CAMECO's Global Business Environment: A PESTLE Analysis Report

This report examines the global business environment, focusing on CAMECO, a fast-growing energy and chemical company. It begins by defining globalisation and its driving factors, including competition, cost, market dynamics, and governmental influences. The impact of digital technology on globalisation is also discussed. A PESTLE analysis is conducted to assess the political, economic, social, technological, environmental, and legal factors impacting CAMECO's international operations. The report further explores the challenges of globalisation, strategic challenges, and provides recommendations for overcoming them. It analyzes CAMECO's organizational culture, structure, and governance using McKinsey's 7S framework and assesses the impact of these factors on global operations, including Hofstede's cultural dimensions. Ethical and sustainable considerations in the global market are evaluated, along with their impact on decision-making. Finally, the report suggests suitable strategic expansion routes for CAMECO, outlining their advantages and disadvantages. The report concludes with a summary of the key findings and recommendations for CAMECO's successful global expansion.

GLOBAL BUSINESS
ENIRONMENT

Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1) Introduction to the concept of globalisation.......................................................................1
2) Explanation of driving factors related to globalisation......................................................2
3) Significant impact of digital technology upon globalisation.............................................3
4)Complete and present a PESTLE analysis of the organisation...........................................4
5) Challenges of globalisation and strategic challenges represented for organisation...........5
6) Appropriate recommendations to overcome those challenges ..........................................6
TASK 2............................................................................................................................................7
1) Explain culture, structure and governance of organisation. Apply McKinsey's 7S to
illustrate organisational overview...........................................................................................7
2) Impact of above factors on global operations and Hofstede's dimension of culture to
demonstrate organisational influence.....................................................................................8
3) Evaluation of ethical and sustainable factors company has to consider in global market10
4) Impact of factors on decision making in global context..................................................10
5) Strategic expansion route suitable for organisation along with advantages and
disadvantages........................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Global business environment is referred to several external factors which surrounds an
company and impacts its operation & decision making procedures. It specifies the nature of
international trade as it evolves in a manner that impacts global commerce in a considerable way.
Global business environment impacts the manner in which a business operates within
marketplace (Adekola and Sergi, 2016). This assignment is written in context with CAMECO
which is a fast developing energy and chemical company, situated in South Africa. As company
is growing its existence at a fast rate, company is operating business activities into countries like
Australia, Canada, Mozambique and Gabon. This report will cover different driving factors
associated with globalisation. Also, it will discuss influence of digital technology on
globalisation. Beside this, a Pestle analysis will be carried out that will helps in understanding
external business factors in a detailed manner. Influence of globalisation on organisational
governance, leadership, culture and structure are discussed. Also, ethical and sustainable
globalisation are evaluated along with different way of taking decisions. At last, different ways
of internationalisation are mentioned.
TASK 1
1) Introduction to the concept of globalisation
Globalisation is defined as the integration of markets in global context which leads
towards the enhanced interconnectedness of domestic economy. There are different markets
which are largely influenced by globalisation. Some of these markets are financial market
including credit market, capital market, commodity market including coffee, gold, tin, oil
market, electronic market etc. CAMECO is a fast emerging chemical and energy company which
is headquartered in South Africa. Company has also managed a stable position in countries like
Australia, Canada, Mozambique and Gabon. Beside this, company is planning to further expand
its business operations in other nations worldwide. In this regard, it can be stated that company
wants to sustain a firm position globally. For this, it is essential for the manager in company to
acknowledge appropriate global business environment. There are some benefits that CAMECO
will enjoy while operating at global level. Some of these benefits are mentioned below:
 It will offer a chance to CAMECO to gain comparative advantage that will results in
enhanced sales.
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 Access to larger market will benefits the concerned company in experiencing high
demand of their products i.e. chemicals and energy sources, which will results in
reduction in average cost of production (Armstrong and et. al., 2015).
 It will allow company to have access of cheap priced raw material without compromising
with quality that will help CAMECO to be cost competitive in their domestic market and
foreign market as well.
2) Explanation of driving factors related to globalisation
There are different driver which are associated with globalisation. These drivers benefits
a company in acknowledging the global business environment and relates aspects in a desired
manner. Main drivers for globalisation involves competition, cost, market and government.
