Global Business Environment Analysis for Ray C Smith Report

This report analyzes the global business environment, focusing on the factors driving global commerce and trade, such as competition, cost, market trends, and environmental considerations. It examines strategic challenges faced by organizations, including international company structure, foreign laws, accounting, supply chain management, communication and cultural difficulties, and the impact of international trade laws. The report also evaluates the influence of globalization on trade governance, leadership, organizational culture, structure, and functions, using the McKinsey 7S model. Furthermore, it explores the effects of ethical and sustainable globalization on organizational functions, decision-making processes in a global context, and the various ways for internationalization along with their associated barriers. The case study of Ray C Smith, a company dealing in coal, storage, and transport solutions, is used to illustrate these concepts.

Global Business Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Evaluate the key factors that drive global commerce and trade............................................3
TASK 2............................................................................................................................................5
P2 Explain the strategic challenges face by organisation in this global environment................5
TASK 3............................................................................................................................................6
P3 Evaluation of factors of globalization which affect trade governance, leadership, culture,
structure and functions................................................................................................................6
P4 Effect of ethical and sustainable globalization on organization functions............................8
TASK 4............................................................................................................................................9
P5 Evaluation of various kinds of way regarding decision making in context to global
organization.................................................................................................................................9
P6 Determination of various kind of ways for internationalization with their barriers. .........10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Globalization is defined as the competitive network of international links that helps in
binding the people and their businesses in this independent global economy (Fabová and
Janáková, 2015). The global business environment refers to the different environment of
sovereign countries where environment of particular country effect the home environment of the
business which effect their decision making and the use of resources. The organisation chosen
for this report is Ray C Smith. The company is dealing in coal, storage and transport solutions.
Ray C Smith is a family owned business established in year 1973. The company has established
its name in the marketplace as one of the biggest retail and manufacture. The topics covered in
the report are factors which contribute in global commerce and trade, various strategic challenges
faced by the organisation, the influences of globalisation on organisational culture and functions,
effect of ethical and sustainable globalisation on functions of organisation, how decision making
can work effectively and the key barriers in the success of the organisation.
TASK 1
P1 Evaluate the key factors that drive global commerce and trade.
Global business environment is describe as the process where numerous forces play role
in shaping the business strategics according to the dynamics of the global environment and
commerce. There are various internal as well as external factors which effect the operations of
business operating in different countries (Keegan, 2017). Globalization is drive by following
factors-
Competition- In order to maintain the brand name and reputation of the business in the
marketplace the management takes various steps to hold its position. The companies which are
facing high competition in the marketplace keep on upgrading and introducing new products and
services in its existing range. The main motive behind this is to provide better products and
services to customers and take the competitive advantage. The company need to take risks in the
business after analysing all the factors that is proper and careful research need to be done. The
company need to do proper study about the strategies and techniques adopted by the other
competitors so as to make changes in its own methods and to take competitive advantage. In
context of Ray C Smith, the management along with the research and development team studies
the business strategy of various competitors and accordingly take steps in its business. As they
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are providing products such as mechanical seats, dry gas, medical devices and many other so
with the help of proper transportation system they can deal their products safely to their clients.
The company can improve its transportation system by dealing products to near by areas with
their own transport vehicles and for distance places they should focus on establishing effective
and efficient relation with outside transport providers.
Cost- The motivation for the global companies is to maximise their investment which
helps in carrying the business operations easily without any difficulties. The focus of the
marketers of Ray C Smith is to offer good quality products and services to its customers at
affordable prices. The focus of the company is to provide better products and services to its
customer than of other competitors. Cost leadership and differentiation strategy help company in
regulating its cost and other expenses (Orugun and Aduku, 2017). The primary concern of the
company is to get the most from the investment cost and to acquires as many possible investors
as in order to carry global operations they require huge amount of funds. The costs within the
business is continuously monitor by the managers in order to see that is there any scope to
minimise the cost of operations and all the functions are performed properly without any
difficulty. By hearing labours at cheap salary they can reduce their cost and for that they need to
provide various other facilities such as leave, compensate, pay for extra work, etc so that they get
ready to work at low salary. Moreover by controlling transportation expenses they can reduce
their cost.
