The report introduces the various important aspects of international and global business considering the case study of one of the major telecommunications company in Australia named Telstra. Telstra Corporation Limited is one of the largest telecommunications organization in Australia that has developed and operated a wide network of telecommunication services, managed internet connectivity, provide ease of accessibility to internet and other related products and services too (telstra.com.au, 2018). The company has a long history in Australia and it has been operating for quite a longtime and has become privatized by undergoing through change programs to remain customer focused. The current CEO of the company is Andy Penn, who wishes to expand its business in one of the European countries named France. The National Broadband Network of the Federal Government has enabled changes to the telecommunications industry and has aimed at delivering HFC networks and copper to the NBN holding company of Government in Australia (Scarborough, 2016). At present, the market value of the company has somewhat declined, which creates scopes for expanding the business in France, attract more customers and enhance the sales revenue and profit generation too.
The company’s vision is to improve the way people live and work while the mission statement of the organizations involves development of technology and content solutions that are simple, easy, effective and are valued by the clients all over Australia. With the diverse range of ideas and opinions, it will be easy to innovate and maintain steady functioning, which can further assist in managing global business though expansion in the new markets easily (Piekkari, Welch & Welch, 2014).
The country where the business organization named Telstra wants to expand and gain market entry is France, which falls within the European continent. The country has a good financial position and the market conditions are suitable for the telecommunications company to gain entry into the market and function with much ease and effectiveness. The macro environmental and geo-political forces are though needed to be analyzed for making sure whether expansion in those global market segments can bring good results in terms of profit level achieved and competitive advantage gained or not (Cavusgil et al., 2014).
There are physical evidences of digital optimism all around France and it is quite fascinating for both the startup companies and corporate businesses of the business spectrum to gain a market entry. The digital transformation in one of the major European countries, i.e., France is n the agenda and the economic environment has experienced significant growth in the past few years (Preston & Windsor, 2013). This has provided enough scopes for the new and existing businesses to make a mark in the country with proper support for the digital initiatives undertaken. More than 85 percent of the participants in the Economist Intelligence Unit Survey stated that the digital transformation has brought huge changes in the economic growth of the country and even allowed the companies from outside France to start business there. The digital transformation has improved the operational effectiveness and save a lot of cost incurred while managing the business operations (Brannen, Piekkari & Tietze, 2017). The transformation achieved by implementing the advanced technologies will provide better support to the clients and can be considered as a major cost saving exercise for Telstra to achieve success in the European global markets (Morschett, Schramm-Klein & Zentes, 2015).
The macro environmental factors include the political factors, economic, social, technological, legal and environmental factor associated with the business performance and decision making process while the geo-political forces are the natural forces affecting the business operations and processes (Chand & Tung, 2014).
The political factors are the change in rates of interest, exchange rates and also the laws, rules and regulations implemented by the Government to mage successful business operations and processes. The business functions are also dependent upon the ideologies and opinions presented by the political parties in France. The system of taxation is quite good, which allows for applying various taxes such as income tax, sales tax and service tax by the Government for creating convenience for privatization of the organization in Australia. France is a developed country and thus the political conditions are stable with very less political conflicts or crisis situations experienced (Cavusgil et al., 2014). Due to this Telstra can easily gain access and entry to the new market, though it will need investments from the shareholders to generate a good amount of capital. The Government initiatives are undertaken for fix a limit for investment of 1500000 Euros for the foreign enterprises in certain areas of France like Saint Pierre, Wallis, Monaco, etc.
One of the major factors that can help Telstra to conduct business in another country, i.e., in France is by assessing the economic position of the country. The rates of interest, fluctuation level, gross domestic product or GDP of the country, per captal income and employment are considerable factors required to maintain a good economic position. The GDP rate has increased from 0.3 percent in 2008 to 1.5 percent in the recent years, which shows the current state of the country though the rate of unemployment is quite less too (Kolk, 2016). Based on all these aspects, France has a favorable economic position, which has created ease for Telstra to sustain in the foreign marketplace.
