Factors Driving Global Commerce and Trade: A Business Report

This report examines the key factors that drive global commerce and trade, focusing on market factors, cost considerations, the business environment, and competitive dynamics. It analyzes the complexities faced by businesses expanding globally, including supply chain challenges, risk diversification, and environmental factors. The report uses Tommy Hilfiger as a case study to illustrate these concepts, evaluating how the company addresses market demands, manages costs, navigates competition, and mitigates risks in the global environment. It emphasizes the importance of understanding external factors like PESTEL analysis and strategic complexities to ensure business sustainability and growth. The conclusion highlights the need for businesses to effectively analyze global trends and adapt to the evolving landscape of international trade to achieve success.

Global Business Environment
Introduction
Business organisation nowadays are expanding their
business to the regions outside their territory for this
they have taken the help of globalisation techniques.
Globalisation in business environment is defined as a
process of interaction among the people of different
country so as to provide them the desired products. This
environment can be defined into external environment
and internal environment. The external environmental
factors include PESTEL factors. This report is based on
the analysis of the key factors that defines globalisation,
along with impact of the strategic complexities
associated with operating in the global environment, for
this Tommy Hilfiger has been taken for the study.
Key factors that drives global commerce and trade
Global Business environment describes the reality of the
nature of the business environment in the industry. It is
growing in the positive way which is shaping the dynamics of
global trade. As the business is growing globally there are
some factors which are to be considered while taking the
decision of globalisation. As the company is expanding the
business globally therefore the needs and demand of the
customer, the cost of the product and the competitors to the
business should be analysed. Tommy Hilfiger which was
founded in the year 1985 deals in the fashion, apparel and
perfume industry and has a huge market base globally. As the
company is the global player so the key factors that derives
their trade globally are cost, market, environment and
competition. The analysis of these factors are done below:
Cost factor: Investment of the company being maximized is
the motivation key for many global companies. The goal for
any company is to get the most profit from the investment
done. The cost at which the company is producing their
product is the main aspect for any company to be successful.
As in the case of Tommy Hilfiger the company is expanding
their business on the global context so the factors that will
make their cost of the product minimum will be taken. The
management of the company should analyse that which
market region is providing them maximum profit in case of
cost proposition.
Market factor: As nowadays consumers are educated and
the lifestyle is changing the way consumers thinks so the
market factor should be taken into consideration while
planning to expand their business in the global market.
The proper study of the market is to done considering the
market determinant. The approach should start by
picking the regions and then the countries within the
regions.
The customer taste and the preference should be
considered while planning to chose the region. As
customers are the base for any company to be successful.
Tommy Hilfiger should also consider the market factors
and the regions in which they should expand their

Risk and diversification complexities: A global company
benefits from a geographically diverse business
portfolio. But if the company is pursuing different
markets opportunities then it may lead them to the areas
with the unfamiliar risk (Sassen, 2016). So the company
should diversify the business but before diversifying it
should get the sustainability in the existing market. Their
is always a risk when the company is expanding its
business in the new market. For companies like Tommy
Hilfiger they should first analyse the risk that is their in
diversification in the new market. For example, Tommy
Hilfigers managers should analyse that if the customers
in the market in which they are expecting to expand will
choose their product over other brands or not. After this
only they should plan the expansion.
Environmental factors: The environmental factors
includes the various business environment issues that
the organisation face while expanding their business.
These factors should be properly analysed and
implemented so that the business can grow in the
current market environment. Some of the
environmental factors includes the Political, Economic,
Social, Technological, legal and environmental factors.
Tommy Hilfiger managers has effectively analysed
these factors before expanding their business in the
global market. This has helped them in growing their
market share and maximizing the profits.
Competition: A company that does not remain ahead of
the competition risks their market sustainability. As
they are neglecting their competitors which will lead
them to loose their potential market. Competitive
companies introduce, upgrade and distribute new
products faster then any company. So this factor should
be taken care by the managers of Tommy Hilfiger as if
the rivals are not considered while planning their
policies then it may lead them to loose their market
share. This help them to innovate the new product
better then the rivals.
Operating in the global environment not only provides
the scope of meeting the needs of new customer,
economies scale but also has some strategic
complexities associated with it. As the world is being
connected at a faster rate it helps the company to frame
the policies at a bigger stage.
In the current economy the business faces many challenges
which are defined below in the context of the well known
company Tommy Hilfiger:
Supply chain complexities: when it comes to sourcing products
and services from the other market, managing suppliers and
supply chains can also be a difficult process. If the length and
complexities of the supply chain is greater then it may lead to
have the unethical and even illegal business practice. So for
decreasing this complexities the company has adopted the
technique that supply the products exclusively to their partners.
Which help them to decrease the unethical practice of the
illegal group. For example, in some countries their operate the
gang which illegally supplies the products of the big brands,
which in turn hampers the product image and its value in the
market. They also affect the supply chain and also breaks it.
CONCLUSION
In the above report it is concluded that for any
organization to be successful it has to effectively
analyses the global business environment trends. As in
the case of Tommy Hilfiger they have taken care of
some factors that affects their market sustainability.
These factors if taken into consideration will always
help the business to expand and grow in the global
market. As business organizations are operating globally
and are eager to find new opportunities to expand
because of which some complexities arises. As business
organizations are operating globally and are eager to
find new opportunities to expand because of which some
complexities arises.