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Order 159428: Global Business Strategy

Unit7.2SR CourseOutline-7.2GlobalBusinessStrategy 5GlobalBusinessStrategy GBSSamples.zip

Type of paperResearch Paper
SubjectBusiness
Number of pages17
Format of citationOther
Number of cited resources15
Type of serviceWriting

You have been appointed as a market analyst in a small investment bank, which manages the wealth of many clients. One of your first tasks is to choose an organisation that operates internationally. This may be an investment opportunity for your employer, but you can choose a non-profit making organisation. In your role as a market analyst you will also need to understand the impact of globalisation on business organisations in general.

Unit 7.2 Global Business Strategy

Level 7 15 Credits

Suggested Resources

Text

Exploring strategy
Authors: Johnson, Gerry; Whittington, Richard; Scholes, Kevan
Pearson Education 2011
9780273732020 773p

Illustrates issues and techniques of strategy using real organisations

Contemporary strategy analysis
Grant, Robert M
Chichester; John Wiley, 2010
9780470747100 499p

Good and well respected general text on strategy analysis including globalisation
issues.

Understanding global strategy
Segal-Horn, Susan; Faulkner, David
Andover; Cengage Learning EMEA, 2010
9781844801497 504p

Text book on global strategy with real world examples and relevant case studies.

Strategic thinking
Wootton, Simon; Horne, Terry
London; Kogan Page, 2010
9780749460778 150p

Text on developing global strategy which gives an insight into some of the analysis
techniques and how they can be used.

Business strategy
Kourdi, Jeremy
London; Economist in association with Profile Books, 2009
9781846681240 250p

Looks specifically at strategic decision making covering Porter five forces and
competitive advantage.

Internet Resources

Free Management library – http://managementhelp.org

Open University Learning Space Free learning –
http://openlearn.open.ac.uk/course/category.php?id=4

Civitas (Institute for study of Civil Society) – http://www.civitas.org.uk/

Free Business Information – http://www.businessballs.com/index.htm

Awareness of current issues across the world –
http://www.newseum.org/todaysfrontpages/#

Culture and Globalisation –
http://www.globalization101.org/issue_sub/culture/cultureglobalization/

Global Market –
http://globaledge.msu.edu/academy/hpgdtmlh/32new/global%20market%20opportun
ity%20assessment/player.html

Financial Information – http://www.bloomberg.com/markets/ and
http://uk.reuters.com/

International Finance sites – http://fisher.osu.edu/fin/cern/cernpop.htm

Strategic Planning Society – http://www.sps.org.uk/

Interview with Michael Porter – http://www.youtube.comwatch/?v=mYF2_FBCvXw

Free case studies –
http://www.icmrindia.org/free%20resources/casestudies/Free%20Business%20Strat
egy%20Cases.htm

Kellogg video – http://www.youtube.com/watch?v=bqtFEJsXqeA&feature=related
http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_10.htm

Video on International Strategy – http://www.youtube.com/watch?v=gwXYfGV25iI

MacDonald’s Case Study – http://studyshare.in/share/showthread.php?1785-
McDonald-s-Case-Study-Marketing-Analysis

IKEA Case Study –
http://www.youtube.com/watch?v=mL7nWwWqYx4&feature=related

http://managementhelp.org/

http://openlearn.open.ac.uk/course/category.php?id=4

Welcome to Civitas: Institute for the Study of Civil Society

http://www.businessballs.com/index.htm

http://www.newseum.org/todaysfrontpages/

http://www.globalization101.org/issue_sub/culture/cultureglobalization/

http://globaledge.msu.edu/academy/hpgdtmlh/32new/global%20market%20opportunity%20assessment/player.html

http://www.bloomberg.com/markets/

http://uk.reuters.com/

http://fisher.osu.edu/fin/cern/cernpop.htm

http://www.sps.org.uk/

http://www.youtube.comwatch/?v=mYF2_FBCvXw

http://www.icmrindia.org/free%20resources/casestudies/Free%20Business%20Strategy%20Cases.htm

http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_10.htm

http://studyshare.in/share/showthread.php?1785-McDonald-s-Case-Study-Marketing-Analysis

http://www.youtube.com/watch?v=mL7nWwWqYx4&feature=related

Top 100 global brands – http://media.ft.com/cms/b71760ac-8157-11e0-9360-
00144feabdc0

European Union CSR – http://ec.europa.eu/enterprise/policies/sustainable-
business/corporate-social-responsibility/index_en.htm

CSR Europe – http://www.csreurope.org/

CSR World wide – http://www.albawaba.com/business/pr/economic-zones-world-
introduces-csr-policy-manual-reference-and-guide-all-stakeholders-3

http://media.ft.com/cms/b71760ac-8157-11e0-9360-00144feabdc0

http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-responsibility/index_en.htm

http://www.csreurope.org/

http://www.albawaba.com/business/pr/economic-zones-world-introduces-csr-policy-manual-reference-and-guide-all-stakeholders-3

7.2 Global Business Strategy

Aims To explore the strategic responses of organisations to the rapidly
changing global business environment. To understand the
strategies and processes used to manage international businesses
in differing geographical and cultural situations. To understand the
importance of managing within a framework of corporate social
responsibility.

Unit Level 7

Unit Code R/503/5094

GLH 60

Credit Value 15

Unit Grading Structure Pass

Assessment Guidance Assignments in accordance with awarding organisation guidance

Learning Outcomes.
The learner will:

Assessment Criteria.
The learner can:

1. Be able to analyse the international
business environment

1.1 Review and assess suitable techniques to
analyse the business environment

1.2 Analyse the micro-environment of a business
1.3 Analyse the macro-environment of a

business
1.4 Analyse how the international business

environment impacts on an organisation

2. Understand the impact of globalisation
on business organisations

2.1 Analyse the extent of globalisation on
organisations

2.2 Assess the benefits, opportunities and
challenges of globalisation for an
organisation

2.3 Analyse the structures of different
organisations operating in international
markets

2.4 Critically evaluate the international
operations of an organisation

3. Understand the importance and nature
of Corporate Social Responsibility

3.1 Analyse the moral and ethical questions
facing organisations in an international
environment

3.2 Analyse the conflicts between corporate
strategy and ethical and social
responsibilities

3.3 Identify legislation, regulation and guidance
relating to corporate social responsibility

Level 7 Management Specification May 2014 1

Indicative Content

1. Be able to analyse the international business environment

Analysis techniques

 Environmental analysis and diagnostics, environmental audit, Porter’s diamond (The
Competitive Advantage of Nations – Porter), PESTLE, ‘five forces’ analysis

Micro-environment

 Stakeholders, suppliers, customers, competitors, market intermediaries

Macro-environment

 External climate, economic, political and legal environment (national and
international), cultural environment, resources (capital, people and natural),
technology

International business environment, culture, CSR, politics, environmental issues,
globalisation

2. Understand the impact of globalisation on business organisations

History

 Economic theory, dependency theory, non-western cultures, maritime European
empires, industrialisation, trade and empire, Bretton Woods, development of
communications, information technology

Extent of globalisation

 Trade, labour movement, cultural exchange, technical development and exchange,
capital

Effects of globalisation

 Effects on markets, business change, capital, jobs and outsourcing, cultural
dominance, natural resources, conflict; debates: benefits and challenges of
globalisation, advocates and critics

Structures

 International business organisation, international supply chain management,
business structures, outsourcing, international communications

Operations

 International business conduct, competition in different markets, international brand
development, protection of IP, trade partnerships, politics and regulation, security,
ethics

Level 7 Management Specification May 2014 2

3. Understand the importance and nature of corporate social responsibility

Moral and ethical questions

 Organisation purpose, nature of business ethics, corporate responsibility, social
responsibility, corporate accountability, corporate governance, cultural conflict (eg.
nature of bribes and rewards), different economic models, different ethical
frameworks (theories: deontological and utilitarianism), Hofestede, Hall (monochronic
and polychronic cultures)

Conflicts

 Current conflicts and issues should be examined. Examples include: climate change
and environmentalism, anti-globalisation and social responsibility, ‘Peak oil’, greater
insecurity, relationships with government, technological change and privacy
concerns, social media, intellectual property issues

Legislation

 UK, European, global and other national legislation and guidance; global agreements
on carbon; legislation on pollution; agreements on issues affecting specific industries
e.g. fishing agreements; institutions; codes of practice and guidelines from
international (e.g. OECD, ISGN), and industry (e.g. ISAR) bodies, reporting
mechanisms (audit standards)

Level 7 Management Specification May 2014 3

Important Notes:

1. You must familiarise yourself with the Academic Dishonesty and Plagiarism
Policy of LQA and ensure that you acknowledge all the sources which you use in
your work.

2. You must complete the ‘Statement and Confirmation of Own Work’.
3. Please make a note of the recommended word count. You could lose marks if

you write 10% more or less than this.
4. You must submit a paper copy and digital copy (on disk or similarly

acceptable medium). Media containing viruses, or media which cannot be run
directly, will result in a fail grade being awarded for this module.

5. All electronic media will be checked for plagiarism.

Marker’s comments:

Moderator’s comments:

Mark: Moderated Final

Mark: Mark:

January 2015

Assignment

Unit:
Global Business Strategy

Unit 7.2 Global Business Strategy

Level 7 15 Credits
Scenario
You have been appointed as a market analyst in a small investment bank, which manages the wealth
of many clients

One of your first tasks is to choose an organisation that operates internationally. This may be an
investment opportunity for your employer, but you can choose a non-profit making organisation. In
your role as a market analyst you will also need to understand the impact of globalisation on business
organisations in general.

Activity 1
Your line manager has asked you to analyse the international business environment for your
chosen organisation and produce a report for him which includes.

a) a review of the techniques to analyse the environment and an assessment of their suitability.
b) an analysis of the micro and macro environments of the business using techniques reviewed

in the first part of your report
c) an analysis of how the international business environment impacts on your chosen

organisation.
d) an assessment of the benefits, opportunities and challenges of globalisation on your chosen

organisation

As you are nearing completion of this report, you receive a memo from your line manager which asks
for further sections to be included in the report. These additional sections must analyse

a) the extent of globalisation on organisations.
b) structures of different organisations operating in international markets

Assessment Criteria 1.1/1.2/1.3/1.4, 2.1/2.2/2.3.

Activity 2

You are now required to give a presentation to a group of managers on the importance and nature of
Corporate Social Responsibility to organisations operating internationally.

Your presentation must cover the following topics:
 an analysis of the moral and ethical issues faced by operating in an international environment
 an analysis of the conflicts between corporate strategy and ethical and social responsibilities
 identification of the legislation/regulation and guidance relating to corporate social

responsibility for organisations

You will need to produce your notes for the presentation and have appropriate hand-outs for the
group detailing the topics covered.

Assessment Criteria 3.1/3.2/3.3

Activity 3

The group of managers who attended the presentation have requested a paper which critically
evaluates the international operations of your chosen organisation.

AC 2.4.

