The scenario of this report determines that a fast-growing SME as Ensoft wants to expand its business operation in the other parts of the world. Thus it is required to analyse the factors that drive globalisation as well as its key challenges that can create hurdles for the firm.
- Evaluate the key factors that drive globalisation.
- Identify what are the strategic complexities Ensoft Ltd can face while operating in a global environment.
- Analyse how operating in the global market can affect the business structure, its culture and functions.
- Discuss the impact of globalisation upon business decision making and strategy of Ensoft Ltd.
International business environment is filled with an ample number of opportunities for organisations which are looking forward to expand their business from domestic to global level. Term globalisation can be understood as a process where a firm try to develop its business all over the world and does its operations at international level. Main aim of these companies is to earn profit as much as they can (Apăvăloaie, 2014). On the other hand, it is required for business firms in grabbing attention of customers right on time so that to earn good reputation in all over world. Under this report, firm which has been taken that is Ensoft Ltd which is a software company and was found in the year of 1997 which is located in United Kingdom and carrying around 80 employees. They are looking to expand their business in United States. Many key elements and other things are being developed under this assignment which are related to cost, market and rivals that are present in the market. Along with this, problems and issues which can be faced by firms has also been discussed under this assessment.
P1. Key elements of cost, market, environment and competition that drive global commerce and trade
It has been located that when a business organisation looks forward to expand its business business at international level, it is very much required for them to look into different aspects and analyse them like cost, prices, targeted marketplace, competitive level and many more. If scenario is clear in front of firms whose aim is expansion of business at global level. On the other hand, if company do not look into these elements it may be possible that firm may face issues which are related to their expansion. Along with this, it has been analysed that proper enlargement asks for high funds and this needs to be properly taken care in an appropriate sense so that profit margins can be raised in a proper manner. Through this, operational activities can be done accurately (Axelrod and VanDeveer, 2014). In present scenario under this report, Ensoft Ltd. which is a software company is looking forward to expand its business and there are some key elements which needs concentration and these are understood below:
Competition: One of main key factor that needs to be understood by Ensoft Ltd. in an appropriate manner so that to grab good position and to gain competitive advantages as well. Rivals or competitors that are present at marketplace and are doing business at target market for a long period of time. It has been analysed that they can put impact on operations, reputation, productivity and profitability as well. In order to gain competitive advantages it is must for Ensoft Ltd. to develop strategies through which they can see that what working way, technologies are being adopted by them. This may lead Ensoft Ltd. to make effective decisions that may lead them in giving good rivalry to challengers. In present context, it has been located that United States is already carries ample number of software organisations that are delivering its software to their clients (Belás and et. al., 2014). Therefore, it will create many complex situations for Ensoft Ltd. where firm may find problems while expanding its business in US.
Cost: Globalisation of a firm requires high funds. Therefore, it is very much required for business firms to look into different aspects and try to develop a budget and keep on monitory it so that business can get enlarge at international level in an appropriate manner. If Ensoft Ltd. do not develop a budget it is may be possible that firm may not enhance their business. Failure into this may lead firm to stop expansion of business. On the other hand, delivering goods to customers according to their needs may lead business firms in grabbing good position at whole new place in short period of time. Along with this, strategic prices policies like offering goods with less cost but with high quality will directly aid in attracting consumers high in numbers. But, it is hard as organisation which is enlarging it has been located that firms have to go through different phases like political, environmental, legal, technological and others as well because these may raise prices of products and services and expenses at the same time.
Market: Setting target market is very much required for business organisations that are expanding their business as this may lead them in attaining all goals and objectives that are related to enlarging. On the other hand, this may lead firm in grabbing good position as well right on time in short period of time. Along with this, enhancement of business requires to understand all the trends and other things like updated technology that is being used by business organisation that are already done.