These are the external drivers which posses a visible impact on the performance and functioning
of companies which wants to enhance their business presence in a global context. These external
drivers impacts the success and profitability of company in a direct manner., in case of
CAMECO which is a company dealing in chemicals wants to increase its business presence in
other nations of globe. In this regard, company is already managing operations in four
international market including Canada, Australia, Gabon and Mozambique. For expanding
business presence in other regions, company is required to consider different driving factors of
globalisation which are mentioned below:
 Cost: It is the opportunity associated with global scope or scale economic along with
sourcing efficiencies which reflects differentials in cost among different countries or
regions. Cost of production and other associates costs will vary for different nations.
This is because of different prices associated with land, labour capital etc. These
differences will leads to maximum investment and enhanced international trade that will
benefits CAMECO in attained expected revenues and profitability (Black, Morrison and
Gregersen, 2013). For example, if Company wants to operate in UK, 1,000 workers will
be ready to work at 150 dollars per month which is quite high as compared with
developing countries. Due to which, Expanses of company will increase and rate of
products will enhance. But as workforce in UK is highly skilled and capable, company
will attain high returns due to which high profitability will be achieved.
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 Market: One aspect related with globalisation is satisfying the needs and requirements of
customers in a desired manner. As people around globe require similar products and
services, appropriate marketing of products and services will benefits the company in
achieving expected outcomes. In order to gain wide success, it is essential for CAMECO
to acknowledge the needs of customers in different regions before offering them
products. By this, company will get to know which kind of product is required in which
place and satisfaction level of customer will enhance. For example, if CAMECO wants to
expand in UK, they need to understand the requirements of people residing there. So that
firm can sustain a strong position in new market.
 Environment: It related to the laws and rules which are imposed by government to limit
trade in a foreign country. To achieve high profit margins, manager in CAMECO is
required to properly understand the business environment of a nation before initiating
business activity there. In case, business environment is suitable, company is going to
enjoy high returns and revenues. But if environment is not suitable, CAMECO can also
face business failure.
 Competition: Every sector faces high competition whether it is retailing or
manufacturing. Competition is related with the rivalry which will be faced by companies
operating in same industry. This competition will take place in order to earn high
revenues and profitability. It is important for CAMECO, to identify their potential
competitor and rivals before expanding business in a new market. This will help them in
formulating appropriate strategies that will help in gaining competitive advantage to
company in foreign market. Expanding work in those areas where competition is low will
benefit CAMECO in earning high revenues (Boshyk, 2016).
3) Significant impact of digital technology upon globalisation
Advancement in technology have posses a considerable impact on globalisation and
aspects related with it. In fact, technological progress is an important driver for globalisation.
There are different aspects related with digital technology i.e. information technology,
communication technology, transportation technology etc. These technologies posses a
considerable impact on globalisation. Internet and social media have enhanced the desire of
individuals to use foreign products. As people are connecting with each other at a faster rate due
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to enhanced technology, interchange of culture and preferences have emerged. Due to this,
people form different nations have became a part of unified place and the essence of
globalisation has enhanced. Without digital technology, it will be different for people to
communicate with one another and business organisations will face issues in transporting
products to different part of world (Cassidy, 2016). This will results in reduced interaction
between different economies and nations, which can results as a big loss for companies like
CAMECO which want to expand at global level.
4)Complete and present a PESTLE analysis of the organisation
PESTLE analysis is a tool that will benefits CAMECO in analysing the business
environment of foreign country where company wants to expand business. In this regard,
PESTLE analysis is carried out below:
 Political factor: These factor plays a vital role in identifying the factors which impacts
the long term profitability of CAMECO corporation in a specific market or country. As
company is operating in industrial mineral and material in different nations and wants to
expand further. Company must have to face different political environments and risks. In
this respect, manager in company is require to consider risk of military invasion, level of
corruption, trade regulation, trading partners etc. to achieve expected profitability. Due to
Brexit, UK has faced political instability as rules and regulations that were governing
trade norms have changed completely. In this regard, UK government have taken some
decisions which have impacted large business organisations in a negative manner. In this
context, CAMECO is required to adopt those policies and decisions that will be in favour
of regulations of UK government so that revenues of company can be maintained.
Otherwise, they may have to pay high penalty in foreign company.
 Economic factor: These factors are associated with interest rate, inflation rate, saving
rate, foreign exchange rate etc. CAMECO can advantageously use economic factors of a
country to forecast their growth trajectory. It will be beneficial for company to operate in
those foreign markets where disposable income of people is high. If people are not
financially stable, then company can face business failure (Cavusgil, S. T. and Knight,
G., 2015). International trade in Foreign market benefits CAMECO in accessing large
marketplace with billions of customers. Due to this their product became familiar among
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more people. This will results them in high sales and profitability due to which they will
gain competitive advantage over local companies.
