Business environment consists of various different factors such as external and internal which can affect organization in different manner (Gammeltoft, 2006). It is crucial that these factors are evaluated by business firm so that they can run their firm successfully and effectively. Through scanning these forces firm can modify their system and policies. Hence they can improve performance of employees and the company. Thus it can earn more revenues. Hence it can maintain strong position in minds of users and in market. Assignment discusses about the Sollatek firm which is electronic equipment firm. It was found in 1983. Report explains about the key factors which can drive globalization. Strategic complexities associated with operating in global environment. Evaluate methods through which global market affect organizations structure, culture and functions. It further explains about the influence of globalization can affect firm decision making and
P.1Evaluate key factors of cost, market, environment and competition that increases commerce
There are different factors through which they can affect globalization. Through these factors company can change their policies and can create effective strategies so that they can run their operations smoothly and hence they can work in a proper and effective manner. Factors that can increase commerce and trade evaluated by Sollatek are-
Economy: Sollatek has to evaluate different factors such as cost of goods and services. Through this they can set right price for their products that such as electrical equipments such as bulbs and valves. Through this they can increase their imports and exports. As if they have set appropriate price for consumers and for international goods it directly leads to increasing sales of company. Hence as a result they can enhance their profits.
Resources and market: Company also evaluate different resources such as filaments, glass bulbs, electricity, oil so that they can generate in different bulbs. Through this they can easily generate electricity. Hence as a result they have to acquire these resources so that they can easily manufacture these goods. Through this they can increase their exports by creating good quality of bulbs and valves. Hence as a result they can generate more revenues.
PESTEL analysis: It includes different factors. They are
Political: It includes that tax rates are increased by Govt in these materials. So company has to carefully consider these factors so that if there are higher tax rates then it can create policies and plans to use these resources in optimum manner. If they had not evaluated this factor then it can reduce their sales. Hence as a result they can increase their sales by evaluating these factors and through important utilization of these resources (Driver and Martell, 2002).
Economic: It has to evaluate this factor very carefully. For example if there is less interest rates in the goods such as bulbs and tubes it is a favorable factor for company. Through this they can imports many goods and can produce different goods to export various goods. Through this they can increase their sales and can enhance their revenues (Sovacool and Bulan, 2012).
Social: It has to create that bulbs and valves which can be easily be used in homes and are according to choice and preference of customers. Hence they can easily export and import their goods and services. So through this they can enhance their sales and can increase their profits.
Technological: Company has to evaluate different technologies and different tools so that they can create goods in an effective and efficient manner. If it uses different technologies so that they can create good quality of bulbs and valves and thus they can attract many consumers. So hence they can easily enhance their imports and exports. Through this they can increase their operations and it results in enhancing trade. Hence as a result they can generate more revenues.
Environmental : They have to evaluate the environmental factors so that they can easily create strategies to deal with them. Company had to evaluate different factors such as they have to use that equipment that cannot damage environment and there are no pollution and wastage. Through this they cannot waste the items and hence they can create good quality of products which can increase the satisfaction level of all consumers.
Legal: In this they have to follow all Govt rules and legislations so that they can create good quality of goods. Sometimes there are rules that Govt has banned different items. So it cannot create that goods and can reduce the imports and exports. So they have to follow govt rules. Hence as a result they can increase their operations and task in different regions and thus they can increase their imports and exports.
P.2 Different strategic challenges faced by firm in operating in global environment
There are different challenges that are faced by firms if they are working in internal and external environment. It can be of communications or in operating their activities effectively and efficiently. So company has to consider these factors so that they can evaluate these factors. Challenges faced by Sollatek are:
Compliance and regulations: When Sollatek is working on international level it cannot work without following govt rules and regulations. For example they have to follow govt rules that they cannot do business without following legislations. They have to pay taxes related to govt so that they can pay taxes in different goods. Through this they can pay taxes in time to govt and hence they can easily run their activities and operations. Through this they can earn their revenues and can increase the market share. Thus they can enhance their operations in different manner (Stenning and Shearing, 2005).
Culture and language: They can also face a challenge of different culture and language all around in the country. So hence as a result they can face different challenges related to language. For example if they are working in Australia they have knowledge of language and culture of Australia. Then only they can explain different plans and policies to all people living in Australia (Gopinathan and Lee, 2011). If they do not their lifestyle, culture and language then they cannot create effective goods and services and cannot explain them properly . This helps in reducing their sales and revenues.
Environmental impact: Company can consider different factors related to environment so that there is no wastage and hence they can incur different challenges related to it. For example They have to use different recycling programmes and reduce different resources such as electricity, proper filaments so that they can properly evaluate environment. They can use fluorescent tubes and bulbs through which there is no wastage to environment. So hence it can increase the sales and enhance their revenues. Through this they can increase their reputation in minds of all users and in market.
Technology and communication: When company works in different countries so that they can face problems related to communication. For example there can be use of effective and efficient technologies so that they can use that and can interact with different staff members very easily. If there is outdated technology then Sollatek cannot properly do the work and hence as a result they cannot interact with employees and other to share their ideas. Hence they cannot receive feedback from people living in other nations.
