Contemporary Business Issues in a Globalized Environment: A Report

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Contemporary Business Issues In a Globalized
Environment
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Table of Contents
Introduction......................................................................................................................................4
Main body........................................................................................................................................5
Conclusion.....................................................................................................................................11
Reference list.................................................................................................................................12
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Introduction
At the exact study, issues regarding contemporary business from the perspective of globalised
environment will be analysed. In order to do so, a brief description regarding globalisation will
be represented at the first part of the study. In addition to that, key benefits of globalisation and
its effect into the process of conducting international business will also be represented at the
study. Moreover, it is quite clear that some external environmental factors do put heavy emphasis
towards the business operation process of international organisation. Some of those factors such
as socio-cultural, financial and technological will be described at the part of the project. Marks
& Spencer has been considered as the chosen organisation for completing the study. It is a
famous UK based retail organisation. The organisation earns more €10 million at the end of 2018
financial year and they have more than 80 thousand employees worldwide.
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Main body
1. Discuss the benefits of globalisation
Globalisation can be recognised easily as an integration process between the economic constants
of different nations. The basic fats of globalisation are closely associated with trading, capital
investment, labour migration, capital flow and technological growth (Steger, 2017).
Globalisation in recent context is resulted towards removing the barriers from national
economics and it also encourage free flow of different services, goods, capital, labour and many
more things. The global economic is constantly being globalised since most of the developed or
developing countries are trying to remove or lower their quotas and traffics for arranging a free
flow in economical context (Pieterse, 2019). Technologies that have been used for
communication purpose and transportation can be illustrated as the key reason behind the
increment of free trading as well as globalisation.
Usage of latest technologies mostly allows a range of different international business
organisations to get involved at the process of globalisation. Several diverse illustrations showed
that large multinational organisations are continuously trying to breaking down their business
and functional operations for creating the opportunity of globalisation in recent context. Most of
the business organisations are opted to conduct globalisation since it present many benefits
towards these business organisations. The expected benefits of globalisation have been described
below:
Globalisation allows free trading among different nations and multinational organisations. Free
trading allows multinational organisations countries to exchange subsequent resources and goods
(Crane et al., 2019). Free trading is the foremost benefit of globalisation as it allows
organisations to lower their lower the overall price of different products or services while
maintaining the quality. In addition to that, globalisation is also responsible for free movement in
terms of labours, which ultimately allows different organisations to access skilful employees in a
comparable lower cost. Therefore, globalisation also provides workers the opportunity of setting
up their career at multinational organisations that is better and beneficial for their career growth.
Moreover, globalisation is solely responsible for greater competition level among different
international organisations. Greater competition is ultimately beneficial for the general
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consumers as they can enjoy greater quality products with a lower cost. Furthermore,
effectiveness of globalisation also allows different international business organisations to
increase their primary investment, which is beneficial for developing countries.
Globalisation is also beneficial for other reasons as well. As an instance, globalisation has the
possibility of increasing the economical growth and GDP rate of a nation, which is quite helpful
at balancing international economical stability (Bourguignon, 2017). Moreover, globalisation
increases the awareness regarding pollution among the social inhabitants, which is an essential
step towards making sustainable environment.
2. Put forward arguments on how at least three (3) of the external environmental factors
from the list of factors identified below have influenced you as an individual and on any
company of your choice.
Every other retail organisations like M&S depends into socio-cultural factors as its operational
as well as functional success closely depends into the socio-cultural factors of the host country.
Since M&S is a UK based retail organisation, it can be described that socio-cultural factors of
UK make direct impact at the success criteria of the organisation.
Close analysis of UK social trends do illustrate the fact that there is a recent change at the overall
habits of UK residents as they are opted to cook rather than relying into readymade and packaged
products. Some of UK based people do like to cook food as they think it is an intrinsic part of
their daily life. Thus, retail organisations like M&S that sell grocery and raw products for
cooking can increase their sales figure at the market place of UK. Moreover, modern society of
UK has a huge demand of foods, drinks and other household products, which clearly indicate the
fact that M&S can further increase their sells figure of while selling food related products.
