Global Commerce and Trade: Strategic Challenges for RCS Logistics

This report provides a comprehensive analysis of global commerce and trade, using RCS Logistics as a case study. It examines key factors such as cost, market dynamics, environmental considerations, and competition that drive global commerce. The report delves into the strategic challenges faced by organizations operating in a global environment, supported by examples, and explores the influences of globalization on organizational governance, leadership, structure, culture, and functions. Furthermore, it evaluates the impact of ethical and sustainable globalization on organizational functions, along with different approaches to effective decision-making in a global context. The report also determines various routes to internationalization and identifies potential barriers. The study incorporates PESTLE analysis to evaluate the macro-environmental factors impacting RCS Logistics, emphasizing the importance of understanding political, economic, social, technological, environmental, and legal aspects for business success in the global market. The report concludes with an overview of the challenges and opportunities presented by globalization for businesses like RCS Logistics.

Unit 18

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade.....................................................................................................................1
TASK 2............................................................................................................................................2
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples...................................................................2
TASK 3............................................................................................................................................4
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions....................................................................................................4
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
.....................................................................................................................................................6
TASK 4............................................................................................................................................7
P5 Evaluate the different ways decision making can work effectively in a global context........7
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.......................................................................................................8
CONCLUSION................................................................................................................................1
REFRENCES...................................................................................................................................2

INTRODUCTION
Global business means integration of one country to another which can help to increase the
organizational performance and profitability. The global environment can be explained as to run
a domestic business in to international country which can help to develop a business effectively.
In business environment various factors are exists that can be affected an operation and attain the
higher profitability (Gajbiye, 2018). This is important for all companies to understand the current
situation and formulate the planning which can help to increase the performance and profitability
in the changing environment. The management of organization is responsible to understand and
develop the business plan which can help to maintain the higher performance. For better
understanding RCS Logistics has been taken that established in 1973 by their family and now it
is using by larger supermarket and biggest manufacturer in order to operate a business and attain
the higher performance in changing environment. Discussions have been made in this study on
major main factors driving globalisation, along with problems that arise during business on the
global marketplace. In addition to this the report contains various types of factors that contribute
to controlling a business growth along with the decision-making process. This report will help to
increase the insights regarding by increasing business from domestic to international market.
MAIN BODY
TASK 1
P1 Analyse key factors of cost, market, environment and competition that drive global commerce
and trade.
In the business environment number of businesses are running that needs to understand the
needs and wants of their customers which can help to develop a business and attain the higher
performance. There are competition arises between many organization that are required to
understand the different factors which are important to consider while operation and maintain the
productivity (Kaynak and Lee, eds., 2018). RCS Logistics is small organization in initially stage
that has organized and arrange all functions and activities in a good way that supported to
increase the performance and business expansion. It involves different factors and aspects that
drives a global business. the managers are operating their business 24/7 hours their activities and
performance. It helps in examine how various part of the organisation work together as it helps

in improving the performance of the organisation and help in implementing the proposed
strategy.
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Cost – This means an expense that occurs in running a business which might be affected a
business in changing environment. For running a business and managing the activities there is
need to analyse the cost which can be create a problem to operate and continuous running. In
context to RCS Logistics, management identify the cost and expenses in buying raw material,
finished goods, and transportation which can help to run a business from domestic to
international market effectively (Moşteanu, Faccia and Cavaliere, 2020).
Market – This is important factor that means to sale any products and services there is
need to analyse the market which can help to increase the sales and performance by increasing
number of customers. In global environment number of business concern are available who
identify the market and formulate marketing plan which can help to increase productivity. In
context to RCS logistics marketing manager are playing important roles as they analysis the
market of each country where they wants to expand their business and bring the effective
planning and good distributional channel which can help to increase sales and performance.
Environment – The another factor is environment that needs to be analysis before making
any decision and decisions and developing a business. In this, management is required to
evaluate political, social, economic, environmental, and legal that can be affected the business
and create the challenges for business. In context to RCS Logistics, management analysis the
environment and formulate all government regulations which can help to operate and regulate
the business in changing environment and drives global business.
Competition – This can be explained as competitive analysis which can help to increase
the business activities by formulating effective planning to increase the sales. In context to RCS
Logistics, managers evaluate the competitors who are running their business in same which that
has created the problem in running. For dealing with such factors and competitors formulate
planning which can help to get competitive advantages (Dima, and et.al., 2018).
TASK 2
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples.
Strategic challenges are facing by many organization that needs to formulate effective
planning which can help to attain the competitive advantages. If management are able to
understand market situation and develop the strategies then it will be opportunity for
3

