Report: Global Business Environment and Allan Reeder's Strategy

This report provides a comprehensive analysis of the global business environment, focusing on the key factors of globalization, strategic challenges faced by organizations, and the influence of globalization on organizational governance, leadership, structure, culture, and functions. The report examines the case of Allan Reeder, a dairy and non-dairy company, and its experiences in the global market. It explores topics such as trade liberalization, technological advancements, and cost factors. Furthermore, the report delves into the complexities of operating in a global environment, including legal, communication, and environmental challenges. It evaluates the influence of globalization on organizational governance and leadership using frameworks such as SWOT and McKinsey 7S model. Finally, the report discusses different decision-making strategies and various routes to internationalization that organizations may adopt, including the barriers they may face.

GLOBAL BUSINESS
ENVIRONMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Key Factors of Globalization.......................................................................................................3
LO 2.................................................................................................................................................4
Complexity of Strategic Challenges Faced by Organisations When Operating in a Global
Environment................................................................................................................................4
LO3..................................................................................................................................................6
Evaluate the influence of globalization on organization governance and leadership, structure,
culture and functions....................................................................................................................6
Influences of ethical and sustainable globalization on organizational operations.......................8
LO 4.................................................................................................................................................9
Different Decision Making Strategies for Globalisation.............................................................9
Various Routes to Internationalisation an Organisation May Adopt, Including Key Barriers..10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Global business environment is combination of different external market factors which
differs according to country. These external factors also impact the decision making of the
business organization and increase the potential to compete in the market effectively. it is also
bvery essential for business organization to analyse current resource to develop strategic
planning for future growth and survivability in the market. Global business environment also
consists on internal factors which impact the performance of the business organization to attain
opportunities to become leader in the market and gain higher profit margins effectively. in this
report there is brief explanation about key factors of globalisation which impact performance of
Allan Reeder company which is one of the biggest dairy products and non-dairy company in UK.
report also discusses some challenges which are faced by Allan Reeder in globalisation of their
business in the market, thus different theories and strategies is provided in the report to increase
opportunity.
LO 1
Key Factors of Globalization
It is very essential for business to analyse all the key factors of globalisation which helps
to increase the growth and expansion of the organisation effectively (Pikhart, 2017). Due to
increase in the demand of customers and change in health concerns the demand of dairy products
has increased which also increases the opportunity for Allan Reeder to increase their market
share by satisfying customer needs. This also increases the brand value of the company and
provides better opportunity to compete in the rising competition effectively. Allan Reeder also
needs to develop effective strategies which increases the potential to become more effective and
understand all the market factors to attain core competency effectively.
Trade Liberalisation
Trade liberalisation is the factor w which helps Allan Reeder to gain opportunity to
expand their business outside UK at lower cost. UK government provides fewer restrictions in
export to support potential business to grow and increase economic value of nation effectively.
After Brexit UK has developed new trade policies which help business sector to increase their
sales outside UK and support economic growth of the nation effectively. Increase in business
potential has helped to increase the globalisation in the market and gain more profit effectively.

This also helps to develop better goodwill by improving the products and services which will be
analysed by different customer base from different market segments effectively.
Change in Technology
Technology is the one of the key factors which has helped business to grow and globalise
effectively. With the help of digital technology and internet platform it has connected different
markets and customer bases very closely (Bhagra and Sharma, 2018). Allan Reeder is also very
effective in implementing all the digital techno logy which led to increase their sales in UK and
improve their quality of dairy products in the country effectively. Company has implemented
effective management information system which allows evaluating all the market trends and
making effective decision to compete in the market and gain higher market share by expanding
in global markets effectively.
Different Cost Markets
As every country has different external factors which can impact the cost performance of
the business organisation. This also increases the demand of products in developing countries to
increase the sales of business organisation (Keivanpour, Ait Kadi and Mascle, 2017). there are
many factors which has improves the opportunity for Allan Reeder to expand in new markets
which are developing which also has lower cost of operation and products and better
opportunity to establish brand in the market. this improves the potential for company to increase
their sales by investing in marketing and providing better information to make decision
effectively. Company has increases their employment opportunities which in return increases the
economic growth of nation to create better facilities for their citizens effectively.
LO 2
Complexity of Strategic Challenges Faced by Organisations When Operating in a Global
Environment
Increase in globalisation and liberalisation in trade activities it has increased various
challenges which national business organisation faces while becoming international. Increase in
the competition in the global market can impact the survivability of Allan Reeder as company do
not have proper experience of global trade which can impact the business in long term (Lasserre,
2017).
Legal Factors