 Social factor: Culture of society and manner of performing work impacts the culture of a
company. Shared attitude and belief of people plays an essential role in deciding if
CAMECO cooperation will be capable to acknowledge the preference of customers in a
given market. There are some social factors which are needed to be analysed by
CAMECO corporation in order to achieve success in a foreign nation such as
entrepreneurial spirit, demographics, attitude, leisure interest etc. if company will not
consider this aspect, then it can face heavy loss of revenue.
 Technological factor: Technology is advancing in at a faster pace. One of the good
example in this regard is transportation as technology is transforming really fast, it has
become easy to deliver a product to another place in a shorter time period. A company is
requiring to perform technological analysis so that those aspects can be adopted which
can be profitable for company (Cavusgi and Knight, 2015). If CAMECO will not update
their technology, customers will change their shift towards other company that will result
in heavy loss of revenues.
 Environmental factor: Different markets have different norms associated with
environmental standards. It can highly impact the profitability of the company.
Sometimes within a country, different states have different environmental rules and
regulations. For example, in UK, government have introduced healthy tax break for
companies that deal in renewable energy sector. CAMECO is required to acknowledge
the climate change, weather, laws about environmental position, recycling facilities etc.
So that all the work can be performed in a sustainable manner.
 Legal factor: in some countries, legal framework is robust and it protects the intellectual
property rights of a company. CAMECO is requiring to properly evaluate these legal
aspects before entering a new market so that company not have to pay high penalties and
fines due to negligence of legal laws. Manager in CAMECO is required to analyse health
and safety laws, environment laws, discrimination law, copyright laws etc.
5) Challenges of globalisation and strategic challenges represented for organisation
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A strategic challenge is a critical issue which is faced by a frim while achieving their
mission, vision, aims and objectives due to inefficiency in strategic management or
organisational structure. This can affect the overall working of a company operating in a new
foreign market. For ex, CAMECO Chemicals deals in offering metal and mineral products to
other organisations. In this case, company faces issue as rival company can outpace them by
providing same metals and minerals n less amount (Ferraro and Briody, 2017). Identification of
challenges related with strategies and globalisation is the first step in formulating a robust
strategic plan. It involves issues between nations and identification of the reasons that results in
these issues. In case of UK, minimum wage of workers is high due to their enhanced skills and
capabilities. Due to which if CAMECO wishes to expand their, they need high investment and
finances which are not possible to acquire with simple business planning. Finding of strategic
challenges will help the firm in understanding their specific requirements in a timely manner. In
context with CAMECO, there are three kinds of strategic issues which are identified.
 Issue which require little or no action for now but are required to be monitored on
continuous basis such as presence of rival companies within marketplace (Voegtlin,
Patzer and Scherer, 2012).
 Issues which can be sorted out with the help of basis strategic plan of company like
timely supply of raw materials and resources.
 Issues which require immediate response and can’t be handled in an appropriate
manner such as economic instability of market or loss of market share.
6) Appropriate recommendations to overcome those challenges
In order to overcome challenges faced by CAMECO, there are some recommendations
which can be given to the manager so that these disadvantageous situations can became
meritorious and will results in achievement of goals and objectives.
 It is recommended to the manager in CAMECO to formulate and implement pricing
strategies in a manner that it will help the company in achieving their targets along with
benefits customers so that rival companies can’t gain competitive advantage in any
manner( Popescu, 2013).
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 Another recommendation is to interact and negotiate with more number of suppliers. This
will help in reducing the bargaining power of supplier and shortage of required material
will not be faced by company.
 It is recommended that CAMECO is required to properly analyse market and related
aspects like economic stability, political stability etc. in a proper manner so that company
can only invest in those regions which will promise high business growth and shares.
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TASK 2
1) Explain culture, structure and governance of organisation. Apply McKinsey's 7S to illustrate
organisational overview
Structure: CAMECO uses matrix structure and in accordance with that the management
and employees of company perform business activities. With the help of this structure, company
can share and transfer all the required information in a desired way. Also, limited resources of
the company will be used optically (Cavusgil and Knight, 2015).
Culture: Company follows soft culture due to which major emphasis is given to all
tangible and intangible objectives associated with the company. Tangible objectives of
CAMECO will include documents, report, services, products, budgetary benefits etc. Intangible
objectives of company will include providing training to team members, developing project team
etc.
Governance: effective governance will helps the company in attaining their long term
objectives in a systematic manner.
