Unit 18 Global Business Environment Assignment Example – BTEC-HND-LEVEL 4
This management report explores what multinational companies have in the global marketing environment. Students will get to know about the complexities of operating businesses in the intercontinental market. They will be able to offer valuable insights into the corporation’s present or aspiring worldwide presence.
Students will be able to analyze business practices using case history and relevant approaches. The knowledge, understanding, and skill set that students will gain on completing this unit will enhance their career opportunities.
It helps them to determine whether to set up their own business or being employed by an organization. On completing the assignment, students will be able to add value to the organization. They will apply their knowledge and support senior-level management on global matters that they never considered before.
Unit 18 Global Business Environment assignment sample
International businesses are maximizing the benefits of globalization. They’re expanding beyond the aerial, sea, and land constraints. Businesses target global markets that boost their financial growth and market share. Though internal markets bring in a realm of opportunities, companies face challenges and obstacles while expanding businesses.
It faces challenges that relate to the micro and macro environment of the enterprise. Expert analysts claim that the social, legal, environmental, and technological factors pose challenges to the multinational company. This unit focuses on the hardships faced by Ford Motor Company while expanding business all across the globe.
As a global automotive leader, Ford commits itself to innovations reinventing technologies to target its global audiences. This report highlights the challenges, and figures out opportunities for the strategic manager running a business in the global market.
Apart from this, it discusses the conflict-generating conditions to obtain the most effective strategies that would help the company to excel in its global market.
Handling the subsidiaries and developing a marketing strategy to boost brand awareness becomes challenging for the group. Moreover, cross-branding activities improved brand visibility and increased brand visibility, thereby reducing operational costs.
Overview of the company
Headquartered in Dearborn Michigan, Ford works was founded by Henry Ford in 1903. The company doesn’t only sell automobiles, but also commercial vehicles. Ford Motor Company works with 12 independent brands and owns a Brazilian automobile company with about 8% market share.
A mix of geographic and demographic segmentation, and psychographic factors that meet the demands and expectations of the clients in the existing and developing countries. It follows a differentiated strategy to cater to the specific needs of the customers.
P1: Analyze the factors that drive globalization
Globalization refers to the removal of barriers to trade beyond the national boundaries that foster interdependence, integrity, and interconnectivity of capital assets and the manufacturing process. It eases resource, cash flow, import and export of goods across multiple countries, hence expanding economic growth and multinational trade in a complex manner.
Factors that drive globalization are as follows:
The Internet made it easy to access services and products from any part of the world. Online sites made it easy to purchase goods including stationery and smartphones. Amazon is one of the popular e-commerce sites that have online stores for books and other products. Customers can compare prices, and settle on one transaction that would cost the least.
- Economic integration
Trade blocs made the national borders porous, as trade barriers get removed in member countries. Blocs like NAFTA for Canada, Mexico, and the USA, EAC for Eastern American Countries make the member nations competent, as they facilitate the flow of services and goods beyond borders. However, there is a decentralization of global markets, and EAC experienced protectionism. For instance, trade blocs encourage the use of homemade products, as opposed to buying regional items from member nations.
- Cultural convergence
The availability of information on social media and online newspapers, made people lose their cultural identity. Due to the convergence of cultural identity, beliefs, and identity, producers gained global clientele. Products manufactured by regional or national producers turned out to be global products. Tradesmen can sell merchandise without personalizing them to meet naive customer preferences.
- Economic liberalization
Decentralization of financial markets improves the connection between countries. The exchange of currencies including the British pound and US dollar became easier than ever that led to easy access to products and services. For Africans, it became easy to pay for an online course in the UK through online payments. It became possible due to easy exchanges of currency to British pounds or US dollars. Companies like PayPal Work through innovative online payment processes and contribute to financial globalization.
- Tough competition
Global firms face intense competition from their rivals and Look for ways to expand their business beyond borders. Companies operating in sectors like news media Face competition from any part of the world. Due to the sneak-peek competition among businesses, proprietors are looking for ways to explain businesses to foreign markets. Quest for foreign markets prompted an increase in FDI or Foreign Direct investment. FDI is involved in transactions where foreign investors pay capital so that proprietors can use it in running the business.
Search financial transactions Associate with Capital mobility, facilitating Economic integrations as businesses enter strategic Alliances.
- Need for scaling economy
With time competitions become intensified, and businesses look for ways to bring down operational costs. It can be achieved through a scaling economy where the same product gets manufactured for The Global market. It requires businesses to make huge Investments to make the products available in global markets. For instance, Ford motor company Sells automobiles across the world.
Factors driving Globalization remain interconnected and interrelated in intricate ways. Factors include socio-economic convergence, financial liberalization, tough competition, Global Business, economy, and the need for scaling economics.
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M1: Impact of factors that drive Globalization in terms of opportunities and challenges
The automobile industry is quite competitive. The market is crowded with companies that eat up each other’s market share.
The growth of the automobile industry faces blockages like an increase in infrastructure expenses, currency fluctuations, government regulations, pricing differences, and competition in the market.
Expanding businesses to the global market implies targeting new consumers or clients to increase sales and marketing. Businesses need to follow certain guidelines to carry out business on a global scale. From tax to trading laws a company needs to follow the necessary legislation of the target country to avoid penalties and suspensions.
Global pricing strategy is one of the challenges faced by Ford Motor Company. Managers face challenges while setting the prices of auto parts, cars, and services. Costs determine the Competitive position of an automobile company, ensuring profitability along with the sustainability. As per the analysts, Local companies pose challenges for international and domestic players. Shipping costs, distributions, and labor charges of the multinational companies would be more than that of Local dealers.
P2: What are the strategic complexities associated with operating business in the global market?