Allan Reeder faces many issues in integrating with new laws and regulation which can
impact the cost and cultural values of the company. This also reduces the potential of company
to compete in the market and develop effective workforce to increase the quality of services. as
per the trade policies changed after Brexit it has impacted Allan Reeder to expand their brand
due to change in employment laws company has reduced the potential of workforce to achieve
objectives of the company effectively.
Communication and Technology
Globalisation also has language barriers as it is very difficult for business organisation to
understand language of customers and communicate effectively which reduces the efficiency to
attract more customers establish brand value in the market effectively (Tallman, Luo, and
Buckley, 2018). Allan Reeder is having cultural issue as they are not able to sell different types
of dairy products in other market due to beliefs and cultural values. As India does not allow cow
cheese and other cow products as country has the religious belief. This also reduces the
opportunity for company to provide more product range which are more demanded in other
markets.
Environmental factors
Due to increased concerns of global warming and other global concerns it has impacted
the market share of international business in the market effectively. There are also many factors
which has reduced the potential due to increased taxation to protect environment which also
increases the cost of products and reduce customer satisfaction negatively. It is very essential for
Allan Reeder to understand all the environmental concerns which new market is facing and
develop effective strategies to increase market share of the company to compete in the market
effectively.
Foreign Exchange Rates
Foreign exchange rate fluctuation is majorly effective international businesses as it
impact the value of products sold and investment made from the base country. It also impact the
revenuer generations form the other nation due to competition which reduce profit margins
effectively. There are many factors which also decreases the potential of Allan Reeder to analyse
financial performance of the company which also impact the strategic planning and
miscommunication between different departments effectively (Lee, 2017).

LO3
Evaluate the influence of globalization on organization governance and leadership, structure,
culture and functions
SWOT Analysis
 Strengths: Heathrow has good brand recognition in UK that is one of the major strengths
which play significant role in influencing globalization. It is considered hub for British
Airways already offers it’s airline services in the multiple countries across the world.
 Weakness: It unable to attract prime customers because company offers affordable airline
services so that all type customers can be bought. But it can become economic stimulant
for the company while expanding business at international level.
 Opportunity: Emerging markets i.e. japan, Asia, Netherland are one of the major
opportunities for the Heathrow Airport that will support to influence globalization.
 Threats: Government policies and regulations are the major threat for the Heathrow
Airport that can impact on global expansion.
Thus, this swot analysis framework has supported company to analyse it’s internal environment
through which it can put more efforts on weaknesses and threats for converting them in
opportunity and strength. While represented strengths and opportunities influences global
expansion in the business market.
McKinsey 7s model
The model is used for Heathrow Airport to analyse it’s organizational structure in the
global business environment. The model is described as follows:
Hard elements
 Strategy: Heathrow Airport follows the service differentiation business strategy so that it
can influence it’s business in the global market (Beugelsdijk and Welzel, 2018).
Organizational has specially differentiated airline service through an extensive trust on
digitalization and IT tools. In addition, organization offers high level of customization
service to the customer so that they feel valuable for company. International market
expansion is another essential strategy of the Heathrow Airport whereas from 2016 it is
expected to offer its services in multiple countries except London. It becomes one of the
six airports which offers scheduled services across the London.

 Structure: Typical airport organizational chart follows by Heathrow Airport whereas
Board of supervisor keep control on country executive, Airport Commission. While
country executive has power to supervise Airport Director who controls on all operations
of functional units. Human resource department supports organization to comply all
government rules and regulation a well as maintain employee’s wellbeing within
workplace. On the other hand, finance and admin provides financial supports to human
resource department so that they can conduct operations effectively and leads success
within company. This organization structure assists organization to keep control all
functional units effectively.
 System: Management of Heathrow Airport sets system i.e. employee’s recruitment and
selection system, quality control system, performance appraisal system, complaint
handling system and others that helps company to influence global expansion in the
airport industry.
Soft elements
 Shared values: Organization has implemented corporate relationship management
approach that helps to build trustful relationship with customers as well as resolves their
complaints as much as earlier (Gökdeniz, Kartaland Kömürcü, 2017). This type value-
based services supports company to promote it’s global business operations around the
world.
 Style: Management of Heathrow Airport has adopted situational leadership style
approach to directs it’s staff members accordingly situation.
 Staff: Human resource of Heathrow Airport always offers incentives and rewards to the
staff members so that individuals inspires within workplace and give high working
performance. It has high employees’ productivity within workplace.
 Skills: To expand business on global level requires excellent competencies and skills in
employees so that they can easily deal will all globally issues at their level. So,
organization always organization Skills and development class for the staff which
improves individuals’ skills and delivery services effectively within workplace.
From the above discussion can be analysed that hard and soft elements of the McKinsey will
support to influence globalization of the Heathrow Airport company in effective manner. The

