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Global Business Expansion Plan of Tufwell Glass

University: REGENT COLLEGE LONDON

  • Unit No: 18
  • Level: Undergraduate/College
  • Pages: 14 / Words 3525
  • Paper Type: Assignment
  • Course Code: BSBMGT617
  • Downloads: 40
Question :

This assessment will cover certain questions which are like - 

  1. What are the key factors required in globalisation.
  2. What are the effective strategic complexities which helps in operating global business functions.
  3. Elaborate the organisational culture, structure and functions.
  4. Give the effective organisational growth and strategy with its functioning.
Answer :

INTRODUCTION

Global business environment refers to a business atmosphere where business of different companies of several nations are operated and run with the purpose of fulfilling needs and requirements of international target audiences. This business environment is beneficial to the organisations because with the help of it, they can aware the customers with their products and services. This help in maximize the sales, profitability, customer base and create a strong brand image in the consumers mind (Adekola and Sergi, 2016).

This report is based on Tufwell Glass which is a small and medium glass manufacturer and based in Crawley and established in 2014. This firm is searching to make expansion in its business into international market. This assignment will discuss about the key factors which driven globalization and determine the strategic complexities associated with operating in global environment. Further, will define that how global market influences an organisation's structure, culture and functions. The evaluation of the influences of globalisation will also explain on organisational decision making and strategy.

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PART 1

1. Key factors of cost, market, environment and competition that drive global commerce and trade

There are several factors that drive global commerce and trade-and create their impact upon global business of a company in term if advantages and challenges. As a advisor of  Tufwell Glass, the individual can advised the company to use PESTEL analysis to analyse the key components of cost, market, environment and competition.

PESTEL Analysis

It is a structure and tool which can be implemented by the management of the company to monitor the global environmental factors that create influences upon the business firm in different manners such as favourably and unfavourably. With the help of this analysis, business owner can finding out the changes in the economic, social, technological, environmental and others factors. It can be beneficial for Tufwell Glass to do strategic planning to expand the business globally (Doh, McGuire and Ozaki, 2015). In context of operating it business internationally the brief discussion of PESTEL analysis is as below:

Political

This factor consist various components like international trading tariffs, political stability, bureaucracy, corruption, taxation policy and others which create influence upon the business of the firm when they are operating their business globally. For example, if Tufwell Glass operate its business globally then it can face some challenges in its business due to restrictions in trading, changes in taxation policies etc. In some nations the politics of the country is stable whir can be beneficial to the company to effectively run the business in the market of that nation. In some nations national authorities also formulate favourable policies in context of host country organisations so that they can sustain and survive at the new market place.

Economical

It consist various drivers of cost like economic trend, growth rates, inflation, interest rates, labour cost, monitory policies, raw material cost etc. These all components can create their impact upon Tufwell Glass in the situation of operating business internationally. In some of these defined components can influence the cost which is invested by it in its global operations in different manners (Doh, Luthans and Slocum, 2016). For example, if the respective firm run its business in China then the labour cost and raw material which are the driver of cost can favourably affect the company because the cost of labour and raw material is low at that place. Another driver of cost like inflation, monitory policies and others can negatively affect the firm. Because if there are the situation of inflation in the nation then the resources which are required to the firm to run business also offered at high rate which affect the firm.

Social

This factor include several drivers of market like taste & preferences, customer services, imports, culture, values, lifestyle, trends and others. These all factors assist the company in operate the business in international market. For example, if the respective company make operations globally and offer products to its potential clients as per their needs, preferences and trends then it positively affect and the firm effectively running in the market. This company operate its business in UK so the product life cycle can be on decline stage. But when the management operate it in international market then it can favourably affect the company in term of growth. Trend is a driver of market which can create unfavourable influence upon the business when customer of specific nation have a need of product as per trend.

Technological

This factor consist different elements like rising technologies, automation, research and innovation, intellectual property regulations, competitor technology and improvement, consumer evaluate to technology etc. which can create competition (Gaspar and et. al., 2016). These components can be considered as the drivers of competition in different ways. For instant, if Tufwell Glass use effective technologies to provide protection from UV rays etc. in its glass products in comparison to its competitors then it favourably influence the business if the company at international level. Technology can also unfavourably affect the business when the administration of respective firm do not use good instruments in cutting and edging, decoration etc. in context of its competitors then it create high level competition for it which negatively affect the business of it.

Environmental

This factor consist various drivers of environment such as weather, climate change, capon footprint, pollution laws, wastage management policies and others. These all components affect the business of the firm positively as well as negatively (Hamilton and Webster, 2018). For instant, during the time of operating internationally, the company have a effective place to store the material so that due to bad weather and climate condition the raw material does not affect. Doing this, the administration can provide finished goods to its consumers on time or in required quantity which influence firm in business environment positively. Apart form it, the company should also follow the pollution and environment act of the nation in which it will be operate because if the firm will not do this then it can be unfavourably affected by the penalty of national authorities of that country.

