Analysis of Global Business Environment: Unit 18 Report

This report provides a comprehensive analysis of the global business environment, focusing on globalization, its drivers, and supply chain management. It begins with an introduction to globalization, defining its key aspects and highlighting its significance in the modern economy. The report then delves into the driving factors of globalization, such as advancements in IT, the rise of new payment systems, capital mobility, and the increasing number of multinational corporations. A SWOT/PESTEL analysis of a sample organization is conducted to evaluate its strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, legal, and environmental factors influencing its performance. The report further explores the complexities of international supply chain management and the opportunities and challenges presented by globalization, including risk and diversification strategies. Recommendations are provided on how to capture these opportunities and overcome challenges. The structure, culture, and governance of the organization are examined using the McKinsey 7S framework, and the influence of ethical and sustainable globalization on the firm's functions is discussed. Hofstede’s Dimensions of Culture are applied to illustrate the impact of culture on the organization. Finally, the report evaluates how global operations have influenced the organization and its adaptation to the global market, analyzing strategic expansion routes and their advantages and disadvantages before concluding with a summary of key findings and recommendations.

Running head: UNIT 18
UNIT 18
Name of the Student
Name of the University
Author Note

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Executive Summary
The globalization can be described as an initiative which is undertaken by the enterprise to
expand its operations to the outside of the country. Hence, the globalization is a global
phenomenon. The aim of the report is to highlight the concept of globalization, its drivers,
and the supply chain as a concept. It examines the external environment of the firm and
provides recommendations and changes in organizational relationships due to the overall
goals can be attained.

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Table of Contents
An introduction to the concept of globalisation.........................................................................3
An explanation on the driving factors of globalisation..............................................................3
SWOT/PESTEL analysis of the organisation............................................................................4
SWOT analysis.......................................................................................................................5
Explain the complexities of international supply chain management........................................6
The opportunities and challenges of globalisation faced by the organization, in context of
risk & diversification strategies and supply chain management................................................7
Recommendations on how to capture those opportunities and overcome the challenges.........8
An explanation of the structure, culture and governance of the organisation............................8
McKinsey 7S..........................................................................................................................9
Inffluence of the etical and sustainable globalisation on the functions of the firm...................9
Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has been
influenced.................................................................................................................................10
An evaluation of how the above factors have been influenced by global operations and how
the organisation has adapted to operating in a global market to overcome the barriers..........10
Assess which strategic expansion routes the organisation took and analyse both advantages
and disadvantages.....................................................................................................................11
Conclusion................................................................................................................................11
References................................................................................................................................12

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An introduction to the concept of globalization
The globalization can be adequately defined as the integration of the markets which exist in
the global economy and leads to the increased interconnectedness of the overall global economies
(Morden 2016). The different markets where the concept of the globalization is particularly
significant can be stated to be with consideration to the financial markets, the credit markets, the
insurance markets and the different markets for the oil, coffee, product markets and the markets for
the consumer electronics and motor vehicles. In association with the globalization of the
entertainment industry and the sports can also be featured as a developed of the 21st century.
The globalisation can be stated to be rather advantageous in nature due to the reason
that it has the capability of providing various benefits to the different individuals and also
gives perks for the countries to specialise and benefit from the associated applications of the
comparative advantage (Karadag 2015). Moreover, the countries which have increased access
to the markets may benefit greatly from the economies of scale, associated considerations and
benefit.
Moreover, another reason why the concept of globalisation has become increasingly
popular can be contributed to the fact that, the globalisation has helped the various businesses
to have a wide access to the cheap labour and raw materials present. It can be deemed to be
cost competitive and hence engage in successive global sourcing which helps to increase
revenue, ensure successful operations and improve the profits for the different shareholders
as well.
As the globalisation has increased, the concept of the free trade has become very popular and
in association with this, it becomes critical to state that, the Globalisation can be taken as an
effective phenomenon and can be known to increase the availability of goods and services
from all around the globe. In consideration of this, it can be considered to be very important
for the firm to engage in sustainable operations and ensure effectiveness of resources.
An explanation on the driving factors of globalization
However, it is effective to consider that, the globalisation as a concept has not resulted
and taken place all of a sudden but it is a result of various drivers and factors which led to the
globalisation as a phenomenon and a concept. In consideration of this, the different driving
factors of globalisation can be mentioned to be as follows:
1. The developments in the field of the IT have brought about
considerate growth and development in the field of globalisation
and business. In consideration of this, it is critical to state that, as
the internet can be used 24/7; the use of communication has
increased the businesses and interactions to a great extent (Hornstein
2015).
2. The increase in the social media and related concepts has dropped
down the national boundaries. In consideration to this, the different
individuals can easily communicate with an individual as present
across the border, the different companies have been using the
means of social media to micro market and directly target the
customers. The firms have gained access to the global virtual
market (Morden 2016).