major drawback of the model is that it is only focus on internal environment of the company
while giving attention on external environment which can affect organization’s performance.
Role of Governance of MNC and leadership within international context
Governance of multinational organization plays effective role in globalization because
MNC sets it’s subsidiaries in multiple countries across the world which leads global expansion of
main firm. Governance of MNC leads both type aspects i.e. political and economic (Voegtlin and
Scherer, 2017). For example, when organization expand it’s business at international level in that
state it gets chance to take advantage of political opportunities as well as it leads high
economical benefits within business. As same concept implements for Heathrow such as when it
will expand its business in multiple countries then it has to invest heavy funds on it’s subsidiaries
for locating at different countries then it will enable to gain financial benefits in the4 business.
The major drawback is that organization can face various risks like political, economical crisis
and others while operating globally.
Leadership: Leadership also plays effective role in globalizing company in multiple countries
across the world such as leaders sets vision and mission of the company for expanding business
at international level. While different leadership styles like democratic leadership style supports
managers to retain skilful and talented staff within workplace so that they can lead high
productivity in the organization. As same for Heathrow Airport London whereas managers will
support company to implement situational leadership styles. As situational leader will conduct
employee orientation program for the staff to make them understand how to work in the
workplace at the international so that individuals will enable to give high level customer services
to the company’s customers. The major drawback of the leadership style is this it requires
leadership expertise who can adapt all leadership style effectively.
Hofstede’s Dimension of culture
It is a cultural dimension model that is used to analyse different type of culture through
it’s eight dimensions of culture. Heathrow Airport can apply this eight-dimensional model to
understand different culture of countries which will help in influencing globalization of business
effectively. For example, long versus short-term orientation dimensional culture is the one of the
major dimensions of Hofstede cultural model wherein long-term orientation denotes that most of
companies focuses on long-term goal so they practice Herzberg’s Equity motivation theory
model so that they can maintain staff wellbeing within workplace (Favaretto, and et.al., 2016).

With this practice organization enables to retain talented and skilful staff within company.
While short-term orientation culture denotes that organizations focuses on short-term goal
achievement so they follow autocratic leadership style. Heathrow Airport can implement Long
versus short-term orientation that will help company to fulfil needs of employees that ultimately
bring satisfaction in them. Then management of the company can influence individuals to adapt
emerging changes like global expansion to achieve long-term and short-term goal on time. Thus,
Hofstede culture dimension model will support organization to expand it’s business operation at
international level.
Influences of ethical and sustainable globalization on organizational operations
Ethical globalization refers as the sets of principles, rules and regulation that directs
organization to expand it’s business in global level. Ethical globalization supports organization
to understand different norms of different countries which have to follow by organization before
operating business activities within global market. There are various ethical issues i.e.
discrimination, unfairness in decision-making process, political issues, confidentiality and
privacy, patent and copyright law etc. which impacts on organization expansion. Heathrow
Airport still operate it’s business operation in London, UK only so it follows only UK’s
government norms and policies. But when organization will operate it’s business in at global
level, in that situation ethical globalization provides right direction how to deal with all ethical
issues like political issues (Gökdeniz, Kartal and Kömürcü, 2017). Then organization will enable
to gain economic benefits over different political policies.
On the other hand, sustainable globalization will help organization to sustain in the global
market by improving quality of products and services. For example, when company will expand
it’s business in that state it have to follow various rules and norms of the different countries in
order to operate it’s business successfully. Or in a case if company does not follow any rule and
regulation of the different countries then it cannot operate or sells it’s airline services to the
customers. So, it is essential for the company to follow sustainable globalization approach
because it will support to deal with all globalization crisis and builds strong organizational
culture within company at global level. When organization will use sustainable practices in their
operations that will influence purchasing behaviour of customers and make business globally
sustained. Thus, both ethical and sustainable globalization assists company to gain highly