P.3 Influences of globalization on firm governance and leadership, structure ,culture and functions
There are different factors which can influence governance and other factors. Globalization can affect positively and negatively. The different factors that can affect governance, leadership, culture and functions. The factors in Sollatek are:
Firm governance: Globalization can increase import and exports so hence leader has taken different decisions. Hence as a result shareholder can create strategies and polices to follow discipline and to instruct and guide all employees so that they can create good quality of products. Thus they can take decision to increase the exports and imports. For example shareholders can create plans and strategies so that they can tell it to their employees and other staff members so that they can tell it to other other employees. They can take decision to use advanced technologies in the system so that they can create different goods which is according to suitability and convenience of buyers. Hence as a result they can increase the revenues and sales. Through this they can increase their operations.
Leadership: Leader can take different decision such as to motivate employees regarding following the rules and regulations. They are also aware about the different plans and policies regarding creation of good quality of products. They have knowledge that they can create goods through following legal rules and regulation of a particular country. So hence they have take decision to give incentives to all employees so that they can create good quality of bulbs and thus they can directly increase their sales. Hence it helps in increasing trade and export of these goods in many countries (SvetliÄiÄ,1996). Thus it helps in development of that nation. Through this they can earn more profits and can increase the trade of goods and services. Hence it leads to growth and development of company (Lenihan, Andr and Hart, 2010).
Structure and culture: Globalization requires exporting of goods and services to all nations. So hence company can change its structure and culture so that it can increase their exports and imports both . It helps them in enhancing exports and imports. So company has decision to make use of less employees and to adopt the advanced and latest technologies so that they can adopt the latest technology. This helps them in earning of more revenues. Through using more highly advanced machines then it can create good quality of bulbs. They can recruit people belonging from different people so that they can communicate with each other in a better manner (Santini and Rabino, 2012). Through this they can share all ideas and thoughts with each other. Hence through increasing communication they can satisfy all needs and wants of all users.
Functions: Manager can make changes in the operations and strategies so that they can create changes in plans and policies . Manager can changes in the functions of plans and policies so that they can create good quality of bulbs and other products. Through this they can create effective and superior quality of bulbs. They can change functions of different processes so that there is faster production of bulbs with improved quality. Through this they can increase their sales and profits. They can change in their strategies and can guide other employees so that they can change their working pattern through incentives and they are also given refreshments. Through this they had changed their styles of working . Thus they can increase the profits and can increase the market share.
P.4 Influences of ethical and sustainable globalization on functions of organizations
There is increase in operations and it can improve the efficiency and effectiveness of operations so that they can create various methods and strategies so that they can create effective and efficient strategies to increase their sales and revenues. So the impact of ethical and sustainable globalization on various functions of globalization used by Sollatek are:
Increases efficiency: It can increase the efficiency of different functions so that they can increase their efficiency in all tasks. If Exports of different material are in effective manner and they have followed all rules and regulations then it leads to increase in efficiency. They have done all activities such as creating products of superior quality which has enhanced globalization. So through this they can easily enhance their operations and technologies. Hence as a result they can easily widens their operations and activities in different technologies. Thus they can enhance their revenues and can easily maintain good position in front of all users and in the market.
Can adopt advanced technologies: If there are far activities which are involved in manufacturing and exporting then they can use advanced technologies so that they can create effective and efficient goods and services. They pay all taxes and disclose all then it can also increase the use of advanced technologies. If they are following all legal practices and rules then for increasing exports they can also use of advanced technologies in their activities and processes so that they can they can export different goods and services to all people (Kennedy, 2008).
Through using of this technology they can increase the efficiency in operations and can enhance different operations. Through using of advances methods it leads to increase in efficiency in operations and technologies (Maringe, 2009)
Improved quality of products: Through using of different rules and regulations and improved globalization they can create effective goods and services. Hence they can create efficient and effective products in the country. So as a result they can improve the quality of services. Through following of ethical practices and rules in imports and exports they can improve quality of product. Hence they can produce good quality of products (Evans, 2008)
. Through this they can easily attract many users and can increase their operations. Hence as a result they can enhance their services and thus they can attract many users. Through this they can enhance their revenue and operations.
Improves performance: If there is ethical and sustainable globalization then it helps in improving the performance of all employees as well as improves efficiency in processes and methods. Through use of fair practices in all procedures and techniques in the system it can increase the efficiency in procedures and systems. If there is increasing exports through ethical practices then it can improve the performance of all employees as they are highly motivated and enthusiastic. Through this they can create differently goods and services. Hence as a result it can enhance their performance and it can also improve their skills. Thus as a result they can also diversify their business.
Increases the production and selling: It also leads to increasing the process of production and selling. Thus as a result they can create different products and services. Through fair and sustainable globalization it can lead to increasing the production and selling process. Through this they can easily sell the products and can improve efficiency of all products.
