Business Environment Management And Distributing – Globe International Limited

Importance of culture in International Management

Describe about the Business Environment Management and Distributing.

Globe International Limited is a multinational company producing and distributing footwear, apparels and skateboard hard goods trucks, wheels, decks, etc.) in more than 100 countries all over the world. It also has ‘Globe’ branded retail in various territories (globecorporate.com, 2016).

A Company having its operation all over the globe should follow the concept of international management. International Management requires skills and knowledge to conduct activities of the business beyond normal business expertise (Mead, R, Andrews, T, 2009). The main purpose of international management is to decline trade barriers, decline investment barriers and to increase foreign direct investment. When an organisation operates its activities globally it has competitive advantage over its competitors, it has the capacity to offer a wide range of goods and services, it also helps the customers to increase their standard of living as goods and services are offered in low price leading to overall economic development and growth.

The main issue involved in international management is to conduct transactions involving multiple currencies, understanding different customs and laws of the country concerned ( Business Dictionary, 2016).Other major issues faced by an organisation having global network is the political risk, foreign debt, exchange instability and high cost (Salacuse, J. 2015).  Corruption has a vast influence in the growth of a business. And the most difficult task is to control such barriers and provide quality maintenance.

Globe International Limited aims at increasing its market share, increasing its profitability, avoiding risk, to acquire resource to meet the manufacturing process and to expand business capacities.

A business operating globally requires the understanding of different cultures to carry out the activities. What works for one country may not be essential for another, and could cause disaster in the market. To ensure effectiveness it is essential to raise the awareness of cultural problems arising within an organization (Heaps, W, 2009). Culture means experience of the society and its impact on every day circumstances (Hummel, D, 2012). Every society has different cultural themes which has relative impact on business. Some people are not ready to adapt the culture and theme of other country, this is the most challenging factor that has to be considered while conducting international business. Not only culture but communication is also a barrier that adds to the restriction of international business. Many countries have a culture of speaking very polite whereas Australians are too loud, so while conducting business it should be made sure that Globe International Limited should try to cope with the culture of the country where they hold business activities (Christopher, E, 2012).  Cross-cultural issues arise in the business context when the human resource manager of a parent company has to recruit employees in a company that is located in some other company. It becomes very critical to understand the business structure and procedure to maintain a balance in the policy of the organization all over the world. Globe International Limited is conducting its business in many different countries and cultural issue is the most difficult thing to manage. To control and manage this issue the manager should have good understanding of business culture and means to develop strategy. It is said that when due consideration is given to culture, an organization will be able to achieve their goals effectively and efficiently. Current method of conducting business alone cannot take its activities to the international level for this the company should be flexible enough to adapt culture of another country and prepare marketing strategies to promote its activities and communicate the happenings of the company in such languages that is commonly being used in that country.

Impact of Global Environment

Due to an increase in the globalization there is a vast growth in international business and we can say that there is no evidence that it will diminish. There has been a large growth in trade and commerce, increase in technology and integration of economies all around the world. Increase in globalization has helped Globe International Limited to spread its trade an commerce all over the world. . To facilitate international trade and commerce managers should understand cultural differences and communication procedure across boundaries to utilize the opportunities and to control the potential downfalls. Due to globalization there is free flow of capital and technology, Globe International can easily trade their products worldwide with limited restrictions that are related to political factors and Government interference. Now, Globe limited can set the mind and attitude to view the world as a single market because of the advantages of globalization as the production factors like raw materials, human resources, managerial skills, technology and finance can be easily trade from one country to another. Globe International limited is successful in deleting the difference between foreign and domestic markets.

There is no business that can run without facing any challenges. To operate the activities of the business effectively and efficiently the international management has to frame appropriate strategies and design a business structure that can possibly manage the problem of cross-cultural environment (Kozenkow, J, 2016). Not only cultural issues but should be able to tackle technical issues, economic issues and linguistic issues. The major barriers faced by the organization are beside cultural issues are:

The way of differences in communication with the customers, employees and business partners is termed as linguistic differences (Tietze, S. 2013). Globe International Limited conducts surveys and research to bring into knowledge that which is the commonly used language in that country and try to develop strategies on how to advertise and promote their business activity in that language (McFarlin, D, Sweeney, P, 2014).  If English is the most commonly used language it becomes very easy to communicate with the customers and [person related to the business, the problem arises when the majority of the population in that community speaks local languages that are very difficult to learn and understand (Silkenat, J, et al, 2009).

To cooperate and compete in the international market it is essential to gain knowledge and information regarding the business attitude and habits of a foreign country. Globe International Limited makes a complete research about the attitude of the people who belong to a particular country where the company is going to do its business so that they can produce those products which can satisfy the needs and wants of the customers.

Challenges faced by the Management

Technical Development is also a major problem in trading business worldwide. Some countries lack the advantage of technology development which restricts Globe Limited to introduce their product in that particular country, (Wuhrer, G, Bilgin, F, 2014). It cannot open its business in a country where people are totally unaware about the competitive features and quality product that it offers as compared to other domestic company that is already ruling the local market (Deans, P, Karwan, K, 1993). To remove this problem Globe Limited is trying to bring technological advancement in some backward areas (Doole, I, Lowe, R, 2008).