Guidelines for assessors

The assignments submitted by students must achieve the learning outcomes and
meet the standards specified by the assessment criteria for the unit. The suggested
evidence listed below is how students can demonstrate that they have met the
required standards.

Activity
number

ACs Suggested evidence

1 1.1/1.2/1.3/1.4,
2.1/2.2/2.3/

The report must identify a range of techniques for analysing the
international operating environment. These techniques must be
thoroughly reviewed and assessments made based on sound
judgements. The analysis should be detailed and cover the micro
and macro environment of the chosen business and clearly
demonstrate how the international business environment impacts
on the chosen organisation.

The report must also show that the learner understands the
impact of globalisation on business through careful analysis which
covers the extent of globalisation and the structures of different
organisation operating globally. The assessment must be
balanced and cover all the different aspects stated in the task.

The report should be in an appropriate business format.
2 3.1/3.2/3.3 The presentation should cover all the main topics stated in the

task , show analysis and identify relevant legislation, regulation
and guidance facing organisations.operating internationally. The
notes produced by the learner must show understanding of the
importance and nature of CSR to organisations. The handouts
prepared by the learner must be detailed with appropriate style
and content for the identified audience.

3 2.4 The paper produced by the learner must provide accurate, and
detailed information for the chosen organisation, The evaluation
needs to be balanced and provide reasoned judgements.

Coversheet (p.1)
5 Global Business Strategy (p.2-3)

GBS Sample 1/Name_ID_GBS Task 1

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Global Business Strategy

Level 7 – Unit 7.2

International Business

Environment Analysis.

Report – Activity 1

Revised 18 Sept 2015

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Contents

Section Details Page

Activity 1

Introduction Company profile 4

1a International business environment Analysis Techniques 4 – 7

1b Analysis of the micro and macro of Marks & Spencer‟s PLC 7 – 8

1c The impact of international business environment on Marks & Spencer‟s 8 – 9

1d What does globalization mean for Marks & Spencer‟s? 9 – 10

1a (2) What is the extent of globalization on organizations? 10

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1b (2) Operating structures different organizations in international markets. 10 – 11

References 12

Introduction

Marks & Spencer PLC was founded in 1884.It has grown from a single market stall to an

international multi-channel retailer. They sell stylish, high quality value clothing and home

products as well as food, responsibly sourced from around 3,000 suppliers globally. Their

portfolio covers general merchandise, food, international and multi-channel across 54

international territories with nearly 86,000 employees.(Marks and Spencer, 2014).

International business environment Analysis Techniques

Business environment is the combination of internal and external factors that influence a

company‟s operating situation and the overall business. It is both Micro and Macro in nature.

Micro or internal factors are controllable and could include management style, organizational

culture, mission and value statement. Whereas Macro or external factors are uncontrollable these

http://www.businessdictionary.com/definition/combination.html

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factors are often both dynamic & complex. Business environment factors can include new

policies, procedures, government changes, improvements in technology, social and economic

trends(Nonaka, I., and Takeuchi, H, 1995).The reason for analyzing the business environment is

to highlight opportunities and threats. Knowing the opportunities and threats to the business

allows the company to set a strong business strategy and understand better where to invest,

expand, diversify and downscale. There are a number of different tools we can use to analyse

both the Micro & Marco factors within a business.

Micro can be analysed with Porters 5 forces model.Porter identified that there are 5 key

forces that influence business that needed to be analysed in order to develop a competitive

advantage (Porter, 1985). These forces are supplier power, buyer power, competitive rivalry,

threat of substitution &threat of new entryand are used for strategic industry analysis. The

positives of using this technique to analyze is that it looks at a wider range of competitors and it

forces the business to look externally. However this is a relatively old model that may not be

suitable for the modern organization, as it can be difficult to come to a conclusion from the

results.

Mendelow‟s matrix or Mendelow‟s stakeholder analysis is a tool that aids in mapping

stakeholders and their influence in certain areas on a business. It covers connected stakeholders

that are close to the core of the business; such as customers, suppliers and distributers. Internal

stakeholders such as staff, management and, finally, external stakeholders including the local

community, media and government to name a few. The pro‟s of this model is that it can work

well when trying to decide to take on a new project and it will highlight all of the stakeholder‟s

interest and their level of power/influence on it, it will identify possible risks and by knowing the

stakeholders better you‟re more likely to get their by in on new projects. (Mendelow, A, 1991).

There are negatives of this model, you maynot be able to get all of the stakeholders on the same

idea therefore risk focusing on a specific stakeholders.

A good tool to use to analysethe micro environment is Porters 4 corners. This tool helps

understand what motivates the competitor and predict a competitor‟s course of action. It could

highlight likely changes to their strategy, their reaction to change and different influences where

http://www.businessdictionary.com/definition/improvements.html

http://www.businessdictionary.com/definition/technology.html

http://www.businessdictionary.com/definition/economic-trend.html

http://en.wikipedia.org/wiki/Motivate

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it be industry, governmental or environmental. The model is split in to two side the “motivation”

which highlights the drivers and the “actions” highlighting the company‟s current strategy . It

assesses the competitors and understands theirmarket stance and satisfaction as well as

management assumptions so we can understand what the competitor assumes about both itself

and the market. The second part is “actions”, highlighting the company‟s current strategy and

how they are doing in the market. It shows if this strategy is working and it gives an insight into

how they may do going forward. It shows their capabilities by analyzing how the competitor

reacts to certain changes and external forces, highlighting their strengths and weaknesses.

Positives of this model are by understanding the four components under motivation and actions it

can help predict how a competitor may respond to a given situation.Porter’s four corners model

provides a framework that ties competitor’s capabilities to their assumptions of the competitive

environment and their underlying motivations.(Porter, M.E, 1998).

Just as with Micro factors, Macro factors can also by analyzed in a number of different ways.

The Pestel model is a simple analysis of an organization‟s Political, Economic, Social,

Technological, Environmental and Legal environments. For example, Political factors could be if

it were a government organization or how politically stable to company is. Economic factors

could include consumer confidence or economic policy. Demographic changes and income

distribution could be considered Social factors. If you look at Technological factors it may

include new development and inventions as well as changes in IT. Employment laws and

competition regulations would fall under Legal factors. Finally environmental regulations and

environmental protection could be considered in Environmental factors. This analysis comes

with limitations and can sometimes be over simplified. This type of analysis needs to be re-

looked at regularly and the data captured is often based on assumptions. On the other hand it is

simple to use and makes you look outside the box, thereby developing external thinking when it

comes to strategy. It can also highlight business opportunities.

Another tool we could use is Country risk analysis. This tool assesses the risk of a particular

country based on different factors and risks, such as financial. This would assess the financial

risk of the business economy in a particular country for instance it would highlight if there is

there a currency risk or Inflation risk. Political risk is also a factor that looks at how the company

http://en.wikipedia.org/wiki/Conceptual_framework

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would operate and the rules around it i.e. would the country ultimately have power of the

company? Are there any regulations in this area? They would look at disruptions in operations,

expropriation riskand possibly loss of intellectual property rights. Country risk analysis can be

done internally or through private reports from companies such as Control Risks Information

Services, Institutional Investor or Economist Intelligence Unit,as well as think-tanks. Countries

where this type of analysis has taken place include Congo, Iraq, Cuba, Australia, Romania and

Canada. The positives of this method is that we can understand the area and see the risks and

limitations before making the move avoiding possible issues on the other side it‟s not always 100

% accurate and some of the data will be used to predict what may happen in an area in the future.

The final tool we would use would be Porter‟s diamond. The diamond model is an economic

model developed by Michael Porter. The diamond model suggests that when certain factors

interact with each other it creates conditions where competitiveness occurs. There are six

conditions to consider. Factor conditions including HR, Knowledge and Infrastructure. Demand

Conditions is how in demand the business is in the country of origin and how that demand may

be translated internationally. Competitiveness coming from related and supporting Industries,

whereby having local suppliers and helping the economy is preferable. Firm Strategy, Structure

and Rivalryis the way in which companies are created, set goals, are managed and the presence

of intense rivalry boosting innovation. Chance is a factor as well asGovernment. Government

can influence business positively and negatively as they set the rules and standards of sellers.

(Porter, M.E, 1990). The positives of this model is that is can highlight why companies struggle

to penetrate certain markets, it involves the government and therefore gets their buy in. on the

downside even if all of the areas are aligned it doesn‟t mean the company will necessarily be

successful it still depends on the commercial capabilities of the company and it doesn‟t

incorporate the online and alternative business areas.

Analysis of the micro and macro of Marks & Spencer PLC

To analyze the Micro &Marco (or internal and external) environments of Marks &

Spencer PLC we will use different analysis tool. To analyse the Micro we will use Porters 5

forces model to analyze supplier power, buyer power, and competitive rivalry, threat of

http://en.wikipedia.org/wiki/Economic_model

http://en.wikipedia.org/wiki/Michael_Porter

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substitution and threat of new entry (Porter, 1985). To analyze the Macro environment of Marks

& SpencerPLC we will use the Pestel model. It is a simple analysis of an organization‟s Political,

Economic, Social, Technological, Environmental and Legal environments (Johnson, G., Scholes,

K. and Whittington, R, 2008).

Micro Analysis

Macro Analysis

Element Analysis Details

Supplier Power High/

Opportunity

M&S has over 3,000 products, raw materials and service suppliers with

current social compliance assessments covering many aspects of human

rights listed on the Supplier Ethical Data Exchange (SEDEX). Many

suppliers are from developing countries, which depend on Western

companies for their contracts. (M&S, 2014).

Buyer Power High/

Threat

The high quantity of buyers means the buyers have the power to dictate

how and where they shop. With 20 million people who shop at M&S per

week (M&S, 2014).

Competitive

Rivalry

Medium/

Threat

M&S is a mix of both food & retail, meaning that they are competing with

a larger variety of businesses, similar stores of mixed channels as well as

the individual food & retailers. (Forbes, 2013).

Threat of

Substitution

High/

Threat

They are competing with newer and more competitively branded

companies as well as larger international companies.

Threat of New

Entry

Low/

Threat

The marketplace is already saturated and competitive with many

international companies competing for business. (Forbes, 2013).

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Conclusion

M&S is currently in an unattractive position. Based on the analysis there are more threats to the

company than there are opportunities. This is due to a number of factors including the economy

and the high level of competition with better branding and more up to date current trends.

Although they have expanded internationally, as well as invested heavily in E-commerce due to

the demand of online shopping, the end of year financial statement shows a loss of 3.9%,

showing consumers haven‟t got their confidence back in the company.

The impact of international business environment on Marks & Spencer

Environmental Analysis Impact On The Organization

Political

Instability in some Middle East markets Threat to regional operations requiring contingency

Instability in Russia Focus effort on marketing activities to ASEAN countries

Economic

Sluggish growth in some UK Areas Managing closures is required to reduce costs

Strong European growth, where sales rose by 3.9%. Build on existing presence to capture share growth

Technological

Consumers habits are changing to digital platforms Invest in developing better online service

Environmental

Element Analysis Details

Political Opportunity M&S are actively working to make their products fair trade. Working with other

countries for both selling and for suppliers creates a good political stance.

