Tommy Hilfiger in Global Market: Strategic Analysis and Complexities

This assignment provides a comprehensive analysis of Tommy Hilfiger's global business strategies, focusing on the key factors driving globalization and the strategic complexities influencing its global environment. The report identifies market, cost, governmental, and competitive drivers, along with international economic integration, foreign direct investment, and international trade. Strategic challenges such as international trade law, taxation policies, and supply chain management are discussed. The essay examines the influence of globalization on the organization's governance, leadership, culture, structure, and functions using the McKinsey 7S model. It also considers the impact of ethical and sustainable globalization on decision-making and strategy. This document is available on Desklib, where students can find a wealth of similar solved assignments and study resources.

GLOBAL BUSINESS

Table of Contents
INTRODUCTION................................................................................................................................2
TASK 1 REPORT................................................................................................................................3
TASK 2 ESSAY...................................................................................................................................8
CONCLUSION.................................................................................................................................15
REFERENCES...................................................................................................................................16
1

INTRODUCTION
The organizations in the business industry have been gaining effectiveness and growth due to
different strategies. There are several business operations which are conducted by the
organizations so that they could gain huge market share and attain a pinnacle in the industry.
This report focuses on understanding the global environment of an organization name Tommy
Hilfiger regarding their position in the industry. It has been observed that the organization faces
different complexities during their operations in the global environment. The complexities have
been explained in the report such that the effective understanding of the complexities helps in
assessing the position of the organization in the market (BARTLETT and BEAMISH, 2013). It is
necessary to take suitable measures regarding the complexities which further help the
organization in gaining substantial growth and building a strong image in the global market.
In the initial phase of the report, different prime elements are discussed that leads the
globalization. In addition, there are several strategic complexities in the business which
influence the business activities and operations at great extent. These strategic complexities are
determined in the report in order to conduct smooth functioning. Further, there are various
factors during the operations in the global market that possess an influence on the
organizational elements such as structure, culture, and functions. At last, the influence of
globalization on the decision-making and strategy of the organization is discussed. The
knowledge and information of these areas will help in handling the global issues of the
organization effectively.
2

TASK 1 REPORT
TOPIC – KEY FACTORS THAT ARE DRIVING GLOBALIZATION AND STRATEGIC COMPLEXITIES
WHICH INFLUENCE THE GLOBAL ENVIRONMENT
INTRODUCTION
Globalization is one of the major elements that help the organization in gaining effectiveness on
the global platform. There are certain drivers of globalization that helps in conducting the
business operations smoothly. In addition to this, there are various factors which need to
consider during the business at the global level. The strategic complexities of the business
functioning of the Tommy Hilfiger could be observed in form of different aspects. Being an
advisor to the Board of Directors of Tommy Hilfiger, these aspects have been explained in detail
as follows.
BODY
In the recent time, the globalization has become the most effective trend in the industry. It is
helping the organization in gaining effectiveness and successfully conducting the operations at
the global level. The term globalization could be understood in terms several aspects such as
political, economic, social, and cultural. The knowledge of globalization through these areas
helps in gaining effectiveness.
Political globalization is known as the expansion and intensification of the political interrelation
at the global level. The political globalization aspect comprises of modern-nation state system
which has been influencing the global governance and political system (DANIELS, et al. 2017). In
addition, the economic globalization is known as the expansion of economic interrelation at the
global level. It focuses on the internationalization of the trade and finance, enhancing the
power of transnational organizations, and improvement in the international economic
institutions. The cultural globalization is a development of cultural flow at the global level
(DERESKY, 2014). Culture is a vast area but in terms of globalization, it focuses on the
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articulation and construction. The social globalization focuses on the development of social
aspects at the global level.
There are four major factors which drive globalization effectively regarding the business of the
organization. The factors which drive the globalization are markets, costs, governments, and
competition. The market is based on four areas such as homogeneous customer needs, global
customer needs, global channels, and transferable marketing approaches. The market of
Tommy Hilfiger is similar to the other clothing industry such as H&M and Lewis which provide
similar products to the customers (GUAY, 2014). Tommy Hilfiger has been focusing on selling
their products in the market as per the needs of the customers. Also, they use effective
channels for the selling of their products. In addition to this, the cost factor also plays a major
role in globalization. It is based on several aspects such as large-scale and large-scope
economies, sourcing efficiencies, arbitrage opportunities, favourable logistics, and high
research and development (R&D) costs. The cost element favours the globalization as Tommy
Hilfiger invests huge cost in the promotion and marketing of their products such that
investment in R&D of the products helps them in gaining effectiveness in the market. Tommy
Hilfiger has been grabbing every possible opportunity in order to gain effectiveness and
substantial growth in the market.
The other factor that drives globalization is government such that it is based on three aspects
such as favourable trade policies, common technological standards, and common
manufacturing and marketing regulations. It is observed that the favourable trade policies have
been helpful for the organization in the globalization process. Also, the role of government in
the business operations of the organizations is helpful in the globalization. Furthermore, the
competition is also one of the important factors that drive the globalization. It has been
observed that the competition in the business could be observed due to the business
functioning of the interdependent countries and also due to the global competitors (PENG,
2014). The major competitors of Tommy Hilfiger in the market are H&M, Lewis, GAP, Nike, etc.
which are influencing its global presence at the huge level. These drivers build a change in the
industry such that the business has been growing rapidly as the organization has been
considering the factors effectively.
4

