Natura's International Business: Opportunities and Threats

This report examines the impact of globalization on international business, using Natura, a Brazilian cosmetic company, as a case study. It analyzes the opportunities, such as low-cost operations, new product development, and access to emerging markets, along with the threats, including intense competition, cultural differences, and changing government policies. The report also discusses the lessons international business managers learn by operating in both home and host countries, emphasizing the importance of understanding market conditions, customer preferences, and cultural nuances. By analyzing these aspects, the report provides insights into the challenges and opportunities of international business expansion in a globalized world, offering valuable information for decision-makers in companies like Natura.

INTERNATIONAL
BUSINESS

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
Analyzing the opportunities and threats which globalization creates for the decision-makers . 3
Opportunities created through globalization..........................................................................3
Threats is created through globalization ................................................................................5
Stating the aspects which international business managers learn by performing role between
both home and host country ..................................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

Illustration Index
Illustration 1: Opportunity created through globalisation................................................................5
Illustration 2: Threat created through globalisation.........................................................................7

INTRODUCTION
International business is regarded as the practice of conducting all the commercial
transaction of the firm on global platform. At present, whole world has become one single
market and thus many firms are taking steps for expanding their operation in other countries in
an effectual manner. Hence, through this way companies are performing significant
improvement in their sales and profitability related condition (Knežević and Wach, 2014). For
the present report, example of Natura is taken into consideration. Natura is the Brazilian
cosmetic company which offers different types of products to its customers. The firm was found
in the year 1969 and it has it’s headquarter in Brazil. Furthermore, the organization has its
operation present in number of countries such as Colombia, France, Mexico, Peru and Paris etc.
Furthermore, in Brazil market the firm faces intense competition from other organizations such
as Avon, Jequiti and O Boticário (Natura, 2016).
This essay will give description about the opportunities and threats that globalization will
create for decision makers of the firm. Furthermore, the study will also depict about main lessons
which business managers of cited company should learn on assessing the difference between
home and host country.
Analyzing the opportunities and threats which globalization creates for the decision-makers
Globalization is being considered as the activity of performing the operation of enterprise
in in global platform. Running the operation of firm in home market is an easier task. This is
because, here the manager have thorough information about the market. Furthermore, the
manager has detailed knowledge about the customers which it wants to target through its
product. But, complication for the manager of the firm will increase if they make the decision to
expand their operation in some new market (Meyer and Thein, 2014). In accordance with the
given context, there are some opportunities and threats examined which are associated with
globalization and these all things needs to be considered by the decision maker of Natura. The
detailed explanation about the same is depicted in below:

Opportunities created through globalization
Illustration 1: Opportunity created through globalisation
 Low cost operation: It is being considered as one of the most significant opportunity
which can be created through globalization. In this context, it has been analyzed that
there are many firms which are more interested in selling their product at the low prices.
Hence, such firms want to expand their operation in the country which does not increase
their cost. In this regard, globalization presents many options of the countries which help
in reducing the overall cost of the firm (Peng, 2010). For example, manager of Natura has
decided to reduce the cost of its operation. Thus, it has taken decision to expand its
operation in different developing countries such as India and China etc. Hence,
globalization eases the functions of company and hence it guides the manager of
enterprise towards the correct path. Thus, it is through this way only an effective decision
can be taken by the decision-makers of Natura. Development of new product: The decision makers of the firm also have to make several
decisions about maintaining needs and demands of the buyers. Here, it is through this
way only the company will be able to attract large number of customers towards the
enterprise in an effectual way. Thus, in the given task the concept such as globalization
tends to play a very critical role. This is because; it gives opportunity to the manager of
firm like Natura to gather the information about the trends which are occurring in the
global cosmetic industry. For instance, manager of cited firm has examined that
nowadays majority of buyers prefer to use natural or organic cosmetic product. Hence, on
gathering the given type of information, manager of Natura can also develop such types
of goods in Brazil and other international market (Schaffer, Agusti and Dhooge, 2014).

