test 4 Flashcards
use of technology in global markets, including:
social media campaigns
Social media campaigns are an important technological tool when marketing in a global environmental.
Article 2: Fast fashion companies are using social media campaigns to promote their products such as “Facebook and Instagram”. This poses as a problem to stop fast fashion as it always for “easier connection and interaction with customers”.
How: Companies are able with these platforms to reach a large audience and consumer base hence enhancing marketing opportunities (stories and videos could be used and shared across platforms to engage with a global market).
Why: Businesses use a social media campaign to gain a competitive advantage or penetrate a new market.
use of technology in global markets, including:
e-commerce
E-commerce is the performance of transactions (buying and selling of products and services) electronically over the internet. Money and data are transferred online electronically between buyer and seller.
Article 2: Fast fashion products are “hitting Australian soil at an unprecedented rate” due to “e-commerce giants such as Amazon Prime”.
How: This is due to “advanced technology using predictive analytics has allowed for faster delivery of products” and a “24 hour access to on-line shopping”.
Websites/apps can be designed in a way that makes it easy for customers to purchase from mobile devices, as well as laptop and desktop computers.
Why: As a result, consumers can purchase products and services from anywhere in the world, a trend towards purchasing goods in the convenience of their own homes, it allows a domestic business to enter global markets without having a physical presence in a target country, saving costs on rent and maintenance.
use of technology in global markets, including:
distribution of products
Technology aids in the transfer of equipment and delivery methods.
Consumers are utilising “e-commerce giants such as Amazon Prime” which allows customers to purchasing more and more online and are receiving products delivered to home through enhanced technology in transport, tracking and delivery systems. Amazon prime utilises “advanced technology using predictive analytics has allowed for faster delivery of products”.
This could mean it can track inventory and automate distribution (eg online ordering links to warehouse for real time stock availability, automate stock requests, as inventory space is one of the biggest costs), saving time and money and enables global growth.
impact of legal systems on business operation in global markets
patent registrations
A patent is legally enforceable and gives a business-owner exclusive rights to manufacture and sell any of its products which are new and inventive.
Article 1: Worley understands that any new processes and products will require protection from others replicating the ideas of the creator or inventor, to do this they shoudl apply for a patent to protect intellectual property, for their created system of large sponges that can be dragged acrosss a slick of oil on the waters surface.
How: The protection of intellectual property is an important strategy to achieve competitive advantage. Businesses can register a patent in multiple countries under the Patent Cooperation Treaty (PCT). The PCT is administered by the World Intellectual Property Organisation (WIPO), of which there are 148 participating countries. If the WIPO approves the patent, the intellectual property (IP) is protected in the countries that are members of the treaty. A patent is maintained if annual fees are paid. Patents must also be updated if there are any changes to the device, substance, method or process. In addition, businesses would have to file individual patent applications in the countries that are not members of the PCT.
Why: If business’ intellectual property is protected, competitors will not take its sales and market share from the business and they will not be able to compete directly with business’ products or services - not register for a patent, it is at risk of others stealing or using its idea, creating a loss of income and competitive advantage.
political factors which impact on business operation in global markets:
relationship of foreign governments with the Australian Government
The diplomatic and economic relationship Australia has with a particular country will also impact business operations, the relationships between governments can have a big impact on a business’ success in a global market.
Article 1: Worley is able to take advantage of the Australia-Gulf corporation council, where Australia and Gulf countries share significant economic relationship, encompassing trade and investment across a range of goods and services. Furthermore, Australia enjoys close relations with Kuwuit, establishing embassies and having a bilateral trade of A998.7 million in 2008.
How: Since the governments share good relationships, and usually hold agreements such as free trade agreements and partnerships
Why: this would be positive for a business; provides excellent business opportunities and makes it easier for businesses to conduct operations.
political factors which impact on business operation in global markets:
stability of foreign governments
Lack of political stability in a country will affect business operations.
Article 1: An issue that Worley faces is the on-going political disharmony in Kuwait and the uncertainty it generates in achieving and maintain economic development.
How: If a country is unstable there may be riots, protests or corruption and this may hinder or complicate business operations.
Why: Businesses should assess how stable a government is, what type of government the country has, how they will be impacted by changes in government and the legal environment within the country. damage to property, disruption of supply chains, and loss of revenue.
impact of cultural considerations on global business practice, including
levels of education
Shortages in skilled labour will impact the success of a business.
Article 1: Worley needs to bring in staff from its offices in Australia to ensure that the high levels of consultancy that is required is carried out.
How: Developed nations have skilled professionals that drive business growth, where as poor and developing nations don’t have the education system in place to develop skill level, (why) resulting in trapped in low or no growth of the business.
Article 1: As Worley is also looking to have a mixture of locals as well
(how) , the business must carefully asses education levels of staff as they may require further training and induction within the business, or must hire new ones, (why) impacting the cost and time the business will lose.
impact of cultural considerations on global business practice, including
customs
customs includegestures, behaviours or communication rules people follow in other countries. when doing business in another country, must will need to consider cultural differences that may be presented.
how: businesses will have to be careful not to stereotype certain cultures and seek advice as to the best way to communicate with employees/consumers from diverse cultures.