Legal

It is another factor which refer to the laws and legislations which are designed by the government of the different nation so that the organisations of different countries can operate their business internationally. For instance, Tufwell Glass run globally and not follows international and trade domestic regulations then it negatively affect the company. But if effectively follow intellectual property law and registered its business before operating in a particular nation then the national authorities laws  will positively influence it.

2. Explantation of the complexity of strategic challenges faced by organisations when operating in a global environment

There are several challenges which can be faced by an organisation when it operate its business internationally. These complexities and challenges can be affiliated to diversification strategies, supply chain flow and others. Some of them are mentioned as below:

Unfamiliar cultures and language-

It is one of the factor which can generate challenges for the company to operate internationally. In contention of  Tufwell Glass, when the company expand its business operate its business in to new market or nation then there are various issues and challenge related to culture and language will occur (Lee,  2017). Because at present it operate in UK so it follow another culture and language. For instant, when it operate in China then it adopt another culture and hire local employees to run the business and they use their local language which can be create complexities for it. Because the company and employees both take time to learn cultural differences and perform in to new culture. This also create the risk and diversification with the company because due to different culture and language.

The legal landscape-

It is another challenge and strategic complexity which can be suffered by companies when they make expansion in their business. For example, if  Tufwell Glass, operate in China, then it follow many laws of this nation like tax regulations, trade legislation and also formulate organisation's law as per the national authorities guidelines. This create the risk for the company because there is not ensure that the new law can be support the organisation or not (Lewis and et. al., 2017). This compliance is challenging in the sense that it changes from nation to nations and needs the firm to keep up with diverse legal power in order to assure the business is always operating within the legislation.

Supply chain complexity

When the company comes to sourcing products and services from overseas, administrating suppliers and supply chains an also be difficult activities. The length and complexity of supply chains increases the option of working with suppliers who have unethical and illegal business practices. For example, when Tufwell Glass expand in China and there are not good supplier to supply the material which is required for manufacturing then it affect the flow of supply chain because distributors and retailers will not offer the finished goods to the customers on time. If the customers will not get product during the time of requirement then it create a risk for the business of the company and impact it negatively.

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PART 2

1. Evaluation of the impact of globalisation on organisational governance and leadership, structure, culture and functions

The impact of globalisation on organisational governance, leadership, structure, culture and function can be evaluate by the administration of Tufwell Glass with the help of Mckinsey's 7S model.

Mckinsey's 7S model

The 7S of this model specifies seven factors that are categorised as hard and soft components (Nohria, 2017). Soft element consider shared values, skills, style, staff whereas hard element consist strategy, structure and systems.

Shared value

It refers to the standards and norms that find out behaviour of employees and actions of company. It can be beneficial to the firm and their workforce fro following rules and regulations of the business (Rowell, 2017). Tufwell Glass has their own standard, values and beliefs that should be followed by staff fro producing glass products.

Skills

It indicates to the competencies and abilities of people which help the firm in operating the business of the firm. When the firm operate internationally then it hire local people of the nation and the management find out skills and cognition of workforce according to the work of the company so that the firm can run effectively. 

Source: Mckinsey's 7S model,(2019).

Style

It refers to the way y which a company administrate its business operations and activities. It can be mention as style of management which is used by the administration of a firm to administrate and control the performance of the company (Saleem, 2015). In Tufwell Glass, the company required to accept effective management style which assist the company in in performing its operations and activities appropriately in international market.

Staff

It refers to the workforce and employees who make their contribution in the effective running of the business of the company (Salvatore, 2015) It is crucial for Tufwell Glass to have skilled and qualified employees who help the organisation in accomplishing its business objectiveness by utilising their skills and knowledge.

Strategy-

It states to plan of action that are formulate the administration of the company to operate the business of the organisation. But in the situation of global expansion, the managers of the company will require to design strategies by formulating the aims, objectives, vision and mission of the company as per new market.  

Structure-

It refers to the framework by which a company arrange the operations and activities of the company. It can be organisational structure which highly observable and can be modified easily. In context of Tufwell Glass, in the global expansion of the company, the management can adopt hierarchical organisational structure.

Systems-

It indicates to the activity of company which provide information about day to day activities of the company and monitor how decision making should be form. In Tufwell Glass, the firm require appropriate administrative system so that business of respective company can be manage adequately.

If the administration of the company have effective staff, plan of action, systems, good organisational structure, skills etc. then the firm can properly lead and direct the employees, govern the business, provide and adequate work culture and environment so that they can efficiently perform at global level.

2. Evaluation of the impact of ethical and sustainable globalization on organisational function

There are several factors and components of ethical sustainable business that  Tufwell Glass has to consist in international marketplace. These factors are defined as beneath:

Insist on Integrity in Business relationship- In term of operating the business of a company globally, it is essential to consider this factor. With the help of this factor the management of the company can form effective relation with the international organisations. In Tufwell Glass, during the time of operating globally, the firm can build effective relation with the suppliers and others so that they can offer better quality raw material to them on time (Tallman, Luo and Buckley, 2018). So that they can manufacture good quality products and provide to their target audiences timely. This way the company can accomplish its business aims and objectives in proper manner.

