Analyzing the Global Business Environment for Siemens

This report provides a comprehensive analysis of the global business environment, specifically focusing on Siemens. It begins by critically examining the impact of key factors such as competitive environment, cost factors, environmental factors, and market dynamics. The report then delves into the strategic challenges faced by Siemens, including international trade laws, supply chain management complexities, technological advancements, and customer service demands. Furthermore, it evaluates the influence of the global market on Siemens, utilizing models like the McKinsey 7S model to assess organizational effectiveness. Finally, the report critically evaluates the impact of globalization on Siemens by analyzing key barriers to international business, providing a holistic view of the company's operations in a globalized context. The report incorporates various factors and theories to provide a detailed understanding of the global business environment and its impact on Siemens, including factors like economic, political and social ones. The report is a good resource for students studying global business and related topics.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
ACTIVITY 1 ...................................................................................................................................3
1. Critically analyse the impact of key factors on the global business environment..............3
ACTIVITY 2....................................................................................................................................5
2. Critically analyse the strategic challenges faced by Siemens............................................5
ACTIVITY 3....................................................................................................................................7
3. Evaluate the global market influence by using the appropriate theories and model..........7
ACTIVITY 4 ...................................................................................................................................8
4. Critically evaluate the influence of globalisation on the Siemens by analysing the key
barriers in doing business internationally...............................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Globalisation can be termed as the process by which businesses organisations develop
international influences in order to operate the business at large scale. Global business
environment can be referred as the environment in different countries that influences the
environmental factors of the organisation. It mainly influences the decision-making and
capabilities to use the resources within an industry. The report is totally based on the globalised
marketing concept of the Siemens. This organisation will be aimed at achieving the higher
profitability in order to establish the different global market for the industry. This study will help
the learners in exploring the concept of globalisation in business context.
This report helps in determining the key factors that derive globalisation and also
accessing the complexities that are concerned with the operating a globalised market. Also, it
will draw a great attention towards the cultural, structural and functional influence of the
business. The report will also concentrate in expansion of the business activities of the Siemens
who is generally aimed at higher profits and sustainability in terms of globalised market network.
ACTIVITY 1
1. Critically analyse the impact of key factors on the global business environment.
Global business environment refers to reach the environment where company operates. It
includes geographic location, culture, politics, technology, rule, regulation, taxation, economy

and so on. While developing the business strategies, it is important to analyse all these factors.
There are some key factors such as cost, environmental, competition, market that affect
environment of global business.
Competitive factors: competitive environment is changing constantly for global
business. Existing and new competitor are implementation the new strategies for taking potential
market shares from Siemens AG. The profit and cost identification unveil the impact of action of
competitors. For example if bottom line profit is less of forecast due to revenue of one product is
below the cost (Akhtar, 2018). Due to this other competitors can reduce their product price and
customer would go to purchase from them. New entrants are always serious threat for Siemens
AG because they enter with innovative products that attract existing consumers and new
customer as well. It reduces the profits and revenue of company at global level. For example if
new competitor start their business near company's location it can attract the consumers.
Sometimes competitors enhance the potential of company by forcing them to launch new
products in order to rebound customers. It helps them to take risk to introduce new products
which can bring profit and loss as well.
Cost factor: In global business environment, there is different cost in different countries.
For example, manufacturing and production cost, selling cost of products, prime cost and
conversion cost, labour cost and so on. Such as labour cost is different in various country that
impact the business of company. Foe example if company want to start its business in other
country then they have to analyse various variable cost such as commission paid to sales
employees, labour wages, energy used in the production process, raw material used in production
process (Collings, Mellahi and Cascio, 2018). With this, salaries of management and employees,
insurance, business and rent rates on office premises and factory in other country. Such different
costs related to business affect Siemens positively or negative both.
If labour cost is law in any country then it would easy for company to make profit. But in
case of high labour cost they have to pay more to employees that can bring loss to company.
Environmental factor: these factor can affect many aspects of business. It includes
employees efficiency, customers willingness to buy products, availability of resources, crop.
Some environmental that can affect the business of Siemens are weather, pollution, climate,
availability of non renewable goods, climate changes, work place efficiency, existence of certain
biological species, availability of certain renewable goods, environmental related laws and

