Globalization Factors Driving Business Success Assignment Sample

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Task A: Globalisation and Its Business Impact: Key Opportunities

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Introduction: Key Globalisation Factors Shaping Business Success

The global business environment means an environment wherein companies serve for the whole world irrespective of geographical boundaries. It is essential for the company because it aids in reducing the cost of production, increases demand for goods, and enhances market opportunity. The report will state about key factors of globalisation such as economic, cultural, political, and legal factors. It will cover the impact of this factor on the business environment in terms of opportunities and threats. Digital technology plays an important role in business, the report will also outline the impact of digital technology and the role of innovation. The report will highlight some recommendations to flourish in a digitalized as well as globalised world.

Globalization

 The progress of technology helps in connecting the world. The Globalisation means unwrap of economics for the competition internationally and allow movement of goods, ideas, opinion and capital freely between the countries. The growth of globalization is increase because of numbers of factors that includes technology, competition, labor and cost, pressure of environment, foreign exchange market, skills and education, regulations of import and export and so more (Steger et al, 2023). The globalization makes whole world as a part of one market, with the dependence of production, consumption of similar goods. Due to globalization, the goods of one company of a country is available for the each and every consumer in the whole world.

The globalization allows an increment in the global output. Globalization is essential for the expansion of trade, for providing reach to natural resources and labor market (Malaviya, 2023). It is necessary because all country in the world have no sufficient resources for the production, the country needs to depend for the resources on the other country.

Key factors of globalization

There are some key factors of globalization which are as follows-

Economic factor- It includes factors like demand and supply, taxation, economic laws and policies, exchange rate and activities of government. It also includes economic integration, foreign direct investment, numbers of trade blocs are made to reduce the trade among member countries (Zajda and Vissing, 2022). These blocs lead to increase economic growth and enhance international competitiveness. The foreign direct investment leads to increase extension of world trade and aids to boost transfer of technology and expansion of global companies.

Cultural factors: The cultural factors include social media, traditional media, news, tourism, education and face-to-face communication. In globalization, there is a movement of cultures enhance the view, opinion and perception of population. Through globalization and with help of communication effectively combine different culture into each other. This leads to increase flow of information, cultural practices, style and taste across the world. The globalization leads to promote or contribute the cultural values of different countries.

Political Factors: The political factor includes government policies like foreign trade, tax-policy regulation. The government made some policies that make possible global trade. For doing business globally, the company has to follow the rules and regulation of that company as well.

Globalization Factors Driving Business Success Assignment Sample

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Legal Factors: The legal factor includes law related to trade such as international trade law, human right law such as the right to work and right to social security. In this evaluating that whether international economic law adequately focuses on human right concern.

Impact of this factor on business environment

There are various impact of this factor in terms of opportunity and threats-

Opportunities- Globalization offers companies opportunities to access new markets, boost revenue through innovation, and share technology and culture, ultimately enhancing productivity, customer reach, and global brand presence.

Access to new market- The Company has opportunity to reach or enter into new markets with the help of globalisation. By doing bi-lateral and multi-lateral agreement, the company can enter into multiple countries (Mukherjee, Makarius and Stevens, 2021). It is an opportunity for the company to access to new customers, gain market knowledge and create brand on the global level. The economic factor of globalization namely foreign direct investment is advantageous for both the companies of the host and investing country. It helps the company in gaining entrance to new market as well as customers, aids the company to expand its business and leads to save cost due to economies of scale. The investments made by other companies through FDI into UK were worth £2.0 trillion in 2021 and investments made by UK companies in other foreign companies was 61.7 billion (Foreign Direct Investment (FDI) Statistics,2024).

Enhance revenue and development product- By reaching new market, the company can develop product and services with new methods. To meet the local demand, the company adapts new offerings and methods. It is a great opportunity for the company for doing innovation. With the help of this, the company is able to earn more revenue. Due to economic integration, there are elimination of trade related barriers. It leads to reduce the cost of doing business. It aids the company to make available the goods and services to greater number of customers. It provides opportunity to the company to increase its production capacity and help in developing new goods or products with a quality output.

Sharing of technology and culture- Another opportunity for the company is to share and gain knowledge, information, technology and cultural values. It helps the company to use technology for efficiency and knowledge and information for the better offerings to customers.

Challenges

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• Competition: The Company has face several challenges due to globalization. As the company access to new market, it needs to compete with the domestic firms in global market. The company faces competition in terms of offering products, technology. To overcome the challenges the company needs to make good working relationship with local businesses.
• High investment: The Company face challenges in expanding business globally. It needs lot of investment to prepare and implement a effective strategy for globalization. It requires lots of time, money and efforts for setting business globally such as make payment of taxes, hiring, contacts with new partner and all.
• Legal Formalities: It is a challenge for company to fulfill all legal formalities of doing business globally related to business and employees. Every country has its own rules and regulation related to working hours, paid leaves. Intellectual property rights, salary and social security. The company needs to give emphasis on labor code; it assists company doing business with efficiency.
• Complexity due to different time zone: Company faces challenge due to difference in the time between two countries. As there is difference in working hours as a result it is difficult to coordinate and schedule meetings, calls. The company finds it difficult to find a time which is suitable for everyone.
• Cultural difference and cultural diversity: When a company enters in global market, there are so many differences in culture that are face by the company. The company faces some cultural barriers like language barrier, distinct cultural expectation and different working style (Doszhan, 2023). The company needs to address this challenge because it can create some misunderstanding.

