Environmental Factors Affecting International Market Commerce Essay

Global environmental analysis is the study of the global environment of a company. This (Global Environmental Analysis)analysis is a part of a company’s analysis-system that includes various other analyses such as the industry analysis, the market analysis, and the analysis of competitors. This system is divided into macro-level and micro-level. Barring global environmental analysis, the other types of analyses can be found on micro-level. However, a company’s macro-environment is described in detail by global environment analysis. Some of the environmental factors such as economical or social factors play a key role in the company’s decisions. This is because the company will get to know the risk its business faces by analyzing and monitoring these factors. This environmental framework also gives information about location issues. In addition, there is other strategic decision that considers this analysis fundamental. External business developments are evaluated by analyzing the factors. It is the responsibility of management to adapt the firm to its environment or having a better way to influence an environment.

Environmental factors affecting International Market

Strategists supervise the economic, government, legal, market, competitive, supplier, geographic, and social cultural settings that determine opportunities and threats to their firms/company/organization. This is known as Environmental Analysis.

Environmental factors of constraints are larger but not totally external and out of reach of the control of individual industrial enterprises and their agreements. They are responsible for operation of firms and managements in a specific country. (Barry M.Richman and Melvyn Copen).

There are many factors that may result in either providing opportunity or threat to the firm. However, some of the key factors are socio-economic, technical, supplier, competitors, and government.

The objective of environmental analysis is to strategize manage competitive forces and components of strategic management. But, the internal environment of an organization is important from environment analysis’s point of view.

Figure 1.4: Environment Forces (influences) on business

Environmental Forces

Outputs

Products

Services

Processing

Transformation of inputs to outputs

Inputs

Human

Physical

Finance

Technology Organization

Fig 1.4 illustrates the influence of environmental forces on business. For example, psychological factors, traits and skills are influential in bringing success to individual. These factors are needed to become successful. Organization sources rely on utilizing physical resource, financial resource and human resource skills in an effective way. Every business organization has internal and external environmental factors.

Theoretical Approaches for evaluating company’s global environment market

The main objective of an environmental analysis is to assess the internal and external factors affecting an organization’s performance. Organization’s strengths and weakness come under internal factors. The opportunities and threats that affect the company are the external factors.

Another term given for environment analysis is SWOT analysis. SWOT stands for Strength, Weakness, Opportunity and threats. Environment analysis is also known as Environment scanning.

Environment analysis helps strategic planners to evaluate the operating environment and establish operational goals. Depending on whether the goals are obtained or not existing strategies, new strategies must be developed or old ones must be adjusted.

An important feature of environmental analysis is usage of internal metrics to evaluate employee performance, customer satisfaction, maintenance costs, and similar factors.

Environmental analysis has many more applications.

It plays a key role in identifying opportunities such as new markets or the acquisition of new technology before its competitors.

It is a valuable tool for evaluating the financial potential of various strategies.

Literature Review

According to Dornier et al, there are four forces that influence globalization.

Global market forces

Technological forces

Global cost forces

Political and economic forces

Global market forces include the pressures created by foreign competitors as well as the opportunities created by foreign customers. Some companies may not have good business overseas but the presence of foreign companies in their region might affect their business. In an approach to defend domestic markets, such companies consider it important to enter into a foreign market as a counter attack.

Technological forces include the availability of technologies important for production.

Some other factors that drive companies to enter into foreign regions for reducing their production costs are low labor and raw material costs. Many investors are showing interests due to the availability of skilled labor in some regions.

Overview about Accenture

About Accenture

Accenture’s portfolios include global management consulting, technology services and outsourcing. It has approximately 259000 people serving clients in more than 120 countries. Accenture teams up with clients to help become high-performance businesses and governments. For the fiscal year that ended in Aug 31, 2012 the company generated net revenues of US$27.9 billion. Accenture uses television, print, and in public places such as airports for promoting their company. The current logo of Accenture is “High performance. Delivered”. Accenture’s headquarters is at Ireland.