organization to run and increase the profitability. RCS Logistics is originally operating as a coal
merchant, operation quickly that helps to expand the business by encompassing storage and
transportation that can help to increase the sales and drives a global business. To analysis this
PESTLE analysis is required to be done. It helps in analysing and monitoring the macro
environment factors which have the impact in the organisation. It is basically used by the
companies who are the new start ups and helps in understanding the external environment. It is a
tool helps in analysing a company organisational design and performance that are as explained:
PESTEL analysis of RCS Logistics:
Political analysis: These are the factors all about how and to what degree the
government intervenes in the economy. Political factors include government policy, political
stability or instability , corruption and tax policies. The main political factors of the RCS
Logistics is Raw material, transportation and distribution because of this may politicians are
attracted with different sources of raw materials because of this the company have to follow
government norms in order to operate their business. They have a deep impact on the business
and the profitability. After Brexit, government is became stable that has favour their business to
grow in global environment that can help to increase sales (Gorondutse and Hilman, 2019).
Economic analysis: It has an significant impact on how organisation do business and
how they are profitable . It economic analysis factors include are economic growth , interest rate,
inflation. Further the factors are broke down into the macro economic factors and micro
economic factors. Economic analysis of RCS Logistics are the ongoing economic recession this
factor determined the profitability of organization. The company also deal with labour and
operational cost the inflation and falling cost cause lots of stress. Therefore, it can be create a
challenge for business to operate it continuously. This business expansion opportunities lies in
developing countries also as the people of upper class can only afford to buy it
Social factors: These are also known as socio-culture factors these are the areas that
involve in sharing the belief ,attitude of the population . Social factors include -population
growth, age .health ,career and so on. The factors are of particular interest and have effect how
they understand the customers. Social factors of RCS Logistics are as they offer products and
services in changing environment. Consumer preferences are also changing as now consumers
are shifted to different brands which is major issue that might be create a challenge for
organization. On the other side, focusing on customers demand and offering variety of products
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and services which can help to increase sales in other country and market (Buckley, Enderwick
and Cross, eds., 2018).
Technology analysis: It helps to know how marketing can help products to reach the
targeting customers in finding out the new ways producing goods and services, new ways of
distributing goods and services, and the new ways of communicating it with the target markets.
Technology analysis of RCS Logistics maintaining good position to enjoy the benefits of the
emerging mobile wave and have partnership with other clients that can help to make the
workings easy and increase the organizational performance from domestic country to
internationalization. Introduced Wi-Fi capabilities in all the outlets as internet is important for
the customers they can surf the web and do their work while operations and storing the
information that provide the opportunity to grow their business in dynamic environment.
Environmental analysis: Environment factor has become important due to increasing
scarcity of raw materials , pollution target and doing business in an ethical way. as customers are
demanding the products that are sourced ethically. Environmental analysis of RCS Logistics is
using the sustainable business model which helps in reducing the use of plastics cups carriers,
they are using bio degradable materials for their daily purposes and helps in increase in
productivity and greenery. Moreover, management focuses on reducing wastages that build
customers interest and maintain higher profitability (Rao and Goyal, 2018).
Legal factors: Legal factors includes the health, safety, opportunities, product labelling
and product safety. It order to trade company should know what is legal and what is not as every
country has its own set of rules and regulations. Legal factors of RCS Logistics are the company
should not violate any law in the home market from where they buy raw materials and also
follows employment regulations that can help to drive a business in global environment.
TASK 3
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
Globalisation on Governance: This means different rules and regulations are formulated
by government of different country that needs to follow while operations. RCS Logistics is
operating business in global environment by following the regulations of different country where
it wants to expand its business and manage the activities effectively.
5

