Individual Reflective Essay
The first term study of International Business Environment nearly finished. During the process of reviews, I have acquired not only new knowledge about International Business Environment but also learnt a new way of thinking. For instance, the significant event in the world, Brexit has just happened, after these studies of this subject, I can think about this event from its impact on the world and the UK. Brexit leads to a fall of GDP and employment of the UK, and the value of pounds have also decreased during the event. According to the results of Brexit, I have known that the globalisation is the necessary trend of the world, any activities against the trend will damage itself even strong and powerful like the UK.
I had a better understanding of Global Risks, and there are five main challenges that world now faces. These five sectors are economic inequalities and the gap between rich and poor, social polarisation, growing mood of anti-establishment populism in geopolitics and environmental problem. We have also disgusted possible solutions about these sectors in classes. The governments could recover the growth and reform economy, rebuild communities for society and reduce the conflicts in the nation, increasing the development of society and managing disruption for the technology sector, strengthening cooperation between countries to ease geopolitical issues and accelerating actions on environmental management. The development of technology is way ahead the stage of society and environment, conflicts of the
The Culture Differences is also an essential part of the studies, ‘culture is a shared way of life of a group of socially interacting people’ (Morrison, 2017), the main sectors of culture are values, attitudes and language, are rooted in social groupings like peoples and nations. Despite the overwhelming trend of globalisation, national differences still exist. Cultural learning causes the gradual process of cultural integration, or ‘crossvergece’, which is a growing cosmopolitan culture and lifestyle, perceived as an aspect of globalisation. A firm’s organisation can be shaped to international business by organisational culture, in both negative and positive ways. According to the theories of culture, understanding different cultures in different culture environments can help managers lead their group better. But there is no best way to manage people because everyone is an independent individual.
Internationalisation is always the keyword in all those case studies, which can define as a process that involves operations across different counties or national boundaries.(Welch ; Luostarinen, 1988) The main strategies of internationalisation are the foreign direct investment, exporting and outsourcing production. Among these approaches, exporting have no organisation with a minimal commitment. Comparing with FDI, outsourcing production offers lower responsibility and flexibility to the country but carries risks like working conditions and weak control of quality; FDI, either acquisition and Greenfield, provides greater commitment and higher risks than other strategies, has ownership and location advantages. Different strategy suit different businesses, it depends on the statement of the type of companies to make the best internationalisation strategy.
Risk Assessment Report
According to the announcement of WEF’s 2017 “Global Risk” assessment, there are three main trends and thirteen underlying trends that could affect the world in the future decade. The three main trends are economic inequalities, social polarisation and increasing environmental risk. Wall-Mart’s effort to expand its presence in India market will mainly reflect there is problematic in economics, conflicts of the growing mood of anti-establishment populism and geopolitics.
Since the globalisation of retail became a clear trend in the international market, retailers are chasing the new markets in Asia, especially China, Russia and India because they represent the high-growth industry. Comparing with that, the retail markets of the western Europe, the US and the UK are more saturated, consolidated and mature. Therefore world supermarket chains giant suck as Wall-Mart and Carrefour are rushing into Asia market and try to gain a competitive position.
India is a populous country, which has invaluable potential in economics. As a result, there are many international supermarket chain desire to enter Indian market to share the profit. According to the research, organised retailers have an exciting chance in the developing market. In spite of the independent sector is declining but it still dominates the sales in India. Wall-Mart could have opportunities to obtain huge consumer base as a supplier of this field. The Indian government also understand this point and has been pushing most regulation reforms to date, and it would not change in the next few years. Therefore the Indian government set the policy that foreign retailers cannot sell their products directly to consumers but allows them to sell to other native retailers. As a result, Wall-Mart is cooperating with a local business called Bharti Enterprises to obey this policy. For India, this is a good policy to promote the development of domestic industry by assisting with mature international companies to acquire their experiences and technologies.
The law of foreign direct investment is not the unique resistance for Wall-Mart to enter the Indian market. There is also a lot of opposition voices are appearing inside the India because of Indian afraid that such foreign supermarkets would snatch the capital and market from local small, family-run shops what form the base of Indian retail market. On the effects of organised retail on small stores and consumers that believe organised retail develop at the cost of small shops. Fortunately, although this issue is rational and reasonable, there are many Indian wishes to see more western-style supermarkets operated in India. As the research shows, 53 percent of those asked approved of large chains, 24 percent were against and 23 percent had no opinion. (Paul L, Carrefour and its competitors in India)
On August 6, 2015, the day that Wall-Mart has signed the contract with Bharti Enterprises, and announced that they are going to operate 15 wholesale retail stores in cooperation by 2015. This event became the fuse of protest, ‘ Quit Retail’ slogans were announced, and Wall-Mart’s brands were burned during the protest.
With the impact of the protest, the Communities claimed their political views what are blocking retailers from other countries outside India. Because they harbour the idea that only people who have the ability in computers and English could get the chances to work in foreign supermarket chains. People who work in small, family-run stores cannot take advantages from overseas retailers. The Communities do against corporate retail and support small shops.