Operations

The three primary cross functional groupings that Accenture uses for organizing its services and people are:

Workforces

Operating groups

Growth platforms

Workforces

The four workforces used by Accenture to serve clients are

consulting,

technology,

outsourcing, and

company.

Operating Groups

The five operating groups are:

Communications,

Media & Technology,

Financial services,

Products & Resources, and

Health & Public Services.

Growth Platforms

This indicates the functional or technical domains in which Accenture helps its employees to specialize their skills and develop and use Accenture’s methodology and create and deliver solutions to clients.

Management Consulting is in charge of the delivery of Accenture’s strategic, operational, functional, industry, process and change consulting capabilities.

Technology unites the full range of Accenture’s systems integration, technology consulting and IT outsourcing capabilities.

Business Process Outsourcing concentrates on managing specific business processes or functions for clients such as procurement, HR, finance and accounting and service that are developed for the industry needs.

Accenture uses their industry knowledge, service-offering expertise and technology capabilities and recognize new business and technology trends and develop solutions to help clients worldwide.

Enter new markets.

Increase revenues in existing markets.

Improve operational performance.

Delivery of products and services in a more effective and efficient manner.

The benefits of Accenture’s market strategy are:

Extensive industry expertise

Broad and evolving service offerings.

Expertise in business transaction outsourcing.

History of technology innovation and implementation such as research and development capabilities on which the company has annual expenditure of approx $300 million.

Commitment to the long term development of our employees.

Proven and experienced management team.

Accenture Marketing BPO services collaborate with chief marketing officers and other executives for providing a better control and stability for their marketing organizations. They help their clients in increasing their sales and revenue by acquisition and retention of customers and reduce the costs by optimizing their market operations. Accenture offers its services to help clients obtain and retain customers, develop new customer insights and optimize marketing spend. Accenture’s value proposition and leadership in marketing BPO is based on extensive marketing knowledge, technology and business assets, deep client and industry experience, analytics capabilities, and our global and best in class Marketing BPO delivery.

Implementation of Marketing Strategies by Accenture

Let us take an example of the marketing strategies used by Accenture to help Piramal Health care in creating a strategic plan that would improve the performance of Pharma Solutions.

Pharma Solutions is a leading service provider across all stages in the drug life cycle. Pharma Solutions reported revenues of about US $226 million during the fiscal year of 2011.

Piramal Solutions disassociated from its domestic formulations and diagnostics business in 2010. The main aim of the company was to focus on making Pharma Solutions as one of the top three players in contract research and manufacturing services by 2016.

The company’s management had understood that there is a requirement to create a strategic plan to ensure that there is growth in the company by next five years. The company also had an intention of building a robust, internal process, people and technological capabilities.

Piramal Healthcare wanted to utilize the services of Accenture in designing a strategic plan.

A two-phase approach was adopted by Accenture to help Piramal Solutions.

In Phase 1, the present scenario of Pharma Solutions’ business strategy and capabilities were evaluated. The alternatives for ensuring that there is profitable growth and areas of operational involvement for each business unit were identified. Accenture helped in establishing a differentiated market positioning that the customers would understand and it also highlighted the relationship oriented culture of Pharma Solutions.

Phase II is the implementation phase. Here, one of the important goals was to add all the solution themes into the culture of Pharma Solutions. The eagerness of the employees was assessed and developed a solution theme in a structured manner that would be helpful to the identified process owners to adapt the new ways of working.

Piramal Healthcare benefitted a lot from the solutions that were developed by Accenture. These solutions helped Piramal Healthcare to grow at a compound annual growth of 18 percent over the next four years. In the words of Nandini Piramal, executive director of Piramal Healthcare, Accenture played a key part in ensuring that the future of Pharma Solutions is good. Pharma Solutions benefitted from Accenture’s functional expertise and skillful guidance as they have established and implemented a strategy that enables it to achieve the company’s growth objectives.