The ageing population, growth in population and life expectancy have somewhat increased the rate of literacy in France considerably and thus it is considered as one of the most developed countries in the whole world. The major lang8ages spoken are French and Catalan and there are people belonging from different religions and ethnicity, though a good culture has been maintained within the communities (Denton, Forsyth & MacLennan, 2017). With the presence of flexible organizational structures, good culture, stable economy, positive work behaviors and proper distribution of income, the businesses like Telstra, Australia will likely flourish by making entry into the global markets.
The huge advances in technology and communities are the most important aspects that make the telecommunication company Telstra to become successful in France. The business processes include handling the traditional projects with the implementation of right technologies and at the same time, reduce the costs of operations. There are many tech companies and with the consistent development and implementation of information technology, various advantages will be drawn by Telstra to mange global business (Hayes, 2016). The entry of Telstra in France will create scopes for the Government to provide funds in industrial and technological growth, furthermore assist in research and development activities. The technological index of France is near about 5, which shows that the country is technologically developed as well.
France consists of a separate ministry for managing the environmental concerns and the emissions of harmful gases are low compared to other countries, considering the fact that the Government has implemented various environmental laws, rules and regulations to keep the environment safe (Folsom et al., 2013). The EPI score is good due to the good amount of energy production from nuclear power management. The employment laws and taxation rules are applied to increase the employment opportunities for individuals, furthermore provide proper wages to workers and prevent discrimination (Fransen, 2013). There are various Labor codes implemented and with the entry of Telstra in France, more employment scopes will be created for people and this can directly impact the growth in economy of the country positively.
The business and trade policies are followed by the organization to maintain good economic conditions and manage proper distribution of income based on the credit availability. The Government is mainly responsible for supporting the balanced trade policies and enables the new business to enter foreign markets though considering the collective preferences. It is important for managing good conditions of fair competition and reciprocity in the gaining access to the new markets, furthermore work with the Council to strengthen the trade defense (Preston & Windsor, 2013). This will also protect the strategic new businesses to improve the level of foreign investments; furthermore generate a good amount of capital for sustaining in the global competitive marketplace.
Based on the last year’s action plan regarding the European Union Comprehensive Trade agreement, the Government has made commitments of addressing the environmental issues and for enabling openness and transparency to protect the companies that enter the foreign markets. Within the global or international market consisting of high level of competition and development of global supply chains, the accessibility of businesses in France is important for entering the foreign markets and develop the exports. The tariff and non-tariff related trade barriers are to be removed as well for ensuring maintenance of multilateral negotiations at the WTO and create proper regional agreements to create a sustainable place in the country. At present, France has improved its trade defense by making the instruments and machineries modernized, furthermore has supported various legislations and laws related to the monitoring of foreign direct investments with respect to the procurement strategies implemented (Adekola & Sergi, 2016). The TARIC is designed to apply various rules and regulations related to the import of products into the customs of EU and even prevent unauthorized important and global business activities. The rate of inflation often lowers the value of France against the major currencies, which may affect the price of imports and increase it gradually. The reduced unemployment rate could also create more opportunities for Telstra to allow new businesses to enter the country and ensure job creation along with promotion of exports all over France (Sarasvathy et al., 2014).
The Electronic Customs Initiative has enabled modernization of the assets and transformed the businesses through computerization of business procedures considering the safety and security aspects. There are bills regarding Taxation along with other control agreements that will be helpful for ensuring continuity of the foreign business to gain a sustainable place in the market. The anti-subsidiary methods are applied to the imports of goods, which can also influence significant amounts of investments made by either the foreign body or the importing country (Matsushita et al., 2015). Thus, development of business and trade policies will ensure management of good trade relations between the two countries, i.e., Australia and France, furthermore allow Telstra to enter the new market and achieve success through internal business expansion.