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3. The rise of the new electronic paying systems such as the e-wallets,
prepaid aspects, mobile pay and related e-Invoices have assisted in
increasing the global trade as a whole and have contributed
effectively to the increase of the globalisation.
4. The possibility of the mobility of the capital has also led to an
increased global trade and related aspects. In association with this,
it is considered critical to mention that when the capital moves
freely from one country to another, it can easily engage in
investigation and related aspects to ensure long term goal
attainment and success (Meyer, Neck and Meeks 2017).
5. According to Lasserre (2017), the complex financial produces such as
the derivatives have enabled the overall collapse of the communism
as a concept and has assisted increased investment in the overall
global trade. The trade openness has increased from 25 to 40% for
the industrial economies and additionally from 15 to 60% for the
emerging economies.
6. The increase in the number of multinational and transnational
companies. As the number of multinational as well as the
transnational companies have been increasing to a greater extent,
there has been a rise in the global trade of related companies such
as the Microsoft, Apple, Google, Mc Donald’s and Sony (Lasserre 2017).
The drive to decrease the tax burdens and avoid regulation has
established complex business structures.
SWOT/PESTEL analysis of the organization.
The PESTLE analysis can be described as a strategic management tool which can be used by
the various enterprises in order to assess the different opportunities which are available to the different
firms. In connotation of this, the given section will assess the Political, social, technological,
sociocultural and the legal as well as environmental factors to understand the different factors which
have a critical influence on the overall performance of the Yummy Goods company as a whole and
understand how these factors affect the overall performance of the firm as a whole.
Political Factors
The political factors can be stated to be the government of the county in which the
firm tends to operate. In association with this it also relates to the trends which take place
choice of the audience. As the different individuals are becoming increasingly health
conscious, it becomes important for the firm to ensure that, they are being able to abide by
the public health policies as these policies push healthier options such as the lower sodium
and the lower sugar intakes successively (Krugman 2017). The Health Menu choices act
states that the different food chai companies need to state the calorie options clearly, so as to
ensure that the purchase of the food options can be altered and assessed accordingly.
Moreover, there are several Food safety acts which need to be followed by the yummy foods
to ensure considerate welfare. Additionally, the aspects like the strength of the government,
the overall taxation and inflation along with other governmental support to the operations of
the firm in Hong Kong (Hanson et al. 2016).
Economic Factors

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The state of the country along with the overall unemployment rates of the country can
have a huge influence on the manner in which the firm tends to perform. As the healthier
alternatives are available to foods, the prices keep fluctuating (Northouse 2018). Other
aspects influencing the economic factors are aspects relating to the interest rates, associated
costs, demand and supply of the industry along with the competition existing in the industry
can be mentioned to be the factors which can influence the operations of the Yummy Foods
in Hong Kong.
Social Factors
The social factors can be described as the fast food trends in the Hong Kong market.
In consideration of this, it is essential to mention that, there has been considerate rice in the
whole foods industry along with the organic products and this has been influenced by the
changing lifestyle of the different individuals as present in the market. In association of this,
it is essential to mention that, the choice of the consumers has been changing and the food
options such as the vegan, vegetarian and the pescetarian are becoming lifestyle choices
instead of the fad (Mowforth and Munt 2015). The trend has been observed to be ore popular
amongst the younger audience. In association with this, various fast food organizations have
been adopting healthier lifestyle choices and offering the different individuals to make better
purchases. The manner in which the firm has been promoting it goods has also become
increasingly popular.
Technological Factors
The technological factors can be described as the information and related technology
which is generally adopted by the businesses in order to promote their products in the market
and to produce them as well. The use of technology is made in several fields such as the
packaging, manufacturing and the promotion as well. Yummy Foods is also exposed to
various options and in order to gain advantage, it would be required to ensure considerate
engagements. The technology also assists them to research and find new ways of performing
well (Moutinho and Vargas-Sanchez 2018).
Legal factors
The legal factors refer to the various acts and bills which re passes against or in favour
of the healthy food options The Yummy Food as an enterprise when operating in the Hong
Kong is subject to all acts before carrying out the operations.
Environmental factors
The environmental factors can be referred as to those factors which relate to the
conservation of the environment. As stated earlier, more individuals have been becoming
vegetarian in order to see to it that they are being able to contribute to the environment and
conserve the limited resources (Hornstein 2015).
SWOT analysis
The SWOT analysis is another strategic management tool which is made use of the
enterprise to assess the strengths as well as the weaknesses of the different enterprises
operating in the globe. Hence, in this section, the strengths, weakness, opportunity and threats
of the yummy food will be discussed critically (Karadag 2015).

