Examine and apply critical issues related to business and management context. Discussinternal contextual factors that impact on a business and the way that decisions are made in an organisation.
The report is about a new start-up named as Esteria which deals in the sector of food and beverages with a limited number of outlets in the Australia region. It is a small business with limited outlets but it is gaining good response from the customers and has good scope of profitability and growth. The report will suggest the business how they can improve with the help of a contextual factor i.e. Globalization. It will briefly explain the concept of globalization along with the opportunities and challenges that business will face due to the globalization and recommendations as per the analysis.
The process of integration and interaction between companies, people and government of different countries are known as Globalization (Steger, 2017). It is a process determined by the international investment and trade and assisted by the information technology (Levin, 2016). The globalization process has effects on the culture, economic development, and well-being of human in society, environment, prosperity and political system around the world (Lechner, 2009). Globalization is also considered as a free movement of people, services, and goods across the world in an integrated and unified manner. Globalization results in opening the gates of the global economy and the can be thought of to be the result of the opening up of the global economy and increase in the trade between different countries (Vaidya, 2006). In other words, countries start operating foreign trade and foreign investments help in opening their economies (Management Study Guide, 2018).
Globalization provides free trade opportunities to different sectors of business including food and beverages sector. Esteria can go global and open their restaurants in different markets such as Asian countries, European countries and Middle East countries. People of these countries prefer different type and taste of foods or snacks. Therefore, it will help them in increasing their market share and revenue.
Globalization offers restaurants a broader collection of selections. Ingredients once difficult to find can reach in some hours by just doing mouse clicks or a phone call. Item can be transported out to out of the country’s customers just as quickly (Black, 2016). Along with the opportunities and benefits globalization brings some challenges or risks as well.
Globalization is very important for expanding and increasing the length of the business and to earn more profit and revenue. As Esteria Restaurant is thinking to expand its business, it is very important to aware the people of the host country where business is thinking to expand. Therefore, it can be done by promoting the services and goods of the business. Esteria Restaurant can promote its services by adopting various channels of advertisement such as
Advertisement- Advertisement is said to be a way of communicating with the customers who use the services and products. These are key messages for which a company pay in order to inform people who receive it (The Economic Times, 2018). Esteria can promote its offering through different mediums such as pamphlets, Television advertisements, hoardings, magazines, etc.
Online Media- Esteria Restaurant should also promote its services through an online medium which also includes social media in order to reach a maximum number of people. Online media is an effective tool for promotion of services and products as the use of internet, social media, and another online site has increased from last few years. People are nowadays using Facebook, Instagram, Twitter, etc. for their entertainment. Along with this, the maximum number of people makes use of online media in order to check the reviews for the services provided by the restaurants.
Esteria Restaurant should hire local people of the host country where they are expanding their business; this will help them in understanding the market of the country easily. The local people of the host country are aware of the language culture, values and taste of the people; therefore it will be beneficial for the restaurant to hire local people (Greathouse, 2018). Along with this, the restaurant will be able to manage the cost of outsourcing the labor.
Increased Cultural Diversity- Globalization has become more dominant, Esteria restaurant has to deal with the cultural diversity of the workers. These variations need makes all the businesses to learn the ways of dealing with the diversity and should adopt guidelines and policies and guidelines for workers.
Employee Training- The ethnic, religious and cultural diversity of the business represents a necessity of employee training. In order to safeguard their new employees and company from discrimination, management has to develop policies and should provide training to current employees so that everyone can work together (McFarlin, 2018). Therefore, Esteria restaurant has to provide training to the employees of different culture, language, etc.
More Options- One of the major opportunity that globalization will provide Esteria that it will make easier for the restaurant to search for the ingredients in order to prepare their dishes for serving their customers. The restaurant will not be seasonally bounded; they can serve anything anytime wherever they are located. Along with this, the restaurant can also add seafood to their menu, because they will get all the ingredients to prepare this kind of food even if they are located in the landlocked area (Berman, 2018). For example, the restaurant can get fresh fish anywhere very quickly. Besides, this number of probable vendors has been increased due to globalization for various restaurants. It also helps in decreasing the suppliers bargaining power and supporting the bottom line (Hanks, 2017). Restaurants now have more options in terms of farms; they don’t need to stick with only one local farm. Now they can get their vegetables flown or trucked anywhere and anytime. If a freeze gets damages then it cannot damage the dishes of restaurant’s menu- it is very easy for the restaurant to get same vegetables from anywhere else.
Marketing Potential – Globalization offers many restaurants an opportunity to sell their special and different dishes around the world. For Example- If the restaurant cooks a very tasty and unique barbecue sauce then globalization will encourage and allow you to sell it overseas (World commission on the social dimension of global, 2006). The same applies to those restaurants with logos and names that give themselves to designs of the t-shirt. A well organized and framed website with crisp marketing crop will help Esteria restaurant to convert into a global brand.
Add new menu- Esteria will get a good opportunity due to globalization is that they can learn new dishes of that local country where they are operating and can add those dishes into their menu according to the preference and taste of the local people of that country. This will help them in increasing the number of local customers who prefer local dishes.