Hence, through this way the company can develop complete new base of target customer
who like to purchase the products. Furthermore, with this, the organization can maintain
satisfaction level of its buyers which is usually hindered when they will not get the
product as per their own needs and desire. Therefore, by complying with the given type
of activity, overall benefit can be gained by enterprise in the form of increased profit and
sales. However, it has been evaluated that it is not necessary that the cosmetic industry
trends which are followed in one country can be applied to other nations too. This is
because, needs and preferences of each customer vary and it is highly influenced through
the culture from where they belong (Wild, Wild and Han, 2014). Help in giving information about the emerging market where firm can expand its
operation: It is considered as another most significant advantage which is associated with
the concept of globalization. Herein, when making decision for expansion, manager of
the firm like Natura will also have to assemble information about different market from
where it can expand its operation. In the given task also, globalisation tends to play a very
significant role (Wu, 2014). Here, due to the presence of given concept, manager of
Natura can get information about different markets which are proving as beneficial for
the cosmetic enterprise. Thus, decision maker of firm can make evaluation between
gathered list of markets. However, by selecting one particular market cited firm manager
can impose positive effect on the firm's profit.
 Availability of skilled labour: The success of the organization totally depends upon its
employee. This is because; it is with the help of workers only high quality services will
be delivered by the company to its respective buyers. Thus, due to globalisation Natura
can avail skilled and talented employees from some other countries. Hence, with the help
of this, they can perform significant improvement in its existing operation (Kaynak and
Hassan, 2014). It is by complying with given type of activity only; the organization can
improve its efficiency of delivering high and best quality services to its customers in an
effective manner. Overall, it can be said that the concept such as globalisation helps
Natura decision-makers in grabbing all opportunities which are prevailing in firm's
business environment.

Threats is created through globalization
Each aspects have both positive and negative points, thus the same thing is also
associated with globalisation. In simple words, it can be said that although the globalisation
provides number of opportunities to the firm, but it also represent number of threats which may
or may not affect the operation of company Thus, in this regard the threats which are related with
globalisation are depicted in below:
Illustration 2: Threat created through globalisation
 Presence of intense competition: It can be considered as one of the most crucial threat
which is related with the concept of globalisation. On operating the operation of firm in
home market, it is evident that the company will face competition from the local
companies only. But, the implication of the concept such as globalisation will lead to
develop number of hurdles in front of Natura (Threat of globalisation, 2016). Here, in
global platform Natura will have to compete with different famous cosmetic firms which
have established their unique and distinctive brand image in the global market.
Furthermore, in order to compete with these firms, decision maker of Natura will have to
develop an effective business tactic. This is because; if it is not prepared then in the given
situation it will become difficult for the cited organization to achieve success in market in
an effectual way. Culture difference: It can be considered as another threat which is associated with the
concept of globalisation. In this context, it can be said that there is a drastic difference
between the cultures of two countries. Thus, for the manager of Natura, it is very
essential that it should mould its services as per the needs and demands of different

customers who belong to varied culture. In addition to this, it can also be said that it is
important for the manager while entering into the international market it should gather
the detailed information about culture which is followed in the specific country
(Fainshmidt, White III and Cangioni, 2014). Thus, accordingly manager of Natura should
transform its operation. Hence, by complying with given type of activity, overall benefit
can be gained by cited firm in the form of increased profit and sales.
 Changing government policy: It has been assessed that each and every country has their
own way to operate their function. Hence, the government of nation also perform
significant changes in their policy which lead to provide positive benefit to the enterprise.
But, sometimes changing government policy will prove as a major threat for the company
like Natura. For example, manager of Natura has decided to sell its product at low price
in the country where it is planning for expansion. However, this approach will not be
practically implemented by the cited firm if government of nation has taken decision for
increasing taxation upon cosmetic firms (Forsgren and Johanson, 2014). In given
circumstance, manager of company will have to sale its product at high prices. Thus, it
can be said that the concept of globalisation will also hamper the plan of the company.
Stating the aspects which international business managers learn by performing role between both
home and host country
There are several aspects which international business manager can learn while
performing organizational activities in both home and host country. Moreover, host and home
countries highly differ in terms of market condition, trend, customer taste and preferences etc. In
the context of Natura, manager is required to assess the target market or group. Along with this,
he is also assigned with the responsibility to analyse the customer taste and preferences in an
appropriate manner. Moreover, company can attain success in both home and host country only
when it offers products or services according to the demand of the customer. In this way, when
manager performs at both national and international level then he gets opportunity in getting
information about the varied needs of customers (Mackinlay, 2013).
Further, manager also learns about cultural differences which take place between the two
countries. Moreover, people live in different countries have varied cultural needs and
preferences. For instance: People of Brazil prefer to make use of organic beauty products. On the
other hand, people of Mexico prefer to use of herbal beauty products . People of Mexico like to