Being a European country, the policies of Europe are often restricted due to the involvement of EU management. Due to this, more pressure is placed on the consumers’ interests for the low price at which the products will be offered. France, being one of the largest European exporters after UK and Germany pose high expectation, which may not be achieved often and this can create difficulties for sustaining in the competitive business environment. The major risks faced in the country include lack of employment scopes, increased price of imports and strict social and environmental requirements to be met for ensuring long term success of the business (telstra.com.au, 2018). Telstra may face risks related to the bargaining power, because with the rising cost of imports, the prices of products and services will also increase considerably. This can deteriorate the trade relations and hinder the agreements for partnership needed by Telstra to create a sustainable place in the foreign marketplace. There are risks associated with the lack of employment, huge deficit in trading of goods along with the lack of competitiveness in manufactured goods and services (Scarborough, 2016). While entering the foreign markets, there can be various issues while registering the intellectual property rights in the export markets.
The economies of scale must be identified at first for France and identify the external risks too. The local market conditions will be evaluated, which can also determine the credit insurance required to build positive trade relations, furthermore manage the external risks with ease. The political corruptions often prevent foreign direct investments and it will lead to higher rate of inflation and lack of discipline in managing the fiscal policies properly. This will also provide opportunities for Telstra to monitor the rates of exchange and adopt the local culture to create positive mindsets among customers and deliver services accordingly (Chand & Tung, 2014). With the development of the organization in the global marketplace, there will be more opportunities of employment, which can impact the growth in economy of France too.
Conclusion:
Serving the customers and remaining customer focused was the aim of the organization through management of proper values including the integrity, trust, service and respect, teamwork, accountability and maintenance of a positive culture. The topic focused on the assessment of various factors including the geo-political and macro environmental factors needed to be considered for managing global business in France. Telstra made sure to assess the economic conditions, which was quite stable and with the management of proper trade policies and agreements, it was much easier for gaining entry to the new markets and sustained competitive advantage.
References:
Adekola, A., & Sergi, B. S. (2016). Global business management: A cross-cultural perspective. Routledge.
Brannen, M. Y., Piekkari, R., & Tietze, S. (2017). The multifaceted role of language in international business: Unpacking the forms, functions and features of a critical challenge to MNC theory and performance. In Language in International Business (pp. 139-162). Palgrave Macmillan, Cham.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Chand, M., & Tung, R. L. (2014). The aging of the world’s population and its effects on global business. Academy of Management Perspectives, 28(4), 409-429.
Denton, G., Forsyth, M., & MacLennan, M. (2017). Economic planning and policies in Britain, France and Germany. Routledge.
Folsom, R. H., Gordon, M. W., Spanogle Jr, J. A., & Van Alstine, M. P. (2013). Principles of international business transactions. West Academic.
Fransen, L. (2013). The embeddedness of responsible business practice: Exploring the interaction between national-institutional environments and corporate social responsibility. Journal of business ethics, 115(2), 213-227.
Hayes, J. P. (2016). Making trade policy in the European Community. Springer.
Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), 23-34.
Matsushita, M., Schoenbaum, T. J., Mavroidis, P. C., & Hahn, M. (2015). The World Trade Organization: law, practice, and policy. Oxford University Press.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
Piekkari, R., Welch, D., & Welch, L. S. (2014). Language in international business: The multilingual reality of global business expansion. Edward Elgar Publishing.
Preston, L. E., & Windsor, D. (2013). The rules of the game in the global economy: Policy regimes for international business. Springer Science & Business Media.
Sarasvathy, S., Kumar, K., York, J. G., & Bhagavatula, S. (2014). An effectual approach to international entrepreneurship: Overlaps, challenges, and provocative possibilities. Entrepreneurship Theory and Practice, 38(1), 71-93.
Scarborough, N. M. (2016). Essentials of entrepreneurship and small business management. Pearson.
telstra.com.au. (2018). Retrieved from https://www.telstra.com.au/
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