Concept of Globalisation | My Assignment Tutor

DRIVERS AND CHALLENGES OF GLOBALISTAION Introduction Company is located in India. Factors and drivers strategic analysis will assist the business in expanding globally. The global environment is a complex system. This presentation focuses on analysing the drivers which impact Thermax limited in globalisation.  For entering a new market business analyst must analyse different factors for maximising benefits and minimising potential threats. 2. Concept of Globalisation The trend of creating interdependence among the nationIncreased trade between nationsDifferent national markets into the global marketplaceThe spread of information, jobs, products and technology Thermax limited can enter the international market for its rapid growth. It has already expanded into 75 countries (thermaxglobal.com, 2020). Further expansion will need an evaluation of different factors.  Globalisation is cost-effective and it increases jobs. Globalisation decreases the operating cost creating the world into a huge market.  3. Drivers of Globalisation Economic integrationTechnological integrationInvestment opportunitiesCompetitive environmentCost structure All the above factors have sped up globalization. Different economies around the world integrated which made the domestic market small. Industries were not satisfied by selling in the small market which increased the globalisation process. Technology eliminated the distance as information exchange was done swiftly. Web technology has facilitated globalisation through rapid information exchange. Raid growing economies provided opportunities by providing investment for international expansions. Investors across the globe were interested. The cost structure between different countries differs significantly because of the demographic, location and development. Thermax will prefer a location with cheap and skilled labour. Emerging economies which fall below the rank of India will serve better for growth.  4. PESTLE framework  Political:  regulatory changes in trade policy, taxation and entrance to WTOEconomical:  Currency rate difference and increase in disposable incomeSocial: Different habits of people and seasonal repairingTechnological: Other alternatives to the water heater or other productsEnvironmental: energy consumption, water pollutionLegal: Prohibition of gas consumption Pestle is regarded as a strategic tool as it assists the business in analysing the macroeconomic factors (Nandonde, 2019). Political parties and governing bodies have the capacity to impact business such as China trade regulation can impact the Thermax production scale as stainless steel is imported from China.  Economic policies and trends can also impact the organisation as an increase in disposable income have influenced people to move to their private house. Socio-cultural habits impact business operations as Russian people have a habit of postponing and it decreases the sale of prior months.  Technology integration has created many other opportunities which can decrease the water heater and other products demand. Energy consumption and laws regarding the same can decrease the production and impact business.  5. Benefits of drivers Elimination of distance through technologyTrade liberalisationCost optimisation and cheap productsInvestors from different nations Globalisation drivers can bring significant benefits to the organisation. In the recent decade technology integrated into the business through the development of the IT sector. It has significantly improved global communication through the internet as people can connect from different corners in real-time. It has reduced the cost of mails and post simultaneously facilitating quick decision making.  Import and export policies are continuously regulated by the government for liberalising the economies (Brand et al., 2018). Tariffs and tax barriers have been regulated for market access. This driver has boosted companies which have also increased the country’s GDP. Cost difference occurs between countries which provide cost advantage as developing economies can provide comparatively low rates for labour and raw material. Economic integration facilitates investment through different investors residing in different countries.  6. Driver’s as challenges Cultural differencesLanguage barrier for expatriatesUnderstanding organisation culture and structureIncreased competition Some of the drivers can become challenging for the business as economic integration and globalisation can create a cultural difference. Indian culture varies from US culture which can become a huge problem. Initially, it becomes difficult for a business to understand their culture and people. It is important to understand the target market before launching any product and hence cultural difference cannot be ignored (Tontus and Nebioglu, 2018). Expatriates moving from another country have a problem in communicating and understanding the exact meaning which can lead to misinterpretation.  The competitive environment can create intense competition in which business will struggle to thrive.   7. Global business environment evaluation Uncertain and dynamicComplexTechnological advancementFree flow of Trade Thermax Limited is operating in the international market where environmental factors can create turbulence in the business. Strategically analysing environmental factors is important as it keeps on changing. Business must be ready to face the challenges and grab the opportunities. Technological advancement can create complexity for strategic managers as there are unpredictability and interdependence. It is difficult to understand and analyse the system for which PESTLE is used.  8. Complexities in global business Political complexity:  Mangers is unaware of the political changes and stability for the future.Economic complexity: Economic forecast goes wrong and can be unfavourable for the businessSocio-cultural complexity: Lifestyle and consumer preferences differ according to demographic and religious belief. Technological complexity: different rates in adapting technology and innovationEnvironment complexity: Business operation must not impact the environmentLegal complexities: Different countries have a different legal system Global business has many complexities which are understood through the Pestle framework (Nandonde, 2019). Political changes like the US pulling out Syria can impact business operating in Syria.  The economic issue can be understood through Brexit as unresolved issues have created disturbance for business operating inside the UK. People’s tastes and preferences change rapidly and it is influenced by different factors (Aithal, 2016). The technological pace is different as some country have disabled internet for information flow.   9. Recommendation Create a sustainable supply chainOperate in underdeveloped economiesIntegrate current technologies As Thermax limited is located in India it must strive to adopt practices which are sustainable so that it can support environmental causes It will create customer engagement through technology and satisfaction by good products 10. Conclusion Globalisation is complexDrivers are effective in creating benefitsManagers must understand the business and its operating environment.  It provides a detailed view on drivers and associated challenges of globalisation. Thermax limited can expand by considering all factors as international market is complex and not understanding can hamper business growth.  References Brand, C., Bielecki, M. and Penalver, A., 2018. The natural rate of interest: estimates, drivers, and challenges to monetary policy. ECB Occasional Paper, (217). Tontus, H.O. and Nebioglu, S., 2018. Drivers of healthcare globalisation and their effects on medical tourism. E-review of Tourism Research, 15. Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African Community. Global Business and Organizational Excellence, 38(4), pp.54-61. Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies, operating concepts & business systems. International Journal in Management and Social Science, 4(1). thermaxglobal.com, (2020), OFFICIAL WEBSITE. Available at: https://www.thermaxglobal.com/

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