Economic Opportunity The UK economy is improving slowly but people are still struggling from the

recession. The new demand for good quality affordable goods will help M&S.

This has also seen a large increase in people moving from the UK meaning higher

demand for home products overseas.

Social Threat The fast paced lives of today mean less people have time to cook, with people

preferring to eat out. The fashion industries fast paced growth and ever changing

styles M&S will struggle to keep up on such a large scale.

Technological Opportunity M&S are slowly revamping their brand, including the introduction of

technology.Some 321 stores are equipped with 1,500 iPad and 40,000 store

employees have the skills to sell from the new website to maximize selling

opportunities. (Mark &Spenser,2014).

Legal Threat M&S are a public company and under constant scrutiny. Increasing human rights,

legal rules & regulations can oftenincrease cases against companies.

Environmental Opportunity Introduction of Plan A in which M&S highlighted five factors to achieve their

business goal that is climate change, waste, sustainable raw material, fair

partnership and health. (Mark &Spenser, 2014).

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Increased pressure over waste Streamline supply chain

Increased consumer concern over the environment Monitor waste use sustainable raw material

Social

Increased concern over CSR Implement new CSR

Community concern over those less fortunate New initiatives such as clothes recycling

Legal

Public company and under constant scrutiny Must act cautiously and have a risk plan

Increase in legislation Keep up to date and follow new legislation

Industry rivalry

Competition is concentrated with large players Differentiation is key to maintaining share and

performance

Increase in e-commerce means more competition for

market players

New initiative ideas and strategies needed

Threat of new entrants

Potential competition from companies using cheaper

labor and materials

Avoid price-based competition and focus on brand

building

High entry costs continue to constrain new entrants Maintain production infrastructure in different regions

Threat of substitutes

Increased use of online shopping Increase online presence

Increased use of smaller convenience stores Keep up with smaller quick stop convenience stores

Power of the supplier

Consumer understanding of Increased need to use local

and Fairtrade suppliers

Use suppliers from developing countries, which depend on

Western companies for their contracts

Power of the buyer

Consumers have increasing information and knowledge Leverage knowledge as an asset to underline value added

Consumers have much more varied and evolving tastes Need to keep up with fast changing trends

What does globalization mean for Marks & Spencer?

Globalisation or „Global Strategy‟ is a shortened term that covers three areas: global,

multinational and international strategies. Essentially, these three areas refer to those strategies

designed to enable an organisation to achieve its objective of international expansion (Lynch.R,

2014).

Globalization will bring a mix of benefits, opportunities and challenges to Marks &Spencer. The

pressure of globalization is beneficial to the company, creating many opportunities. Emerging

markets and international growth in 2014 was up by 6.2% and continuing to rise. New

technologies and adapting ecommerce means M&S can set up flagship stores internationally that

are starting ahead of their UK counterparts. Product variety is a key factor as there is increased

demand for western products worldwide. Alliances are able to continue to grow with strong

relations worldwide and new stores and suppliers increasing this partnership. It will also bring

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challenges. There is pressure in the current climate for localization, focusing on homegrown

companies and productsusing local materials and suppliers. Going international will raise

stakeholder expectations which may not be realistic. Increased government regulation from

different countriescould mean increased safety and environmental laws. More regulations could

mean possible trade barriers thus raising costs. Expanding in mature markets where it is saturated

with local and other international companies will create more competition. International

government may impose additional taxes.

What is the extent of globalization on organizations?

The overall extent of globalization on any company or organization depends on a number

of factors. It depends on the company‟s mission and visionand where they aim to be and what

they aim for. It depends on the values and objectives of the company. The resources and/or

products will be taken in to account as it might not appeal internationally. Financial and

operational capacity of the company will be a factor and legal issues or regulations may take a

part or affect the extent of it. e.g. America and Iran. There aredifferent ways to globalize by

adopting different strategies. The domestic strategy is where a company would expand to

increase sales, they would not adapt to the local market but focus on selling a domestic product

overseas i.e. a simple export and sell concept. Multi-domestic Strategy is run from a head office

but only in principle, with each country appointing a manager with the power to run and operate

as they see fit with no real input from the main company. A Transnational Strategy adopts a mix

between global and domestic practices and tries to create a standard operating model that is

adaptable to each region. Finally, Global Strategy is one of a truly centralised company i.e. they

act as one. The full business cycle is monitored and centralized and ensures maximum efficiency

and minimizes repeating issues.

Operating structures different organizations in international markets.

There are many different structures in organizations and different reasons they choose to

use a particular one. Each structure comes with its benefits as well as pitfalls. Functional

structures group together people using similar skills. These functional groups work side by side,

individually reporting to the Head office. This is good as it means there are highly specialized

teams making most use of the resources but also means there is a lack of communication

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between the departments. Divisional structures group together people by products, customers or

locations. This type of structure can shorten development time and is great for companies with

multiple divisions. However it is likely that the company will be duplicating resources. Matrix

structures combine the functional and divisional structures. It creates relationships between the

departments and divisions as well as more resources being available to get to a certain outcome.

Team structures use both permanent and temporary teams. It is good for projects as it means

people work closely with one another and feel supported by the team but it can often delay

productivity as the whole team needs to agree on the final outcome and the functionality of it

means they need to meet on a regular basis. Finally, Network structures extensively use strategic

alliances.This is a great structure to use if the aim is to increase core effectiveness, but

outsourcing it allows much more resources and flexibility at the core. This does however leave

the company with less control over the overall operation.

References

12 | P a g e

Competitive Intelligence in Business (2013) website (online) available from

http://intelligence2act.com/porters-four-corners-revisited.htm accessed Dec 27th 2014

Hennessey. R (2013). British retailers struggle to do it all (online) available from

http://www.forbes.com/ accessed Dec 27th 2014

Johnson, G., Scholes, K. and Whittington, R. (2008). Exploring Corporate Strategy, (FT

Prentice-Hall, Ed. 8).

Lynch. R (2014) Golbal Strategy website (online) available from http://www.global-

strategy.net/what-is-global-strategy/ accessed Dec 27th 2014

Marks and Spencer plc (2014) corporate website (online) available from

http://corporate.marksandspencer.com/ accessed on Dec 22nd 2014

Marks and Spencer plc (2014) Investor: website (online) available from

http://corporate.marksandspencer.com/investors/fe827a51c3574257b5794bc754f6da56

Mendelow, A. (1991) „Stakeholder Mapping‟, Proceedings of the 2nd International Conference

on Information Systems, Cambridge, MA (Cited in Scholes, 1998).

Nonaka, I., and Takeuchi, H.(1995). The Knowledge-Creating Company (Oxford Univ. Press).

Porter, M.E. (1985) Competitive advantage: Creating and sustaining superior performance. New

York: Free Press.

Porter M.E (2008) The Five Competitive Forces that shape Strategy, Harvard Business

Porter, M.E. (2004). Competitive strategy: techniques for analyzing industries andcompetitors.

New York; London: Free Press

Porter, M.E. (1998). Competitive advantage: creating and sustaining superiorperformance. New

York; London: Free Press

Porter, M.E. The competitive advantage of nations. New York: Free Press. (1990)

http://intelligence2act.com/porters-four-corners-revisited.htm

http://www.forbes.com/

Global Strategy

http://corporate.marksandspencer.com/

http://corporate.marksandspencer.com/investors/fe827a51c3574257b5794bc754f6da56

GBS Sample 1/Name_ID_GBS Task 2

Corporate Social Responsibility
On Internationally Operating

Organizations

What is Corporate Social Responsibility?

 CRS or Corporate Social Responsibility

 Its an unwritten understanding that assumes companies are Obligated socially to

look beyond only the objective of making profit

 Socially obligated to support other principal groups in society out-with the

immediate needs of staff, shareholders and or stakeholders

 Financial CRS, environmental CRS, and social CSR are often included business

strategies.

Moral and Ethical issues

 Ethical issues affront international business differences areas, this could

include the laws, different regions cultures it can also cover economic

development and political systems.

 Human Rights

 Corruption

 Moral Obligations

 Issues within the environment

 Employment practices

Human Rights

 Basic human rights in the western world are by law

 Rights such as freedom of association,

 freedom of speech,

 freedom from political repression

 These basic human rights we live by are not by law enforced or respected in
many countries

 What is the responsibility of a international company in a country where basic
human rights are trampled on?

Corruption

 Throughout history we have been aware of the problem and impact of
Corruption across the world. Even in todays society where we have
regulations in place to prevent this it still occurs

 Businesses across the globe have gained economic advantages though bribery
and back handed deals usually with government officials

 The United States passed the Foreign Corrupt Practices Act to fight corruption

 Outlawed the paying of bribes to foreign government officials to gain
business

Issues within the environment

 Home nations Environmental regulations are often enforced.

 Host nations regulations are usually inferior if at all

 Issues arise as no one individual is responsible for the Environment, most of
the environment is public so who should be responsible for it?

 The tragedy of the commons occurs when a resource held in common by all,

but owned by no one, is overused by individuals, resulting in its degradation

Employment practices

 Minimum wage

 Minimum age to work

 Safe work place

 Adequate breaks

 Proper equipment to do the work asked

Corporate Strategy & Social And Ethical

Responsibilities

 Corporate strategy

 Corporate strategy involves long term company-wide decisions and actions

that can help an organization achieve its objectives. (Hill and Jones, 2008). It

takes into account the environment through its structure of resources and

competencies with the aim of achieving and exceeding the expectations of

the stakeholder.

 Corporate responsibility

 Corporate responsibility Is a company’s moral obligation and efforts that go

beyond what may be required by regulators or environmental rules. Its what

companies should look at beyond profit making.

Conflicts between corporate strategy and

ethical and social responsibilities

 Shareholder

 To make maximum profit

 Stay within the boundaries of
the law

 Increase business revenue and
size

 Stakeholder

 Increase company awareness

 Increase popularity within the
local nation

 Meet the needs of multiple
groups, staff, local population,
consumers

Shareholder v Stakeholder

Carroll’s Corporate Global Social

Responsibility Pyramid

Figure 1: Corporate Global Social Responsibility Pyramid

Corporate Social Responsibility

Pros & Cons

 Pro’s of CSR

 Improved innovation, competitiveness

and market positioning

 Better risk management abilities as you

are more aware of the environment

and the full scope of the company

 Improved reputation in the market

 Better equipped to adapt to changes

 More robust accepted in the community

as it shows an ethical side giving a

“social license” to operate

 Cons’s of CSR

 By utilising the recourses available to

you in society it makes for higher profit

 It can give company’s too much power.

 There is no one directly responsible for

CSR as no one in the company is

accountable directly to society

Legislation and Guidance

 Legislation

These are regulations and obligations required by law that companies

must implement and abide by.

