, with references to relevant literature.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
An introduction to the concept of globalisation..........................................................................1
Driving factors of globalisation..................................................................................................1
Impact of digital technology upon globalisation. .......................................................................2
PESTLE analysis ........................................................................................................................2
Examine the challenges of globalisation and the strategic challenges........................................3
Recommendations.......................................................................................................................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Global business environment is defined as the environment in different countries along
with the factors which are completely different from home country of a organisation (Kokodey,
Gnezdova, and Lomachenko, 2018) . These factors can not be control by the organisation but
influence its profitability, performance and growth. This report if based on the Sasol limited
which is an integrated energy and chemical company in Sandton, South Africa. This report
includes concept of globalisation along with its key factors and various strategic complexity
associated with operations in global environment.
MAIN BODY
An introduction to the concept of globalisation.
Globalisation is refers to the process of integration and interacting between peoples
companies ans government across the world. It has been associated with the increasing
interdependence of economy across the world with culture and population. Along with this, it
brought cross broader mobilisation of goods and services, technology along with flow of
information and investment the worldwide. Countries has been concentrating on building
paterniship between economies in order to facilitate movements over many countries (Belyaeva,
2018) . The affects of the globalisation are complex but majoe technological advances provides
various advantages as whole through globalization. Developing countries also provides benefits
through globalization as through this they tend to be more cost effective and attract jobs. Sasol
limited is operating in 33 counties along with 30,100 employees worldwide. Through which it
has increase its efficiency and gain a competitive edge.
Driving factors of globalisation.
There are various factors which have been support in the success of globalisation , some of the
drivers are explained below:
Containerisation: This is refers to a system of standardise transport which utilised same
size of steel containers to transport goods. These can easily be transferred through any modes of
transport. Ocean shipping cost has been reduced due to containerisation and manufacturing
country come closer to markets for exports through which market becomes contestable globally.
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Technological change: technological advances has been reduce the cost for transmitting
and communication information. This is one of the key driver behind the trade of goods and
services through the usage of web technology.
Tax rates: every business desires for the lower unit of labour cost along with favourable
manufacturing factors. Because of this countries encourages to adjust their tax system so that
foreign direct investment will be attract and influence country's economy.
Impact of digital technology upon globalisation.
Technology is refers to a key force in business globalisation as this has rotate global
economy and stand as strong competitive strategy. Technological development benefits business
enterprise to become global through enhancing economies scale and the market size that is
needed to break even (Bhagra, and Sharma, 2018). This factors reduces cost of transportations
and communication across the national broader along with facilitate global sourcing of raw
material and inputs. In addition to this, patented technology has encouraged globalization as the
company which is owning the patent can explore foreign markets without much competition.
World wide web support in reducing barriers of time and place while doing business dealings
and trade as now buyer and sellers can make deal and trade at any time and at any place across
the globe.
PESTLE analysis
Pestle analysis refers to evaluation of external or macro environment that have a direct impact on
the companies performance. This has been discussed below in context to sasol limited company.
Factors Explanation
Political factors Political factors plays an significant role in the determining the various
factors that have impact on its profitability and growth (Wei, Thurasamy, .
and Popa, 2018). In the context of Sasol, company wants to expand its
market in the Angola, the political environment of the country is stable and
it could be an opportunity for the Sasol to invest in this country. However,
for the energy and chemical industry there are various barriers of
government that could become threat for the company.
Economical
factors
Economy of Angola is fastest developing economy country, and this could
be an opportunity for the business of Sasol, to expand its market in
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developing country. GDP growth of the company is also increasing rapidly
and it could help in better profitability and growth of the company.
Social factors In Angola there are different culture and sub culture of people in the
country that have an impact on the strategies and decision making process
of the company. This could be an threat for the Sasol to expand its market
in Angola.
Technological
factors
In Angola there are lack of technology advancement this could be an threat
for the company to expand its market with energy and chemical industry.
Environmental
factors
In Angola there are various rules and regulation in order to protect the
environment of the country. To follow all the rules and regulation in energy
and chemical industry could be difficult for Sasol.
Legal factors Company is well established and growing and it could be an opportunity
for Sasol to deal all rules and regulation of government in order expand its
business.
Examine the challenges of globalisation and the strategic challenges.
Legal and regulatory structure: every country is consist of the different laws and
regulations for governing business. This is biggest challenge that a Sasol company has faced as
this is an energy and chemical based company which need to follow various rules and laws and
need to change their policies and operations as per the foreign country's law (Dunn, and Jensen,
2018). That results in disruption in the business operations and function that could impact the
performance and profitability.
Foreign workers exploitation: lower cost has provide benefits to the consumers but
along with this, it leads to the tough competition as many firms search for cheap labour sources.
This was the challenge that a Sasol company is facing while globalizing its business operations,
higher competition has impact on the company's profitability and sustainability.
Recommendations
As per the above discussion, there are various challenges which Sasol company is facing
in globalisation, such legal and regularity structure for that a company need to recruit a
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experienced analytics that can study and analyse the legal and regulatory climate for their
industry before entering into new market. In addition to this, Sasol will face many challenges
while operating Angola as this is not a developed country, for this this company should conduct
research on a constant basis and examine the environment properly and made the strategies
accordingly so that threat can be transform into the opportunities. Along with this, Sasol can
provides better incentives and facilities to employees in order to attracted skilled workers for the
better productivity.
CONCLUSION
As per the above analysis it has been concluded that, global business environment is
refers to the process by organisation start operating on international scale. There are many
drivers of globalization the influence the companies to operates across the globe. With this
provides many competitive advantages to firm in which technology plays a important role. In
addition to this, there are many challenges as well to globalisation that a company face.
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REFERENCES
Books and Journals
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Belyaeva, Z., 2018. Business environment challenges and trends for contemporary SMEs in
Europe. In The sustainable marketing concept in European SMEs. Emerald Publishing
Limited.
Bhagra, A. and Sharma, D.K., 2018. Changing paradigm of employability skills in the global
business world: A review. IUP Journal of Soft Skills. 12(2). pp.7-24.
Wei, L.H., Thurasamy, R. and Popa, S., 2018. Managing virtual teams for open innovation in
global business services industry. Management Decision.
Dunn, S.L. and Jensen, J.D., 2018. Judaism and Jewish business practices. International Journal
of Business Administration. 9(4). pp.73-88.
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