Treat employees fairly- It is another factor through with the firm can ethically sustain in global market.  In Tufwell Glass, if the administration of the company fairly treat their employees then it effectively operate the business (Tregear, 2015). Because if the firm will not make any kind of discrimination and will follow all the ethical legislations towards its employees then they make their contribution in the operations of the company and it achieve its business goals and sustain internationally.

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3. Evaluate the different ways decision making can work effectively in global context

It is essential to the company to devise effective decision for global business operations. There are diverse factors that affect the decision miking in favourable and unfavourable manner. If the company want to make expansion in the business by operating it different locations and destitutions. Then, it can be beneficial to the company to accomplish the business aims and objectives. In Tufwell Glass. If the administration of the company take adequate decision regarding transnational expansion in context of nation, location, workforce planning, organisational structure, strategies and others so that it can operate effectively.

Apart from it, the administration of the respective company can conduct market analysis so that they can have information about the market that which kind of product are required in the market. This help in formulate marketing strategies and also assist in providing information about customers needs before expanding the business. By using competitors analysis, they can can also get information about rivals and their products of the same sector so that they make innovation in their existing products if it is similar to competitors before launching it in the marketplace. These kind of decision making is beneficial to the company because it help in accomplishing the business aims and fulfilling consumers needs timely.

4. Determinative and articulation of the several routes to internationalization

Internationalisation is a very effective way by which organisations can expand and develop its presence in foreign market. Various tools and techniques are used by companies to step out of their current market and to perform their business activities in international economies. Tufwell glass is a small glass manufacturer who wants to expand its business and work with foreign marketers and business units (Uchihira, Ishimatsu and Inoue, 2016). Some of the tools are discussed below out of which Tufwell glass can use one or two for their operations and working on global level.

  • Exporting process is when businesses make sales and transport their products in international market. Exports takes place when organisations are generating revenue from foreign consumer by providing their goods. Through exports companies set their foot in international waters and make profits along with their domestic market (Wood and et. al., 2015). For instance, Tufwell glass can use this method of internationalisation as it is the most basic way of expansion and growth. Some barriers this tool has is the cost and risk associated with it, costs like transportation cost and cross border taxes are involved in it.
  • Franchising process is one of the easiest manner of setting business in international market in new locations. Procedure of franchising is, brands basically search for a person or persons who are interested in becoming their franchisee. They give contract to potential franchisee in which they carry their business activities in foreign market according to their ways decided by the brand owner and the franchisee. In this contract, franchisee becomes the semi-independent owner of the brand in their respective region and locations. Some disadvantages of franchising is that the original brand will lose its identity, changes in quality will be made by the part owner and that  can hinder the image of company. 
  • Joint Venture is another chance companies have to grow and make its presence in external markets. In joint ventures two businesses bind themselves in a contract having same aims and objectives along with sharing same levels of risks or rewards. Part rights are with all the parties involved in contract and by which they perform business activities in their assigned areas.

Tufwell glass is an small business enterprise therefore, the best option available for it to internationalisation is by exporting. Company should start exporting its products in various locations and through several means, which are there in market (Adekola and Sergi, 2016). Exporting is the most basic phenomena and the best for Tufwell glass looking at its current situation and position in marketplace. 

CONCLUSION

From the above information, it can be analysed that global business environment is an effective option to the organisation because with the help of it, they can make expansion in their business and make growth in it. There are several drivers and components which help in operating firm internationally and affect the firm. There are different challenges which are also faced by the management when they are running globally. To operate globally and making expansion in the business of the firm, there different routes and ways which can be used by the administration of the firm to international business operations.

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REFERENCES

  • Adekola, A. and Sergi, B. S., 2016. Global business management: A cross-cultural perspective. Routledge.
  • Doh, J., McGuire, S. and Ozaki, T., 2015. The Journal of World Business Special Issue: Global governance and international nonmarket strategies: Introduction to the special issue. Journal of World Business. 50(2). pp.256-261.
  • Doh, J. P., Luthans, F. and Slocum, J., 2016. The world of global business 1965–2015: Perspectives on the 50th anniversary issue of the Journal of World Business: Introduction to the special issue.
  • Gaspar, J. and et. al., 2016. Introduction to global business: Understanding the international environment & global business functions. Nelson Education.
  • Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University Press.
  • Lee, I. ed., 2017. The Internet of Things in the Modern Business Environment. IGI Global.
  • Lewis, H. and et. al., 2017. Design+ environment: a global guide to designing greener goods. Routledge.
  • Nohria, N., 2017. Fast forward: The best ideas on managing business change. Business Review. 9. p.10.
  • Rowell, A., 2017. Green backlash: Global subversion of the environment movement. Routledge.
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