 Guidance

Are what companies are influenced to do in order to go beyond legal

requirements

Legislation and Guidance relating to

Corporate Social Responsibility

Environmental CSR

 Legislation

Environment Act 1995

 Guidance

Considering land use/biodiversity

Reducing packaging/improve

labeling

Marketplace CSR

 Legislation

Sale of Goods Act 1979

Consumer Protection 1987

 Guidance

Promoting diversity. For example, by

promoting positive role models

Engaging in cause-related marketing

Legislation and Guidance relating to

Corporate Social Responsibility

Community CSR

 Legislation

National Parks and Access to the

Countryside Act 1949

The Conservation of Habitats and

Species Regulations 2010

 Guidance

Loaning facilities and assets

Liaising with local communities

Workplace CSR

 Legislation

Employment Protection Act 1978

The National Minimum Wage Act, 1998

 Guidance

Respecting rights to free assembly and

collective bargaining

Listening to and involving employees

Characteristics of Socially Responsible

Companies

 Ensure a safe work environment.

 Uses clear and simple advertising- don’t mislead.

 Offers medical assistance.

 Promotes recycling.

 Helps displaced workers with placement.

 Gives money to charities.

 Sponsors educational causes.

References

 Caroll. A.B (2003) Academy of Management Review: A Three-Dimensional

Conceptual Model of Corporate Social Performance

 World Bank Group (2003) Corporate Social Responsibility Practice:

Strengthening implementation of corporate social responsibility in global

supply chains

 Hill, C. Jones, G. (2008) Essentials of Strategic Management, Hill &Jones,

South-Western College Publishing

 Finbar, M. (2014, December). Unit 7.2 Global Business Strategy. Lecture

conducted from Btec, Abu Dhabi.UAE

 Hill, C W L (2013) International Business, The McGraw-Hill Companies, Inc

http://www.amazon.com/s/ref=ntt_athr_dp_sr_1?_encoding=UTF8&sort=relevancerank&search-alias=books&field-author=Charles Hill

GBS Sample 1/Name_ID_GBS Task 3

1 | P a g e

Global Business Strategy

Level 7 – Unit 7.2
By Xxx

2 | P a g e

Evaluation of the International

Operations of Marks & Spencer PLC

Report

Revised : 18
th
Sept, 2015

3 | P a g e

Contents

Details Page

Company profile 4

Strategic direction 4

Business strategy 4

Organizational structure 5

International operations 5

International performance 6

Future challenges 6

References 7

4 | P a g e

Company profile

Marks & Spencer is now a multi-channel retailer. It was started by Mark Marks and Thomas

Spencer. It started as a single stall in Kirkgate Market in Leeds in 1884. Over the 130 years it has

been in operation is has grown in to multimillion GBP business operating in 50 territories

worldwide with 86,000 employees. In 1926 Marks & Spencer became a publicly listed

company. From here it has slowly started to diversify, adding a food department in 1931. The

1930’s saw the introduction of cafés and the opening of their own research lab. Marks & Spencer

went international with their first stores in Europe in 1975. They continued to grow over the

coming years, opening up in Hong Kong in 1988 – the same year they acquired several American

companies including Brooks Brothers & Kings Supermarkets.

Strategic direction

Marks & Spencer’s Strategic direction is expansion by market development. Its aim is to expand

and open up in new locations and countries using the existing products and services to increase

market share. Looking at new areas geographically, once set up they will make changes to suit

the local market and consumers. Marks & Spencer has already successfully expanded into India,

Russia, China, the Middle East and Western Europe. This type of strategy is great for expanding,

growing market share and increasing competitive rivalry. It can however sometimes lead to

alienation of current consumers.

Business strategy

Marks & Spencer has a mix of focused & differentiated business strategy, concentrating on

product differentiation supplying a higher quality of product that was produced locally so at a

higher cost. They have recently changed to a new low cost strategy that they have named “Plan

A”. Plan A has highlighted five factors to achieve their business goal they are climate change,

waste, sustainable raw material, fair partnership and health. (Mark & Spenser, 2014). The plan

also highlights their aim to offer better quality products at a competitive price. The introduction

of this strategy has already increased sales by 4.2 %. This low cost strategy is one where the

company and its operations are run from a very well put together corporate strategy; meaning

that the internal operations, functions, departments and business units are running with the

5 | P a g e

highest efficiency. Market development and procurement are a constant in business strategy. To

achieve the best market knowledge and the lowest cost.

Organizational structure

Marks & Spencer have adopted a functional or flat organization structure. This type of

structure works well for the company as it ensures specialized groups of people in each area

making the most of the pool of resources. It has limited levels of management so allows more

direct dialog between employees and management. It allows each group to have control of their

area, having both responsibility and accountability. A flat structure means the whole organization

work with ease and less resistance. This works well, however due to Marks & Spencer’s plans to

expand and to continue to grow international this organizational structure will need to be looked

at as it is not suitable. They need to look at a geographical divisional structure which will allow

the company to adapt to the local needs of that area. It will make expanding in to new

geographical areas easier.

International operations

Value chain

activity

Analysis Details

Primary:

Inbound

logistics

Strength Successfully launched the new national e-commerce distribution center. This

continues to focus on the implementation of a single-tier network anddistribution

center. This is reflected on international markets also.

Operations Strength Continue to develop innovative packaging aimed at reducing their footprint.

Although not manufacturing the products themselves they are ensuring the best

practice

Outbound

logistics

Strength They have built the foundations of a robust infrastructure through new IT

systems and logistics developments. As they start to reshape the distribution

network to a single-tier network.

Marketing and

Sales

Strength M&S have a strong marketing campaign. They have re- branded and launched

Their marketing today is both interactive and multifaceted

Service Strength Increased number of retail staff has resulted in improved customer service.

M&S actively prioritized core customers and monitor customer service with

regular review of customer reaction to products, as well as in-store and online

experience through focus groups and in-house Customer Insight Units

Secondary:

Procurement Strength M&S has over 3,000 products, raw material and service suppliers with current

social compliance assessments covering many aspects of human rights listed on

the Supplier Ethical Data Exchange (SEDEX). Many suppliers are from

developing countries, which depend on Western companies for their contracts.

(M&S, 2014).

6 | P a g e

International performance

Marks and Spencer have been successful internationally. International sales rose in 2014 by

6.2% to £1.2bn, driven by strong growth in India, Russia, China, the Middle East and Western

Europe. In Europe sales rose by 3.9%, with the Netherlands and France being the focus areas.

Existing strategic relations continue to improve. Sales in the Middle East grew by 2.6%, with

stores opening in Lebanon and Cairo. Some areas internationally weren’t as successful, e.g.

China where they needed to refocus strategy on the main flagship stores due to poor sales. In

Ireland the decision was made to close four stores. The successful international growth comes

from all areas of the Marks and Spenser’s portfolio of Food, Retail and general merchandise.

The international team is structured in a way as to give a better understanding of the local

markets which enables to focus products depended on the area.

Future challenges

Main future challenges that Marks and Spencer will face include the reduction in demand for

food. E-commerce and online shopping is growing significantly with consumers preferring the

ease of this method. They will have to respond to the dynamic environment within which they

operate and their strategy to become a truly international, multi-channel retailer. Consumers are

more individual and fashion focused, meaning retail demand is higher and they need to keep up

with these fast paced evolving market trends. Increased competition from other competitive high

street retailers will always be a challage. There is always the risk of global recession, so M&S

will need to have a strong risk strategy and contingency plan in place.

Technology

development.

Strength M&S are slowly revamping their brand, including the introduction of technology.

Some 321 stores are equipped with 1,500 iPad and 40,000 store employees have

the skills to sell from the new website to maximize selling opportunities. (Mark

& Spenser, 2014).

Human

resource

management

Strength M&S have restructured their organization to be more flat and specialized. This

empowers employees and increases productivity

General

Administration

Strength Top management has recent restructured and it has put in to place plans to grow

their staff with them through training & development. M&S are Implementing

management training plans for all levels from graduate program to onsite

training.

7 | P a g e

References

Marks and Spencer plc (2014) corporate website (online) available from

http://corporate.marksandspencer.com/ accessed on Dec 22nd 2014

http://corporate.marksandspencer.com/

GBS Sample 2/Name – ID GBS Task 1

Statement and Confirmation of Own Work

StudentDeclaration

IhavereadandunderstoodATHE Assignment Submission guidelines and AcademicDishonesty

andPlagiarism policies.

I canconfirmthefollowingdetails:

ID No:

Name:

Programme Title: ATHE Level 7 Diploma in Strategic Management

Course Title: Global Business Strategy

Subject tutor:

Assignment No:

EnrolmentDate:

Due Date:

I declare that the work submitted is my own work andthatIhavenotplagiarisedanypartofit.

Ihavealsonoted theassessment criteriaandpass mark forassignments.

Signed:

Course Title: Global Business Strategy

ATHE Level 7 Diploma in Strategic Management

Submitted by: Xxx

Table of Contents

Section 1: Business Report – Analysis of International Business Environment 1

1.1Introduction……………………………………………………………………………………… 2

1.2Layers of Business Environment………………………………………………… 2

1.3Techniques to Analyze International Business Environment………………….. 3

1.3.1 Macro Environment……………………………………………………………. 3

PESTEL Analysis…………………………………………………………… 3

Porter’s Diamond…………………………………………………………… 4

1.3.2Micro Environment…………………………………………………………… 4

Porter’s 5 Forces……………………………………………………………. 5

Mendelow’s Stakeholder Analysis…………………………………………. 5

1.4Analysis of Micro & Macro Environment on Nissan………………………….. 6

1.4.1PESTEL Analysis of Nissan………………………………………………….. 6

1.4.2Porter’s 5 Forces Analysis of Nissan ………………………………………… 8

1.5Impact of International Business Environment on Nissan……………………. 9

1.6Benefits, Opportunities and Challenges of Globalization on Nissan………….. 11

1.7Extend of Globalization on Organizations……………………………………… 12

1.7.1Domestic Strategy…………………………………………………………….. 12

1.7.2Multi- Domestic Strategy……………………………………………………… 12

1.7.3Global Strategy………………………………………………………………… 13

1.7.4Transnational Strategy………………………………………………………… 13

1.8Structures of Organizations Operating in International Markets…………….. 13

1.8.1Functional Structure…………………………………………………………… 14

1.8.2Divisional Structure…………………………………………………………… 14

1.8.3Product Divisional Structure………………………………………………….. 14

1.8.4Geographic Divisional Structure……………………………………………… 15

1.8.5Matrix Structure………………………………………………………………. 16

1.8.6Network Structure…………………………………………………………….. 17

1.9Conclusion…………………………………………………………………………. 17

Section 1

Report

Rev.1

Date 15 – Sept – 2015

Analysis of International Business

Environment

1.1 Introduction

International business has grown rapidly in the recent years because of technological

advancements, cross border movements, liberal government rules and policies etc. and

consists of all commercial transactions between two or more countries.This report

analyses globalization and its impact on business environment. Nissan Motor

Corporation, a multinational automobile company is selected to carry on the study.

