Unit 1 Global Business Environment Pearson BTEC Level 5


Global market refers to an area where many companies of different sectors are used to sell their products at national and international level. In context with global business environment, it shows factors which impact on operational function of organisation. It includes political, economical, ecological, global warming, rapid growth of population and more. All these elements assist industries to cope up with market changes and do modifications in business structure accordingly (Apăvăloaie, 2014). Therefore, business tycoons who want to move organisation at global level need to analyse concept of these factors which affect the ratios of profit and production. In this report, a manufacturing firm of UK has been taken named by Entertainer. This SME association deals its business in making toys at a UK marketplace. At present, it wants to expand business in international market. Therefore, in this regard, various factors are being discussed and the present report includes drivers for global trade and commerce, complexity for strategic challenges and more.

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P1 Key elements of cost, market, environment and competition that drive global commerce and trade

Today almost every organisation whether dealing in manufacturing or retailing sector wants to expand operational area in other countries also. This would help in selling commodities at international market easily which gives much profitability as compared to domestic area. However, moving business in other locations especially out of territorial region is not an easy task. Employers need to analyse on various factors which may create hurdle in their mission in a proper way (Epifanova and et. al., 2015.). It includes market condition of such places, economical situations, urbanisation and more. These factors create a large impact on brand value along with profit ratios of business both in negative and positive manner. In context with Entertainer, they want to set up its foot in new locations across country in UK. It is a manufacturing firm which produces toys. Therefore, it is necessary for the manager of this company to analyse market situation of target places and other factors which may wide up its business scale in a profitable way. Some factors are described below which need to be considered by management of those companies who want to globalise their business:

Cost: It is the most important factor of an organisation whose impact is on every part of business. Therefore, managers of firms always try to raise funds from various sources through which they can operate functions of business in a proper manner. In context with globalisation, it is compulsory for enterprises to find every component which may help in deceasing expenditure of cost related to manufacture (Doh, McGuire and Ozaki, 2015). Along with this, they should evaluate economic condition of country through which purchasing power of people can be measured. This would help in determining whether opening outlets in targeted locations is beneficial and increase profitability or not. In addition to this, managers are required to measure availability of resources like raw materials, manpower, transportation cost and more along with cost at which they are available. Getting all these things in low cost help in reducing manufacturing expenditure which aids them in getting more profitability.

Market: It is highly amendable for management of a company to analyse situation and various component of market which will help in formulating strategies accordingly. This is highly essential for those companies who want to enter into new market area of foreign countries. Factors present at marketplace which impact on profitability and productivity of operational business of a company in both positive and negative manner are culture, purchasing power, taste of customers etc. Therefore, in order to open outlets at new places of international market, the management must identify culture of people first. As culture reflects taste of customers, preference and lifestyle of them. In context with Entertainer, this firm deals in toy manufacturing industry so, its managers are needed to evaluate demand of customers and manufacture toys as per requirement (Axelrod and VanDeveer, 2014). This firm should made products according to age group. For this process, managers should introduce latest technologies in organisational system so that best quality of such products can be obtained. In addition to this, they must purchase high quality of materials used in manufacturing of toys like fabrics, polyolefins, ploymers, plastic

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