Market- It is one of the important factor which need timely evaluation that is the
business operations are carried according to the trends in the marketplace. Consumer behaviour,
preferences, attitude and taste changes on frequent bases. Its the responsibility of the business
management to consider them and take actions accordingly. The marketers tries to find
consumers who has high purchasing and living standards and has well developed infrastructure
as this make their process easy as customers are understandable. In case of existing market the
market data is easy available as company need to classify and group its markets according to its
structure and framework. In context of Ray C Smith the management is focusing on the market
trends and taking corrective measures and able to stand separate and established its name in
logistic industry (Salleh, Yang and Wang, 2015). The company is transporting its products in
various other countries that is by providing good quality products and in reasonable prices they
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would be able to attract more new potential customers and can formulate loyal relation with its
existing customers or clients.
Environment- The dependence of people on the technology and the rapid transfer of
information across the borders has increased the demand for global products and services. The
newly established global businesses are taking the advantage of the new technology in expanding
its business and in making people aware about their existence in the marketplace. In context of
Ray C Smith the company is analysing the environmental changes and formulating business
strategies accordingly in order to remain competitive in marketplace and satisfy its customers.
The company is dealing in steel products where they are effecting the environment through air
pollution so by regulating its production activities they would control the pollution level.
TASK 2
P2 Explain the strategic challenges face by organisation in this global environment.
There are various level of difficulties and challenges which are face by business
organisation in operating across the globe. In the process of expanding the business in other
countries the company need to reach to new customers who have different attitude and taste
towards the products and services (Taneja, Sewell and Odom, 2015). The company need to
understand the environment of the country in which they are dealing and accordingly need to
formulate the strategies and methods in order to attract the customers there. Here are few
challenges which are face by company in the international business-
 International company structure- The structure of the company and the locations
where the company is operating effect the business activities and functions of the
company. It's not necessary that the one strategy will work in all the places where
company is operating. Thus, according to the location and business environment the
different strategies are adopted by company in order to attain success. According to the
international company structure business need to form new teams and need to hire
expertises who have capabilities to carry the operations of business.
 Foreign laws and regulations- The company need to operate and function according to
the foreign laws and regulations. The laws and regulations of every country is different
that is rules related to tax policies, trading laws and many other laws and rules are
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different and company need to consider them in its business activities and need to
function according to them in order to survive there.
 International accounting- One of the main area which company need to consider in
carrying international business is the tax compliance. The different tax system and the tax
rates make the accounting function of the business organisation operating at global level
difficult and challenging (Bagley, 2015). Accounting transactions and strategies are the
primary key for every business to maximize its revenue and protect the company from tax
liabilities.
 Supply chain management- It becomes difficult for the company to manage and source
its products and services from different countries. The management of suppliers and
supply chain management is the most difficult and tricky process for the company as the
unethical behaviour of suppliers create problem in the business as the materials are not
delivered on time or wrong material or quality issues and many other such problems
create the challenging situations for the company.
 Communication and cultural difficulties- The communication is the barrier in the
operations of the business that is employees and the management find it difficult in
understanding. Moreover the communication is the most important factor as with
effective communication the things become easy to understand and there are less changes
of mistake and errors (Cantele, Vernizzi and Ricciardi, 2016). The culture of the
particular country effect the business profits as the taste and preferences of people differ.
The company need to understand the culture and accordingly they need to formulate the
strategies. It is the time consuming process and the results are obtained in the long run.
 Impact of international trade law- The trade law differs according to the countries that
is every country has its own rules and norms for trade. The political factors effect the
operations of the business. The level of income, distribution of income, wages,
employees laws, and more other factors effect the operations of the business. The
government of countries formulate the trade polices and rules which need to be followed
by organisations which are operating their (Gupta and Sharma, 2016).