regulations. For example some regions have hot and arid climate\, due to this productivity of
labours may decrease. Falling fuel price can help to increase business through cheaper travel.
Apart from this hiked fuel price reduce the business due to high cost of delivering charges.
Environmental laws and regulations are different country. In this case, Siemens AG has to follow
all legal requirement according to rules. They are responsible for providing services and products
which are ozone friendly.
Market: Various kind of market such as geographic market, demographic market,
competitive market affect business. It is important to monitor business market in order to
continue success. In market many companies are providing the innovative products and services
according to new trends of business. By monitoring market Siemens AG will know when they
have to adjust product and services in order to meet needs of changing market, when have to low
or raise prices according to competitors, when can target new geographic and demographic
market. For analysing demographic market company need identity the demands, wants, necessity
according to education, sex, income level, occupation, religion, interest of customers.
Considering this, company can target customers such as middle class, price conscious to affect
them. Company can use the same media to target customers via blogs, Facebook, Pinterest,
magazines.
This can help company enhance their business globally by delivering the products which
is highly preferred by consumers.
ACTIVITY 2
2. Critically analyse the strategic challenges faced by Siemens.
Strategies challenges are those which can drive the global business environment from
high to law level or law to higher level. These challenge includes international trade law, supply
chain management, risks, financial management, monitoring performance, uncertainty of future,
technology, customer service, regulation and compliance, exploring data etc.
International Trade law: this law includes the rule and regulation, custom between
countries and trade. It is a set of agreement and law which create the rules that business and
countries has to follow strictly. This law has two main area of concern that is remedy work and
export control. Trade remedies are used by government to take right action against imports
which can cause the material injury to domestic industry due to foreign government subsidies

and foreign pricing (Hamilton and Webster, 2018). It includes set of duties by the international
trade commission. Whereas export control laws are responsible for the exportation of software,
technology, sensitive equipment related to foreign policies objectives and national security of
countries. UK government agency has right to issue export licences which includes department
of commerce, department of state, department of treasury. This law carries both penalties
criminal and civil.
In addition, Siemens AG also have to follow the rules of world trade organisation, which
is previous international organisation which regulate trade. There are some guiding principles of
world trade organisation.
Reciprocity: this principle state that all the members of different countries should work
for lowering trade in exchange for the same acceptance from other countries.
Non-Discrimination: All member should follow the same favourable conditions for the
trade. In this they must apply the uniform for their workers to every country in the company.
Standard of the product must be as same as at domestic level with related to technology
specification and other needed requirements.
Safety: it is related to safety of public health, environmental and animal safety.
According to this members world trade organisation are responsible for safety of their workers
such as they must provide the safe work place, proper equipments' health insurance and so on.
Agreement and enforceable: members are required to raise issues and disputes regarding to laws
and rules and then those issues are heard in the jurisdiction of the world trade organisation
(Kasemsap, 2018).
Transparency: According to this, members should publish their rules and regulations
transparent.
Supply Chain Management: it is not easy to apply supply chain management globally.
Siemens AG work to enhance revenue by enhancing and exp[anding its product and services.
With this they also suffer with risk and complexity of their supply chain. There are three main
reason of complexity of Supply chain which includes the globalisation, internal pressure and
complexity. Meeting the demands and needs of customers is the biggest challenge for supply
chain professionals of company. Customers not only expect to get the products in timely manner
but also want choice when they receive those products. Furthermore, demand of visibility that
increased in recent time. Meetings these demand can be difficult.