Nissan Motor Co. Ltd. was founded in 1933 in Yokohama City, Japan. At present, around

the world, Nissan has its manufacturing units in 20 countries including Japan and their

products and services are available in more than 160 countries around the globe. Nissan

Motor Co. Ltd. has a portfolio of three brands- Nissan, Infiniti and Datsun, which are

marketed in all major markets in the world. In 1989, in North America, Nissan launched

Infiniti as anexceptional brand. In 2012, the new global headquarters for Infiniti was

opened in Hong Kong with sales operations in over 50 countries. Datsun brand was re-

launched to the world in 2012 (Nissan Motor Corporation Annual Report, 2014).

1.2 Layers of the business environment

Any business organization needs to operate in an environment. A business environment

comprises of all the external and internal factors that effects an organization’s operating

conditions like, competitors, suppliers, government entities, owners, social, economic and

market trends etc. (Daniels, Radebaugh, Sullivan, 2009). In order to analyze the

environment, we have to understand the different levels or layers in which a firm

operates.

Figure (i): Layers of business environment (Johnson et al,2008)

The Macro-Environment consists of the external environmental factors that impact an

organization’s activities.Industry consists of organizations doing the same business.

Competitors and markets are the immediate layers surrounding the organization. The

concept of strategic groups can help identify an organization’s close and distant

competitors. Then there is the Organization itself. (Johnson, Scholes, Whittington, 2008).

1.3 Techniques to analyze international business environment

For an organization to operate successfully, it needs to identify and analyze its

environments and resources and devise a strategy accordingly.

There are two types of business environments namely Macro environment or external

environment and Micro environment or internal environment.

1.3.1 Macro Environment

The macro environment represents forces that impact all firms across all industries.Two

ways by which the Macro-Environment of a business can be examined are by using the

PESTEL analysis technique and Porter’s Diamond analysis technique.

The PESTEL analysis is a structure that classifies the Macro-environmental influences

as Political, Economic, Social, Technological, Environmental and Legal (Johnson et al,

2008).

The Organization

Political factors

o Attitude of government

authorities

o Political stability or
instability

Economic Factors

o Growth of the economy
o Monetary policies like

inflation, interest rates

etc.

Legal factors

o Employment laws
o Safety regulations

Social factors

o Changes in lifestyle
o Size and structure of

workforce

Environmental factors
o Environmental

regulations

o Environmental
contaminants

Technological factors

o Changes in information

technology

o New developments and

discoveries

Figure (ii): PESTEL

Analysis(Johnson et al,2008)

Advantages of PESTEL Analysis Disadvantages of PESTEL Analysis

 Provides a simple outline for
analysis

 Helps minimize impact of possible
threats to the organization

 Needs to be done on a regular basis
to ensure effectiveness

 Most of the data are based on
assumptions that proves to be

unsupported

Table (i): Advantages and disadvantages of PESTEL Analysis

Porter’s Diamond proposes that there are indispensable explanationsas to why some

countriesare more competitive than other countries and why is that a few industries in

these countries more competitive than others(Johnson, Scholes, Whittington, 2005).

Factor conditions: includes skilled resources, capital resources technology base etc.

Demand conditions: the more demanding local market is, the more it hints to national

gain.

Related and supporting industries: when a firm depends on the supporting competitive

local suppliers, it can enjoy more cost effective and advanced inputs.

Firm strategy, structure and rivalry: these often differ among nations. Domestic rivalry

brings in the best of a firm as they are under pressure to improve and innovate, thus

customers benefitting from getting better quality products and services at lower costs.

The role of the government comes in to influence these four factor determinants

positively or negatively(Johnson et al, 2005)

Advantages of Porter’s Diamond Disadvantages of Porter’s Diamond

 Organizations can identify the
extent to which they can build on

home based advantage

 Enables industries to develop a
globally competitive position

 Capability of a firm to look into
location advantages of other nations

are limited

 Significant lack of national
resources

Table (ii): Advantages and disadvantages of Porter’s Diamond

1.3.2 Micro Environment

The micro environment represents all the factors that have direct influence on an

organization’s performance and decision making liberty and these factors comprise of the

organization’s customers, suppliers, competitors, and the public (Johnson et al, 2008).

Porter’s 5 forces analysis was developed for conducting strategic industry analysis. In

this framework, one can analyze an organization’s competitive structure by looking at the

5 forces of competition that influence profit potential(Johnson et al, 2005).

Table (iii): Advantages and disadvantages of Porter’s 5 Forces

Mendelow’s Stakeholder Analysisis used to identify and investigate the expectations or

interest and power of stakeholders, who are the individuals or groups who has an

influence or is influenced by a business organization. (Johnson et al, 2008)

Under Mendelow’s Stakeholder analysis, these stakeholders are categorized into three.

Competetive
Rivalry

Threat of
new entry

into an
industry

Power of
buyers

Threat of
substitutes
to industry
products

and services

Power of
suppliers

Advantages of Porter’s 5 Forces Disadvantages of Porter’s 5 Forces

 Provides useful understanding
about the forces at work in the

organization

 Improved decision making and
competitive advantage, better

productivity and faster time to

market

 The competitive forces are likely to
be different in each segments of the

same organization

 The assumption that the buyers,
suppliers and competitors never

interact with and influence each

other

Threat of new entry:

 Cost advantages

 Economies of scale

Competitive Rivalry:

 Customer loyalty

 Quality differences

Power of suppliers:

 Number of suppliers

 Size of suppliers

Power of buyers:

 Number of buyers

 Size of order placed

Threat of substitution:

 Substitute performance

 Cost of change

Figure (iii): Porter’s 5 Forces (Johnson et al, 2008)

Connected stakeholders,are the organization’s customers, suppliers, and distributors etc.

who are closely related to the functions of the organization. Employees and management

forms the internal stakeholders who work inside the organization.External stakeholders

are the government entities, environment groups, media, investors, and local communities

etc. who are indirectly affected by the organization (Johnson et al, 2008).

Table (iv): Advantages and disadvantages of Mendelow’s Stakeholder Analysis

1.4 Analysis of Micro and Macro Environments on Nissan

1.4.1PESTEL Analysis of Nissan

The PESTEL Analysis of Nissan below has identified certain opportunities which Nissan

needs to capitalize in order to gain competitive advantage and as a result increase the

market share. However, the threats that have been recognized will have to be carefully

studied and appropriate strategies devised to mitigate the impact of these threats.

The details of Nissan’s PESTEL Analysis are mentioned below:

Political

Analysis: Threat

Nissan has manufacturing units in 20 countries around the world and therefore it needs to

deal with different political factors influencing its business operations. Some of the

reasons why Nissan sees the political factors as a threat are:

 Governments of developing countries encouraging the use of local products. E.g.

Proton in Malaysia, Tata in India etc.

 Strict government laws and regulations that can affect the automobile industry as

a whole, like the increase in taxes.

Advantages of Mendelow’s Stakeholder

Analysis

Disadvantages of Mendelow’s

Stakeholder Analysis

 Enables to figure out the interest of
all the stakeholders who are related

to the organization

 Enables an organization to identify
new opportunities during

implementation of a project

 Analysis should be done on a
regular basis or continuously since

the stakeholders may change

rapidly

 A productive collaboration with
stakeholder is missing

Economic

Analysis: Opportunity

The economic factors like global economic growth, business setting in the industry etc.

are considered as opportunity for Nissan. Few of those economic factors influencing

Nissan are:

 Improvements in US markets

 Slow recovery in Europe and Russia. E.g. Nissan’s sales rose 2.4% as matchedto

a 1.8% rise in the global market in Europe and Russia (Nissan Annual Report

2014)

Social

Analysis: Threat

Social factors also have an impact on automobile industry. These factors are considered a

threat for Nissan and they are:

 Changes in buying patterns of customers, e.g. customers outlook towards vehicles

has changed from car being seen as a status symbol to focusing on features like

fuel efficiency, low emission cars etc.

 Environment awareness of destructive emissions through vehicles

 Government’s attitude to road safety in developing countries

Technology

Analysis: Opportunity

Nissan is constantly developing its technologies to make its vehicles better, more

economical and reasonably priced for its customers. Nissan considers technology as an

opportunity in its environment and below are few examples of how far Nissan has

exceeded in technology and innovation.

 First automakers to road-test autonomous drive vehicles.

 The Nissan LEAF is the world’s first mass-produced zero emission vehicles and

the best-selling electric vehicle with 45% market share (Nissan Annual Report,

2014).

Environment

Analysis: Opportunity

Customers these days are very much aware of the environmental effects of harmful

emissions from vehicles and this has put pressure on automobile manufacturers to

produce vehicles which are eco-friendly and fuel efficient. Controls on carbon emission,

eco-friendly and fuel efficient cars are the advantages of Nissan. Theseenvironmental

factors are considered an opportunity by Nissan as customers consider these as an

important feature while purchasing vehicles.

Legal

Analysis: Threat

Legal factors such as below are considered a threat to Nissan.

 Tax increases in Japan would lead to reduction in consumer demand

 Strong environment protection laws

 Green movements that lead to increase in taxes

1.4.2 Porters 5 Forces Analysis of Nissan

Porters 5 Forces helps to evaluate the attractiveness of abusiness by examining various

threats like the treat of new entry, substitutes, buyers, suppliers and degree of rivalry

between competitors (Johnson et al, 2008). The Porters 5 Forces for Nissan mentioned

below analyses the level of threat for each factor.

Substitutes

Analysis: Low Threat

 Other leading car manufacturing companies

 Sports bike manufacturing companies

 Government focus on public awareness about fuel emissions and thereby

encouraging to use public transport

Buyers

Analysis: Moderate Threat

 Increase in bargaining power of buyers as a result of the increase in information

and knowledge about products in the same category

 Switching costs are decreasing because of intense competition

Suppliers

Analysis: High Threat

 Nissan shares its mechanisms with alliance partner Renault

 Nissan’s concern over the quality of products ensures that they choose the right

suppliers and right costs

Competitors

Analysis: Moderate Threat

 Nissan faces strong global competition in terms of prices, features, luxury etc.

 Mercedes, Toyota, Audi in the automobile industry, Yamaha, Ducati in bike

manufacturing proves to be very competitive

New Entry

Analysis: Low Threat

 Prospective competition from Chinese manufacturers

 Technology advancement and environmentally friendly vehicles like the hybrid

cars. Although Nissan has developed in the same category, Toyota’s “PRIUS”

hybrid cars holds a good share in the market

1.5 Impact of International Business Environment on Nissan

Like any organization functioning in an international environment, Nissan too faces both

opportunities and threats due to the nature of its operations globally.

Environment

Analysis: Opportunity

 Production of hybrid cars zero-emission technology is an advantage for Nissan to

focus on low CO2 emissions and fuel efficient vehicles e.g. Nissan’s LEAF, e-

NV200

Competitors

Analysis: Opportunity

 Nissan’s competitors Toyota, Honda and Mitsubishi has jointly decided to set up

electric vehicle charging infrastructure in Japan

 Nissan is utilizing this opportunity to increase its sales in electric vehicles.

Buyers

Analysis: Opportunity

 Nissan’s market intelligence to track customer trends to ensure suitable models

for each territory or segment are offered.