 Labour availability- The laws for employees need to be considered by the company and
need to function accordingly. Moreover the company find the difficulty in making the
labours understand the process of work. The proper training need to be provided to the
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new employees and it is the time consuming process. The changes of mistake are high in
this case and the proper monitoring and controlling activities need to be performed by the
management in order to ensure that work id perform in the correct way.
TASK 3
P3 Evaluation of factors of globalization which affect trade governance, leadership, culture,
structure and functions
Every business corporation is established with having different vision with each other. With the
changes of organizational mission policies , the governance, style of leadership, as well as
cultural value has been change, It directly influence with effect of globalization. This directly
influences the cultural and structure policies. Structure of an organization is build to show
distribution of line and power of authorities. Culture reflects value and belief on which the
corporation run its business. And leadership style reflects way manager use to direct and guild
their subordinate in order to attain goal. RCS Logistics is now plan for expand their business by
exporting its coal production outside the territory of county (Dereli, 2015). Mckinsey 7s model
has been used to identify the effect of globalization on its essential elements which define below
Strategy: This is action plan which help in giving direction and show path to achieve goals. By
attaining competitive advantage. Organizations need to build their strategy according to the
preference of their global as well as local customers. RCS Logistics needs to change their
strategies as their market has been expand thus their strategy must be include, how they collect
funds for expansion of business through breaking laws and value of local customer.
Structure: This is one of the most important elements for running an organization for
long term. After globalization managers need to focus on build flexible organization structure. It
is required to apply effective leadership style for RCS Logistics when they start business in
foreign countries.
Shared value: Business entity is made of value and belief of their workforce. When a
organizations enter in global market they need to change their culture policies because they have
to deal with different employees and hire staff from different origins. To maintain positive
relation managers need to use effective tools of communication (Woerkom and Zeijl-Rozema,
2017). In context of RCB logistics the company has large workforce so its essential for them to
have effective culture policies and for that the management is taking steps to established
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effective communication with workforce and make them comfortable in the workplace
environment.
System: It considered all the operational policies through on the basis of which
organization supply goods and service within the market. After globalization , manager need to
apply relevant policies and use of trade equipment tools which help in building strong position in
market place. Moreover RCB logistics need to make changes in its production activities
according to the requirement of the clients and also according to the government rules and
regulation when they are transporting in other countries.
Style: Success of an organization depends on the leadership style they adopted. With
changes in globalization policies manager must adopt those leadership style through which they
can easily control all the subsidiaries through which they can run business in foreign countries
(Chao, Wu and Yen, 2015). In context of the RCB logistics they are using coach and support
leadership style in order to establish effective relation with employees and motivate them to
enhance their performance.
Staff: When an organization enters into global market, they need to hire workforce from
different countries. Thus all the policies regarding bonus, promotion have been changed. In
context of RCB logistics the rules and policies of company need to be formulated according to
the business environment of the country in which they are operating that is according to UK
market so company should focus on hiring the local candidates as employees who understand the
rules and regulations in better way.
Skills: To successfully maintain position in global market efficient workforce is required.
Globalization also helps in finding best workforce. With the help of skilled employees company
can increase its production level which provides benefit to them. In context of RCB logistics the
management is focusing on hiring fresh skilled talent who would able to make effective changes
in its old production system.
P4 Effect of ethical and sustainable globalization on organization functions.
Ethical and sustainable globalizations positively impact on running business function
which describing below:
Organizational functions: Business is run by fulfilling functions of it various
department which include, operation, production, marketing and financial functions.
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Production function: it considered process through which input is converted into output. RCS
Logistics being in engaged in coal production the company require heavy tools and equipment
for running their services in effective way. After globalization they can cut their cost through
outsourcing of various equipment and tools required for production process. They can identify
and build strong relation with manufactures which help them to provide raw materials at low
cost.
Financial function: It is related with the department of finance through which
organization able to determine their requirement and source of capital funds.Formation regarding
financial statement. After globalization, RCS Logistics able to issue their share in global market
as well as they have more opportunity to take loan from various financial institution through
which their fund capital has been increase without breaking any law (Muduli, 2017).
