- 1. Concept of Globalization
- 2. Driving factors of Globalization
- 3. PESTEL analysis for the organization:
- 4. “Challenges of globalization and the strategic challenges this represents for the organization”
- Strategic challenges for Good Taste
- 5. Recommendations to challenges
1- Write a repot on "Global business environment" with 20-25 references in about 3500 words.
The entire assignment talks about the globalization in the business environmentand for understanding the concepts of the Globalization process, a company called Good Tastes Limited is chosen. Good tastes limited are a food manufacturing company offering its surplus amount of food services to all its customers.
After the revolution in 1990, the Good Taste Limited offers products like soups and other liquid foods which proves delicious and satisfies the tasty tongues of the customers. The Good taste company focuses on satisfying the customers by offering them the reliable services. The organization has beaten the kitchens in Cuisine by offering the non-vegetarian foods and meals. The food industry supplies the variety of delicious foods and the cooking ingredients both to the customers and the chain of the hotels. The major success of the business was due to the effective global operations which made them to expand their business internationally. The report helps in outlining ideas for the organization to expand its business from Hong Kong to other markets like UK in order to achieve the international marketing. The report talks about the challenges faced by the company while entering into the new market like UK.
1. Concept of Globalization
Globalization is a wide concept which has brought the world at a same place. It has provided the opportunity to the countries to come along and participate in trade practices. There is a common platform for the companies where they could exchange their goods and services. It has removed the trade barrier and has bought liberalization on the same platform. There is an allocation of the currency behind any transaction that is taking place between the companies. This helps the companies by making international influence and operating at a global scale. This has given the opportunity to raise the capital for the business from different sources. International trading and stick markets are the common terms in the globalization. Companies used to purchase the shares of the other companies in order to provide strength to their capital. However, there are exposures in the market, but the return is highly considerable. This is the reason most of the companies are being indulged in globalizing their business. Good Tastes Limited has been suggested to invest in UK for expanding their business routes. This is because it is one of the emerging markets and has made FDI an easy process to facilitate in the country. Globalization means the business, people and nations are becoming interconnected with the rise of technology, improved transportation and global financing of the modern days helps the business cross borders to venture in a new market. [Referred to appendix 1]
2. Driving factors of Globalization
The driving factors of globalization include:
Technological advancement: Technological advancement is one of the most important factors which help in the globalization process. The technological advancements in the food industry include the new refrigeration techniques which help in the preservation of the liquid foods and vegetables. Technological advancement involves the introduction of new and innovative technologies which helps in achieving the goals of the organization. [Referred to appendix 2]
Capital flows: International trade helps the organization to open up multiple channels which helps in the expansion of the business. Flow of capital has been mobilized with the technological advancement. For the countries who are involved in export and import activities could easily make the transactions. Funds are being transferred with just a click that has greater roles in driving the globalization. Flow of goods and services are effortlessly done with the advancement of the technology. Thus, the mobilization of the capital has become more normal which affects the globalization positively and could help Good Taste Limited to bring maximum return.
Trade flows: After the removal of the trade barriers most of the companies are being indulged in exporting and importing activators. FDI is being the major example in this scenario. Countries are now asking foreign companies to make investment in their company. UK is best example of the FDI. Therefore, making investments in the other countries is more a factor of fear. Developing countries like UK is providing huge score for the foreign companies as the people ae increasing their standard of living and getting attracted to foreign products. (Hamilton and Webster, 2018).
3. PESTEL analysis for the organization:
Political: The political factors prevailing in the country of UK, say where it wants to expand can directly affect the food industry of Good Taste Ltd. If the political power of the nation is high and the entire nation is under the control of the political parties, then one can say that they can have influence over the food import and export.
Environmental: The production of the product and its distribution has to take care that the business doesn’t spoil the environment in the process of business development or operations. Therefore, the way the business is conducting itself in the larger social environment to treat the natural resources is the environmental effects for the business.
Social: The social factors are always linked with the lifestyle of the people of UK. The lifestyle of the people who are the customers of the food industry can have direct influence over the business operations. The people who are the customers are the ones who always seek for innovations in the products that they receive from the industries.
Technological: The business of Good taste is going global where the UKn markets that it serves in have its own needs and demands. The technology helps all aspects of the business where the stakeholders to the management are all connected via a wireless media of the day to track the business progresses and market demands so that the future planning to meet those demands can be executed.
Economic: The aspect of economy determines the purchasing power of the consumers in a market where the disposable income for purchase is higher. On the other hand, as the economy declines the purchasing powers of the consumers gets lowered. Hence the economy of the markets that the business is working in has to be economically strong to sustain and let the business grow as per its potentials.
Legal: The way the business conducts itself in the market, the laws and regulations those binds the business are all been documented under the legal provisions of the market economy as it is in UK.