Think Local- Many restaurants are obtaining their ingredients internationally; a restaurant providing to local people can have a big advantage in marketing. If the restaurant is making use of local ingredients then it can be good for the environment, because it escapes the process of shipping. The money will remain in the local community if local ingredients are used by the restaurant, which helps in maintaining good public relations. The local people of the country are expecting from last many generations, that the business which is operating in their country should make use of only local ingredients and suppliers. This is because it can reflect business’s commitment towards becoming a good citizen of the country. But it is now possible due to arise of globalization and made the way to stand out as well.
Increase revenue- Globalization will help Esteria restaurant to increase their revenue and profit by opening their outlets in different countries.
Positive relation- Globalization also helps the country where the business has its origin in maintaining good relations with the host country.
Increased Risk – When the ingredients are imported from different countries in order to prepare the dish and maybe made extra stops in the handling and storage stages. The restaurant has less control over the ingredients they have ordered because they don’t know what has happened or happening with them and consequently takes more risk (Bouchet, 2015). For example: If spinach got some bacteria which the restaurant had imported from South Africa may cause damage to the health of the restaurant’s customers and which may result in winding up the restaurant because the customers or the government of the host country will not spare the management of the restaurant. If the restaurant import any beef from another country which gets suddenly hosted by a scandal where the meat of the horse or other impurities gets added to the packages, then the restaurant will be accountable.
Changes in the Preferences and taste- The market of the business gets broader due to globalization which also results in changes in the taste and preferences of the customers. The existence of the restaurant business is just because of understanding and delivering the food according to the demand and preference of the customers (Zhou & Piramuthu, 2016). Therefore, it is a challenge for Esteria restaurant because they have to switch the taste of their dishes according to the taste of the host country people. Along with this, they need to change some dishes and add new dishes according to the demand and preference of the local people.
Increase expenses- In the developed countries most of the restaurants have to bear high expenses such as labor and operational expenses. The labor of the developed country is skilled therefore they ask for the higher wages which ultimately results in increasing the expenses of the company or restaurant (Schaadt, 2013). If Experia restaurant will think to expand the business in developed countries then they have to pay a huge amount as expenses for that they need to procure the financial resources.
Conclusion
In the conclusion, it can be said that globalization is a good option for Esteria restaurant in order to expand its business globally. It will help the restaurant to increase their market share and revenue by operating in different countries and adopting the rules and regulations of the host country. The globalization will provide various opportunities to the business such as increase of market share, more option of ingredients, marketing potential, etc. Along with the opportunities, the above report has explained some challenges that the restaurant can face due to the globalization of their business such as increase of risk, changes in the taste and preferences, and an increase of business expenses. Further, the report has also suggested some recommendations that will help Esteria restaurant in increasing their business and enhancing their activities.
References
Berman, C. (2018). How Does Globalization Affect Restaurants? Retrieved January 2018, from https://smallbusiness.chron.com/globalization-affect-restaurants-77851.html
Black, E. (2016). Globalization of the Food Industry: Transnational. Retrieved January 2018, from https://digitalcollections.sit.edu/isp_collection
Bouchet, M. H. (2015). Overcoming the Challenges – Globalization. Lulu Press, Inc.
Greathouse, J. (2018). 5 Reasons To Hire Locally–No Matter Where You Are. Retrieved January 2018, from https://www.inc.com/kevin-j-ryan/startups-reinventing-luggage-at-ces.html
Hanks, G. (2017). Globalization of the Food & Beverage Industry. Retrieved January 2018, from https://bizfluent.com/info-7742456-globalization-food-beverage-industry.html
Lechner, F. J. (2009). Globalization: The Making of World Society. John Wiley & Sons.
Levin, S. (2016). What Is Globalization? Retrieved January 2018, from https://www.globalization101.org/what-is-globalization/
Management Study Guide. (2018). What is Globalization ? – Meaning and its Importance. Retrieved January 2018, from https://www.managementstudyguide.com/what-is-globalization.htm
McFarlin, K. (2018). The Effects of Globalization in the Workplace. Retrieved January 2018, from https://smallbusiness.chron.com/effects-globalization-workplace-10738.html
Schaadt, G. (2013). Food Safety and the Challenge of Globalization. Retrieved January 2018, from https://www.foodsafetymagazine.com/enewsletter/food-safety-and-the-challenge-of-globalization/
Steger, M. B. (2017). Globalization: A Very Short Introduction. Oxford University Press.
The Economic Times. (2018). Definition of ‘Advertising’. Retrieved January 2018, from https://economictimes.indiatimes.com/definition/advertising
Vaidya, A. (2006). Globalization: Encyclopedia of Trade, Labor, and Politics. ABC-CLIO.
World commission on the social dimension of global. (2006). A Fair Globalization: Creating Opportunities for All. Academic Foundation.
Zhou, W., & Piramuthu, S. (2016). RFID and Sensor Network Automation in the Food Industry: Ensuring Quality and Safety through Supply Chain Visibility. John Wiley & Sons.
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