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Strength
The strengths can be essentially described as the capabilities of the enterprise which
are useful in combating against competition and attaining the opportunities which exist in the
market. In association with this, the strengths of the enterprise can be mentioned to be as
follows:
 The firm is one of the largest fast food chain companies as present in the country
 It is a growing brand
 The firm makes use of local food items
 The brand can be considered to be a well-managed brand with adequate food options
and opportunities.
Weakness
The weaknesses can be described as the shortcoming of the enterprise which often
acts as a barrier in the path of the enterprise. The Yummy Food limited can be understood to
have the given shortcomings or weaknesses:
 The fast food is not very healthy
 The firm has limited options available in Hong Kong
 The marketing of the firm is not very effective (Krugman 2017)
 The prices offered can be considered to be quite high
Opportunities
The opportunities can be described as the availability of those options inside the
business environment or arising outside the business environment which may be beneficial
for the firm in the long run. In association with this, the different opportunities which are
available to the yummy foods can be stated to be as follows:
 The demand for the fast food has been increasing in the developing regions as well.
 The demand for the vegan food items has also become very popular and in association
with this, the enterprise can aim to extend its operations adequately by engaging in
adequate experiences and opinions such as vegan meals.
 The business can seek to expand its operations outside of Hong Kong such as the
South East Asian countries or Australia (Mowforth and Munt 2015).
Threats
The threats can be stated to be the presence of certain factors in the business
environment which contribute to the overall downfall of the firm or act as a barrier. The
different threats to which the Yummy Food can be stated to be as follows:
 The ongoing scale of life threatening diseases. The Covid 19 can be stated to be one
of the pandemics which have caused a great deal of panic and fear around the world,
with special reference to China and this could result in adequate threat.
 The firm faces acute competition from various enterprises as present in Hong Kong
and globally.

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 The local fast food chains also offer a tough competition to the enterprise and its
operations.
Explain the complexities of international supply chain management
The supply chain management can be described as a complicated concept which is undertaken
by an organization to increase the revenues and expand the product portfolios. In consideration with
this, these aspects introduce complexity into the business and risk the offerings. The complexities in
supply chain fundamentally refer to the manner in which the different aspects of the firm and its
procurement activities are influenced by the different factors performing in a business environment.
The first reason why the international supply chain can be understood to be complex is because of the
customer accommodation (Driskill 2018). This simply means that, meeting the demands and the
needs of the different customers is not any easy task and any business which aims to ensure long term
operational success would need to undertake these demands.
Globalization can be mentioned to be another reason why a firm generally tends to get
involved in a complex supply chain. If the firm operates globally, the supply chain of the firm needs
to be designed in a manner such that, it is being able to maintain effective relations with the suppliers
around the globe. Lastly, the internal pressures and the trends can be described as another set of
factors influencing the business. The primary issues lying with the frim refers to the issues like
restrictive options and costing considerations.
The opportunities and challenges of globalization faced by the organization, in context
of risk & diversification strategies and supply chain management
After assessing the different risks and diversification strategies along with the complexity of
the supply chain management, the different opportunities and challenges which will be faced by the
enterprise in relation to the globalization can be mentioned to be as follows:
Opportunities
The opportunities which are largely available for the enterprise can be mentioned to be as
follows:
1. Expansion to Australia
At present, the firm does not have any operations and exports to Australia. Therefore, in association to
this, the firm would be required to plan accordingly in order to see to it that it is being able to expand
its operations to Australia which would successfully engage the firm in considerate operations.
2. Adopting the vegan way
At present the enterprise is not engaged in adopting the Vegan food options but this may be a sound
alternative which the firm might choose to undertake in the long run. In consideration of this, it is
important for the Yummy Foods to see to it that it is being able to expand the market and at the same
time adopt the vegan way (Moutinho and Vargas-Sanchez 2018).
3. Market and product diversification
Therefore, in association of the two given opportunities, as per the Ansoff matrix, the firm can engage
in adopting the market development and the product development strategy with the help of which it
can either expand to new markets or develop new vegan product options.