 Nissan is focusing more onareas like North America and China where the

company believes its most important market is currently and an opportunity for

Nissan to increase sales in these regions.

Suppliers

Analysis: Opportunity

 Nissan’s exceptional partnership with suppliers for manufacturing their products

 Nissan uses fair and impartial process in selecting suppliers and influences

supplier’s profits and businesses directly

Technology

Analysis: Opportunity

 Zero-emission technology

 First automakers to road-test autonomous drive vehicles

Political

Analysis: Threat

 Government awareness and development of rules and regulations to use public

transport in developing countries

 Political instability in countries, e.g. in the first half of 2013, Nissan’s sales in

China were obstructed by the islands clash (Nissan Annual Report 2014)

Economic

Analysis: Threat

 Increase in rate of inflation

 Exchange rate fluctuations

 Countries imposing and increasing taxes on purchase of vehicles

 Increase in prices of fuel and manufacturing costs could end in consumers opting

out of buying cars or buy cheaper substitutes

New Entrants

Analysis: Threat

 Potential competition from Chinese manufacturers and hybrid vehicles poses a

threat to Nissan

Substitutes

Analysis: Threat

 Government focus on using public transport awareness

 High competition with Toyota and Honda

 Sports bike manufacturing units

1.6 Benefits, Opportunities and Challenges of Globalization on Nissan

“Globalization refers to the broadening set of interdependent relationships among people

from different parts if the works that happens to be divided into nations, sometimes

referred to the integration of world economies through the reduction of barriers to the

movement of trade, capital, technology and people”. (Daniels et al, 2009:48)

Globalization has a great impact on automobile industry. Nissan has set a good model of

showing the world what globalization can get to an organization.

In 1990s, Nissan was almost at the edge of bankruptcy, when in 1999; Renault came up

with the take-over offer to Nissan. The current CEO of Nissan, Carlos Ghosn was sent to

Nissan by the Chairman of Renault to reorganize the company and make it profitable

again. Within one year into Carlo’s change plan, Nissan was back profitable. He brought

in noticeable modifications like changing the senior management of Nissan, closing down

5 of Nissan’s plants, laying off people from the manufacturing units and instead brought

small units in South and North America were labor was cheap. He diversified the staff to

bring in people with various backgrounds in culture, nationality, gender and education.

Benefits of globalization on Nissan

 Cheaper and efficient labor

 Bargaining power with suppliers, lower prices

 Diversification- ensures to meet the diverse needs of customers

 Sharing technology

 Global plant floor- design anywhere, make anywhere, sell anaywhere

 Brand reputation

 Innovation- invest in R&D. e.g. development of Nissan’s LEAF electrical vehicle

 Strong financial performance

Opportunities of globalization on Nissan

 Increase in demand for environmentally friendly hybrid vehicles

 Growth through strategic partnerships

 Growth through multicultural and international associations

 Increase in fuel prices rises the demand for hybrid and electric vehicles

Challenges of globalization on Nissan

 Global competition in the automobile industry

 Increase in fuel process

 Increase in price of raw materials

 Growing consumer demands

 Exchange rates of yen

 Decrease in fuel prices in future could make hybrid and electric vehicles less

attractive to customers

1.7 Extend of Globalization on Organizations

The extend of globalization of an organization depends on the organization’s mission,

objectives or values, resources used, the end products, rules and regulations governing

the organization etc.

Businesses whether big or small can have different strategies in place. Four basic

strategies that organizations follow to decide on how to run their operations thus attaining

their objectives and dealing with challenges are mentioned below:

1.7.1 Domestic Strategy

The organization pursuing domestic strategy assesses international businesses distinct

from its domestic business.

 Products are often intended to meet the needs of the local market and not to be

traded in foreign markets

 Domestic strategy usually is centered on simple exporting

1.7.2 Multi-domestic Strategy

The multi-domestic strategy alters its products, services and business activities to suit the

needs of the local region or country. (Daniels et al,2009)

 Products are adapted to meet the requirements of local conditions

 Minimizes political risk, given the local standing of the company

Some companies that followed a multi-domestic strategy are Johnson & Johnson and

Proctor & Gamble. The technology invented by the R&D unit in P&G’s Japan subsidiary

to reduce thickness of infant’s diapers without loss of any sponginess created high value

for P&G in Japan initially and later worldwide. (Daniels et al, 2009).

1.7.3 Global Strategy

A company adapting global strategy chooses to maximize integration. This strategy

forces businesses to manufacture goods for a whole market and presume that there are no

differences between countries regarding consumer tastes or preferences and assume that

consumers will sacrifice these to get their high standard products (Daniels et al, 2009)

 These companies see the world as one market

 Firms provide standardized products and uses standardized marketing tools

Examples of companies pursuing global strategy are Google, Nokia, American Express.

1.7.4 Transnational Strategy

A transnational strategy concurrently uses location economies, influences core

competencies and attends to local responsiveness (Daniels et al, 2009).

GE, Philips, Acer are companies that has transnational strategy.

 Is a combination comprising the major advantages of multi-domestic and global

strategies

 Focuses on standardizing when possible and adapting when required

1.8 Structures of Organizations Operating in International Markets

In order for an organization to carry out its strategy for an organization, there needs to be

a formal plan of relationships, roles and responsibilities within an organization. This

formal agreement or plan is what is known as an organization structure. (Daniels et al,

2009).

Determining the appropriate structure for an organization to ensure maximum efficiency

with distinct line of authority is a crucial operational decision. Factors like the

organization’s objective, values, the impact of international operations on the company

performance etc. often determine the type of organization structure.

1.8.1 Functional Structure

Figure (iv): Functional Structure (Daniel et al, 2009)

Functional Structure is the way how work is organized when an organization’s products

share a mutual technology and competitiveness for global strategy. This structure is more

popular among companies manufacturing narrow range of products. E.g. companies such

as Total or British petroleum have this structure.

Advantages Disadvantages

 Efficient use of resources

 Helps maximize scale economies

 Inability to respond to
environmental changes

 Poor communication among
departments

Table (v): Advantages and disadvantages of Functional Structure

1.8.2 Divisional Structures

Organization uses divisional structure format to lay down roles and responsibilities

between departments according to outputs.

1.8.3 Product Divisional Structure

Most of the companies around the world have Product Divisional Structure as these

businesses include variety of assorted products. E.g. Moet Hennessy and Louis Vuitton

two of the world’s famous brands merged to be one group known as LVMH. Since these

two companies had different products, the managers split them into 5 divisions each

division concentrating on a sole product. (Daniel et al, 2009).

Advantages Disadvantages

 The most popular and well suited
for a global strategy as both the

domestic and international

 Duplicate functions among product
divisions

 No formal means of how one

CEO

Production

Asia
Production

Europe
Production

Marketing

Asia
Marketing

Europe
Marketing

operation of a product report to the

same manager

 Enhanced coordination and better
assessment of manager performance

product division can learn from

other divisions experience

Figure (v): Product Divisional Structure (Daniel et al, 2009)

1.8.4 Geographic Divisional Structure

When organizations have large foreign operations that are not controlled by a single

country, they tend to use geographic division structure.

e.g. Nestle organization has a geographic divisional structure. It has more than 500

factories in nearly 90 countries selling 8000 brands worldwide. The drawback of this

structure is mainly duplication of work. In case of Nestle, their factories in US were

paying more than 20 different prices for vanilla to the same suppliers because of the lack

of coordination (Daniel et al, 2009). Nissan is another example of an organization

following the geographic divisional structure.

Advantages Disadvantages

 Useful in a specific market rather
than on global market

 Gives country manager flexibility
to adapt to local conditions

 Duplication of work in many areas

 Lack of coordination

CEO

Corporate
Managers

Divison A

R&D Marketing Finance

Division B

R&D Marketing Finance

Division C

R&D Marketing Finance

Table (vi): Advantages and disadvantages of Product Divisional Structure

Table (vii): Advantages and disadvantages of Geographic Divisional Structure

Figure (vi): Geographic Divisional Structure (Daniel et al, 2009)

1.8.5 Matrix Structure

Matrix structure gets the benefits simultaneously from both functional and divisional

structures.

ABB, Citibank, Dow Chemicals are organizations that adapted Matrix structure and soon

realized the drawbacks of the structure as they didn’t know who would handle

responsibility in a team and returned to structures that specified roles and responsibilities

(Daniel et al, 2009).

Advantages Disadvantages

 Encourages each group to exchange
information without restrictions

 Has dual reporting rather than
single line of command

 More complex than other structures
like financial and divisional

structures thus leading to problems

in operations

 Requires that group compete with
each other for resources, rewards or

risks

CEO

Europe
Diviosn

R&D Marketing Finance

Asia
Division

R&D Marketing Finance

CEO

Group A Group B Group C Group D

Country X Country Y

Figure (vii): Matrix Structure( Daniel et al, 2009)

Table (viii): Advantages and disadvantages of Matrix

Structure

1.8.6 Network Structure

An organization with a network structure outsources value activities to other firms.

(Daniels et al, 2009)

For example, companies like Nike, emphasize on their design skills and hires other

companies like Sanmina to make their products. Similarly, many banks, hotels, credit

card companies found that they can create more value by outsourcing call center

functions to those who has competency in that activity (Daniel et al, 2009).

Advantages Disadvantages

 Helps organization to outsource
activities

 More flexible

 Disintegration makes it complicated
to develop control systems

 Managers need to locate good
sources to outsource for the

organization’s operations to run

successfully

Table (ix): Advantages and disadvantages of Network Structure

1.9 Conclusion

Further to the micro and macro environmental analysis, a number of factors which could

affect the running of Nissan both positively and negatively were identified.

Consequently, the opportunities presented will have to be maximum benefited, while on

the other hand, the challenges has to be carefully tackled, with effective strategies,

making use of Nissan’s internal strengths and resources. Therefore, the effective strategy

for Nissan will be to orient the operations towards the environmental analysis results, by

effectively utilizing its unique resources and core competencies.

Company

Producers

Distributiors

Designers

Suppliers

Figure (viii): Network Structure (Daniel et al, 2009)

GBS Sample 2/Name – ID GBS Task 2 handouts

Activity 2

a) An analysis of the moral and ethical issues faced by organizations operating

in an international environment

A lot of changes have taken place in the way business is conducted in today‟s world.

These changes can be seen in all the areas and functions of any business, starting from

the nature and style of management to the motive behind operating a business.

The growing concerns against the negligent behavior of the businesses have resulted in

several changes being introduced in the last fifty years. Apart from making profits, the

businesses were expected to follow certain socially acceptable practices as well as they

were expected to be held morally responsible and accountable for their actions with

respect to the society, environment in which they operate and the overall well-being of all

those involved with the business. This growing concern has resulted in what is known as

business ethics in today‟s business world.

Since the last three decades, businesses have addressed business ethics in different forms,

like introduction of compliance programs and managers, development of codes of

conducts and also by providing training on behavioral issues. However, despite all these

efforts, the issue of ethics in business is still a matter of heavy debate and lots of studies

are being conducted on the various issues associated with ethics in business.