In addition, there are other factors also which possess a substantial influence on the
globalization such as international economic integration, foreign direct investment, and
international business and trade. International economic integration is also known as global
economic integration in which an arrangement is developed between two regions regarding the
reduction of the trade barriers and challenges along with the fiscal and monetary policies
(Trompenaars & Hampden-Turner, 2011). It helps the businesses of organizations like Tommy
Hilfiger in effectively conducting their business operations in the country to gain growth in the
market. In addition to this, the foreign direct investment is also one of the potential drivers that
help the organization in establishing their business at global level effectively. The business of
Tommy Hilfiger is conducting effectively in India through foreign direct investment such that
they have built a strong position in the market. At last, the international trade and business
possess a huge influence on the organization as the business operations at global level attain
huge development and growth due to effective policies and procedures. Tommy Hilfiger has
used such practices for conducting their business operations at the global level.
Tommy Hilfiger has been conducting their operations at global level effectively but it is
observed that there are certain strategic challenges that lead complexities in their operations. It
has been observed that the international trade law possesses a huge impact on the functioning
of the organization at the global level. The international trade laws are developed in order to
conduct smooth functioning of the business at the global level. The strategic plans of the
organization are developed for the global operations through the international laws (Ferraro &
Briody, 2017). The impact of international trade law is observed in both private and public
sectors. The taxation policies also hinder the business operations of organizations like Tommy
Hilfiger. It has been evaluated that the business functioning and operations of Tommy Hilfiger
face several challenges due to the international trade laws. The influence of political, economic,
social, and cultural factor has a great influence on the international trade laws such that trade
relationships between the countries and organizations are affected.
In addition, the strategic complexities of the business operations at the global level are
observed in the economics of globalization and environmental impacts of the globalization. The
economics of globalization focuses on capital, technology and information, free movement of
5

the goods, and services. It is helpful in the expansion of the local, regional and national
economies at the global level. There are various challenges that are faced by the economics of
globalization such as energy and environment security, global imbalances, global health issues,
conflict and poverty, development of new power, and global incorporations (Louhiala-Salminen
& Kankaanranta, 2011). These challenges have influenced the business functioning of Tommy
Hilfiger at the certain level. Globalization possesses a huge influence on the environment which
could be observed through different aspects. The business functioning of Tommy Hilfiger
possesses a low influence on the environment as the raw material used for the business is eco-
friendly and the waste of the products is also low.
The international supply chain management has been becoming more complex in the recent
time. There are five major supply chain management challenges which could be faced by
Tommy Hilfiger in their business functioning. Initially, they need to enhance the customer
access and gain effectiveness in the supply chain planning. The next challenge is the
improvement in the supply chain plasticity in the complete process. The total cost of supply
chain and risks in the supply chain management also incurs various consequences. At last, the
weaker model of supply chain affects the organization in their effective functioning
(Kowalkowski, et al. 2011). Tommy Hilfiger needs to effectively manage and handle these areas
for gaining effectiveness in the business.
CONCLUSION
It has been depicted from the above report that the globalization possesses a huge influence on
the business functioning of the organization at the global level. There are various aspects which
need to be considered by the organization for conducting their business operations at the
global level. The drivers of globalization should be assessed and utilized by the organization in
gaining required outcomes effectively. In addition to this, the strategic complexities of the
business operations regarding the global environment needs to be managed and handled
effectively so that the organization functioning could be done smoothly. The knowledge and
information which have been gathered from the report will help the organization in forming
effective global business strategies for the future.
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RECOMMENDATION
It is necessary for Tommy Hilfiger to assess the global environment and develop suitable
strategies. In addition to this, there are several international trade policies which influence the
functioning of the business at some level but it could be handled effectively through
cooperation with the government. Suitable strategies for business should be implemented for
the functioning at the global level.
7