In contrast, the Congress Party do support increasing the international trade cooperation, and they are in charge in India. They believe that the development of organised retail could help improve the quality of products in the local market because it provides local distribution channels for traditional exports products. Their research shows that the foreign supermarkets have offered cheaper products with good quality not only for specific groups but everyone. The Congress Party will continue the pragmatic policy of openness for the next five years which is the conflict with the Communities’ political views. Although the Congress Party has the power for the moment, the conflicts between political parties will increase the risk of geopolitics sector in WEF’s 2017 ‘Global Risk’ assessments and have a negative impact on strengthening cooperation.
In conclusion, the statement of Wall-Mart’s expansion in India could reflect some of the epitomes of Global Risk. For instance, domestic businesses and some Indian do resist retailers from other countries; this activity can define as conflicts of the growing mood of anti-establishment populism and geopolitics. The contradictions in political party politics and the policy announced by the Indian government that does not allow foreign retailers sell products to local consumers are part of the social and political challenges, and these make the adverse effects on the international policy on this sector which is strengthening cooperation. People from different classes have different opinions about foreign retailers; wealthy people welcome foreign businesses because that can bring them better quality and higher kinds of goods, while poor people usually resist international companies because organised retailers from other countries would crow out small local stores that can provide jobs to them. The conflict between wealthy and poor people is a miniature of economic inequalities. For governments to solve these problems and reduce the risks, they should strengthen cooperation between countries, encourage international policies; promote growth and reform the economy, increasing job opportunity; reducing the conflicts between parties and boost cultural diversity.
Dilley M.(2005) ?Natural disaster hotspots: a global risk analysis?, chapter 3, Risk Assessment Framework P23 -P33
Lapoule P.(2010)?management decision?, chapter 3, Carrefour and its competitors in India, P396-P402
WEF(2017), The Global Risks Report 2017, 12th Edition, Part 1: Global Risks 2017, P10-P21; Part 2: Social and Political Challenges P22-P35
We have discussed the impact of Brexit to globalisation in the class, and I have summarised the main points on this topic: Brexit will represent a retreat from globalisation for UK-based businesses, 7% GDP has fallen since Brexit as trade has declined; Brexit causes the increase of unemployment for UK staff.; The goods what export to Europe gets the negatively influences while EU is the most significant export market for the UK. Brexit also lead to an impact on the relationship between the UK and the EU; UK students cannot get the scholarship to study in EU countries and vice versa.
In this week, we have discussed the World Economies’ Global Risk and possible solutions to this issue. According to the research, we found that the potential of persistent, long-term trends such as inequality and deepening social and political polarization to exacerbate risks associated with the weakness of the economic recovery and the speed of technological change. The model of globalisation is transforming from ‘external’ to ‘internal’ which has adverse effects on Global cooperation. For globalisation, governments need to recover the growth of economic but as the result of the response of Inflated anti build populism, it may not fix the social cracks if the governments only rely on the resumption of economic development. Therefore governments also need to reform the market capitalism.
We analysed the shareholders of Tesco and the main factors that lead to declining financial performance of Tesco, the impact of the business environment to Tesco and how the company has responded or continued to respond to the environmental changes. Since Tesco is a global retailing company, it must follow the rules and regulations of the markets in the host countries. The political factors include quotas, tariff and taxes, embargoes, the stability of the country, subsidies and patent rights over the use of certain technology. They are all decided by the government of the host country; therefore, Tesco always ensures that it works hand in hand with the relevant authorities to achieve its goal of capturing the target market. Tesco’s coping approach for these impacts is to create opportunities, reduce food wastage and improve the health and safety of both consumers and employees across the world
The topic of today’s seminars is a case study in week six, we analysed the main conflicts in different cultures and how do the cultural differences between China and the United States impact on John’s and his Chinese colleagues’ attitudes and behaviours in knowledge-sharing. In this case, it is clear to see the differences between Chinese and American culture, and the culture difference affects on their concept and attitude. The culture difference can help with keeping cultural pluralism but has adverse effects on globalisation without appropriate fusion method. The governments should promote the communication in the world and make culture difference become an advantage of globalisation.
Before this seminars, we have read the data about COSCO’s development. By analysing the data, we found that the COSCO adopted a strategy of moving ‘fromowning ships to control ships’ such as the company gradually reduced its investment in non-core businesses such as travelling, finance and real estate to place more emphasis on shipping-related businesses. The COSCO Group focused on transforming the company into a global logistics service provider by that strategy. The PEST factors impact on COSCO’s internationalisation including international trading policies against and support the company, grouping the strategic alliances up, cooperating with local government and enterprises and adopting a strategy of innovation to give its core competitiveness in international shipping markets.
In this week we had some further discussion on COSCO and the factors what help COSCO develop in the world and the organisational structure of COSCO. COSCO is good at conforming to the trend of the market economy and changes in the world shipping industry; Building strengths by collaborating with local businesses; Sending the approach team of management into international market; Encouraging both innovations of technique and administration to form a competitive advantage of enterprises and Establishing a strategic alliance to build a stable strategic customer base.