McKinsey's 7S model:
There are different aspects related with this model. These aspects are divided into soft
and hard elements which are mentioned below:
 Strategy: It is a plan that is developed by a firm to achieve competitive advantage in
market. Different strategics which are formulated by CAMECO must be align with
business objectives of organisation. While formulating strategies for globalisation,
company is required to consider aspects on structure and operation so that sustainability
can be attained.
 Structure: Hierarchical structure of company will help the company in performing
business operations in a systematic and organised manner.
 System: The system used at CAMECO is unique as uranium products are produced.
System can considerably impact globalisation if the new market conditions will not be
known to company in a desired manner.
 Shared value: Shared value associated with CAMECO are assisting the workforce of
company so that organisational goals can be attained in a unified manner. Company is
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require to maintenance these values so that globalising can result them in enhancing of
revenues and profitability.
 Skills: Employees in CAMECO are required to have capabilities and skills by giving
them proper training so that organisational productivity and profitability can be increased
desirably (Uchihira, Ishimatsu and Inoue, 2016).
 Style: it involves management and leadership. These style varies from one another. The
manager in CAMECO is required to follow democratic style in which opinion of
employees will also be considered. This will motivate them to deliver their best
performance.
 Staff: CAMECO has a staff of around 3400. To hire employees, skill tests are conducted
so that capabilities of hired workers can be acknowledged.
2) Impact of above factors on global operations and Hofstede's dimension of culture to
demonstrate organisational influence
Organisational structure, culture and governance can considerably impacts the global
operation in either a positive or negative manner. Organisational structure is that system which
outlines different activities which can be performed by company in a desired manner. Company
follows mix structure which is beneficial for global operations as strategies will be implemented
according to the required situation so that desired outcomes can be achieved. If organisational
structure of company is not effective then it will became difficult for company to manage global
activities in a proper way. Organisational culture will decides the coordination and dedication of
employees (Groşanu and et. al., 2015). If CAMECO will have appropriate organisational culture
then company will be able to expand internationally without facing any complexities but if
organisational culture is not suitable then mismanagement of work will takes place and company
that can also impact the brand reputation of company. In case of CAMECO, following of
effective governance procedure will benefits the company in understanding different laws and
regulations of different nations in a desired manner. Due to which company doesn't have to pat
high penalties and fines for not considering the laws and procedures.
To grow successfully in a global manner, CAMECO can adapt some aspects which are
mentioned below:
 Company can enhance the sales of existing services and products by offering them at
lower rate than rivals in foreign market.
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 To internationalise in a proper manner, company can formulate and implement different
strategies that will help them in gaining competitive advantage over rival companies.
Hofstede model: This culture dimension theory is used by different organisations so that
different cultural background of workforce can be understood properly. In case of CAMECO,
this model will help the company to sustain an appropriate working culture due to which
organisational profitability and productivity will increase. Aspects related with this model are
stated below:
 Masculinity vs. Femininity: According to this factor, decisions must be taken by
management according to the welfare of entire staff. Masculinity denotes material
rewards, assertiveness and heroism to achieve success where as feminism denotes
modesty, cooperation and care of everyone. In case of CAMECO, company is require to
be modest and cooperative so that all working staff can work properly.
 Power distance index: Manager in CAMECO needs to provide equall freedom and
power to its workforce. This will help them in delivering their best performance as they
will feel more valuable. Every employee in company must be given work according to
their skill and capabilities (Hamilton and Webster, 2018).
 Individualism and collectivism: It stated that if employee will consider their personal
needs, it is not possible for company to attain its organisational needs. By this profit
margins of CAMECO can get considerably impacted. To overcome this, manager is
required to follow collective approach where every individual will work in a unified
manner.
 Uncertainty avoidance index: CAMECO is enhancing its business presence in new
international markets that can arises some problem for company. It can results in risks
and high uncertainty. Changing regulations and rules can results CAMECO loss of
revenues and profits. Low certainty will help the company in achieving desired outcomes
without any complexity.
 Long and short term orientation: Long term orientation defies that individuals are
required to be modest, thrifty and pragmatic whereas short term orientation defines
individuals needs to put emphasis on principle and truth. As CAMECO is
internationalising itself, company is require to plan long term orientation.
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 Indulgence vs Restraint: Nations having high IVR score can encourage its population to
be happy whereas countries having low IVR suppresses the gratification of people.
Restraining the employees can results in heavy loss of revenue for the company.