TASK 2 ESSAY
INTRODUCTION
The globalization plays a major role in the business functioning and operations of the
organization at international level. It has been observed that there are different factors which
influence the globalization and its elements at the great level. There are various barriers that
lead change in the leadership decision-making. In addition to this, the globalization possesses
an influence on the governance and leadership, culture, structure, and functions of the
organization. Also, the ethical and sustainable globalization possesses influence on the
functioning of the organization. It is important for the organization to develop effective
decision-making for smooth operations (Okoro, 2012). Moreover, the organization could use
different strategies and techniques in order to work at the global level. These areas will be
effectively understood and explain in this segment effectively.
BODY
The organization effectively conducts their business operations at the global level through
globalization such that they gain effectiveness and attain huge market share. Tommy Hilfiger is
one of the biggest clothing organizations that have expanded their business operations at the
global level through different channel and mediums. It has been observed that the globalization
possess huge influence on the organization. McKinsey 7S model of the organizational structure
is considered for effectively understanding the influence of globalization on the organization. It
also helps in the influence of globalization in terms of governance and leadership, culture,
structure, and functions of the organization.
The McKinsey model relies on 7S which have been divided into two categories such as Hard S
and Soft S in which the Hard S comprise of strategy, structure, and system while the Soft S
comprise of style, staff, skills, and shared values (De Jonge, 2011). These 7 elements are helpful
in understanding the influence of globalization on the organization effectively. The strategy of
the business by Tommy Hilfiger has been enhanced due to the globalization of the organization
has been using potentially strong strategies in order to conduct their business functioning. In
8

addition to this, the structure of Tommy Hilfiger has been organized and effective such that
their governance and leadership practices are effectively conducted at the global level for
gaining effectiveness. The governance and leadership practices of the organization possess
substantial influence due to the globalization (Koh, et al. 2012). Also, the system of the
organization comprised of several processes and procedures which are conducted in order to
accomplish the desired objectives effectively.
In addition, the skills possessed by the employees and staff members are helpful for the
organization in gaining effectiveness and high productivity in the market. Further, the staff is
one of the major elements of the organization such that they play the important role in the
growth of the organization. In globalization, the high efficiency and quality from the employees
help the organization in conducting their global operations effectively. The style of the
organization is known as the methods through which the organization is managed by the top
authorities. There are different styles which are followed in Tommy Hilfiger such as contingency
theory, scientific management theory, and situational leadership. Further, the shared values of
the organization reflect the culture at the certain level. It comprises of the norms and standards
which assist in the behaviour of the employee and the company actions. The values of the
company effectively maintain during the globalization of business as it helps in gaining
effectiveness and smooth functioning of the business. It has been depicted from the above
information that the globalization possesses a huge influence on the organizational elements
such that the elements need adequate strategies for effective functioning (Vera-Baquero, et al.
2013). Also, the organization functioning has been gaining effectiveness at the global level due
to the globalization.
It has been observed that the functioning of the organization has been influenced by the ethical
and sustainable globalization at the great level. Globalization is known as the rapid growth and
expansion of the business operation at the global level regarding the change in government
policies and advanced technology. The sustainable globalization is a transformation regarding
the people and business processes at the global level. It has been observed that there are six
elements that help in understanding the sustainable globalization effectively such as economic,
technology, poverty and inequity, limits to growth, the movement to talent, and geopolitical
9

