Tufwell Glass: Analysis of the Global Business Environment Report

This report examines the global business environment, focusing on the case of Tufwell Glass, a UK-based glass manufacturer seeking international expansion. It analyzes key drivers of globalization including cost, market, environment, and competition. The report delves into the strategic ch...Read More

Global Business
Environment

EXECUTIVE SUMMARY
Global business environment includes uncontrolled interaction of local and international
markets which influence the manner in which firm perform its operations. Cost, market,
environment and competition are the key factors that helps in deriving globalization. The macro
business environment factors impacts on operations and activities of firm. Analysis of these
factors helps in determining their impact and formulating appropriate strategies to minimise the
impact. While operating business globally, firm confront some strategic challenges which are
related to environmental impact and economies of competition. McKinsey 7s framework helps
management in systematic execution of policies, strategies.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
LO1..................................................................................................................................................4
Key elements of cost, environment, market and competition that drive global trade and
commerce...............................................................................................................................4
LO2..................................................................................................................................................6
Complexity of strategic challenges confront by company while operating its business in
global environment.................................................................................................................6
LO3..................................................................................................................................................7
Impact of globalisation on the leadership, culture, structure, functions and governance of
organisation............................................................................................................................7
Impact of sustainable and ethical globalisation on functions of organisation......................9
LO4................................................................................................................................................10
Different ways in which decision making can effectively work in context of global business
environment..........................................................................................................................10
Different routes to internationalisation or market entry that a company may adopt and their
key barriers...........................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Global Business Environment refers to the uncontrollable international and local
interactions that impacts the way a firm operates. It refers to the surroundings in distinct
sovereign countries with components exogenic to the organisation's home environment that
influence decision making on use of resources and capabilities (Adekola and Sergi, 2016). In this
report, given organisation is Tufwell Glass which is a small medium firm based in Crawley,
United Kingdom that manufactures glass products. The company runs its operations successfully
from year 2014 and now wants to expand into global markets. In this context, the report covers
various topics including key factors of cost, competition, market and environment that derive
global trade and commerce and the strategic challenges faced by organisations when operated
globally. It also covers impact of globalization on structure, culture, leadership, governance and
functions along with impact of ethical and sustainable globalization on functions of firm. At last,
different factors that impacts decision making in global context and various routes to
internationalization with key barriers are covered in report.
LO1
Key elements of cost, environment, market and competition that drive global trade and
commerce
Definition of Globalization:
Globalization is defined as the process that defines the way technology and trade have
made the world a more interdependent and connected place. It is the integration and interaction
among governments, organisations and people of distinct nations.
In developing and developed nations, the impact of globalization is higher as investment
standard and education technology can be raised by it (Armstrong and et. al., 2015).
Globalization also helps in economic development of different nations. There are some factors
that drives globalization like economic factor that involves market and business economy data. If
the economic growth of an underdeveloped nation is low, then globalization assists in company's
growth by taking advantages of transportation facilities, technology and resources.
Technological factor also derives globalization by enabling to exchange technology from one
nation to another in the form of equipments and machinery. By exchange process, the interaction
among countries increases.

Tufwell Glass is a glass products manufacturing company of Crawley, United Kingdom
which runs its operations successfully in the country. Now, firm is planning to expand its
operations in other countries for which it needs to consider various factors. There are some key
factors of market, competition, cost and environment that drive global trade and commerce.
These factors are mentioned below:
Cost: This factor includes various costs associated with production, transportation, labour
cost etc. which vary from nation to nation (Black, Morrison and Gregersen, 2013). This
difference leads to increased investment and improved global trade that will benefit Tufwell
Glass in accomplishment of expected profits and revenues. For instance, if firm wants to operate
in North America, then its cost to hire labour will be quite high in comparison to developing
countries. But, the workforce available there is highly capable and skilled which will leads
company to accomplish high returns on investment when operate business at global level.
Market: The another factor that derives globalization is market that is highly associated
with satisfying needs and demands of customers. As the people around globe have diverse needs,
effective marketing of products will provide benefit to Tufwell Glass in gaining attention of
large number of customers. So, it is crucial for firm to acknowledge preferences and needs of
customers from different regions to satisfy them by offering products accordingly. Catering the
needs of people residing in different nations leads to increase in global trade. For instance: If
firm plans to expand in North America, it requires to understand needs of people who resides
there for sustaining strong position in market for long term.
Environment: Business environment of each nation is different that highly impacts the
operations of company. The laws and regulations imposed by government of different nations
are distinct that may limit foreign trade. Proper understanding of business environment of a
particular nation will help Tufwell Glass in running its operations smoothly at global level and
earn high revenues. As the business environment of each country is different, it impacts on
strategies and operations of business in both positive and negative manner. This impact can be
determining by assessing PESTLE factors. The political factor includes political stability, tax
policies, tariffs, trade policies etc. If the country has flexible trade policies, then provides an
ease to company in trading its goods at global level and hence, derives globalization (Boshyk,
2016). The economic condition of country also impacts the operations of business. If the
country has high inflation rate, then it will directly influence the buying power of customers