In addition to that, the annual growth of UK population has been expected to be 0.6% (Hakulinen
et al., 2018). This statistics clearly shows that the demand of cloths and foods is going to
increase even in future context. It will assist retail organisations like M&S to increase their
overall revenue generation. The organisation M&S is also quite popular for its luxury clothing
product range. At least 13% of UK population is consumed by Millennial. Millennial are the
major buyers of fashion clothing for major parts (Taylor-Robinson et al., 2017). Therefore, it is
expected for M&S to increase the sales of luxury clothing products in future context as the
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percentage of millennial is expected to grow even greater. It is quite natural that different
generations have the possibility of bringing in perceptible shits in context of consumer
behaviour. Consumer behaviour has the credibility of setting new trends from the perspective of
clothing and food industry. Therefore, it is quite essential for M&S to look after the buying
pattern and behaviour of millennial and generation X, as it seems these two has the possibility of
directly influencing the revenue generation of M&S.
The organisation M&S put heavy emphasis and consideration at their respective social agendas.
For developing their brand image and overall market reputation, the management of M&S
introduced a sustainable strategic planning that can assist them at building effective relationship
with their suppliers, consumes and outer community (Selim, 2017). For being effective and
efficient towards the millennial and generation X the organisation is trying to redistribute their
partners for reaching their potential and existing consumer base.
The economic factors as well stability has highlighted the fact that citizens of UK always opted
to spend a heavy amount for buying luxurious clothing and food cuisines. The spending power of
UK based consumers are quite high in comparison with other parts of EU, which indicates that
M&S is quite successful at bringing up their revenue generation while conducting their basic
business operations at the market sector of UK.
However, it has been observed from different instances that due to the recent competition and
steady increment of agriculture, the price of food and food related products is continuously
decreasing at the market sector of UK. This social trend might negatively affect the operational
cost of M&S, as they need to lower the price of their food related product for coping up with the
recent competition (Green et al., 2016). Nonetheless, the rate of fashion and trendy clothing is
rising at a consistent manner and despite of heavy competition there is no sign of price demur.
Therefore, M&S can consider upbringing premium pricing strategy for moving up their revenue
generation.
Financial factors of UK have influences on an individual working for Marks and Spencer. GDP
growth rate holds a major significance for a person involved in retail sector. Increase in GDP
signifies good financial health of UK, which is perfect for flourishing of retail industry. This can
bring in more investors. It is necessary to utilise this opportunity as an individual. In present
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situation, GDP rate of UK has a growth of 1.18 percent, which is indicating a positive scenario
(statista.com, 2019). This will bring major opportunities in M&S, due to better financial
condition. This will bring UK into notice of other major countries. It may give chance for
improve trade relationship with them. Therefore, as an individual, a person may feel more
secured regarding his or her job.
Per capita GDP in UK has as extraordinary amount of increment in 2019. Present amount is
31.82 thousand pounds per capita (statista.com, 2019). This indicates that many people will have
sufficient money to purchase retail products from M&S. This has become a positive factor for an
employee of this company. This will sustain this company in future and make jobs secure. An
individual may get opportunities to earn more money by reaching higher position in this
company. In a market, where growth is constant, M&S will definitely look to provide more
benefits for employees.
Disposable income in areas like Kensington, Chelsea, Hammersmith and Fulham is three times
that area like Nottingham. On average, their household income amounts 58816 pounds. This
factor indicates there spending ability of these households is quite high. This indicates that there
are possibilities that these people may buy retail products more from M&S. An individual will
have to use this opportunity by improving brand image of M&S amongst those people. This can
bring in more financial benefits for this company, which will directly affect positively on jobs
(bbc.com, 2019).
Financial growth of UK will influence M&S positively. This may bring interest of BRIC
countries such as Brazil, Russia, India and China for investing in UK retail sector. There are high
chances that companies will be interested in joint venture, collaboration and other kind of
partnership with M&S. This will bring new opportunity to delve into more adventurous venture.
This will give M&S opportunity to yield more financial benefits. Economical growth of UK
opens up trading option for M&S (Bean, 2016). They can exploit this situation by collaborating
with foreign companies. Influence of this particular financial factor is positive on M&S.
Technology can connect shareholders, investors, customers and employees of M&S. This
increases coordination between them. High coordination can result in more productivity. Issue
regarding business can be solved. M&S can find more suppliers by using communication
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technology, which will help in decreasing cost for raw material. This will provide benefits for
both employer and employee.