(Wild, et al. 2014). The economic element is dependent on the environmental, social, and
governance (ESG) framework and GDP such that the financial analysis helps the organization in
developing effective strategies for the future development. Tommy Hilfiger has effectively
conducted this element in order to initiate their sustainable globalization. The technology
element comprises of the service sector and levelling of the playing field. Poverty and inequity
possess elements like the bottom of the pyramid, new market creation, and CSR. The limits to
growth possess elements like manufacturing sector, agribusiness, and ecosystems services.
Movement of talent has two elements which are urbanization and migration (Vogel, 2010). At
last, the geopolitical aspect possesses elements like governance, terrorism and security,
nationalism vs tribalism, and democratic capitalism. Every element of each aspect possesses an
influence on the sustainable globalization such that the organization needs to consider in these
areas for effectively conducting their operations at the global level. In addition to this, these
elements require adequate attention during the sustainable globalization as every element
possesses a huge impact on the business operations of the organization.
The ethical globalization comprises of several aspects which possess a huge influence on the
organization. It is essential for the organization to consider the ethical aspects regarding
globalization in order to conduct their business functioning and operations effectively. Initially,
the organization has to assess the cultural and ethical values of the country where the
organization has to establish their business operations. In addition to this, environmental
aspect is one of the major elements of the ethical globalization as the environmental
regulations of the host country should be followed by the organization for conducting their
business operations. In addition, the organization should ensure that their business operations
are not affecting the environment. Further, the human rights and employment practices also
come in the ethical aspects such that the organization has to consider ethically regarding the
employment condition in the host country and introduce the required employment opportunity
for the people (Zikmund, et al. 2013). Also, the human rights such as freedom of speech,
freedom of movement, freedom of association, freedom of assembly, and freedom from
political repression, need to be followed by the organization during the business at the global
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level. It is also depicted that the unethical factors could be developed due to several elements
such as ineffective organization culture, leadership, decision-making process, performance, etc.
The major aspect needs to be considered by the organization is the decision-making process.
The force field analysis is an effective tool that helps in analyzing the influence on the decision-
making. This analysis is based on the equilibrium between the forces that lead change and the
other that resists the change. For conducting a change the driving force needs to be
strengthened or the resisting forces should be weak. Here, the force which leads changes and
which resist changes in Tommy Hilfiger depends on both internal and external factor (Griffin &
Pustay, 2012). The internal factors that lead changes are low team morale and huge growth in
business while the external factors are expansion opportunity and change in demographic
trends. In addition to this, the internal factors of the forces that resist changes are weaknesses
and current structure of organization while the external factors are government legislation,
partnership in business, and obligations toward customers. Each element has been given the
certain score which helps in evaluating the outcome of the analysis. The result of the analysis
could be attained in two forms such as decide whether the changes are leading forward or not
and thinking which supportive forces need to strengthen while which resisting forces need to
weaken for the change. After assessing the scores, it has been evaluated that the plan for
change in the organization is favour such that the strong forces would be helpful in
accomplishing the desired outcomes.
Decision-making is one of the effective practices of the organization such that the people in the
organization use this practice in order to conduct several operations and activities. For
becoming a successful manager, it is necessary to execute decisions that are effective such that
the manager properly organizes, plans, leads, staffs, and handles the team effectively. There are
several decisions which are taken by the manager for the appropriate functioning of the
organization. In globalization, the effective decision-making is helpful for the organization in
accomplishing their required objectives. The decision-making process is comprised of seven
basic steps such as defining the problem, identifying the limiting factors, developing potential
options, analyzing the options, choosing the most appropriate option, implementing the
decision, and developing a control and evaluation system. These steps are essential for the
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decision-making of the organization (Sloan, 2010). It has been observed that the effective
decision-making of the organization like Tommy Hilfiger at global level helps in conducting the
business operations and activities effectively which further helps in accomplishing the desired
objectives.
The decision-making and the strategies of the organization are influenced by different factors
such as principles of leadership change and the process of internationalization. There are ten
principles of leadership change management in the organization such as lead with the culture,