Government uses a number of economic policies to influence the level of activities that has a direct impact on Globe International Brands (Madura, J, (2008). The economy of Australia has been able to see growth over the last two years leading to a positive impression on the Australian consumers in globe products (Noorderhaven, N, Koen, C, 2015).

The Marketing Strategies used by Globe International Limited:

Product

Globe deals in the retailing of three products- Surf, Skate and Urban Street wear. Among all these three products the main focus is given to the clothing sector. They have adopted Multi-branding technique leading to the creation of a well managed brand portfolio. They produce high quality product to satisfy the needs of the target market. While conducting a research it was found that the packaging used for accessory and footwear product is of very high quality. Globe International Limited has been able to create a good brand image.

Globe Limited places a strain when it comes to the pricing strategy of the company. They accept that the Action Sports customers are ready to pay for good quality brand footwear, apparel and accessories. Due to this Globe Limited has made a niche for itself in the international market.

Advertising is very important for Globe International as it helps to attract more customers. Globe sponsors an action hero to promote their brand products to attract more youth. As we know that youth is the ultimate customer of the globe brand so, they started selling their products online, as youth is highly exposed to the technological world (Shilbury, D, et al, 2014). Mostly, internet sales takes place as it is more convenient and time saving (Richter, T, 2012).

The product outsourcing of Globe is basically from the factory to its store front. They not only sell their products in their store but also distribute it to other retailers. Distribution is a critical process and presently Globe is focusing to expand its distribution to those untapped markets (Globe International LTD. Marketing Plan and Research, 2015).

Language

Globe Limited aims at offering high quality products that includes style, comfort and durability. Decision making is a tough task to perform as there are many aspects that has to be critically examined and figured out. Those firms which are planning to enter into the global market have to take the following decisions.

International Markets Decision: The managers have to decide whether it will be a benefit to start its business in a newly targeted country or not.

Market Selection Decision: It has to be properly determined that to whom of that particular country to make sales.

Market Entry Decision: A survey has to be conducted to before entering into any market to be on a safer side.

Organisational Decision: It is important to analyze what type of organization, a firm is going to adopt to manage business in the international market.

Conclusion

International Management means managing business activities in more than one country. To manage international business it is essential to get familiar with the culture and language; economic and political environment; and business practices of countries in which they plan to actively invest and trade.

Globe International Limited aims at delivering high quality product and they even have a price dominance over its competitors, despite of keeping high price of the products that they offer they have managed to increase their sales because their target customers is mainly the    ’ Y category’ that means they focus in getting attention from the youth. To increase sale they sponsor a sports actor to promote their product.

The problem faced by Globe Limited is that it becomes difficult to measure Action sports size as there is a growing trend. They have been working to minimize all the barriers in promoting international business. Globe Limited has set a standard in setting up their business overseas firstly they research new territories and then assess the new market as it is necessary to know beforehand that how big the market is and is it a established one. They adapt the marketing strategies keeping in mind the local values, language, currencies and customs to bring correct impact on marketing plan. They have also started to work with the local partners, distributors and agents who can help in getting established in the new market. It is often misunderstood that pricing is only concerned with currencies differences but it is not so, it is also associated with knowing the price levels in different new territories. Adjusting media mix is also an essential task because the marketing channels which we use are usually different. After that a company should be concerned in getting the time right to enter into the new market and can thus exhibit their plans overseas.

To stabilize the activities in the international market Globe International Limited acquires to set skills that prove to be helpful across regional and national boundaries to move their business forward. Other strategy that they prefer to maintain is to keep deep awareness and lifelong curiosity with cautious honesty. Globe Limited uses best people around the planet to be able to play internationally and to work on a global scale using excellent negotiating skills. Globe Limited is enjoying the gamesmanship in the market.

References

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Deans, P, Karwan, K. (1993). Global Information Systems and Technology: Focus on the Organisation and Its Functional Areas. Idea Group Inc.

Doole, I, Lowe, R. (2008). International Marketing: Analysis, Development and Implementation. Cengage Learning EMEA.

Globecorporate.com. (2016). About, Viewed 19 September 2016 from https://www.globecorporate.com

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Hummel, D. (2012). Understanding the Importance of Culture in Global Business, Viewed 19 September 2016 from https://www.oracle.com/us/corporate/profit/archives/opinion/050312-dhummel-1614961.html

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Salacuse, J. (2015). The Global Negotiator: Making, Managing and Mending Deals Around the World in the Twenty-First Century. Macmillan.

Shilbury, D, Westerbeek, H, Quick, S. (2014). Strategic Sport Marketing. Allen & Unwin.

Silkenat, J, Aresty, J, Klosek, J. (2009). The ABA to International Business Negotiations; a Comparision of Cross-cultural Issues and Successful Approaches. American Bar Association.

Tietze, S. (2013). International Management and Language. Routledge.

Wuhrer, G, Bilgin, F. (2014). International Marketing Compact. Linde Verlag GmbH.