Impact of digital technology in globalization and role of innovation

Technology advancement makes the process of globalization simpler. In other words, progress of technology is one of the important forces for driving globalization. The impact of digital technology on globalization are-

• Reduce cost: Digital technology aids the company in access to big global market and helps in achieving economies of scale. The technology advancement decline the cost of transportation and communication by using software that aids in preparing a plan for efficient route as it lead to reduce consumption of fuel and delivery times (Skare and Soriano, 2021). It assists the company in efficiently managing the supply chain. With the help of patented technology, the company can use or explore foreign market with less competition.
• Ease of doing business: Doing business is becoming easy due to the advancement of technology. With the help of World Wide Web decline the hurdles of time and place in the dealings of business. The buyers as well as sellers able to makes transactions at any time from any place of the world.
• Better data collection: The digital technology helps in collection of data with the help of social media and cloud computing. The company by processing the data and helps in connecting the global community. The fast data transmission leads to evaluate the data fastly as a result the company get better insight for launching products.

Role of Innovation

Innovation is an important key for a business as it play a crucial role in the success of any business. It is an essential requirement of the business because it allows company to identify opportunities and problems in the business and aids in bringing new products and services in the market.

1. Innovative leadership- The innovative leadership is essential for the company. It is a kind of leadership that means application of innovation for the management of people and projects. The application of innovation is essential for the company in times of risk and uncertainty. It helps the company in overcoming the situation of risk and give advantage by bringing innovation (Salih, 2020). For example, The CEO of Apple brings the idea of personal computer and work with the staff of the company on the innovative of “Think different” campaign of marketing leads to the success and favorable outcome of the iPhone, iPod and iTunes.
2. Product Innovation- The product innovation helps the business in creating a new product and enhancing the existing one, so that company can serve according to the needs of its customers. It assists the company in gaining new customers and building a brand loyalty. It leads to bring efficiency as a result cost reduces and profitability increases. For example- The FitBit continuously does innovation in its watch and enables to promote fitness and health with the help of its products. It used advance sensor in its smart watch and help customer in live healthier and happy life. It has advance sleep tracking tool also. This, product innovation helps the company in serving according to the needs of its customers.
3. Process innovation- The process innovation means reducing unit cost of production and improving quality of products. It also includes new ways and improving methods to create or build better products or services. The process innovation can be done in any area of the company like production, operation, management of supply chain, providing services in customers and the administration process. For example- On-demand warehousing is a supply-chain innovation. This is an innovation for the company that requires a temporary warehouse space but not want an operating cost for opening a new warehouse.
4. Business model innovation- This is a process in which a company adjust its business model. This innovation shows a basic change like how a company can delivers values for its customers with the development of new distribution channel or revenue stream. For example- the Amazon company use two business model for its business, the one is online store and the other one is physical store (Shakeel et al, 2020). Through the both platform, the company serves to a wide variety of customers with a number of goods such as grocery, dresses, electronics, beauty products, health and personal care items, industrial supplies and kitchen items as well as services. Thus, the online store and physical store is a part of business model innovation and it create value to the company`s customers as well as develop new distribution channel and increase revenue of the company.

Recommendations

• The company should make partnership with the right partner so that enable to do effective communication and able to get right and proper information about the market and related to culture so that the company efficiently can grow in the new market.
• For thriving in globalised or digital world, the company should possess technological expertise, digital literacy and essential skills. The company should make investment in talent and make a culture for learning, it aids the company in adopting changes that take place in global market so that enable to serve the customers.
• The company should do innovation in the product, process of production and methods because today`s business environment is competitive. Innovation by the other country leads to attract the company customer and it become very tough to regain the customer base and market share again. So, the company should give more focus on innovation.

Conclusion

In conclusion, the global business environment helps in limiting the risks of closure of business. The report stated about key factor of globalization like economic, cultural, political and legal. It covered some impacts of this factor on business such as access to new market, product development, sharing of technology as opportunity. It also covered threats of this like competition, difference in time zone and so more. The report highlights role of innovation in terms of product, process, business model and leadership with the help of example of different countries. It outlined impact of digital technology including ease of doing business, cost reduction and suggested some recommendations.

References

Books and Journals

• Doszhan, R., 2023. Multi-vector cultural connection in the conditions of modern globalisation. Interdisciplinary Cultural and Humanities Review, 2(1), pp.27-32.
• Malaviya, R., 2023. Concept of Globalisation. Understanding Globalisation: Challenges and Prospects.
• Mukherjee, D., Makarius, E.E. and Stevens, C.E., 2021. A reputation transfer perspective on the internationalization of emerging market firms. Journal of Business Research, 123, pp.568-579.
• Salih, A., 2020. Cross-cultural leadership: Being effective in an era of globalization, digital transformation and disruptive innovation. Routledge.
• Shakeel, J., Mardani, A., Chofreh, A.G., Goni, F.A. and Klemeš, J.J., 2020. Anatomy of sustainable business model innovation. Journal of cleaner production, 261, p.121201.
• Skare, M. and Soriano, D.R., 2021. How globalization is changing digital technology adoption: An international perspective. Journal of Innovation & Knowledge, 6(4), pp.222-233.
• Steger, M.B., Benedikter, R., Pechlaner, H. and Kofler, I., 2023. Globalization. University of California Press.
• Zajda, J. and Vissing, Y. eds., 2022. Discourses of globalisation, ideology, and human rights (Vol. 14). Springer.