Globalization on Leadership: This is important activity that uses by management to
getting the works done in certain period of time that helps to increase the sales and profitability.
In context to RCS Logistics, management follows participative leadership which is effective as
management provide the right guidance and participate in all logistics work that supports to
increase the sales and profitability (Çera, Belás and Strnad, 2019).
Globalization on structure: For any organization it is important to have effective structure
which can help to manage the workings and develop a business in changing environment that can
help to increase the sales and profitability. To understand the structure of RCS Logistics
McKinsey model is designed that are as explained:
McKinsey 7's models:
It helps in depict how effectiveness can be achieved in an organisation by the interaction of
7 key elements: Structure, strategy, skill, system, shared values, style and staff. These elements
are categorized as “Soft Ss” and “Hard Ss” it helps in maintaining the effective balances. This
model has explained as:
Shared values: The main aim of RCS logistics is to understanding the needs of the of
consumers who relates to larger supermarket and other companies. The company should need to
take certain steps which helps in increasing the consumer confidence with respect to its weak
economy and should take the necessary steps regarding the news of RCS logistics being shut
down (Christiansen and Piekarz, eds., 2018).
Strategy: The company should focus mostly on the differentiating the products by breaking
up the design patterns of which are unique and of the latest trend. RCS logistics is adopting
lower pricing strategy where it provides its products and services at lower cost that can help to
increase sales in global environment.
Systems: For the long success and future growth of the company, should focus on the
expansion of its outlets and systems that can help to manage the all activities. The management
of RCS logistics is maintaining MIS system that can help to get information of daily activities
and transaction in different country which can help to develop a business.
Structure: Structure provide by the RCS logistics is very long with an effective
management so that in near future it has proper growth. The most issue of the structure of RCS
logistics is that it is falling behind an E-commerce so the company should take necessary steps to
6

change it. Moreover, democratic organizational structure helps to allocate the roles and
responsibilities by deciding goals in changing market (Nord and et.al., 2018).
Staff: Employees are important assets of any organization as they understand the goals of
organization and give their contribution to increase the sales and productivity. In RCS Logistics
number of employees are working who understand goals and deliver the better quality of services
that influences to drive the global business.
Skills – If employees of organization are enough skilled and talented then it will be an
opportunity for organization to grow and sustain in competitive environment. The management,
leaders and employees who are working in organization are good in managing all activities and
functions which can help to operate the business and increase performance (Schembera, 2018).
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
Globalization is the continuous process of managing and arranging the all activities and
functions of organization that can help to increase the performance and profitability in
competitive environment effectively.
Ethical Globalization is mainly uses to deliver information, selling good and services in
other country, using technology, and other activities which can help to increase the sales and
profitability in competitive environment. This is important for all organization to understand
current trend and formulate the planning which can help to increase productivity. RCS Logistics
is maintaining code of conduct, good behavior, and creation of value by formulating all policies
which can help to increase the profitability and competitive advantages in changing environment.
Sustainable globalization refers retaining a business across the border by managing all
activities and functions effectively. Every organization aims to increase the customer satisfaction
by delivering better quality of products and services. RCS Logistic is affording all its customers
the same professional service by operating the business 24 hours, 365 days which increases the
brand image and supports to sustain the business in global environment. There are numerous
functions which are operating by chosen organization for the purpose of surviving in cut throat
competition and attaining the higher growth that are as defined:
Human resource: This can be defined as main function which are uses by Human
resource management for the purpose of choosing right employee for right position so that all
functions can run smoothly. The HR department has responsibility to identify the vacancy in
organization and find out the potential and suitable employees who can apply their skills and
7

knowledge to complete the work. In RCS Logistics, HR function is important which influences
sustainable globalization as when ever there is any vacancy has occurred then HR management
of organization is responsible to fill the vacancy by placing skilled and talented employees who
can work effectively and sustain in competitive environment effectively. Moreover, management
maintains friendly and ethical environment by working properly which can help to attain the
business goals and objectives effectively (Ayoub Salloum, 2018).
Marketing: Marketing is main function of each organization as it introduces new
products and services in environment and increase the sales ratio. Before launching any product
and service in global environment there is need to identify the target customers and their needs
which can help to provide the products and services accordingly. The marketing function of RCS
Logistics is performing many important activities as it identify the needs of their potential clients
and provide the kind of services which can help to increase sales and brand image in challenging
environment. This functions helps to maintain the sustainable business by using different channel
of marketing and promotion (Al-Khasawneh, 2020).
Finance: For running and managing any business and activities there is need of finance
and proper arrangement of cash inflow which can help in effective operation and maintenance
without any hindrance. In other words, finance function uses by RCS Logistic company where
finance manager perform their responsibility in effective manner by arranging all funds and cash
inflow in effective ways that helps to increase the organizational performance and profitability.
Moreover, management of such organization is responsible for allocating the funds in necessary
activities by estimating budget which can help to increase the sales and profitability.
TASK 4
P5 Evaluate the different ways decision making can work effectively in a global context.
Decision making is the important aspects which is required to be taken in all activities
and functions as it helps to operate a business and attain the profitability. Decision making is the
continuous process of identifying problems and getting optimum solution which can help to
develop a business. To make any decisions there is need to go different ways which can be
adopted RCS Logistics that are as explained:
Identification of problem – This is the first stage which uses by each people in relation to
make decision and deciding the goals that can help to reach the desires. In context to RCS
8