start at the top, involve every layer, make the rational and emotional case together, act your
way into new thinking, engage, lead outside the line, leverage formal solutions, leverage
informal solutions, and assess and adapt. These ten principles lead effective change in the
organization such that influencing the decision-making and strategies of the business at the
global level. It has been observed that the sudden change in any one of the principles of
leadership change substantial influence is observed in the decision-making and strategies. In
addition to this, the process of internationalization also possesses a huge influence on the
decision-making and strategies of the business at the global level. Internationalization is known
as the process through which the organization increases the organizational operations and
activities at the global level (Zott, et al. 2011). There are different processes through which the
organization could internationalization. Tommy Hilfiger has been focusing on
internationalization process by exporting their products to the other country and also direct
purchasing by operating the new factory in the market.
The internationalization process could be understood through different theories and
approaches. The major theory is new trade theory while the most appropriate approach is the
Uppsala model. In addition to this, there are other theories also such as contingency theory, the
economy of scale, and contract theory. Tommy Hilfiger has been using Uppsala model for
conducting their business operations at global level effectively. It is essential for Tommy Hilfiger
to effectively choose the most appropriate internationalization process for the business
operations.
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In addition to this, the international expansion strategies also possess a huge influence on the
decision-making and strategies of the business activities and operations at the global level.
Tommy Hilfiger possesses various kinds of strategies that are helpful in their expansion at the
global level. The major methods which could be used by Tommy Hilfiger in the expansion of
business at the global level are exporting directly to the international consumers, selling with
help of overseas distributors and agents, conducting business operations overseas, and joint
venture. Every expansion strategy possesses several advantages and disadvantages of the
business functioning of the organization. In addition to this, there are some risk factors which
are necessary to be considered for the effective business functioning such as cultural
differences, language issues, and legislation. The advantages of the exporting direct to the
international consumers are uses existing systems, online promotion, the establishment of the
direct customer relationship, and high-profit margin while the disadvantages are the risk of
non-payment, no physical contact with customers, and potentially bureaucratic. The
advantages of selling with help of overseas distributors and agents are less transaction to
handle and cost-effectiveness while the disadvantages are less profit margin and ineffective
management of the customer service (Cavusgil, et al. 2014). The advantages of conducting
business operations overseas are the relationship with suppliers and customers, avoid tariff
barriers, and control over quality and customer service, while the disadvantages are higher risk,
significant cost and investment of management time. At last, the joint venture has several
advantages such as the most appropriate method for entering the market, less risk, and buying
expertise of existing market while the disadvantages are strong competitors and wrong
investment in the business.
Furthermore, the strategic decision-making of the organization is one of the effective methods
that help in the functioning of the organization such that the business objectives are
accomplished effectively. There are various elements that are necessary to consider during the
strategic decision-making such as strategic planning, SWOT Analysis, Cost-Benefit Analysis, and
Stakeholder Advices. The knowledge of these elements helps the organization in conducting the
strategic decision-making effectively and also gaining effectiveness in the market. In addition, it
has been observed that the international trade barriers possess a huge influence on the
13

decision-making and strategy of the organization. There are various kinds of trade barriers such
as tariffs, non-tariff barriers to trade, import licenses, export licenses, import quotas, subsidies,
voluntary export restraints, local content requirements, embargo, currency devaluation, and
trade restriction. These barriers affect the decision-making and strategy as the business
functioning and operations are affected at the huge level.
CONCLUSION
It has been evaluated from the given report that the global business of the organization is
dependent on the various essential element such that structure, culture, function, governance
and leadership. In addition to this, the decision-making and strategy for the global business are
also influenced and depends on various elements. The knowledge would be further used in
order to accomplish the desired business goals.
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CONCLUSION
The above report has been helpful in acquiring the adequate understanding and knowledge of
global business. In addition to this, the report helps in understanding the role of globalization in
the effectiveness of the organization. There are various aspects which are needed to be
considered by the organization for conducting smooth global operations so that the
organization possess the substantial share in the market. The knowledge and information that
have been attained from the report will be further used in appropriate instances effectively.
15

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