P.5 Analyse ways that decision making can work globally
There are different ways through which decision making can work in different manner. There can be various ways through which decision making can be made effective. Ways applied by Sollatek are:
- Identifying obstacles: By taking working international countries company can work globally in different nation. So hence as a result they can enhance their activities and can improve the performance. Through this they can enhance their tasks. Hence when manager can take decision regarding identifying of problems and issues involved in working globally. So hence as a result they can increase their operations. Through this decision manager can effectively work in firm and hence they can enhance their operations on large scale. Through this they can increase the operations and hence as a result they can enhance their activities. Hence as a result they can enhance their tasks (McDonald, 2013).
- Evaluate factors: Manager can take decisions to evaluate different factors so that they can monitor the environment. Hence as a result they can monitor the different external and internal factors. Through this they can make changes in their plans and policies so hence as a result they can enhance their operations and can enhance their activities. Through this decision of manager they can improve the performance. Through this decision they can easily work globally and can expand their operations. Hence as a result they can perform efficiently and effectively. Through this they can earn more revenues and can enhance their market share (Pakes, 2013)
- Related to selling and marketing: Through effective and efficient decision of production and selling they can take decisions related to it. Through this decision they can increase the production and can sell many bulbs and other equipment to the customers. Hence through this decision, they can enhance their operations (Jones and Millar, 2010)
- . By taking this decision they can enhance their tasks and sell m many products to many users. They can use effective and efficient technologies. As a result they can sell many items in the market and to customers. Through this they can create various strategies and plans and thus they can effectively do the promotion of many products. Hence as a result they can increase their operations and can diversify their operations.
- Related to promotion of products: This is also a way to take effective and efficient decision that to increase the operations through effective promotion of goods. Hence they can use strategies such as advertising, sales promotion, direct marketing etc. to promote the goods and services. Through this they can easily promote various products and can increase the sales. Hence as a result they can enhance their revenues.
- Related to modifying their plans: They can take decisions to modify and change their plans and polices related to expanding their operations and strategies so that they can work in an effective and efficient manner. Through this they can take decisions such as modify their plans in such a manner so that they can widen their operations and hence they can perform the job in an effective and efficient manner. Thus it leads to improving the performance and hence as a result they can widens their activities. Through this they can increase their profits and can diversify their operations. Hence firm has different advantages so that they can enhance their operations.
6 Various routes to internationalization and key barriers
There are different routes through which country can enter into international countries. Sollatek uses 5 routes to internationalize it:
- Diagnosis: Company can evaluate different factors of it want to do operation in international countries. So hence as a result they can evaluate different internal resources such as projects, resources and experience and different language. They can also evaluate external factors such as competitors, culture and language of that country in which company wants to expand itself. They can also evaluate different external factors.
- Objective: While entering into international countries company can be evaluate their objectives and priorities. For example they has a goal that they had to sell 50 bulbs which is a priority for them . So hence they can create plans and strategies to sell and market their products to users. Through this they can easily sell their products and they can easily promote their products.
Strategies for international planning: Company has created various strategies to enter in international countries. They can use different communication channels such as direct marketing, digital marketing, press and advertising etc. They can also evaluate different factors such as distributing and selling. Hence as a result they can create different strategies which can be used in international countries. So through this they can create effective strategies and policies and train their staff to sell different products. They can also use various agencies so that products can easily be sold in various countries (Alexander and Warwick, 2007)
- Action plans: Company is creating different actions plans so that they can sell different products and items in market. There is a plan which consists of various steps and actions which help in enhancing different activities and tasks. It also includes investing money in different activities and resources so that objectives can easily be achieved. Through this they can easily perform operations in international countries.
Different barriers to internationalize in various countries faced by Sollatek are:
Financial barrier: Sollatek is a small scale firm so hence it cannot have some money to invest in activities and operations in international country. So as a result they cannot increase their operations and hence they cannot expand their tasks in easy and efficient manner. Through this they cannot increase the satisfaction level of all users. Thus it leads to reducing the sales and revenues of firm.
Managerial barriers: There is a management barrier which includes lack of knowledge related to different activities and hence they cannot sell products in an effective manner in international countries. Through this it can reduce sales and profits of firm. Hence they cannot maintain good image in minds of all customers and in market.
Industry specific barrier: Sometimes govt puts barrier on products which are related to industry which wants to perform operations in international countries. For example Sollatek is a bulb producing industry. So there is ban of use of bulbs in certain areas due to some issues. Then company cannot internalize in those regions where there is ban and thus it can reduce the sales and revenues of firm.
Firm related barriers: Sollatek is a small firm which consists of different factors such as lack of training, and lack of research. Hence they cannot properly train all employees and staff members as they do not have advanced training tools and equipment’s. They do not have funds to effective research for various methods and techniques (Furlong, 2013).
Globalization is very crucial for every business. There are different key features related to cost and market environment which can enhance globalization. Strategic challenges faced by firm. It is crucial so that they can enhance their operations. Different internal and external factors that can influence globalization. Influence of sustainable globalization on function of firm.
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