Globalisation introduce complexity more. Adopting globalisation supply chain means to
modify products in order to assist the cultures of different markets. With that company also have
to consider the regulation and legal issues of while supplying their products in different
countries. Apart from this making good relation with suppliers in other different country is
difficult and take more effort and time without guarantee of result. Sometimes complexity does
not occur from the outside source but it comes from internal source such as custom process,
business work. Company needs some custom process with specialised suppliers. It can build
supply chain less effective and restrict options. Other division of company also can impact the
supply chain department.
Technology: according to source technology impacted global business environment
mostly in positive manner. Such as it help to develop the high level added products and services.
Due to technological innovation company is able to flourish the world. It provides many
advantages to global business environment. Technology enabled Siemens AG to compete
fearless in the market by building the locations in other countries with sharing, creating, products
or ideas effectively for the partners, employees and customers worldwide (Mohamad and Chin,
2018). Tactic tools such as enterprise software allow company to develop new products and
services to lead in the market. For example company like Toyota gas stated in it website that they
always seek technology in minimize and prevent the accident and damages in any situation. With
this globalization has forced company to engage in strategic planning to enhance their business
in the international market. Innovation in technology has introduced the new job opportunities
for aspirants ay national and international level. It assists company in order to choose skilled and
knowledgeable applicants.
ACTIVITY 3
3. Evaluate the global market influence by using the appropriate theories and model.
Global market greatly influenced the business environment of Siemens AG. It includes
factors such as the business culture, religious fundamentalism, technology, economic, legal,
political and so on.
Economic factor of global market increase the demand of products. It provides greater
opportunity to Siemens AG to make profits internationally. There is always fluctuations in
economic activities. Due to this, it demands of products can increase the and price will increase

as well. In care of desecration in demand can lead to low price of products of Siemens AG. Other
company such as Toyota, business of this company can be affected by the government and its
policies. Political factors of global market majorly affect the operation of its business. If
company is operating in other country, in that they have to adopt the regulations and directives
which is created by the government of country. Political factors regulates the business and
influence the power of consumers and business. In addition, social factor which includes the
behaviour, tastes lifestyles of people according to their needs and demands are varied from
country to country. This impact the business of Siemens AG positively or negatively both.
McKinsey 7S model of organisational structure
This model is used for the effectiveness of organisation. According to this there are seven
internal factors in the organisation that should be reinforced and aligned to be successful. Seven
factor of this model is divided into hard and soft elements. Hard management can analysed and
influenced by management whereas soft elements are more intangible that influenced by
corporate d culture (Nakos and Whiting, 2018). Hard element of Siemens AG are strategy,
structure and system whereas, soft elements are skills, style, shared values and staff.
This tool assist company to remain in competitive market. The structure of organisation
is created to its hierarchy, divisional make up and chain of command that outline how operations
interconnect and function. With this how management measure, measure, configuration
responsibilities of workers whereas skills consist capabilities, talent of staff and management.
Skilled employees and management decide the success of company. Style refers the approaches
that management use tom lead in the market.
Hofstede’s Dimensions of Culture: This frame work is used for the development of
cross culture communication, social culture and values, behaviour in its members. This model
help company in order to survey of employees values. With help of this frame work culture of
organisation can be analysed. This theory describes the low power distance and high power
distance. It measures inequalities which is accepted by employees with and without power. It
defines inequalities in sense of acceptance. With this, it describes the individualism and
collectivism in Siemens.