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Challenges
The challenges which are being faced by the enterprise can be stated to be as follows:
 Brand image of the firm: The brand image of the firm is currently at stake. This can be
mentioned because, the company is from Hong Kong and at present the firm has to take
considerate precautions because of the fingers being pointed against the firm. In association
with this, it can be considered effective to state that, as the firm does not have adequate
healthy options associated with it, the firm is not being able to ensure effective branding.
 Expansion costs: Although the firm may adopt the market development or the product
develops strategies, it will be required to engage in adequate investments so as to attain
success in one of the segments (Obstfeld 2015).
 Product alignment: The product alignment with the needs of the market or the alignment of
the needs with the current offerings and capabilities of the firm might not be possible.
Recommendations on how to capture those opportunities and overcome the challenges
Hence, the yummy foods as an enterprise are exposed to a number of challenges and the
opportunities. The different challenges which are available at the firm can be mentioned to be as
follows:
Opportunities
To ace the opportunities which the firm is currently facing, the firm would be required to see
to it that it is being able to engage in effective market research in regard to the kind of investments
which the firm may be required to undertake in the market. In association of this, it becomes quite
effective to state that, once the firm is being able to engage in effective research and criteria, it will be
required together adequate sources and continue with its plans.
Challenges
To overcome the current challenges, the new product development is important and to meet
with these challenges, the firm can get into an association with other firms through a joint venture and
this would assist the enterprise in ensuring successful outcomes and expansion plan.
An explanation of the structure, culture and governance of the organisation
Structure of the firm
The organizational structure can be described as the hierarchical relationships which exist in
the enterprise and the manner in which one association tends to get into another association with
another party while trying to engage in associated operations. Hence, the structure has a sound
influence on the overall operations of the firm and it must be aligned in a manner such that the goals
of the enterprise are attained (Obstfeld 2015). The current structure of the enterprise ca e understood
to be hierarchical in nature.
Culture

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The organizational culture can be stated to be the guiding forces as employed in the
workplace. In association with this, it becomes critically essential for the enterprise to see to it that it
is being able to carry out the different cultural aspects. At present the culture of the business
environment can be stated to be quite supportive and hierarchy oriented.
Governance
The corporate governance can be defined as the manner in which the different aspects relating
to the operations of the firm are required to be managed. Aligning with this, any firm needs to carry
out its governance aspect in a manner such that, no unethical practices take place at the enterprise. In
association with this, yummy foods carry out its governance well and have several associated
programs pertaining to the employees as well.
McKinsey 7S
The application of the McKinsey 7S to the operations of the Yummy Foods can be stated to
be as follows:
 Strategy: This aspect refers to the overall strategy which is undertaken by the
enterprise and provides a source of maintaining a competitive advantage over the
various competitors of the enterprise.
 Structure: The structure refers to the manner in which the different departments and
teams are developed. In such a scenario, it can be mentioned that, the firm follows a
hierarchal structure (Potrafke 2015).
 Systems: The daily activities are known as the systems. The systems are the regular
operations of yummy food.
 Shared values: The shared values refer to the core values of the employees and the
different ethical aspects which have to be considered in a firm for the long term
welfare. In consideration with this, the organization has a good shared value.
 Style: This is the style of leadership adopted at the firm.
 Staff: The generic employees and capabilities (Valmohammadi and Roshanzamir
2015).
 Skills: These are the exceptional skills of the enterprise.
Influence of the ethical and sustainable globalisation on the functions of the firm.
The ethical and the functional globalisation can be referred to as the transparent movement
pertaining to the organization whereby the firm decides to ensure that it is being able to carry out the
expansion options and the sustainability aspects clearly and there does not take place any kind of
dissertation from the workplace (Bortolotti, Boscari and Danese 2015).

