BTEC - Global Business Environment: Sasol's Globalization Analysis

This report provides a comprehensive analysis of the global business environment, focusing on Sasol, an energy and chemical company. It explores the concept of globalization and applies the PESTLE framework to evaluate the external factors impacting Sasol, including political, economic, social, technological, legal, and environmental aspects. The report identifies key drivers of globalization, such as the digital revolution, global education providers, financial liberalization, and intense competition. It examines the significant impact of digital technology on globalization, highlighting its role in reducing costs, facilitating global sourcing, and enabling transactions across borders. Furthermore, the report addresses the challenges and complexities in Sasol's globalization efforts, including high investment costs, immigration challenges, and the need to understand new local systems. The report concludes with recommendations for overcoming these challenges, emphasizing the importance of thorough market analysis and strategic planning. It is also concluded that globalization helps in expansion and development of an organization.

GLOBAL BUSINESS
ENVIRONMENT

INTRODUCTION
Globalization is a procedure that helps in interconnection of countries In the world. This
results in great expansion of businesses. Globalization includes the trade of goods, services
and information across the world. SASOL is an energy a chemical company.
Headquartered in Sasolburg, South Africa. It was formed in 1950. The report is consisting
of concept of globalization and the PESTLE analysis of SASOL organization, driving
factors of globalization, impacts of digital technology and the challenges of globalization.
The report also contains the suggestions, to overcome from the challenges of globalization.

Globalization
 This word is used for describing the growing interdependence of the world's
economy, culture and population rate. This concept is about the cross broader trade of
goods and services. This helps in the flow of investment, in worldwide, it also includes the
trade of information, technology and skilled people (Leblang, . and Peters, 2022).
 The countries are building economic partnerships to facilitate these movements across
the countries. The huge ranging effects of globalization are complex and politically
charged.
Now a time with better and advanced technologies , this benefits the whole society.
Globalization also means the speed up of movements and exchanges goods and services in
all over the planet.

PESTLE analysis of organization SASOL
PESTLE is a tool that is used for the analysis of a business. This tool is used by many
organizations, in reference to identify the impact of external factors on a firm. Below are
the external factors, that can affect an organization.
 Political factor: the political factors involve the policies, taxes, rules and
regulations. This factor is completely depended upon the government decisions, and
this it will affect SASOL in various ways. For example, new favourable tax policy by
government will impact positive on the business of SASOL.
 Application of favourable rules and regulations by government is an opportunity for
SASOL to grow and expand their business.
 But the unfavourable terms by government will affect negative on the business of
SASOL.

Social factors: these are the cultural norms, safety, security and health factors, these are
use for SASOL to plan their marketing analytics and forming new marketing tactics and
strategies for the business (Xia and et. al 2022).
Better marketing analysis will impact positive on SASOL, because it will provide an idea
to grow and develop their business in right direction.
 Technological factor: this external factor involves the advancement of
technologies in a business. New technologies in information technology department in
SASOL will help in the betterment and advance growth of the business.
 Adopting new technologies in SASOL, results in a competitive advantage to SASOL.
 This advantage helps in rapid growth of business in an effective and efficient manner.

Legal factor: this is related to the change in legislation, that impact the business in
positive and negative in both aspects. This factor includes the imports, exports, taxation
and other duties by government.
 This factor gives the licence of expanding the business legally, with the help of import
and export of services and goods.
 Doing business legally will make the growth of SASOL smooth. It will help in
expansion of the business to the global level.
 Environmental factor: this factor is majorly concerned with the effect of
surrounding environment , that influences the ecological aspects of SASOL.
 This factor includes the environmental protection laws, waste disposal laws and energy
consumption regulation.

Key driving factors of globalization
 Globalization is described as the removal of hindrance to trade across the countries, it
enables the high integration, interdependence and interconnectivity of production
system and capital markets and the inflow and out flow of the financial resources.
Thus, globalization is driven by the below mentioned factors:
 The digital revolution: current time is completely depended upon the internet access.
Internet has made the use of goods and services produced from anywhere in the world.
 The digital time has completely changed the concept of shopping, jobs and education
 Internet has created a huge and better change in reference to these concepts (Kihombo,
and et. al 2022).

Global education providers: with the popularly of online leaning is increasing , there are
many institutions who provide online learning and training platforms for the employees of
different countries
 The institutes provide online training program and learning programs to the new employees
in organization of other countries. SASOL can also provide online learning and training
programs to its employees, in order to their development and betterment of their career
growths.
Financial liberalization: the increase of the interconnection of the countries due to the
deregulation of financial markets. Globalization has made the exchange of money easy.
 The global currencies and the money transfers are easy now in the times of globalization
(Sweidan, and Elbargathi, 2022). It has made easy the use of purchasing from other countries.
 Financial liberalization in SASOL will help the organization in allocating resources from the
other countries.

 Intense competition: the increase competition among the firms, therefore the firms are
looking for the new market in the world, for the expansion of their business.
 Due to the intense competition , organization are searching for new market (Santos and
et. al 2022).
 The search of foreign markets has been facilitated by increase in foreign direct
investment (FDI). In reference to SASOL, jumping to the new market will result in
greater profits for the business.
 New market helps SASOL in expanding and growing their business across the
countries.
 Intense competition between the firms helps SASOL in innovation of new products, in
order to achieve competitive advantage in the market.

Significant impact of digital technology on globalization
Advancement in digital technology have considerably facilitated globalization. The
digital technological progress has been one of the major forces that drives the
globalization. The online technological breakouts compel business enterprises to become
global by enhancing the economy scale and the market size and scale that needed to be
break even.
 The virtual technological advancements reduce the costs of transportation and
communication throughout the world. This will also facilitate the global sourcing of raw
materials and the other inputs.
 The patented digital technologies encourage globalization, as a firm having
its own patented will exploit the foreign markets without having much of the
competition.
 The digital technology has made easy the working of business across the world
(Castro-Mondragon and et. al 2022). Using of digital technology in SASOL will lead to

 The digital technology of SASOL, helps in innovation, research and development,
advancement and betterment of their business. More the use of digital technology, will
result in more in profits for an organization.
 From the past records with no advancement of digital technology, high technology
production was limited to rich to countries with high wages.
 But in current times technology is easily transferable to developing countries, where
high tech production can be combined with low wages.
 By the digital technology, buyers and sellers are now made transactions at any time
and any part of the globe.
 The digital technology has revolutionized the global economy and has become critical
competitive strategy for SASOL.

Challenges and complexities in globalization of SASOL
 High investments cost: globalization presents many challenges for the multinational
companies in terms of capital investments and leadership. Setting new business in new
county for SASOL is itself a task for the organization.
 SASOL faces many challenges in establishment of new business in new country, and
especially in a developing country (Ni, and et. al 2022).
 Investing in a developing country is a huge risk for an organization, because a
developing country cannot assure the fixed profit to SASOL.
 Investing costs the investment of good infrastructure also , for example, investment in
building, electrics, furniture and fixtures.
 These investments costs highly to SASOL. Finding a retain mangers for the
organization. with requisite skills in reference to add value to the SASOL and work
efficiently within the local culture.