Article 1: Worley has extensive experience and knowledge of the Middle East having offices in Saudia Arabia, Oman, the UAE and Qatar. The staff has understands the diverse cultures and customs, and understands local etiquettes, traditions, and dress codes.
why: impacts the ability to be better liked by consumers and employees. if a salesperson approaches a meeting with knowledge of a custom’s cultural background, then his/her words, body language and actions can all be adapted to better suit those of the customer.
impact of cultural considerations on global business practice, including
holidays and celebrations
Local holidays and celebrations can have an impact on a business’s marketing campaigns.
Article 1 + How: Worley enjoy celebrates Eid al-Fitr. Social media can be used to promote holiday sales or using a celebration as a background to sell products, gain a larger market share. Furthermore, Ramadan, a period of fasting should be understood on employees and how that affects work operation.
why: Businesses need to factor local holidays and celebrations into project schedules and timeframes to ensure success in overseas countries in which they choose to operate (multi-cultural background and people celebrate a wide variety of holidays)
impact of cultural considerations on global business practice, including
religious belief
the main religion of a country can influence the way businesses conducts its business. although very few religions influence business activities directly, the impact of religion on human value systems and decision-making is significant.
Article 1 + How: Worley is contracted in Kuwait, a part of Middle East and therefore the main religion is Islam, religion exerts a considerable influence on people’s actions and outlook on life, as well as on the products they buy. businesses will need to be aware of the religious beliefs of countries to ensure that it does not offend its customers and staff. furthermore, staff shoudl be accomodated (e.g prayer rooms)
why: understanding religious beliefs of a target country and business partners will help refine strategies and build stronger business relationships
impact of cultural considerations on global business practice, including
communication protocols
it will be important for a business to know and demonstrate the correct communication protocols to display professionalism and respect for business partners
understanding subtle non-verbal communication between cultures will be necessary. for instance, a firm handshake or making direct eye contact could be unusual or even offensive to foreign colleagues
muslim males cannot shake hands or maintain eyecontact in workplace.
where possible, businesses should research the professional protocols required when operating in overseas markets and ensure that staff are attentive to body language.
the role of business in relation to ethical practice in a global context
minimum standards of labour by the International Labour Organisation (ILO), including the use of child labour
the International Labour Organisation (ILO) is a United Nations’ agency dealing
with labour issues, particularly international labour standards and decent work for
all workers, enforcing conventions (protocols, ratified) (making it officially valid) and recommendations (guidelines).
businesses need to be aware of the ILO’s Minimum Age Convention which states that 15 years (13 for light work) and the minimum age for hazardous work at 18 (16 under certain strict conditions).
Australian company, Outland Denim, ensure that children 13 years of age are employed to do light work in their plants. Following the Minumum Age convention.
Businesses need to also be aware of the Worst Forms of Child Labour Convention, it’s purpose is to eliminate exploitation of children. Outland denim takes their responsibility in avoiding the exploitation of child labour.
The ILO understands that children may have to work and businesses need to ensure strict standards and prevent the exploitation of children, there are major repercussions if disobeyed. if complied it will ensure long-term business success and to maintain a good public image. A business can adopt a code of ethics as a guide for acceptable behaviour: publick backlash (negative public image), legal challenges, penalised by government regulatiors in their domestic and international market
the role of business in relation to ethical practice in a global context
corporate social responsibility
corporate social responsibility requires businesses to achieve its business goals in the context of the broader system in which it operates; thus giving due consideration to the community, society, triple bottom line and environment of a range of stakeholders.
To do this businesses support local charities, could create and publish an ethical code of practice, conduct its business ethically and legally, such as without bribery or corruption, consider sponsorship and providing donations to causes that target its market.
Outland denim offers employment opportunities for women, founded as an avenue for training and employing sex trafficking victims.
public image, long-term sustainability (for future generations), build positive relationships with the local communities and also help develop a positive business image in these countries.
economic factors which impact global business opperations
economic activity
the activity of producing, buying and selling products or services, economic activity (size of a country’s economy) is measured by gdp (gross domestic product): the total dollar value of all goods and services produced in a country.
if the overseas country is experiencing an economic expansion, businesses would experience stronger sales, as consumers would be more confident to spend on products.
Similarly, if the country is experiencing lower economic activity (downturn), consumer confidence levels would be low, and business might not experience strong sales of her product.
when operating globally, businesses would need to be aware of the host country’s gross domestic product rates to assess the amount of spending on the business’ products, and their for it’s profit and success
economic factors which impact global business opperations
discretionary spending
Businesses would need to do accurate and timely market research to determine discretionary spending habits and patterns of current and developing global markets.
Business’s need to determine consumer confidence levels in the new market to see if consumers would purchase the business’s products if brought to this market. they would need to identify where its target markets are where consumers have sufficient disposable income to afford its products when these are brought to the market.
If the discretionary income is reduced, then customers are less likely to buy products from the businesses and they are more likely to spend their income on essentials.
buying patterns are changing on fast fashion due to the increased tax on garments, putting pressure due to currency fluctiations anhd increase of interest rates