which ultimately impacts on profit ratios of Tufwell Glass in negative manner. The needs and
preferences of customers also needs to be consider by manager before offering products in
market. If the products are not provided as per the needs of society, then it will impacts the
operations and sustainability of company in market.s
Competition: In current competitive business environment, each industry faces high
competition in market while operating at global level. It is associated with the rivalry that is
faced by organisation operating in similar industry. So, for Tufwell Glass, it is crucial to
determine potential customers before entering into the new market as this will help company in
formulating appropriate strategies that will leads it to gain competitive advantage over rivals and
improves global trade and commerce.
LO2
Complexity of strategic challenges confront by company while operating its business in global
environment
Strategic challenge refers to the critical issue that is faced by organisation in attaining
their vision, mission, values and objectives. These challenges are confront by company due to
ineffective organisational structure or strategic management (Cassidy, 2016). The overall
working of organisation can be impacted by this when it performs its operations globally. While
operating in global environment, there are various strategic challenges that Tufwell Glass will
face along with their complexity. Some of the strategic challenges are mentioned below:
Language and culture of other nation: It is the another strategic challenge which is
faced by organisations while operating its business operations in other nation. Across most of the
western countries, the culture is quite akin, however, there can be stark divergence when the
culture of other nations are considered like Middle east, Africa etc. Understanding the culture
and language of different nations is not an east task and this will be a strategic challenge in front
of companies which wants to expand its operations in foreign country. For example: If Tufwell
Glass wants to expand its operations in other nation like North America, then the culture and
language of nation is not similar as United Kingdom. It will be a strategic challenge for company
to cope up with this situation (Cavusgil and Knight, 2015).

Environmental Impacts: This is the another strategic challenge which companies face
while running its operations globally. People are now become more aware and concerned about
environment conservation and reversing the impact of global warming. The rules of each
country are different surrounding the issues like green packaging, energy consumption and
recycling which required to be incorporate into operations of business which is a strategic
challenge for company when operating business at global level. Non compliance of these will
impacts the operations of business as it may face criticism from society and government of
country. So, for operating business at global level, Tufwell Glass requires to cope up with these
laws and undertake careful planning to construct and design its building so as to develop
environmental friendly office. For instance: As Tufwell Glass deals in manufacturing of glass
products, the atmospheric emissions from the activities associated will melting pose major
impact on environment. It is a complex matter for company to control and minimize these
emissions in an unified way (Cavusgil and Knight, 2015).
Economies of globalization: Globalization increases the interdependence of countries
which also increases the movements of goods from one country to another. The laws and
regulations framed by government of each country are different which makes it difficult for
company to frame appropriate strategies. To cope up with those legislations poses a strategic
challenge in front of organisation and impacts on its operations in adverse way as if the
company is not adopting appropriate strategy, it may not be able to run its operations effectively
at global level. For operating business in foreign country, Tufwell Glass will be subject to
various tax rules, regulations and laws surrounding trade. Compliance with those laws will be
challenging as this requires firm to keep up with distinct jurisdictions to ensure that business
operations will be run according to laws. Also company requires to frame and adopt appropriate
strategy regarding movements of goods from one country to another so that its operations can be
run smoothly and in an effective way while operating at global level.
LO3
Impact of globalisation on the leadership, culture, structure, functions and governance of
organisation
Globalization integrates the economies of world and influence leadership, governance,
culture, structure and functions of organisations. Tufwell Glass is a United Kingdom based

organisation which is manufacturing glass products. As the company is running its operations
successfully from last five years in UK, now it wants to expand its business operations in other
nations. This will impacts the planning and strategies of company as the strategies related to
product, operations or any other aspect are different form local market and hence, impacts the
structure of organisation. The long term objectives of the company will impact positively when
the governance and leadership of organisation are effective. Healthy culture of organisation
promotes motivation among employees thus, improves functions of company (Ferraro and
Briody, 2017). All this will help Tufwell Glass in expansion of its business operation effectively
and attaining long term business objectives.
McKinsey 7-S Model:
McKinsey model was proposed by Robert Waterman and Tom Peters in year 1970.This
model includes 7 elements which are categorised into hard and soft elements. The soft
components includes skills, staff, shared values, style and the hard one includes structure,
strategy and systems. These elements in context of Tufwell Glass are mentioned below:
Strategy: The firm opt strategies to deal with the difficult situations that arise when
expand operations globally. The structure of an organisation is highly influenced by the
strategies which are formulated by it. So, for attaining sustainability and competitive advantage
in new market, Tufwell Glass requires to consider structure and operations of organisation.
Structure: It defines the way a firm is organised and its teams and departments are
structured. Tufwell Glass follows hierarchical structure that will helps in managing its
operations in organised and systematic way (Groşanu and et. al., 2015).
Systems: It involves day to day procedures and activities that employees use to perform
their task. The systems and processes of Tufwell Glass influence highly while expanding its
operations at global. Consideration of market conditions helps company in developing its
systems accordingly.
Shared Values: It includes core values of company that depicts from its culture and work
ethics. Maintaining strong work ethics, governance and healthy culture at workplace provides
advantages to Tufwell Glass while expanding operations globally (Hamilton and Webster, 2018).
Style: It includes leadership style that is adopted by leaders of company. As the culture
and systems of each country is different, it influence the existing leadership style of Tufwell