Understanding business ethics can be a difficult task. The field is very diverse and covers

a lot of issues like corporate governance, morality, reputation management, fair

laborpractices etc. In fact, business ethics addresses the entire scope of responsibilities

that a company has to each of its stakeholders, and it is also about the process of

management, the relationships between managers and the relationships between

managers and other employees (Harrison, 2005:12). Further, the concept of business

ethics incorporates the issues like corporate responsibility, social responsibility, corporate

compliance etc.

The ethical issues in international business are:

– Employment: work conditions of a company might be different in the host

country than what is in their home country. Company then needs to decide on

which work conditions they would like to implement- host country, home country

or something in between.

– Corruption: government officials are often paid bribes by companies to gain

business. The US Foreign Corrupt Practices Act was passes to fight corruption.

But what is considered ethical in one country cannot be treated as same in another. E.g. in

developing countries like India, China etc. it is common practice to bribe officials,

however this cannot be tolerated in other countries and businesses will have to face

severe consequences if they indulge in such practices.

– Human Rights: basic human rights are not accepted in many countries and are

taken for granted in many places which are not universally acceptable.

– Environmental regulations or pollution: when environmental regulations in the

host country is inferior to that in the home country, ethical issues arise in form of

high levels of pollution, overuse of common resources etc.

– Moral Obligations: companies are not free from fulfilling moral obligations.

Laws are one of the ways to make companies behave morally by returning

something beneficial back to the society.

Additional moral and ethical issues faced by companies in international business:

– Doing business transparently

– Abstaining from tax avoidance procedures

– Fighting against corruption and bribery

Triple Bottom Line

Organizations often think about how to serve their customers and society, but their focus

on business have always been on the „bottom line‟. Lately, a new observation to the

bottom line has emerged to what is known as Triple Bottom Line.

If organizations want to achieve success, they should consider the Triple Bottom Line:

economic, environmental and social which is also known as 3 Ps: Profit, Planet and

People.

An effective CSR must reflect the configuration of these with the organization‟s business

strategy, values and sustainability.

Ways to improve moral and ethical issues faced by organizations operating in an

international environment:

– Avoid any deliberate harm to the environment and society

– Follow the government regulations in the host country and cooperate with their
government

– Pay fair share of taxes in line with the tax regulations

– Respect the host country‟s cultural beliefs and norms

– Make contributions to the development of the host country

– Respect human rights of the company‟s employees

b) An analysis of the conflicts between corporate strategy and ethical and social

responsibilities

“Corporate Social Responsibility (CSR) refers to good citizenship by the firm- i.e., its

obligations to society, particularly when society is affected by the firms strategies and

practices” (Verbeke,2009:383)

CSR assist businesses to be like good citizens, i.e. to contribute to society in a beneficial

way, by avoiding any harm and ethically relating to their stakeholders, employees,

suppliers and the entire community.

Carroll’s CSR Pyramid

The components of Carroll‟s CSR pyramid are:

Economic Responsibilities

– Consistent performance with maximum earnings per share

– Maintaining a strong competitive position

– Maintaining a high level of operating competence

Legal Responsibilities

– Consistent performance with meeting expectations of law and government

– Complying with various legal authorities

– Being a law enduring corporate citizen

Ethical Responsibilities

– Consistent performance with meeting expectations of social and ethical norms

– Respecting the new and evolving ethical norms ibn the society

– Preventing ethical norms from being compromised

Philanthropic Responsibilities

– Consistentperformance with philanthropic expectations of society

– Importance of manager to participate in charitable activities

– Providing assistance to educational institutes

Roles of business in society

The Shareholder Model

As a business flourishes in a society, it needs to maintain a good relationship with its

stakeholders. Employees, customers and suppliers are the most influential stakeholdersof

a business with media, local residents, trade unions, government authorities having

extensive range of impact on business. Analysis of a society from a stakeholder point of

view often helps business to determine risk and future opportunities.

The Shareholder Model

This model focuses on the idea that the main purpose of a business is to make profit for

its owners thereby increasing the wealth of the shareholders.

This model believes that excessive legal regulations are not necessary while doing

business in a society and that their attempt to maximize wealth, the society at large will

also be befitted.

Advantages and Disadvantages of CSR

The incorporation of CSR in businesses is generally viewed as a positive object in many

companies. Apart from the benefits of increase in company transparency, a positive

consumer image of being a good corporate citizen, there are also certain disadvantages to

CSR.

Advantages:

– Better reputation

– Increased customer loyalty

– Greater worker productivity

Disadvantages:

– Difficulty in getting return on investments from social and environmental

programs

– Hesitance from shareholders to put in money in business for serving CSR

programs

– Expensive requirements on companies to focus on CSR

c) Identification of the legislation/ regulation and guidance relating to corporate

social responsibility for organizations

CSR activities differ among countries. What is seencommon CSR activity in one country

will not be seen as important and common in another country. The most common CSR

activities that companies indulge in are:

Leadership

– Involving relevant stakeholders especially employees in determining what success

will be and what their part would be in achieving it.

– Determining policies and procedures on specific concern areas like complaints,

environment, human rights etc.

– Providing essential training to employees to help them take the necessary action

including training on CSR and ethics.

– Fighting corruption and bribery especially if the business is operating in areas

prone to these.

Marketplace

– Providing clear and decent product information with regards to product quality,

safety etc.

– Ensuring that the products and services are safe to human health as well as the

environment

– Promoting environmentally friendly products

– Guaranteeing fair prices to all consumers

Workplace

– Attending the employees and including them in communication between

managers and staff

– Providing provisions for training and development opportunities for employees

– Encouraging a diverse workforce through training, providing equal opportunity

workshops etc.

– Ensuring equal benefits for all employees

– Providing flexible working hours

– Encouraging and promoting health and safety in the workplace

Community

– Helping charities and community organizations by giving gifts of cash or other

forms

– Sponsoring events, sports club etc. keeping brand promotion in mind

– Allowing employees time to do social work

Environmental

– Using green or more efficient technologies

– Reusing and recycling materials

– Minimizing packaging to decrease the amount of consumer waste

– Efficient use of transportation of goods and logistics

GBS Sample 2/Name – ID GBS Task 2

2.1 An analysis of the moral and ethical issues faced by organizations operating in an international
environment

International businesses may face many ethical issues that rise from differences in political systems,
economic development, government laws and regulations and also from cultural differences between
nations.

Ethical Issues in International Business

• Employment
Often when business start operating internationally, the legal employment requirements and working
environment might be different from home market.

• Corruption
Corruption is an ongoing problem in the society. If the company makes payments to secure business in a
market, means it is encouraging corruption through unethical manner.

• Human Rights
It is important for the organizations to choose to survive in a community that respects basic human rights
such as freedom of speech, freedom of association etc.

• Environmental Regulations or Pollution
It is not essential that all foreign countries have regulations on environment. It is possible that companies
may emit harmful materials into the environment to reduce their costs of getting costly anti-pollution
measures.

• Moral Obligations
Moral obligations or social responsibility refers to the idea that businesses should consider giving back
something beneficial to the society to enable them to flourish.

2.2 An analysis of the conflicts between corporate strategy and ethical and social
responsibilities

Governance Structures

The governing body of any organization is basically a Board of Directors. The main responsibility

of the board is to ensure that an organization fulfills the wishes of the primary stakeholders. These

stakeholders could be the shareholders in some private companies, while it could be some funding

body in a public sector company. These differences has led to how organizations operate and hoe

strategies are developed and also the composition of the boards.

The two most general governance structures are:

The Shareholder Model The Stakeholder Model

This model focuses on
maximizing profits for the
owners while minimizing the
importance of the firm’s
interaction with other groups
and its role in the society

This model recognizes the
importance of making profit
and at the same time
identifies the importance of
the firm’s relationship with
other groups- shareholders,
employees, customers,
suppliers and the society as a
whole

Corporate Strategy
Corporate Strategy is the direction and scope of an organization’s by which it creates value across different
businesses with the aim of achieving specific goals (Verbeke,2009).

Corporate Responsibility
Often referred to as Corporate Social Responsibility (CSR), Corporate Responsibility is the commitment of
the business to contribute to the society in which it operates by behaving ethically thereby improving the
quality of life of their employees and families as well as the society as a whole (Verbeke,2009).

Figure b.1: Carroll’s Corporate Social Responsibility Pyramid (Carroll, 1991)

Advantages of CSR Disadvantages of CSR

• Improves company profitability and
value

• Increases company transparency
with investors, media,
shareholders, society etc.

• Attracted by consumers for being
corporate citizen

• Resistance from investors
• Disproportional costs on small

businesses- not all business have
funds for implementing CSR
strategies in their organizations

• Greenwashing- those managers
who forsakes social benefits to
company profits have the risk of
losing their jobs as shareholders
see the responsibility of the
managers to maximize profits for
the company

Advantages and Disadvantages of Corporate Social Responsibility

The incorporation of CSR in businesses is generally viewed as a positive object in
many companies. Apart from the benefits of increase in company transparency, a
positive consumer image of being a good corporate citizen, there are also certain
disadvantages to CSR.

2.3 Identification of the legislation/regulation and guidance relating to corporate social responsibility for
organizations

Legislation: the responsibilities of a company that are required to be implemented by the law
Guidance: the options taken by the companies to go past the legal requirements of law

Main CSR Activities in :

Leadership:
Legislation

– UK Corporate Governance Code
– Companies Act 2006

Guidance:
– Incorporating CSR into corporate governance
– Fighting bribery and corruption

Marketplace:
Legislation

– Consumer Protection Act 1987
– The Enterprise Act 2002

Guidance:
– Avoiding confusing advertisements
– Responding to customer complaints

Workplace:
Legislation

– Health and Safety at Work Act 1974
– Employment Rights Act 1996

Guidance:
– Listening to employees and involving them
– Fighting bullying at workplace

Community:
Legislation

– Countryside and Rights of Way Act
2000

– Planning Act 1990
Guidance:

– Investing in social activities
– Coordinating with local

communities

Environmental:
Legislation

– Environment Act 1995

Guidance:
– Treating emissions
– Decreasing goods transport

GBS Sample 2/Name – ID GBS Task 3

Statement and Confirmation of Own Work

StudentDeclaration

IhavereadandunderstoodATHE Assignment Submission guidelines and AcademicDishonesty

andPlagiarism policies.

I canconfirmthefollowingdetails:

ID No:

Name:

Programme Title: ATHE Level 7 Diploma in Strategic Management

Course Title: Global Business Strategy

Subject tutor:

Assignment No:

EnrolmentDate:

Due Date:

I declare that the work submitted is my own work andthatIhavenotplagiarisedanypartofit.

Ihavealsonoted theassessment criteriaandpass mark forassignments.