use the beauty products with different flavours. Along with this, manager also gets chance to
learn about customer preferences and purchasing behaviour or attitude towards the beauty
products offered by Natura. For instance: individuals of Mexico are highly price conscious in
nature. Thus, it can be stated that customers prefer to purchase product which have lower price.
In contrast to this, customers of Brazil place more emphasis on quality aspect rather than price..
Due to this, customers consider quality factor while purchasing the product rather than price
level (Maertens, Colen and Swinnen, 2011). This aspect clearly shows that purchasing attitude
and behaviour of customers differ from country to country. In this way, manager can learn about
the habits and attitude of individuals living in different parts of the world. In addition to this,
political, economical, social, technological, legal and environmental factors of different countries
highly vary to the significant level. Thus, by evaluating such aspects of both home and host
country, managers of Natura can widened their knowledge to the significant level. For instance:
High level of political instability takes place in Brazil. In such country, one cannot predict about
the moves which will be undertaken by the political authority. On the other hand, political
conditions of Mexico are stable and maintain the price level. This in turn provides information to
the manager about how they should deal or perform activities in the different market.
Moreover, in this context it is also examined that the gap which takes place between the
rich and poor Brazil people is not much. In this, by taking into account such information
manager of Natura can offer suitable products which satisfy the need of citizens. In addition to
this, economic condition of Mexico presents that manager of Natura can enhance customer level
by offering the effectual beauty products. Further, people of Mexico are highly aware from
technological aspects in compare to Brazil. In this way, by generating information about these
entire aspects manager of Natura can frame competent strategic and policy framework which aid
in the growth and profitability aspect of the firm. Hence, all the above mentioned areas clearly
present that manager learns learn from several aspects at the time of performing business
activities in both home and host country (Meyer and Thein, 2014).
In addition to this, on operating the operation of Natura in both home and host market,
manager of cited firm can gain knowledge about different legal aspects which is followed by
them. For example, the laws and regulations which are followed by the cosmetic industry of
Brazil completely vary from other country. This is because, the provisions which is imposed by
by regularities of one country differs from another. Thus, it is due to the presence of given aspect

it is essential for the manager of cited firm to know the difference and thus it should transform
its operation on the basis of given aspect (Levene and Conversi, 2014). Furthermore, another
lesson which manager of Natura can learn about the interplay between home and host county
difference is of to examine the manner which is varied countries are using for the purpose to
manage their operation. In this context, it is examined that employees of the firm prefer to work
in various types of organisational environment. Their preference is highly influenced with the
culture from where they belong. For example, Brazillian prefer to work in the hierarchical
structure firm (Ambos and Håkanson, 2014). This is because; such type of structure tends to give
clear information about e roles and responsibilities which is followed by the employees of
company. However, people of US prefer to work in the flat organisational structure. This is
because; they like to work in more open environment which does not have any restrictions. Thus,
by operating the activities of Natura in number of nations, business manager can get the
information about different ways which can be followed by diverse countries to manage people
of the organisation.
CONCLUSION
From this project report, it has been concluded that internationalization offers opportunity
to the business unit to enhance its profitability aspect by expanding the business operations.
Besides this, it can also be revealed from the report that globalization made easier for the firm to
perform business activities at global level. Further, it can be inferred that globalization offers
several benefits to the business unit in terms of widened presence at global level, economies of
scale, maximization of productivity and profitability etc. It can also be seen in the report that
high level of competition, changing political and legal aspects etc. restricts firm to expand their
business activities at global level. Along with this, it also has been articulated that managers
learns several aspects regarding political, economic, social, cultural and legal aspects when they
perform in both home and host country.

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