Due to high level of increment in GDP per capita in United Kingdom, new opportunity for M&S
has arrived. There are now more financially stronger customers, who can contribute to growth of
M&S. Retail organisations such as M&S will greatly benefit from this. There is a higher chance
of increasing profit, as customers may purchase products in bulk. M&S may try to use this
situation by introducing new products. There are economically rich regions in UK where higher
chance of selling retail products is available. Greater London holds a huge amount of wealth in
UK. Chances for selling products of M&S are high here. People will be more willing and can
become loyal purchasers. West Wales, Cornwall, Lincolnshire are some poorest regions of UK.
Due to low economical strength, M&S have lesser chances for selling their most items in these
regions. This is a negative influential factor for M&S. Therefore, it becomes a major drawback
for M&S in terms of profit (theguardian.com, 2016).
Technological advancement in retail sector has influenced M&S. Customisation can be seen as
personalisation. This has become a notion, which is becoming a dominating factor. Customers
are demanding shopping experience, which are specially personalised for them. They are
demanding more control during shopping procedure. An individual will have to learn these
technologies to maintain customer satisfaction (Kowalkiewicz et al., 2017). BOPIS or buy online
pickup in store is advancement in technology. Many customers prefer to use this method.
Customers are trying to use this method especially when they are travelling. Therefore, an
individual should know proper specifications of this technology (Gao and Su, 2016). This person
will have to learn these methods to maintain performance inside M&S. Data are easily available
due to modern software available to employees of UK. An individual will be able to use these
technologies and perform tasks better. This will help an individual to bring out solutions to
sustain in competitive market. This gives an individual an idea about the competitive market in
retail sector. Therefore, every decision made by this person in M&S will be focused on achieving
competitive advantage.
E-commerce business is booming in market. Brick and mortar stores of M&S face a serious
threat due to this. Therefore, it decreases profit share of M&S, as many other brands are easily
accessible by E-commerce platforms (Laudon and Traver, 2016). There is a chance that sales
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will be decreased. An individual’s career in M&S depends largely upon financial condition of
this company. Therefore, chances of losing jobs will become high. Automation has become
relevant in M&S. Machines are replacing people, which is harmful for jobs. An individual may
not be required anymore, as machines may replace personnel. Therefore, this environmental
factor will become harmful.
Technology have not only given advantage to M&S buy it has put same technological resources
in hands of competitors. Major rivals of M&S have access to these same technologies and they
are easily aware of their rival. It acts as a disadvantage, as M&S can face tough competition in
market. Cyber security has become an issue in technological advancement. There are many
hackers, who have malicious intent to invade privacy of M&S. This is security issue as database
of M&S hold many secret trade data. If these are leaked, then it will become disastrous for them.
Therefore, it has forced M&S to add extra layer of security in their system (Jideani et al., 2018).
People are asking for customised experience in retail shopping. Therefore, M&S will require
modifying their approach of selling products. They will have to personalise their website for
customers and study their buying pattern to integrate it within their product suggestion. If they
can apply this method, some financial benefits will come in their way. Usage of BOPIS amongst
customers has increased at great deal. People are willing to use this method to make their
shopping experience better. Therefore, integrating this system in M&S has some specific
requirements. Gadgets, devices and other software applications will be necessary to cope up with
this change. These utilities will assist M&S to utilise this technology in their organisation.
Automation is beneficial for M&S. Efficiency will be soaring high due to usage of it. Cost of
automation is much less over long period. There are initial costs for setting it up but later it can
give more output than employees can. In addition, it will help M&S finish work in short amount
of time. Due to higher productivity, M&S will stand as a top retail company (Kumar, 2016).
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Conclusion
This particular study discussed more than a few benefits related to globalisation. Globalisation
helps in sharing technical knowledge, decreases trade barriers amongst cross border nations.
Therefore, it helps in creating more job opportunities for job creation. There are influences of
culture and society, which shapes buyer behaviour in retail sector. Financial factors like GDP
growth, GDP per capita bring more opportunity for M&S to increase their business.
Technological factors may influence both individual and M&S. Some points in favour of
technological advancement and some disadvantages are highlighted. It can be deduced that these
environmental factors will influence M&S and an individual.
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