Suppliers provide the crude material, tools, and other things used in production. Quality maintenance of the raw materials and other inputs relies on the suppliers.
Competitors are organizations dealing with similar products and services, produced by your company. Suppliers play an important role in the success of businesses. Globalization affects the supply chain management of multinational organizations. Get quarters of the multinational company is located in a different country, and the regional officers are located in the targeted foreign market. While working abroad a company has to maintain an efficient connection between its two units.
Another challenge that a company faces while operating abroad is compliance with legal regulations and laws. Executives of any multinational company need to acquire knowledge of foreign regulations and laws.
Fluctuations in exchange rates affect the profitability and sustainability of the Company in the global market. Fluctuations in the exchange rate can adversely affect the profitability of the business.
Whether it’s a regional or multinational company, it can’t avoid challenges that emerge from cultural differences. Due to differences in cultural norms, and values between the two operating units of a business, there will be issues in communication, business ethics, and work environment. While operating in the global market, companies face problems in managing their supply chain and dealers. With the rise in complexities in supply chain management, the likelihood of the companies indulged in unethical and illegal activities increases.
- Opportunities of globalization
If executed properly, global business expansions open a floodgate of opportunities. By operating businesses in the global arena, companies get a vast number of customers. It doesn’t only improve the profitability of the company but also boosts its brand awareness. By going global, companies can acquire skilled employees and the best talents across the globe. It would improve the innovation, and scope for idea generations and creativity.
P3: How does globalization affect the organizational structure, functions, and culture of an organization?
Globalization affects leadership, and management functions through the market and customer base. Management needs to consider the full impact of globalization on the workplace. As a company adopts new trends and becomes global, it experiences changes in the structure and culture of the organization.
While some changes are good, others might not be that positive.
- Increased cultural diversities
As a company becomes global, it experiences increased cultural diversity within the workspace. It requires large and small companies to adopt new policies and guidelines. Increased cultural diversity yields positive outcomes, as companies gain insights from marketing and management perspectives.
- Standardizing workplace ethics
As a company becomes global, it needs to adopt the western standard by increasing workplace standards and providing better workplace security. It has a direct impact on employees who were working in unsafe or unhygienic conditions. Though conditions might worsen in some places, the concern over workplace safety is noticeable.
Religious, ethnic, and religious diversity necessitates employee training and education programs.
- Important Leadership Theories
- Task-based leadership hypothesis
Task-based leadership theory depicts leadership that accomplishes tasks. It focuses on delineating assignments to workers. A task-oriented leader designs procedures and plans to educate subordinates based on strategies. It outlines guidelines for assessing task performance. Task-centre leaders plan their activities relying on targets that finish on time.
- Relationship-oriented leadership theory
Relationship-oriented leadership theory talks of leadership, which relates to interpersonal relationships. Relationship-oriented leaders act as mentors to their subordinates. They take out time to interact with their subordinates. It is how they incorporate their feedback into decisions. They strive to make the job experience enjoyable, fostering a positive work environment
The psychodynamics approach analyses the psychological force that influences human thoughts and sentiments.
M3: Evaluate the influence of globalization applying relevant models and theories.
Hofstede’s hypotheses serve as the foundation for research in multifaceted psychology. It helps researchers to study various aspects of global business and relations. Dimensions proposed by Hofstede represent the embedded values and beliefs of diversified cultures. It shows how individuals from diverse cultural backgrounds act. It also projects their behavior.
- Power Distance: It depicts the level at which societies with less power expect the unequal distribution of authority or power.
- Uncertainty avoidance: It is the degree to which individuals are not at ease with uncertainty.
- Independence versus Collaboration: It specifies whether individuals prefer independence or collaboration with colleagues.
- Feminine versus Masculine: Masculine relates to an individual’s preference for achievement. Feminine shows a preference for cooperation and modesty.
- Short-term versus long-term goals: Long-term direction the inclination of society toward virtue. Transient direction represents people, who get inclined toward the foundation of truth.
How to curb the barriers of globalization
- Effective leadership: It is one of the ways to reduce the negative impacts of globalization. The report discloses that Ford Motor Company adopts situational leadership to change and implement policies within the enterprise.
Organizational changes affect Individuals working in it, and to reduce the negatives the strategic managers need to develop programs to prepare for it. Training programs that help them to develop new skills and enhance their knowledge. It helps them to adopt changes in their job responsibilities.
Management needs to establish synergies between departments and operating units/ Ford can form new ventures or mergers with local dealers in the target market.
Organizational structure should support globalization across the boundary. A hierarchical structure might not work in all situations. So the company should follow a scatter organizational structure, it would empower the low-level management to make decisions on their own.
It brings in innovation in the planning and manufacturing process. Oftentimes, companies ignore the communication planning aspects that result in a lack of communication and failure of strategies. Ford needs to ensure that its executives and managers get information from a well-structured channel. The plan should address cultural diversity while fostering workplace harmony. The automobile company needs to customize services and products to meet the needs of consumers in the target market. It helps the organization gain customer trust in the long run.
This report discusses the benefits and downfalls related to business expansion. Irrespective of the size and nature of the business, global expansion is challenging and includes threats like cultural diversities, currency fluctuations, poor organizational structure, and more.
It requires management to comply with international laws and regulations. Global pricing strategies create issues for the firm. Taxes, fees, charges, and other expenses will vary depending on locations. It likewise points out the opportunities related to business expansion.
By operating businesses in the global arena, companies get a vast number of customers. It doesn’t only improve the profitability of the company but also boosts its brand awareness. Cultural diversity yields positive outcomes, as companies gain insights from marketing and management perspectives.
Finally, it discusses the measures that management ought to take to counter the adverse effects of globalization.
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