competitive advantage over its business operations as well as builds good brand image in the
global market.
LO 4
Different Decision Making Strategies for Globalisation
Globalisation affects decision making of the business organisation in developing
strategies due to change in leadership styles (Kasemsap, 2018). Globalisation can be described as
the removal of barriers of trading across national borders to enable increased integration of
production processes and capital markets, and flow of financial resources, technical
innovation/technology, knowledge, labour, cultures, goods and services among different nations
thus expanding international trade and economic growth. This implies that in globalising and
liberalising markets, protection of national firms from foreign competitors is reduced by
removing international trade barriers to allow free trade/competition. This has intensified
competition across national borders and forced firms to formulate strategies that favour lowering
of costs through exploiting opportunities across borders.
Analyse external environmental factors
Allan Reeder has to accept that globalisation lead to rapid change for which company has
to be prepared in order to increase the potential and compete in the market effectively.
Understanding economic factors helps company to develop effective budget and improve their
opportunity to grow in new market (Barac and et al., 2016). By analysing social factors Reeder
can develop effective products and services to increase customer satisfaction which improve
brand value in the new market and gain higher profit margins effectively. With this decision
Allan Reeder enables to understand customer’s preference and needs at global level as well as
risks which company can face while operating it’s business at international market.
Corporate social responsibility
Allan Reeder also has to conduct corporate social responsibility activities which can
impact the brand value of the organization and increase customer segment in different market to
compete in the market and attain core competency effectively. This decision is taken by Allan
Reeder in order to expand business at global level. CSR approach will support business to offer
such unique product or services which can meet all customer’s objective at international level.
Differentiate product line from others

Allan Reeder is having different range of dairy products which has improved the
customer retention and improved the loyal customers in UK effectively (Chasdi, 2017). This
decision is taken by Allan Reeder to gain competitive advantage and build strong customer base
in the global market.
Above discussed helped Allan Reeder to make decision which is influenced by
globalisation every industry is connected globally and directly or indirectly interdependent with
each other. Executives can be proactive and develop policies that help Allan Reeder to remain
competitive in a changing world where economic power will likely be internationally disbursed.
As the tourism industry is also growing rapidly the demand for dairy products is increasing and it
is very essential for company to make effective decision which is related to market dynamics
which increases the potential of products to gain higher profitability in the market effectively.
Various Routes to Internationalisation an Organisation May Adopt, Including Key Barriers
Business organisation has to improve their performance by analysing all the available
resources which can improve their potential to achieve objectives effectively. Allan Reeder has
to analyse all routes to become international in the market and identify all the barriers to become
successful more effectively.
Growth Motives
Businesses which analyses growth opportunities develops strategies to go in global
market and increase their business share effectively. the main focuses of company is the increase
the market share in the global market to gain more recognition and provide better products and
services to customers to increase their satisfaction effectively. Allan Reeder has this motive in
the company which leads organisation to increase their exports in different countries and
increase sales effectively.
Knowledge Motive
Knowledge is one of the way through which businesses can go in global market as it
helps to provide better experience to compete in the market. Allan Reeder has effective research
and development team which helps company to develop innovative products which increases the
opportunity to grow in global market effectively (Shageeva and et al., 2017). Small and medium
size businesses have the potential to learn more effective with low investment. This also helps
Allan Reeder to gain more profit margins and improve potential of their workforce effectively.
Barriers to Internationalisation

Financial Barriers
As the lack of proper funding in the business increases the hindrance to grow in
international market. Allan Reeder has highlighted this as its barriers due to shortage of capital to
invest in new market as there is high risks in new market which can impact the actual market size
of the company in UK market.
Managerial Barriers
Allan Reeder has to increase training and development of their workforce and implement
workforce diversity to gain better innovative ideas for managing employees in new markets in
global market. Business organisation does not have proper experience about all the information
which can develop effective marketing strategies in global market. Due to lack of proper
communication and management strategies impact the performance of the company in the global
market and also reduces the potential to compete in the market to attain higher profit margins
effectively (Kokodey, Gnezdova and Lomachenko, 2018).
CONCLUSION
This report has analysed that it is very essential for business organisation to understand
all the internal and external factors of global business environment as it varies in different
market. Report discussed the different factors which impact the globalisation of company and it
is very essential for organisation to focus on these factors to expand in different market
effectively. Due to increase in the demand of dairy products it has also impacted the
opportunities of Allan Reeder business growth as it increased competition in global market.
Report highlighted different challenges which company face while operating in different
markets. With the help of Mckinsey model and Hofstede dimension model helped company to
understand organisational structure and culture which can improve the internal performance to
achieve objectives effectively. Furthermore, report discussed different ways of decision making
process in global market to earn more profits.