Human resources functions: Workforce is the most elements through which organization able to
attain competitive advantage. Globalization help RCS Logistics to find relevant and skilled
personals for the work .They hire their workforce in ethical manner which help in increasing
good will and positive perception of employees towards the organization. The term ethical
manner in context of the RCB logistics refers that first ethic principle followed is honesty that is
work is performed with full honestly. Second ethic principle followed is leadership and respect
for others in the organisation. Manager of RCS Logistics have more options regarding
recruitment of employees. They hire their personals in ethical and effective manner.
Sales and Marketing: This is also essential function of every business corporation.
Capital requirement is fulfil by we n corporation have great margin with high rate of selling
product. RCS Logistics is not related with selling product as it is engaged in the production of
coal however with the applying of effective advertisement and promotion strategies they can
attract global market investor in their company. For this they need to use strategies of promotion
which not violence any ethical rule of marketing policies. This strategy also useful in finding out
new target market in economy (Bughin and Chui, 2017).
Administration: It is related with functions dealing problems of customer, handing mail
service and inquires. Globalization help in changing these polices and ethical and legal manner.
Management department of RCS Logistics use effective administration policy after taking
decision of entering into global market as they need to handle equipment global customer. Thus
their policy is also change according of maintain sustainable global organizational play change.
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Research and development: This function is related with researching of new market for new
opportunities as well as change product polices, by analysing strategies of competitors.
Globalization is useful for management department of RCS Logistics as they field out new
market but they also identify new competitors and to reduce risk of uncertainty they build
strategies which help in developed their organization in legal as well as ethical manner.
Globalization has been influence all the relevant factors of organization. Being as organization
RCS Logistics is working a coal operating industry, with the use of Micky;s 7 models , their
manager can easily recognise the effect of globalization overall the structure, staff,
system ,culture and production, financial, administration and advertisement function by applying
effect global policies which help in sustainable development of corporation (Zizlavsky, 2016).
TASK 4
P5 Evaluation of various kinds of way regarding decision making in context to global
organization.
Decision making is the procedure of selecting best alternative for business entity in orders
to achieve future gaols. Skills and capabilities of manager determine on the basis of decision
taken by them. In context with RCS Logistics it is really essential for taking best decision to
survive within the global market. For this they need to apply following procedure (Kura, 2016).
Identification of goal: To improve the effective of taken best decision, manager must
need to clearly goal and main object of the organization. Manager of RCS Logistics needs to
circulate the main purpose of their running corporation within each level of department.
Flexible policy’s Manager need to use take thoes decision which is not fixed and changed with
time as due to effect of globalization, it is reality hard to sustain with particular objective. The
addition or changes in the policies of the government effect the business operations that is in
context of RCB the company have to focus on the production of steel as rules of government
changes according to different environmental situations.
Fulfilled need of employee: Decision must be taken in order through which organization able to
fulfil demand of customer and satisfy its labour force. RCS Logistics is manufacturing
organization thus they need to focus on taking decision which helps in giving full satisfaction to
their global customers. By providing facilities such as medical facilities, transportation facilities,
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childcare facilities and many other they would be able to satisfy its employees which in return
provide effective results to the company.
Marketing trends: Organization must focus on taking decision after analysing current
marketing trends within the organization. Manager of RCS Logistics recently enter in global
market thus it is really essential for them to choose those alternative which can rely current
marketing trends. The changes take place on frequent bases in the marketplace so they need to be
ready in advance in order to deal with them.
Advancement of technology: With the changes of time technologies also changes. Especially in
the sector of production. Manager of RCS Logistics on the bias of changes in the technologies
and equipment regarding with coal production take decision. It will help in increasing future
profit. Moreover with the use of latest technology based machines they would be able to increase
their production activities as they have enter in the global market so the need for its products will
increase.