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Applying Hofstede’s Dimensions of Culture to demonstrate how the organisation has
been influenced.
Figure 1
(Source: Hofstede-insights.com 2020)
The Hofstede model is a cultural comparison model which tends to compare the cultural
aspect of one county with the other. The different aspects which are compared can be mentioned to be
the aspects like the Power distance, individualism masculinity, Uncertainty avoidance, long term and
Indulgence. It can be clearly observed that with consideration to the Power distance, the gap is wider
in Hong Kong than to the aspect in Australia. Moreover, the culture of Australia is influenced by
Individualism. People in Australia welcome all kinds of risks whereas it’s not the same in Hong
Kong where the culture is restricted (Hofstede-insights.com 2020). Additionally, with respect to the
operations of the Yummy Goods, there exists long term focused as compared to the one in Australia.
Lastly, the Indulgence is much more in Australia as compared to that of Hong Kong.
An evaluation of how the above factors have been influenced by global operations and
how the organisation has adapted to operating in a global market to overcome the
barriers
An organization seeks to learn and perform exceptionally in the global competitive market. In
consideration of this, the factors associated with the structure, ethics, culture and performance have
been taken for the factors.
 Culture: The organizational culture is bound to change at regular intervals and in
consideration of this, due to its expansion in Australia, the firm engaged in a cultural
modification whereby the perspectives of the employees can be changed and the management
can positively reflect associated changes (Potrafke 2015).
 Structure: The structure of the firm at yummy foods has become flexible and hence, the flat
structure is followed.

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 Ethics: Due to the increased consumer warranty, the needs and demands of the consumer
changes and the concept of ethics comes into questions (Alvesson and Sveningsson 2015).
Assess which strategic expansion routes the organisation took and analyse both
advantages and disadvantages.
The Yummy Foods would be required to undertake certain strategic initiatives and expansion
routes for the welfare. At present the firm can engage in Product development and market
development.
 Product development: The product development means to develop the aspects of the product
and bring about successive victories. The advantage of this procedure is that the firm can
decide upon innovation and new offerings whereas the disadvantages are that the path is very
expensive (Valmohammadi and Roshanzamir 2015).
 Market development: In this step, the firm would expand into a new country which in this
case is chosen as Australia. Using this step will fulfil the firm’s objectives. The factors
operating in the other country can be characterized as risks.
Conclusion
Therefore, the strategic workplace environment can be mentioned to be essentially
competitive in nature and in consideration of this, all firms are required to plan well. The report
assessed and analysed the concept of strategic initiatives in a firm. The report has outlined the
different operations available before undertake the right step for Yummy Food.

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References
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work in progress. Routledge.
Bortolotti, T., Boscari, S. and Danese, P., 2015. Successful lean implementation:
Organizational culture and soft lean practices. International Journal of Production
Economics, 160, pp.182-201.
Driskill, G.W., 2018. Organizational culture in action: A cultural analysis workbook.
Routledge.
Hanson, D., Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management:
Competitiveness and globalisation. Cengage AU.
Hofstede-insights.com 2020. Australia Hong Kong [online]. Available at:
https://www.hofstede-insights.com/country-comparison/australia,hong-kong/ (Retrieved on:
14 Mar. 2020).
Hornstein, H.A., 2015. The integration of project management and organizational change
management is now a necessity. International Journal of Project Management, 33(2),
pp.291-298.
Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises:
A strategic management approach. EMAJ: Emerging Markets Journal, 5(1), pp.26-40.
Krugman, P., 2017. Crises: The price of globalisation?. In Economics of Globalisation (pp.
31-50). Routledge.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic
management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Morden, T., 2016. Principles of strategic management. Routledge.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Mowforth, M. and Munt, I., 2015. Tourism and sustainability: Development, globalisation
and new tourism in the third world. routledge.
Northouse, P.G., 2018. Leadership: Theory and practice. Sage publications.
Obstfeld, M., 2015. Trilemmas and trade-offs: living with financial globalisation.
Potrafke, N., 2015. The evidence on globalisation. The World Economy, 38(3), pp.509-552.
Valmohammadi, C. and Roshanzamir, S., 2015. The guidelines of improvement: Relations
among organizational culture, TQM and performance. International Journal of Production
Economics, 164, pp.167-178.

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