In UK the business laws would be different if the brand was working in Hong Kong. So, these aspects of the legal business norms would enable the businesses to grow globally in different markets as desired by the Board of Directors (Hamilton and Webster, 2018). Further, use of technology in production processes has reduced manpower intervention while standardized the product quality in the process making the business have the efficiency to grow and sustaining a competitive market like UK. The brand of Good Taste has maintained a low carbon footprint in their processes of manufacturing and now aims to further develop it which is the strength of the company.
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4. “Challenges of globalization and the strategic challenges this represents for the organization”
Overall cooperation for the interest of people and countries: Company has to work for the overall interest. People are country both are the stakeholders of the company. Thus, if stakeholders found that their interest ate not fulfilled the company could face major challenges. Good Taste has to ensure that their services are marked by their stakeholders for the long run of the business. There are challenges in this operation format as well.
Instability: Under the developing countries like UK there are lot of chances that the external environment could create instability. This is because of the political side which is major influencer in the economy. New government could have new reforms which could affect the decisions of Good Taste.The survey of the market from both primary and secondary sources about the culture, social status, taste, opportunities in the markets of the developed and developing nations of the globe are to be collected. (Dau et al., 2017).
Global competition: The businesses of the day are getting tough competitions in the existing markets that they are operating in. Hence the globalization makes the business to seek the needful competence in its operations that would help it to develop the needful skills which would further boost its operations in other markets. The globalization has its challenges and gains which would be discussed herein. Thus, it aims to improve its business potential and also aid people of various economies that it is working in to have a better lifestyle for people and society as a whole for long term sustainability developments.
Strategic challenges for Good Taste
Decision making challenges: Good Taste has to con sider for the strategic challenges in terms of decision making. This is becauseonce the business has chosen its target market there are many activities taken by the political parties which could affect the investment and other strategy of the company. Business has to venture to seek the localized bases which they may call the business port for that market. Hence, the limited technologies won’t be a hindrance in such a place has to be confirmed to set up the business there. For example if the brand ventures in UK like huge market the App for sales of their products from a central point in every urban center may be served via third party delivery services like Swiggy or Zomato like mobile based apps.
Strategy towards the sale of goods and services: UK is a developing country and there is FDI which is highly supported by the country. Therefore, there are large number of competitors for the company. It has to consider their strategy twice before selling the gods and services. This could be in terms of the price and the location that need to be targeted by the company. Hence the business has to face the situation and seek the challenge to be covered with few retail outlets in major metropolitans’ in the later stages but to venture into the e-commerce model is best suited for a business based out of Honk Kong. The model in such case is the best way to go for Globalization of a brand with least risk but most efficient services are needed for such venture that would make the business stable to develop the needful infrastructures that would be built for the Metro clients in a later stage.
However, the challenge is the market entry which already has a vary array of competitors in its casket. Therefore, the challenge is to overcome those and come to a point where the ways to overcome the challenges are to be designed by the business so that they may involvement them with success to go globalized (Ravanfar, 2015).
5. Recommendations to challenges
Unique selling Proposition (USP): This could be used in order to deal with the competitive challenge. The challenges like market selection can be overcoming with a good study of the existing businesses business models and how they have changed it with time. Where the gap lies would be for the business.And that would be made to seek an entry into an already existing sector. The venture has to do tie ups with the local vendors of logistics which further would assist the business to reach the end users. (Saleem, 2015).
Pricing: Pricing need to be done in manner such that the business can withstand the cost and do proper projections of sales in the future for needful acquisitions that sees that targets are met. Therefore, the many risk that the financials have to bear has been reduced with survey and promotions before the launch. This is the big part of the marketing plan to develop the promotions that highlights the USP and also gets in the best deals so that more and more people join with the business via the apps. (Courses.lumenlearning.com, 2018).
The future improvements could be focusing on making the plans based on the expectations of the company. Budget and removing the exposures need to be significantly handled by the company. Making better pricing strategies that suits the customers by making proper survey of the market need to be done.
Bowen, H.P., Baker, H.K. and Powell, G.E., 2015. Globalization and diversification strategy: A managerial perspective. Scandinavian Journal of Management, 31(1), pp.25-39.
Courses.lumenlearning.com. (2018). Globalization Benefits and Challenges | Principles of Marketing [Deprecated]. [online] Available at: https://courses.lumenlearning.com/marketing-spring2016/chapter/reading-globalization-benefits-and-challenges/ [Accessed 2 Jun. 2019].
Dau, L.A., Moore, E.M., Soto, M.A. and LeBlanc, C.R., 2017. How globalization sparked entrepreneurship in the developing world: The impact of formal economic and political linkages. In Entrepreneurship: Concepts, Methodologies, Tools, and Applications (pp. 1881-1900). IGI Global.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University Press.