ACTIVITY 4
4. Critically evaluate the influence of globalisation on the Siemens by analysing the key barriers
in doing business internationally.
Globalisation is a concept that leads to increase the competition level in marketplace. The
competition is related to the product and services technological adaptation, quick response and
quick production by the Siemens. This organization is mainly used the different techniques and
methods to increase their market share and values (TallmanLuo and Buckley, 2018).
Globalisation is a phenomenon that lead to integration with the business, politics and
relationships. However, globalisation always occurs in the Siemens because it will change the
government policy in marketplace. There are many forces support the globalization in the
business process because it always influences the enterprise ability to operate both
internationally and nationally. There are different key barriers in the business process that affects
the organisation in global world.
Overcoming the language Barriers- This is the main issues in the business process
because There are many people those who are unable to connect with the another people.
Linguistic issues go beyond the simply hiring translator that help for people at the time of hiring
processes and real estate buying (Schandl and et.al., 2018). It is needed for organisation to
provide the training to their employee related the language. Many people uses the native
language for the purpose of communication. For Example- Both Australians and American speak
English language but other groups are used native language for speaking. It makes sure the firm
to control the sensitive inconsistencies and doesn't depend on direct translations.
Overcoming cultural Barriers- The lack of understanding towards the cultural
differences is a major issues that can lead to increase the tragic misunderstanding between the
people. It causes the business to get some bad condition and situation. Siemens is mainly focused
towards the cultural issues that occurs between the employees. It is needed for organisation to
maintain the good relationship to the employee. At some areas of firms are less receptive to the
lady manager. On the other hand, Few cultures are opposed to the women at workplace.
Working across the time Zone- This is another key barrier and issue that represents the
situation of working across time zone. In the Siemens, it supports the Local IT and regular to
shut down for their backing up files in the different branches. Sometimes, the central branch of
Siemens firm is not middle of their midnight backups when other branches needs to work on the

basis of company budget (TallmanLuo and Buckley, 2018). This issue will affect the entire
communication gap between the employees in the organisation.
Working with multiple currencies- This is the main key barrier in the business because
the currency exchange is more volatile other than the politics factors as well as religious
differences. It is directly impact on the Siemens operations and their functions. This organisation
is also used the software to handle the calculation of business process. It makes sure the
organisation is done the currency exchange in consistently across the firm.
Dealing with the infrastructural issues in different countries- Siemens business is
developed all over the world. It is rarely considered where there will adequate power to manage
and sustain the business operations. On the other hand, Roads will be adequate for getting in
supply to build the facilities and services. Siemens business, it has faced many issues such as
getting reliable internet access, finding the adequate educated workplace and other related the
logistical issues or infrastructural. It is needed for organisation to maintain their local
infrastructure and support the workforce environment at organisation.
Dealing with Multi-national laws- It is the most difference in the doing business outside
the countries. For Example- Contract law is the most radically issues at the workplace and many
other local cultures as the serious problem in the organisation. It is an essential of business
process to maintain the legal counsel that provide and guided the people to follow all the rules
and regulation in proper manner (TallmanLuo and Buckley, 2018). These are different laws
create ta differences in the hiring and firing laws, property ownership laws, advertising and
marketing or many other issues.
Assuring the secure file and sharing across borders- Security and privacy is the
important terms that help for organization to manage and secure their important information
related the business. All the employees are collaborated with the other people to share their
documents with other branches. It is necessary for business to secure the data while offering to
maintain the optimal performance. It can be utilised all the users to centralise the storage of files
by using Azure cloud. Sometimes, Many attackers has affected the important data of business
that's why, it is needed for organisation to maintain and control the file while preserving the data
integrity.

CONCLUSION
From the above study it can be concluded that, exploration of the global market advances
huge opportunities to the business. This report has provided various key factors that effects the
global market of the Siemens and such key factors lead to the great impact on the profitability of
the firm. It has also been determined various challenges and strategies faced by the industry and
also some methods to diversify such strategies. It has also provided various ethical and
sustainable influences of global market on a business. This has also been analysed that
stockholders plays the important role in engaging the positive relationship within an
organisation.

REFERENCES
Books and Journals
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Mohamad, M.A. and Chin, O., 2018. The Effects of Business Networking and Entrepreneurial
Munificence on the Business Sustainability of Small Rural Business. Global Business
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Nakos, G. and Whiting, A., 2018. The role of frequent short exams in improving student
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Schandl, H. and et.al., 2018. Global material flows and resource productivity: forty years of
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Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global
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Online:
Global Business Environment. 2018. [Online]. Availabile
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