Glass. To cope up with the diverse culture, leaders of firm needs to adopt appropriate leadership
style as this will help in running business operations successfully.
Staff: The employees of the organisation and their skills and capabilities. Globalization
will increase the need of workforce within organisation. For globalizing business operations,
hiring of adequate number of employees will provide advantages to Tufwell Glass in running
operations effectively.
Skills: The actual competencies and skills possess by employees are included in this
element. Availability of highly skilled and knowledgable employees helps Tufwell Glass in
performing its business operations and functions in effective manner at global level.
Hofstede’s Dimensions of Culture:
This model includes some cultural dimensions that demonstrates embedded values of
different cultures. These dimensions impacts the culture of organization and its performance.
Some of the dimensions and their impact on culture of firm is mentioned below:
Power Distance: This aspect depicts the degree to which the less powerful members in
society are accept and expect unequal distribution of power. In context of Tufwell Glass, it the
power is distributed unequally then it may harm the productivity and culture of company in
adverse way while operating business globally.
Uncertainty Avoidance: This aspect depicts the uncomfortableness of society with
uncertainty and ambiguity. While expanding business at global level, if the risk taking tolerance
of people is low, then the uncertainty avoidance index is high. This can be minimize by Tufwell
Glass through strict regulations and rules.
Individualism vs. Collectivism: This aspect considers the extent to which people in
society are integrated in group and depend on it. High score of individualism depicts loose
connection among individuals and little responsibility sharing within society's members. In
context of Tufwell Glass, if the employees are high on individualism, then they enjoy
challenges and their expectations regarding rewards are also high. It creates harmony among
people and they prefer to work in group to attain organizational goals.
Form the above mentioned both models, McKinsey 7-S Model is appropriate for Tufwell
Glass as it helps firm in bringing the processes and departments in synchronization with each
other. It also helps in systematic execution of strategies, policies and regulations that are
formulated by top management and helps management in analyzing the impact of changing

corporate strategies, cultures, technology and policies. All this will helps company in running its
operations successfully at global level.
Impact of sustainable and ethical globalisation on functions of organisation
The growing interdependencies of nation all over the world by maximizing variety and
volume of cross border transactions of international capital flows and goods and services
influence the sustainability of organisations. Sustainable development requires use of wider
markets, harness latest technology, strengthen process of decision making and manage links to
international economy (Khilji, Tarique and Schuler, 2015). For improving sustainability of
business, Tufwell Glass requires to improve product quality and relationship with suppliers.
Globalization highly influence the sustainability of organisation as if firm wants to expand its
business in another country, it requires to make changes in its processes. Sustainability may not
be same for all nations as some may experience an enhanced local environment as a implication
of globalization while others may experience deteriorating one.
Ethics refers to the moral values or principles that governs conduction of an activity.
Organisations are require to carry out their business operations in ethical manner (Laudon and
Traver, 2016). This ensures that the firm is not involved in any wrongful activities that may harm
environment or society. While running operations at global level, company needs to ensure that
all the activities are conducting in ethical way. If firm is engaged in any unlawful activity then it
may impact negatively on its business activities and harm its image in market. The factors like
crime, corruption and poverty in the country in which it operates may leads to create difficulties
in front of company in running its business activities in an ethical manner. In context of Tufwell
Glass, if there is corruption, then there is high possibility that the top level employees will
misuse their powers in illegal way which harms the functions and operations of company. It
creates an ineffective culture within firm which acts as a barrier in ethical working within firm.
Some of the ethical and sustainable factors that are required to be considered by Tufwell Glass
includes compliance with laws and regulations and corporate social responsibility. CSR
initiatives taken by company ensures its contribution towards society and environment. These
includes providing employment opportunities, emphasize on health ad welfare issues etc.
Compliance with laws helps in running business operations successfully and attaining
sustainability in market. Bringing transparency in policies and procedures of company and