Logistics, Management identify the problem which are pertaining in operation and
transportation.
Collection of information – After identification of problem there is need to collect the
information and causes that are creating problems in operation and transportation so that right
action can be taken ( Bereznoy, 2018).
Evaluation of option – The stage is uses by management of RCS Logistics to get various
option and activities which can help to operate a business and increase the organizational
performance in competitive environment.
Selection of best option – From the all option management of Chosen organization uses
the best option which can help to increase the organizational performance from one country to
other which can help to increase the sales and performance effectively (Rodrik, 2018).
Feedback – After selecting the best option management and leaders of RCS Logistics
gets feedback from their potential customers regarding products and services that can help to
operate the business and increase the organizational performance in changing environment so
that right decision can be made and develop their business in global market.
RCS Logistics have decided to bring the new innovation and technology as people are
facing the problem of late delivery that needs to solve. The new technology can help to make
easy delivery of products and safety as customers wants which can help to develop the
organizational performance. This helps to increase the customer satisfaction and organizational
productivity in competitive environment. As management have identified the customers are
facing the problem in getting right delivery and safety product due to which they ate going
towards other brand. For getting the solution of problem effective decision are made by
management as fast and safe delivery that influences the number of customers in global business
environment.
On the other side, management are responsible for making decision in relation to
increasing productivity. It bring the solution by reducing barriers and formulating effective
decision process such as clear communication, coordination, management and control that helps
to develop the business performance.
9

P6 Determine and articulate the various routes to internationalisation an organisation may adopt,
including key barriers
Foreign Direct Investment: Foreign direct investment means when we are directly
involving in an activities of investing in the foreign market. This can be adopted by RCS
Logistics to go internationally by arranging the foreign investment in global environment. FDI
needs large amount of capital to cover the cost such as premises, technology and staff. This can
be done only when we are establishing the new firms or if we are acquiring the existing
company. This can be done by the individual into the business located in the other country.
Licensing: It help in allowing another company to make use of the property in the
targeted company. Properties used by the company is normally the intangible properties for
example – trademarks, production techniques and patents. In licensing RCS Logistics have to
pay the fees so that there is a right use of the property. Licensing should have very little
investments and have higher returns on their investments. Licensing take care of the
manufacturing and the commercialism cost (Kirton and Maclaren, 2018).
Franchising: Franchising means when the franchisor gives some rights to franchisee,
and the franchisee will pay the commission and some revenue to the franchisor. Franchising is
some what similar to the licensing in which the rights of intellectual property are sold to the
franchisee. The rules followed by the RCS Logistics who follow franchisee are very strict as they
have strict rules a regulations to be followed. It helps in expansion of the business (Vihari, 2019).
Exporting: Exporting means that there is a sale of goods and services to the other
country. Exporting has the lower risk and is the best way to enter in the foreign market. in
context to RCS Logistics , can adopt exporting for running their business that can help to go
international market. It is an cost -effective process as the person should not have to invest in a
facilities related to the production of the targeted companies as the goods are produces in the
produced in the home country then they are send for sale in foreign countries.
From the above Exporting route is adopted by RCS Logistics which can help to develop a
business and increase the profitability by arranging and managing activities from one country to
other that can help to increase sales and performance.
KEY BARRIERS WHILE FACILITATING INTERNATIONALISATION
10

A lack of adequate support is one of the biggest obstacles to internationalisation. When
heading to a global level, this can serve as a significant challenge for enterprises, as no project
can be carried out without the use of funds. RCS Logistics may use approaches such as mergers
and acquisitions to solve this.
The language barriers that may create problems for the organisation are another challenge
or obstacle when going to an international level. Each nation's culture is different, so knowing
the culture of a foreign country is necessary for RCS Logistics to easily tap into an international
country without some kind of hurdle.
CONCLUSION
From the above study, it can be inferred that several variables emerge in the business
world that need to be addressed in relation to social, political, economic and environmental
factors when operating a business that can generate competition in the current environment.
Analysis of PESTLE is used to understand which factor may affect the global climate, and
management, institutions and practices are necessary for running a company.
11

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