The following questions need to be addressed in this report:
- Examine the factors affecting globalization.
- Discuss the strategic complexities faced by businesses in a global environment.
- Analyze the impact of the global market on an organization’s structure, culture, and functions
- Discuss how globalization affects decision-making and strategy formulation in Clif Bar & Company.
Global business environment can be signifies as a place where various kinds of companies are working in order to earn more profit and gather more market share as well. It is a wide environment where any company enterers once it is set up properly in their home country. In global level, a company can not only work in one country but can expand their business in multiple no. of countries as well. It is the responsibility of business managers of the organisation to understand the market properly and analyse that where are the opportunities available where company can go and develop their business in an effective manner (ApÃ„Æ’vÃ„Æ’loaie, 2014). There are various kinds of factors which are present in the global business environment which have a deep impact on the functioning of the company. The organisation which will be referred in this report is Clif bar &Company. This organisation is producing organic food materials and drinks since 1992 for their customers. This assignment will include key aspects of cost, market, environment and competition that helps in driving the global commerce. Also, the various kinds of challenges that will be faced by the company while doing their operations will also be discussed in this report.
P1 Key factors of cost, market, environment and competitors which drive global trade and commerce
Globalisation can be described as a process in which a company comes out of its native nature country and starts their business n some another country in order to develop themselves in the market. Here, basically integration happens between people, company living in different economies of nation if it s understood in context with an organisation than it will relate it with expansions. In this basically the company tries to create an environment where they can grow their business in effective and efficient manner so that it can grow and develop in the market (Axelrod and VanDeveer, 2014). Once a company enters into international market then it is called as multinational organisation. Technology also plays a major role in developing the concept of globalisation in economy and with the help of transportation as well they have got support in interconnection of the economies on various social and economic grounds. If Clif bar &Company will also think of expansion in the international market then they are required to consider various factors which will help the company in doing expansion effectively. Brief descriptions of key drivers of globalisation are as follows:
It can be determined as an amount which is required to be paid by the company to expand their company in the international market. This is very essential part of the expansion process and is required to be considered while making the budget of the company itself otherwise company can invest more money than required and can go into losses as well (Belás and et. al., 2014). The company is required to invest their time in this process and ascertain the correct process and make sure that they are putting money in right idea and will be in a profitable position at later period of time. Once the amount is determined then company make use of it in purchasing heavy machineries and equipments to produce various kinds of products for their customers. Direct costs involve insurance, rent; inventories etc. as they involve direct relation with the amount of units produced and the indirect cost include those expenses which does not have any direct connection with the quantities produced. If the company will develop in global market then they will earn more profit and improve its productivity as well which will automatically reduce their cost of production.
Market can be defined as a place where the company is finally selling their products and services to their respective customers. The more immersion of the present market is the significant explanation behind development of globalization. For example an association is doing its task in the economy of United Kingdom and have achieved fair development. Preceding this circumstance an association does not have any development openings hereafter organizations developed the worldwide level to accomplish a superior productivity and development. An association needs a correct chance to venture into specific market with right procedures and showcasing so better motivating forces could be accomplished (Belás and et. al., 2015).
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This can be considered as one of the most crucial factor through which the company is doing their operations in a corrective manner. The major factors which are considered here is technological and political drivers and both of these factors are considered as the base of the globalisation concept. The commercialisation and liberalisation of economy have made it reasonably easy for administration to start their business into other nation with their products and services. An association with the assistance of computerized instruments can dispatch themselves in more up to date showcase in an advantageous way. The legislature have made it to a great degree simple for association to come and direct their assembling forms because of various advantage it provides food. A business can be for all intents and purposes show in the nations through methodologies, for example, e-organizations and internet business.
The competition can likewise be dealt with as one of the significant drivers for globalization. There is a noteworthy ascent in the between firm rivalry which convinces a business into propelling their organizations at worldwide level. This activity of propelling at universal level is additionally supported by FDI's and interdependencies among countries through exchange (Carneiro and Brenes, 2014).
P2 Complexities of strategic challenges which face by Clif bar &Company in international environment
Apart from their size and structure, there are various kinds of challenges which are being faced by the company while doing their operations at the global level. Clif bar & company is an organisation which is carrying out its operations in the market of UK, Asia and some African region. There are various kinds of elements which are having an impact on the working of the company in the international market. These actors are as follows:
Compliance and Regulation:
It can be considered as the biggest roadblock which comes in the way of the management of any company while doing their activities. It is compulsory for them to follow all the compliances and regulations in a proper manner because then only their activities will be considered as legal. This will also given them the permission to sell goods and services freely to their customers. It is to be noted that each and every company is having their own laws and rules so if company is having their office in various countries then they will have to follow different rules at different places (Cavusgil and Knight, 2015). The other part attached with it is associated with the challenges company faces while doing import and export of goods and services. During this process, there are various types of laws which are being made by the