3) Evaluation of ethical and sustainable factors company has to consider in global market
Ethical and sustainable factors and their influence over business operations: There are various
ethical and sustainable issues which can impact the organisations in the global market. These
factors are discussed below:
Loyalty of customers: Loyalty of customers is a major factor which can impact the
sustainability of Cameco in the global market. If the customers are not satisfied with the products
of the Cameco then their loyalty will decrease and they will opt for the products of the
competitors of the Firm. So the Cameco needs to ensure that they are providing their products
according to the demand and expectations of the customers for ensuring their satisfaction.
Through this satisfaction, company can ensure the loyalty of the customers which will also assist
the firm in sustaining in the market for a long period of time (Khilji, Tarique and Schuler, 2015).
Ethical factors
Loyalty of the employees: Loyalty of the employees is associated with their work
satisfaction. The business firms needs to follow the rules and regulations of employment in an
ethical manner for ensuring that the employees are satisfied in their working. If the employees
are not satisfied, then Cameco needs to provide them rewards and other monetary benefits for
enhancing their satisfaction and motivation. The motivate and satisfied employees stay loyal to
the organisation which will assist the firm in achieving the sustainability in the global market.
4) Impact of factors on decision making in global context
Impact of these factors on the decision-making of company
While operating in the global environment or market, firms such as Cameco needs to
ensure that their provided products are of good quality which will enhance the customer
satisfaction. Satisfied customers purchases the products from the same company due to the trust
and loyalty. If the customers are not loyal, then company needs to take more decisions so that
their satisfaction and loyalty can be enhanced. Dissatisfaction of customers can also negatively
impact the decision making as the customer may feel bored from the company and the sales of
the company can reduce.
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Whereas dissatisfied employees would not work with the required efficiency and it will
negatively impact the decision-making process of organisation. This is because the taken
decisions may not proved beneficial for the employees which is the reason of dissatisfaction. The
company needs to modify their decisions for ensuring the satisfaction and loyalty of the
employees (Laudon and Traver, 2016).
These factors must be considered by the Cameco while taking their decisions in order to
ensure the satisfaction and loyalty of the employees as well as of customers. Through this, the
company can sustain in the market for a long period of time in the global market.
5) Strategic expansion route suitable for organisation along with advantages and disadvantages
There are different expansion routes which can be followed by an organisation to expand
their business presence in international market. These routes are different in their approach and
working pattern. Some of expansion routes which can be followed by CAMECO are exporting,
joint venture, franchising, licensing, wholly owned subsidiary etc. In exporting, products and
services are offered to customers direct form the company. Market research and distribution will
be handled by company only. In joint venture, company joins hands with other companies due to
which expanses due to business activity decreases and expertise knowledge and resources are
gained.
Franchising is defined as a contractual agreement where a retailer signs an agreement
with a franchisor so that goods and services of company can be sold in return of specific
commission or fee. In licensing, a right is given to the licensee by licensor so that products can
be used for selling purpose. In this, licensee earn profit and licensor earns royalty which was
fixed by both parties while signing agreement (Tregear, 2015). In case of CAMECO, Joint
venture will be the suitable methods to internationalise its business. These routes are mentioned
below:
Joint venture: It is defined as a cooperative enterprise where two or more than two
organisation join their forces so that strategic and tactical edge in the market can be gained
appropriately. Different organisations consider joint venture to pursue a specific task. This task
can either be a new business or a new project. CAMECO can initiate it will the help of
contractual agreement. All the losses and profits will be shared by the CAMECO and other
participant in accordance with the owned shares.
Advantage:
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 Initiating a joint venture will offer the opportunity to company to attain new expertise and
insights. By joint venture in a new market, CAMECO can easily take advantage of the
already existing customer base that the partnering company has sustained.
 CAMECO will have access to strategical beneficial resources like advanced technology
and specialised staff. All the expanses for these resources will be shared by the
concerning parties (Salvatore, 2015).
Disadvantage:
 This market route restricts the flexibility of the company due to which individual
businesses suffers loss of profitability or revenues.
 As different companies will work with CAMECO, imbalance in investment, expertise
and assets will be faced which can impact the involving companies in a negative manner.
CONCLUSION
From above mentioned report, it has been concluded that there are different aspects
which are associated with global business environment. To drive global trade and business,
aspects like cost, market, competition and environment is needed to be considered. Complexity
of strategic challenges can acts as a barrier in the success of company. Influence of globalisation
on organisational governance and leadership, structure, function and culture etc. different ways
of decision making will benefit the company in taking strategically right decision. Different
routes for internationalisation will benefits the company in expanding global business
appropriately.
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