Ability of employees: Success of project is depend on how well organization’s
employees accept the change and has to work with all the equipments. Thus before taking a
decision on any policy it is relevant for the manager to communicate about the decision to their
workforce and on the basis of their acceptance they need to choose it. Manager of RCS Logistics
must select their decision regarding business operations and production activities after evaluation
capabilities of their workforce as it is really hard accept and work in global market (Nambisan,
Zahra and Luo, 2019). Moreover they should assign work to its employees according to their
skills and abilities because they would be able to provide effective results.
P6 Determination of various kind of ways for internationalization with their barriers.
Following are the way through which an organization can easily enter into global market
competition
Direct & indirect export: This is one of the most popular methods in market. Individual
can able to enter their organization in direct method by producing goods in home country and
exporting as well as traded these in other countries. It is most ethical way of entering into global
market. In context of RCB this method would able to provide effective results to the company as
they are dealing in heavy products so changes of damage are high in direct and indirect export.
Licensing: In this method, individuals take permission from owner of the trading
property to take their property in order to produce and sales good in another country. The one
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whom property is use is known as licensor and those who take permission is known as licenses
of the property. This is also trending way of starting business in foreign country. As the risk of
loss is comparatively low then other method of globalization of business (Hitt, Li and Xu, 2016).
This method of trading in other countries is appropriate for RCB as by obtaining license they will
be legally protected and would face any legal or political problems.
Franchising: It’s the type of business in which owner of the trade product and service
gives right to another party with some obligation to run their business in foreign country .For this
franchisor charge fee. It is effective marketing strategy which helps in expanding business. In
context of RCB if they adopt this method they would be able to target the large market area in
different countries but they may face other problems such as decrease in quality or exchange of
their products and many more.
Joint Ventures: In this type of way of entering global market. Business entity came
together with another organization to run business by sharing and contributing their assets and
abilities. An organization is established through joint venture process. This has separate legal
identity which made this organization different from its joint venture companies. This method is
not suitable for the RCB business that is in joint venture they have to share their power and the
profit with the other party and moreover the decisions in business activities are to be taken with
their due permission.
Merging with a firm: This method is basically known as equity method of
internalization. N which local organizations merge their whole business with foreign
entity .Foreign direct investment is the best way of merge with another corporation. It is most
trending way of globalization. This is also cost effete method which requires only skilled
persons. It is beneficial for both local as well as foreign entity. At present time mostly
organization invest in their countries small corporation to expand their business and build
effective position in relevant target market. In context of RCB they may think of this method as
its adoption will provide great benefit to them in expanding their business in other countries.
Barriers in global business
Legal barriers: When organization enter in global market it is relays hard to work
according to the law ad regulation formulated by foreign county. They need to ay custom, duty,
tax. It is really hard for RCS Logistics when they work in global market as counties o Asian and
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American continents have high legal formatives regard coal production business (Kasemsap,
2018).
Non tariff barriers: In includes quotes, sanctions, and other strict restriction imposed by
countries for global entities. These types of barriers are mostly imposed by developed country to
restrain developing countries firm to enter in their local market. It is really hard for RCS
Logistics to enter into developed countries market.
By entering into global market, RCS Logistics face barriers regarding legal restriction and duty
as well as tax liabilities they need to pay in entering into other foreign countries market.
However they can overcome problem regarding with trade barrier by taking effective decision
through applying flexible policy according the need and demand of customers as well as
analysing trends of global market. RCS Logistics is famous for providing best quality of coal
product the local market of Midland. To enter in global market, they need to change polices
regarding running business functions of production, finance and advertisement (Attfield, 2015).
By using indirect method of internationlizatin, RCS Logistics easily enter into global market
however the organization face barriers of global legal policies but the manager with the use of
effective decision making procedure overcomes the risk of loss in running business within global
market.
CONCLUSION
From the above study it has been concluded that there are various internal and external
business environment factors which need to be considered by business organisation while
operating across the globe. The company need to first understand the process and culture of the
country in which they want to expand there business and accordingly need to build the effective
and efficient business strategies. The proper implementation of business strategics helps
organisation in accomplishing the desire results and contributes towards the success of business.
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