communication the appropriately among stakeholders ensures that Tufwell Glass run its
operations ethically in market.
LO4
Different ways in which decision making can effectively work in context of global business
environment
In order to expand business operations in another country, various decisions are required
to be taken by management of organisation. In global context, the decision making affects in
different ways (Popescu, 2013). Dissatisfaction among customers negatively impacts the
decision making of firm. As Tufwell Glass deals in manufacturing of glass products, the
requirements of customers are differ. So, firm requires to take decisions regarding manufacturing
of such products that meets the requirements of customers and satisfy them.
In context of running business operations globally, management of Tufwell Glass
requires to take decisions regarding hiring of right skills of employees within firm and provided
training and development to employees etc. For expanding business, highly skilled and efficient
employees are required and to cope up with the culture and competitive environment of new
market. It affects the decision of management of company in context of training programme.
They require to take decision regarding providing appropriate training to workforce so that their
skills and knowledge can be improved and they are enable to perform business operations
effectively (Salvatore, 2015). This will also improve motivation level of employees which helps
Tufwell Glass in running its operations successfully in global market and attaining higher
revenues and profits.
Strategic Diamond:
The strategic diamond refers to a model that provides concise as well as simple way to
depict the way different parts of strategy of company fit together. This tool helps in analysing,
visualizing, summarising and sharing the strategy of product or business. Strategy is regarding
making crucial choices and integrates them into big picture. This model includes five elements
including arenas, staging, vehicles, economic logic and differentiation. For taking effective
decisions, proper understanding of market and needs and preferences of customers is necessary
as this helps firm in offering appropriate product to customers and gaining competitive
advantage over rivals in market. As the systems, laws, culture of each country differ from

another, making improvements in quality, processes, hiring of skilled employees etc. will help
organisation in attaining sustainability at marketplace.
Different routes to internationalisation or market entry that a company may adopt and their key
barriers
At the time of expanding business at global level, firm requires to consider various routes
to internationalization that are available to enter into foreign market. Each route is different in
its working pattern and approach. The different routes to entry that Tufwell Glass can use are:
Acquisition: This is a transaction which is used by firms to increase their control by any
other firm which can be done by purchasing of stock, exchange of stock or any other method.
Merit: Whenever a company is not bale to cover their cost they are facing reduction in the
profitability then in such case it is very profitable for them they are acquired by any other
company which is belonging to same industry.
Demerit
 When a company is acquired by any other company then they loose their original identity
and brand name which may affect their image in market.
Direct Exporting: As per this market entry strategy, sales are made directly into market
by using resources or appointing distributes. Such organisations which possess well established
sales programme are likely to move towards expansion by the process direct exporting. The
main motive of business is to achieve goals in appropriate manner.
Merits
 Expansion using this strategy is cost effective (Voegtlin, Patzer and Scherer, 2012). The main organisation controls services and products in foreign markets.
Demerits
 It leads to failure when agent become ineffective to perform task.
 It do not help in establish strong consumer base and more efforts needs to be made for the
same.
Joint venture: This is a type of partnership in which a particular business project is taken
into consideration. As per joint venture, two companies come together for working in business

environment and having common goals. The projects are basically for maximising business
profit and minimising risk.
Merits
 Starting joint venture will provide opportunity to organisation for gaining insight and
expertise (Uchihira, Ishimatsu and Inoue, 2016). Forming joint venture with other companies will give organisation access to better
resources.
Demerits
 Joint ventures are flexible but and there are few times when this flexibility can be
restricted.
 There is no equal pay possible in joint ventures as it is not accepted in companies which
are working together and share same responsibilities and involvement.
Barriers to foreign market entry
There are some potential barriers that Tufwell Glass may face while entering into foreign
market. Some of the barriers are mentioned below:
Policies of government: One of the potential barrier that an organisation may face while
entering into foreign market is government policies. If the policies and laws of the particular
nation are rigid, then it may create hurdle for the company to enter in new market (Tregear,
2015).
Availability of labour: It is also the barrier for companies to enter into foreign market
as non availability of skilled labour will restrict company to perform its business operations
effectively in new market.
CONCLUSION
As per the above mentioned report, it has been concluded that there are various factors
like cost, competition, environment and market that drives global trade and commerce. While
business expansion, organisation face various strategic challenges like legal landscape,
environment conservation etc. when operating business at global level. Globalization influences
the leadership, structure, culture, governance and functions of company. It is necessary for
organisation to run its business operations ethically and sustainably in market. In global context,
the decisions of management affects in various ways like providing training to employees,

formulation of appropriate strategies etc. There are various routes to enter into foreign market
that a organisation can consider in order to gain success in market.

REFERENCES
Books & Journals