The global business environment refers to the internal and external environment of the organisation system. It consist of several factors that have direct impact on the decision-making process. It is the responsibility of management to examine all these elements properly in order to carry out the overall function in effective manner. Modern time consist of different type and nature of organisation that form the part of global business environment. The company selected in their report is John Lewis, which is a retail public limited company situated in London. There are around 50 stores that are located in Scotland, Wales and England. This report throws light on key factors which drives global commerce and trade, influence of globalisation as well as different ways of decision making. Apart from it, there are several routes to the internationalisation of an organisation that form the important part of globalisation concept.
P1. Key factors of cost, market, environment and competition that drive global commerce and trade
Every business organisation have to operate in dynamic business environment which keep son changing in time. Thus, it is necessary for the companies to work accordingly in order to keep in pace with these changes. The globalisation is a broader concept that involve number of transactions related to finance, communication and finance. There are number of changes that have to be implemented in response to this process. Its impact can be classified into two parts that include, production and market globalisation.
Product globalisation refers to the process that involve sourcing of goods, raw materials from one nation to another in order to gain high outcome and profit on the other hand market globalisation is a procedure that include reduction of barriers that come across while performing selling function within diverse countries (Cantwell, Dunning, and Lundan, 2010).
Moreover, globalisation allow John Lewis to established sustainable image and goodwill in market place as well as facilitate them to earn high sales volume and profits. They can go for joint venture and merger that helps them to expand their current business operations and transactions across the world. There are numerous factor that impact the global traders and commercialisation that are discussed below:
Cost: It is the amount that haws to be incurred by any business organisation whole performing functions of marketing, production, promotion and other activities (Werther Jr and Chandler, 2010). Thus it involve expenditure of finance from the company to carry out that process in effective way. Cost is also involved in other area of manufacturing, transportation and updating of value of products. It can be further divided into two parts:
Direct Cost: It is the price amount that is related to production of goods and services. It is related to one cost object. It include cost faced by company incurred on sand, cement and gravel.
Indirect Cost: This type of cost cannot be linked with some certain cost objects. There are number of functions that has to be performed in day to day operations related to supply are consider under indirect cost.
Market: It is the place where buyers and producers meet to carry out the exchange process. It consist of several parties that include wholesalers, traders, producers, that play different role in the market place. It get largely impacted by demand and supply process of products and goods. It involves some elements of market that are discussed below:
Market-related to raw materials: Every company require raw materials to produce finished products. There are diverse type of raw materials that has to be traded over world wide (Cavusgil and et. al, 2014).
Labour Markets: this market is for the individuals that are looking for employment in various places across the countries. UK have number of employment opportunities that attract number of prospective people to gain advantage for the same.
Environment: Business environment have a huge influence on functioning of the company. Thus, it is the duty of management to perform environment scanning and take decisions accordingly.