Contextual Factors Impact on Indian Restaurant Business

This report examines the impact of contextual factors, particularly globalization, on the business of Ramro Khana Restaurant. It explores both internal factors, such as diversity, manufacturing, and technology, and external factors, including political, economic, legal, and social influences. The r...Read More

Running head: Impact of Contextual factors 1
Management and Business Context
Impact of contextual factor on India restaurant

Impact of Contextual factors 2
Contents
Introduction......................................................................................................................................3
Internal and external contextual factors that impact on a business.................................................4
Impact of Internal factors on business and its potential benefits and challenges........................4
Impact of External factors on business and its potential benefits and challenges.......................6
Conclusion and recommendations...................................................................................................9
References......................................................................................................................................10

Impact of Contextual factors 3
Introduction
The business and trade are undergoing huge changes due to evolvement of world. Globalization
can be referred as the easy availability of services, goods and connectivity amongst nations. The
amendments are done in policies that have unlocked the markets not only domestically but also
internationally, and now local products can compete with international products. The report will
be made on Globalization as Contextual factor. The impact of internal and external contextual
factor on the new start up business will be discussed. Ramro Khana Sweets and Cuisine is the
new venture and the expansion of this business internationally will be mentioned in this
assignment. As per the current market situation, it can be analyzed that those countries who
espoused open approach for the brand of international and exposed their markets for the purpose
of competing with international products, have attained a lot from globalization (Piscitello
&Sgobbi, 2004). For instance, a collective enormous like China has exposed its market for
foreign direct investment and made the tactics and strategies for making them friendly towards
foreign investment. This strategy is facilitated to bring the economy of china to the forefront and
gave result in the form of increase in the per capita income of its citizens.

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Internal and external contextual factors that impact on a business
Globalization is one of the contextual factor that role is vital in the organization to stimulate the
business structure and strategies. There are various internal and external contextual factors that
stimulate the business environment. Internal and external factors of globalization are defined
below:
Impact of Internal factors on business and its potential benefits and challenges
Diversity
The emergence of globalization can have the impact on the workforce of the organization by
bringing the diversity at the workplace. The impact of diversity can be into positive as well as
negative form on business structure and strategies of Ramro Khana Restaurant. Diversity in
workforce makes enable the restaurant to communicate in better manner with the customers who
come from different regions (Crane & Matten, 2016). Restaurant will be enabling to make good
bonding with foreign people and develop new strategies for making food because the style of
making food of Indian Restaurant is different from other countries. There can be negative aspect
as well of diversity which may influence the new venture because the thoughts, beliefs and ideas
of staff will be different from others that bring the situation of disputes and conflicts among the
employees (Josling, e.d.).
Manufacture
Ramro Khana is the Indian restaurant and for expansion of it, it is necessary to analyze the taste
and diet of other countries so that as per their taste the restaurant can move ahead with
production. In general terms, The Ramro Khana needs to make amendments its menu as per the

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change in the locations due to globalization. It would be the challenging task for the management
of the restaurant because it will lead to the restaurant to create new strategies and tactics for
making satisfied the customers of other country (Dunning, 2014). The restaurant will earn
potential benefits due to diversification in the products and services in the menu. The market
share of the company will be increased due to effective production or manufacture.
Technology
Technology is the major element for the growth of the business and the role of globalization is
vital in this context because it helps to understand the up-gradations and advancements in the
technology in all over the world. Ramro Khana restaurant is specialized in making sweets and
Indian cuisine with core Indian ingredients. The role of technology will be helpful for the
restaurant to provide the good quality to the customers because globalization brings
technological advancements and upgrades. These upgrades have some potential benefits and
challenges on the business structure and strategies of the firm (Maylor, Blackmon &Huemann,
2016). The benefits can be earned by restaurant by delivering right services in quick manner to
the customers and provide the new technique of billing and cash due to up-gradation of the
techniques. On the other hand the restaurant may face the challenge due to emergence of
globalization such as staff would require time to understand the new techniques and changing
environment which may bring the hassle situation for the restaurant. There are various examples
such as Burger King, McDonalds and many more that have adopted the latest technology to
provide the efficient services to the customers.

Impact of Contextual factors 6
Impact of External factors on business and its potential benefits and challenges
Political factor
Political factor involves the tax policies, trade and tariff polices and fiscal policies which are
imposed by the governing authorities (Chen, 2008). Ramro Khana is the restaurants which want
to expand its business globally and it is required for the business to understand the number of
aspects related to the policies of the country. The restaurant will have to cope up with the
political environment of the various locations and regions where business wants to expand its
business. For instance it restaurant want to expand its business in United States than it would be
crucial for the business to understand the market entry strategy and get knowledge about the high
tariffs and protectionist policies (Export.gov. 2017). The business can get the potential benefits
in the term of learning new political factor and market entry strategy. Whereas a small
misunderstanding about the political term of different country may lead the company into loss
condition (Meiners, Ringleb & Edwards, 2014).
Economic factor
The economic factor encompasses the exchange rates, GDP, interest rates and income scale of
the population. Due to globalization the entity need to face number of challenges in the form of
fluctuations in the interest and exchange rates. These activities will certainly put impact on the
business structure (Wild, Wild & Han, 2014). The restaurant has ability to cook the delicious
food by involving the core Indian spices and ingredients but before making the same menu for
different countries, restaurant must understand the taste of people of different regions and
locations and make amendments in the menu as per the demand of the customers. For instance, if
restaurant operates its business in that nation that GDP is lower or weak; it will influence the