Signed:

Course Title: Global Business Strategy

ATHE Level 7 Diploma in Strategic Management

Submitted by: Xxx Xxx

Table of Contents

3.1 Company Profile …………………………………………………………………………………………….. 5

3.2 Strategic Direction ………………………………………………………………………………………….. 5

3.3 Business Strategy ……………………………………………………………………………………………. 5

3.4 Organizational Structure ………………………………………………………………………………….. 5

3.5 International Operations…………………………………………………………………………………… 6

3.6 Value Chain Analysis ……………………………………………………………………………………… 6

Value Chain Primary Activities ……………………………………………………………………………… 7

Value Chain Secondary Activities ………………………………………………………………………….. 8

Summary of Value Chain………………………………………………………………………………………. 8

Strengths and Weaknesses of Nissan’s International Operations ………………………………… 9

3.7 International Performance ………………………………………………………………………………. 10

3.8 Future Challenges …………………………………………………………………………………………. 10

3.9 Conclusion …………………………………………………………………………………………………… 11

Section 3

Report

Rev.1

15-sept 2015

Evaluation of International Operations of

Nissan

3.1 Company Profile
Nissan Motor Co. Ltd. was founded in 1933 in Yokohama City, Japan. At present, around

the world, Nissan has its manufacturing units in 20 countries including Japan and their

products and services are available in more than 160 countries around the globe. Nissan

Motor Co. Ltd. has a portfolio of three brands- Nissan, Infiniti and Datsun, which are

marketed in all major markets in the world. In 1989, in North America, Nissan launched

Infiniti as an exceptional brand. In 2012, the new global headquarters for Infiniti was

opened in Hong Kong with sales operations in over 50 countries. Datsun brand was re-

launched to the world in 2012 (Nissan Motor Corporation Annual Report, 2014).

3.2 Strategic Direction
In 2011, Nissan proclaimed their new mid-term plan called “Nissan Power 88” which is a

business plan for 6 years that will help elevate the growth of the company through new

sections for fiscal years (FY) 2011-2016. In Nissan’s strategic direction, in 6 years, they

plan to deliver a new vehicle every 6 weeks, continue to emphasize on sustainable

mobility, introduce new technologies, and increase investments in brands (Nissan Annual

Report 2014).

3.3 Business Strategy
One of Nissan’s strategy is to directly involve with their customers and build a strong

relationship with every car owner of theirs. Their sales plans are focused on conquering

their customer’srequirements in every market and enhance their product excellence. For

FY 2016, the goal of Nissan is hit the market share by 8%.So far, Nissan’s been fruitful

in cutting down costs annually by 5%, by evaluating their purchasing, logistics and in-

house costs (Nissan Annual Report 2014).

3.4 Organizational Structure
Nissan follows a geographic divisional organizational structure as they have large foreign

operations. They do also have the other divisional structures, according to their

customers, product and services. These structures ensure enhanced coordination with one

another and helps meet the challenges of their geographic location. Often these structures

are useful when managers can gain economies of scale in production in a specific market.

One of the disadvantages could be duplication of work in some areas but Nissan has set a

solution to reduce duplication. Nissan- Renault alliance is converging R&D,

manufacturing, purchasing and HR functions below a sole leader. This provides more

competence in R&D, flexibility in sourcing and benefits from vehicle architecture

(Nissan Annual Report, 2014).

3.5 International Operations
The Nissan- Renault alliance established in 1999 is considered the most successful

alliance in automotive industry. The benefits of sharing the marketing strategies, plants

and car platforms are added advantages for both the companies. Nissan’s ongoing plans

to develop alliance partnerships with Daimler, in producing joint engine development,

small cars with Mitsubishi, viablecars with Ashok Leyland and in the Russian market

with AvtoVAZ are carried out in parallel by Nissan.

These strategic partnerships, brand reputation, strong financial performance and

innovation of new products and services are the key strengths of Nissan.

“Technically, a core competency is a special knowledge, skill, capability or technology

that creates unique value for the firm by creating an acknowledged thread that runs

through all the firm’s value activities”(Daniels et al,2009:465).

A core competency can be developed from various sources like product development,

employee productivity, manufacturing expertise, marketing imagination and executive

leadership.

3.6 Value Chain Analysis
“The cooperative action that takes place as a product moves from raw materials through

production to the final distribution is what is known as value chain” (Daniels et al,

2009:871)

A dependable value chain helps an organization to concentrate on its centralcapabilities

which are the distinctive set of talents or information that makes it superior than its

opponents(Daniels et al, 2009).

General Administration

Human Resource Management

Technology Development

Procurement

Inbound

logistics

Operations

Outbound

logistics

Marketing

& Sales

Service

Figure (ix): Porters Value Chain (Johnson et al, 2008)

Value Chain Primary Activities
Inbound Logistics- Strength (Distinctive competency)

 Share common supply chain network with Renault

 Reliable and global supplier base

Operations- Strength (Distinctive competency)

 Common platform for small cars

 Standardization of products and components

 Strategic partnerships with other automobile manufacturers

Outbound Logistics- Strength (Core competency)

 Common distribution channel

 Focus on Asia and US markets

Marketing & Sales- Strength (Core competency)

 Two global brand names

 Separate marketing strategies for each brand

Service- Strength (Core competency)

 Enhance dealerships

 Training programs

Sec

ond

ary

acti

viti

Primary activities

 Enhance vehicle and parts warranty

Value Chain Secondary Activities
General Administration- Strength (Core competency)

 Proven top management with ability to communicate shared vision and values

 Strong corporate culture

Human Resource Management- Weakness (Needs improvement)

 New organizational structure

 Creation of new executive positions

Nissan reorganized its organization structure by replacing 3 regions organization

structure with a 6 region organization structure to have more managerial concentration on

each segment. In the previous structure, the segments comprised of different regions that

were over seen by managers who were preoccupied with other responsibilities. Under the

new 6 regions structure, each regional chairman was responsible for multiple functions in

their geographies. As per Trevor Mann, Chief Performance Officer, Nissan Motors, in

this new structure there still exists tensions between regions especially related to pricing

and market shares. Therefore, there is a need for greater standardization and adoption of

best practices throughout all the 6v regions (Nissan Annual Report 2014).

Technology Development- Strength (Distinctive competency)

 Joint R&D

 Investments in new futuristic technologies like hybrid, electric etc.

Procurement- Strength (Distinctive competency)

 Benefit from coordinated and integrated procurement plan with focus to cut costs

Summary of Value Chain
Nissan’s competencies are its advanced engineering and technologies, innovative product

and styling and their global brand. Nissan is deeply committed to technological

innovation and Nissan’s autonomous driving technology is an example to this. Nissan has

positioned themselves as an affordable, durable and stylish brand in the automobile

industry as Nissan is well aware of its customers’ demands for variouskinds of vehicles.

Nissan ensures to offer models pertinent to each region or product sector. Technology is

the biggest opportunity and distinctive competency of Nissan and it can lead to the

possibility of using this competence in innovation and effective manufacturing

capabilities to meeting the global customer expectations.

Strengths and Weaknesses of Nissan’s International Operations
Strengths:

 Brand power- mix of luxury models and competitive prices

 Strong R&D department constantly working on innovation

 Leadership in Zero-emission cars- Nissan LEAF is the best-selling electric vehicle

in history

 Growth through business development–from a 4.6% market share in 1999, Nissan

achieved a record share of 5.8% in 2010 and aims at attaining 8% market share in

2016

 Nissan has the competitive advantage of being the first Japanese automaker to use

autonomous drive vehicles. Nissan lately publicized that by 2020,it would be

ready with numerous, commercially feasible Autonomous Drive vehicles by

2020.

(Nissan Annual Report 2014)

Weaknesses:

 Product recalls- e.g. Nissan North America recalled certain models of Nissan

Rogue vehicles that experienced an electrical short in the harness connector due to

a mixer of water and salt seeping through the carpet on the driver side door near

the harness connector which could cause a vehicle fire. Similarly, some of the

Nissan GTR and Infiniti models were recalled recently because of a steering

column issue. Although Nissan recalls are lower than that of their competitors,

this ruins brand reputation and causes negative influence on customer loyalty

(Joseph, 2015).

3.7International Performance
Global demand in FY 2013 reached 83.11 million vehicles, up to 4.8% from FY 2012.

Nissan’s global sales volume increased 5.6% to 5.188 million vehicles and global market

share was 6.2%. Net sales increased 1,805.2 billion yen for the year to reach 11,434.8

billion yen. Operating profit was 605.7 billion yen, for a profit margin of 5.3%. The

growing demand for environmentally friendly vehicles, increase in fuel prices and the

growth that Nissan attained from the partnerships were all opportunities that Nissan

grabbed to perform well in the market (Nissan Annual Report 2014).

3.8Future Challenges
Nissan expects constant sales development in the coming years, profiting from new

product introductions, which includes 10 new vehicles, the new Murano, the new Pulsar

in Europe, the new zero-emissions e-NV200 in Europe and Japan, several Datsuns, new

Infiniti models in China, and one ton pick-up trucks. Expansion in areas of light weight

vehicles, zero emissions will be continued by Nissan as usual (Nissan Annual Report

2014).

Political, economic, and social changes are challenges that should be tackled by any

organization. Nissan sees improvements in their US performance. Nissan’s US sales

increased to 11% in 2014 as compared to 5.9% growth in the overall US market. That

made the US Nissan’s largest market, with sales of 1.39 million vehicles (Kubota, 2015).

Europe, showing signs of recovery are positive. Nissan’s sales rose to 4.1% as compared

to 3.9% in 2013 (Nissan Annual Report 2014). As per Financial Times 2015, in

December 2011, Nissan announced that it would not take orders for some cars in Russia

due to the country’s financial troubles. Automobile manufacturers couldn’t adjust prices

to compensate that savings in Russian currency. However, Nissan increased its prices

between 5-8% for half its models sold in Russia to compensate the drop in value of sales

in Russian currency. So, Nissan is positive about the Russian market. A healthy sales

forecast is predicted in China market where Nissan’s fourth plant is opening in Dalian

(Nissan Annual Report, 2014). Collectively with all these trends, Nissan expects that this

would help balance any influencearising from the increase in sales tax in Japan, that

would reduce customer demand.

Another factor to be considered as a challenge will be the decline in fuel prices. A recent

study estimates that each 10¢ drop in fuel prices associates to 1% decline in customers

considering alternate fuel vehicles (Tuttle, 2015). This would cause less attraction to the

hybrid or electric cars as consumers would become cost conscious. Not to forget, the

competition from other automotive companies and increase in the price of raw materials

are all challenges that Nissan anticipates.

3.9Conclusion
Nissan is making satisfactory progress and believes to be moving in the right direction, as

reflected in the financial statements.

Nissan is an example of how business can benefit from globalization. With excellent

strategies in place, Nissan was brought back from verge of closure to profitability and

growth by capitalizing on the benefits and opportunities of globalization. Globalization

has been a critical success factor for Nissan also due to the opportunities made available

from the alliance with Renault.

Nissan is committed to going beyond customer, supplier, employees and shareholder

expectations by utilizing all the growth opportunities, continuing to focus on sales power,

innovation and sustainability globally.

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