Thermax Ltd: Evaluation of Global Business Environment Factors Report

This report provides a comprehensive analysis of the global business environment, focusing on Thermax Ltd., an engineering company operating in the energy and environment sectors. The report begins with an introduction to the business environment and its impact on company performance, emphasizing the influence of legal, political, technical, social, and environmental factors. It then evaluates factors driving globalization, such as competition and cost, and their effects on Thermax Ltd.'s operations in 75 countries. The report also includes a PESTEL analysis of the company's home country, India, examining political, economic, and social factors and their potential impact. Furthermore, it addresses the challenges faced by Thermax Ltd. during globalization, including structural changes, cost differences, and leadership issues. The conclusion highlights the necessity of the PESTEL framework for understanding the external environment and developing strategies to address complexities, along with the importance of factors such as competition and cost. The report concludes by referencing relevant academic sources.

GLOBAL BUSINESS
ENVIRONMENT

TABLE OF CONTENT
• Introduction
• Evaluation of factors which drive globalisation
• Challenges faced by the firm in the process of globalisation
• Conclusion
• References

INTRODUCTION
• Business environment can be defined as the external environment in which the business
organisation is continuing their operations. There are internal and external factors that effects
their performance. The global business environment is impacted by the legal, political, technical,
social and environmental factors. These factors effect their performance in such as way that there
is an decrease in the profitability and productivity of the company. This report will focus on
Thermax Ltd. And the environment in which they operates. Thermax Ltd. Is an engineering
company which operates in the energy and the environment. This company was founded by A.S
Bhathena in 1966 headquartered in Pune, India.

EVALUATION OF FACTORS WHICH DRIVE
GLOBALISATION
Globalisation is a process of integrating two or more economy with the aim of expanding the business
operations. This involves sharing of culture, knowledge, belief system, goods & services and so on. Thermax
Ltd. Has expanded its operations in 75 countries which have sustained their effective leading image in the
industry. The company is affected by many factors while performing globalisation. In relation to this following
factors are explained:
Competition: The company is affected by intense competition in the external environment. But this competition
motivates the company to performer their business effectively in order to maintain their competitive advantage.
The major competitor of Thermax Ltd. Are BHEL, Fontus, Alstom and so on. The strategies of these firms
effects the productivity of the company. Therefore, it is necessary for Thermax Ltd. To analyse its key
competitors in order to gain maximum market share.

CONTINUE…..
While evaluating the impact of these factors it is founded that the cost factors affects the most. The company must try
to achieve efficiency with minimum cost and maximum profitability. Also, Thermax Ltd. Is facing intense competition
in the industry which forces the company to adopt effective production technique which will elevate their position in
the industry. Also, the company must adopt marketing strategies which will enhance their customer engagement. This
will strengthen their workforce to work towards the attainment of high performance of work.

PESTEL ANALYSIS
• PESTEL analysis can be defined as a framework which will help in the evaluation of the external
environment of the company. Since the Thermax Ltd. Has its headquarter in India so this analysis will
be based on the working environment of the home country of the compnay. The PESTEL framework
can be explained as follows:
• Political Factors: these factors define the influence of the government authorities on the working
environment of the business. Thermax Ltd. Is located in India so the company is much more influenced
by the government decision. The country is famous for their political scams and dynamic decisions of
political leaders. So, the company must take care of the these factors which will help them to sustain
continuous growth and survival. The company can consider these factors as threats as the prediction of
these factors is difficult for the company.

CONTINUE…
• Economic factors: These factors involve the inflation rates, unemployment rates and so on. The company is
effected by these factors. India usually faces inflation which affects the productivity of the company. The
company have to incur a lot of expenses on their raw material and employment of labour. These factors are
considered to be a threat in the productivity process of the company.
• Social Factors: These factors include the cultural diversification, social and demographic factors, lifestyle
trends and many more. India has a diversified culture and Thermax Ltd. Have to keep focus on each of the
diversified cultural trends to serve the customers in a better way. The analysis of the trends and cultural
diversification help the company to develop innovative and personalised products.

CHALLENGES FACED BY THE FIRM IN THE
PROCESS OF GLOBALISATION
• Globalisation is a complex tropics which faces many challenges in the external environment. The
company gets an opportunity of entering into the other nation and a new market. Moreover, these
challenges are related to the strategic decision taken by the company towards the growth and
development. The challenges faced by the company can be explained as follows:
• Change in structure: The first major issue is the change in structure of the company. These
problem arises some of the issues like change in the external environment of the company,
change in workforce effectiveness and many more. Thermax Ltd. Must focus on maintaining
efficiency in their working environment in order to achieve the level of performance. This will
ensure their growth and productivity.

CONTINUE…..
• Cost differences: There is a numerous differences in the level of cost across the different parts of globe. Thermax Ltd.
Is working in the global environment. The company is developing strategies in order to get cheap labour with effective
resources. The operational cost of the company can be reduced by introduction of technology and coordinating the
resources towards the achievement of the goals of the company.
• Leadership: It is difficult to find effective leaders with knowledge and skills regarding the product in the particular
geographical area. Thermax Ltd is focusing on recruiting the workforce which can lead the team towards the success
path. Also, for this the company adopt different management style and theories of leadership which will enhance their
working. The recruitment of attracting competent talent towards the company is a sign of successful global strategy.

CONCLUSION
• From the above report it can be concluded that PESTEL framework is necessary to get an
overview of the conditions prevailing in the external environment. Also, there is an need to
develop strategies in order to tackle the complexities in the working environment. These
complexities arise due to the impact of certain factors that impacts the environment. Moreover,
this report covers the factors that drive the globalisation. It includes factors such as cost,
competition and so on. Furthermore, this report emphasize on the challenges faced by the
organisations while expanding their operations worldwide.

REFERENCES
• Ahmadi, F., Rahimi, M. and Rezaei, A., 2018. Study of relation between business model and sensemaking
decisions. Journal of Humanities Insights, 2(02), pp.99-108.
• Amponsah, C. T. and Ahmed, G., 2017. New global dimensions of business excellence. International Journal of
Business Excellence, 13(1), pp.60-78.
• Baller, S., Dutta, S. and Lanvin, B., 2016. Global information technology report 2016. Geneva: Ouranos.
• Bergquist, A. K., 2017. Business and sustainability: new business history perspectives. Harvard Business School
General Management Unit Working Paper, (18-034).
• Boshyk, Y. ed., 2016. Business driven action learning: Global best practices. Springer.
• Esmaeilpour, M. and Barjoei, S., 2016. The impact of corporate social responsibility and image on brand
equity. Global Business and Management Research, 8(3), p.55.