Impact of Contextual factors 7
income level of the business. Whereas the business operates its new venture with strong GDP
country in such case restaurant can earn high enormous profit (Prasad, Rogoff, Wei &Kose,
2005).
Legal factor
There can be legal risk to expand the business globally because Legal regulations are different of
each country. Due to globalization, businesses are interconnected with each other and the
amendments of one’s country economy will definitely influence to another which may bring the
critic condition for the business (Turnbull & Valla, 2013). It will be vital for the business to
understand the legal norms of the country where it wants to expand its business because the
carelessness will bring the situation of wind up. Ramro Khana has to face numerous challenges
due to emergence of lawsuits.
Social factor
The social factor comprised the communities and stakeholders of the business. Their role is
integral in stimulating the business organization. The emergence of globalization will bring the
changes in the thoughts, beliefs and way of observing along with the buying perceptions and
patterns of the customers (Birnleitner & Student, 2013). In such scenario, company need to adapt
the new strategies for fulfilling the requirements of the customers of different nations. The
restaurant will initiate the training and development program for the staff of over there to learn
the Indian recipes and special dish as per their local taste. It will consume more time and
additional expenses for this program will be incurred (Griffith, Cavusgil & Xu, 2008).

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Conclusion and Recommendations
It can be concluded from above discussion that the globalization has brought people and
businesses much closer. The role of globalization in the international business is crucial as it
does participate to develop the strategies for making profit for the business. The potential
benefits and challenges of contextual factor on the new venture have been mentioned. The report
has comprised the internal and external impacts of globalization on the Ramro Khana Restaurant.
It has been recommended to the new venture to understand the laws, policy, interest and
economic condition of the country where it wants to expand its business. Due to diversity at
workplace, business should provide the training program to the employees separately as they
belong from different regions. Instead of seeing the profits only, company need to analyze the
risks and challenges after expanding the business. Effective market entry modes should be
adopted by the business and conduct market research and surveys to get the knowledge about the
region and country in an adequate manner. Customer segments and targeted market should be
comprised in the research.

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References
Birnleitner, H., & Student, D. (2013). Influence of Macro-Environmental Factors to the Process
of Integrating a Foreign Business Entity. In MIC 2013: Industry, Science and Policy
Makers for Sustainable Future; Proceedings of the 14th International Conference,
Koper, 21–23 November 2013 [Selected Papers] (pp. 387-400). University of Primorska,
Faculty of Management Koper.
Chen, C. (2008). Entry mode selection for international construction markets: the influence of
host country related factors. Construction Management and Economics, 26(3), 303-314.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Dunning, J. H. (2014). The Globalization of Business (Routledge Revivals): The Challenge of the
1990s. Routledge.
Export.gov. (2017). India Market Challenges. Retrieved on 10th January, from:
https://www.export.gov/article?id=India-Market-Challenges.
Griffith, D. A., Cavusgil, S. T., & Xu, S. (2008). Emerging themes in international business
research. Journal of International Business Studies, 39(7), 1220-1235.
Josling, T., (e.d.). Globalization of the Food Industry and its Impact on Agricultural Trade
Policy. Retrieved on 10th January, from: http://citeseerx.ist.psu.edu/viewdoc/download?
doi=10.1.1.200.9867&rep=rep1&type=pdf.

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Maylor, H., Blackmon, K., &Huemann, M. (2016).Researching business and management. New
York: Palgrave.
Meiners, R. E., Ringleb, A. H., & Edwards, F. L. (2014).The legal environment of business.Ny
Boston MA: Cengage Learning.
Piscitello, L., &Sgobbi, F. (2004).Globalisation, e-business and SMEs: evidence from the Italian
district of Prato. Small Business Economics, 22(5), 333-347.
Prasad, E., Rogoff, K., Wei, S. J., &Kose, M. A. (2005). Effects of financial globalization on
developing countries: some empirical evidence. In India’s and China’s Recent
Experience with Reform and Growth (pp. 201-228). Palgrave Macmillan.
Turnbull, P. W., & Valla, J. P. (Eds.).(2013). Strategies for international industrial marketing.
Oxon: Routledge.
Wild, J. J., Wild, K. L., & Han, J. C. (2014). International business. London: Pearson Education
Limited.

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