Global Business Environment Assignment Sample

BM 461- Global Business Environment

Executive Summary

Global business environment presents multiple challenges and opportunities that faced by the business during the operations at overseas level. This report summarizes the situational analysis of inflationary pressure and its impact on global business and consumers. Further, the impact of cost of living of the consumers is analysed, resulted in the decrease in the purchasing power & raise in cost of services and products utility within Mansfield Nottinghamshire. At last recommendations are provided to the local council in relation to mitigate the adverse impact of inflationary pressure through changes in the tax rate and with the regulation of monetary supply within business economy.

In addition to this, the impact of brexit and new immigrant trends was summarized in second briefing. Primary survey was conducted on the local shopkeepers, resulted in revealing negative impact on the availability of labour, efficiency and sales of the business. Further, focus needs to be placed on increasing the subsidiary provided by the government was summarized in this report.

Introduction

Global Business Environment comprises of opportunities and challenges faced by the business while operating the activities or operations in the global market. This report includes discussion about the impact of inflationary pressure and cost of living topic on the stakeholders of local town namely Mansfield Nottinghamshire. The other one is based on the new immigration trends and impact of brexit on the businesses operating in the concerned local town. Further, report will critically assess the issues that faced by the global business and demonstrate changes and awareness within the business environment. It analyses the information and data based on surveys, interviews and relevant information will be included from the secondary data collection methods.

Briefing 1: Cost of living and inflation

Situational analysis

Inflationary pressure in global business environment

Ageing populations, transition towards the renewable source of energy and increased the trade barriers has a significant contribution to increase the inflationary pressure within the global business environment (Hampden-Turner et al, 2020). These result into arising complexities for the businesses, operating in Mansfield Nottinghamshire, regarding its routine activities in the challenging business environment. Excess supply of currency, national debt, effect of pushing cost and pulling demand and rise in the exchange rate are the major factors of causing inflationary pressure in the global business environment. Inflationary pressure leads reduction in the purchasing power, increases the rate of interest and reduces the pace of economic growth, has a negative impact on the global businesses along with the firms operating in Mansfield Nottinghamshire.

In the year of 2023, it was reported that due to rise in the food prices, energy consumption and fiscal instability. The global inflation was measured at the rate of 6.9% (Statista, 2024). Government regulations and policies play a vital role in managing Inflationary pressure by balancing the growth and prices by way of tax and subsidies. 

Impact of inflationary pressure on cost of living

In the environment of global business, there is a vital impact of inflationary pressure on the cost of living. The measures of cost of living are termed as the average cost based on the accepted living standards within a specific region or country (Di Giovanni et al, 2022). Inflation primarily leads to enhance the cost of living as the prices of services and goods rises. This in turns further places significant impact on the price index of consumers (CPI). Furthermore, Inflationary pressure leads to higher the cost of utility and daily essentials and leads increase in the interest rate for the home loans.

Apart from that, it minimizes the wages and salary of the general public as the organisations faced complexities in operating business in the global environment with an inflationary pressure (Mukherjee and Ouattara, 2021). This results in the decrease in the purchasing power of the consumers and reduces the standard of cost of living.

Data collection and analysis

On the basis of primary data collection based on the interview with the customers and shop managers, in the area of Mansfield Nottinghamshire, it was analysed that inflationary pressure has an adverse impact on their business operations and purchasing power and cost of living of the customers. Interview with the managers of the shop exhibits that inflationary pressure leads fluctuation in the prices of the outputs and input. This reduces the profitability of the business. Furthermore, it has been analysed that inflationary pressure also resulted into reduction in the pace of development and growth of business. In addition to this, inflationary pressure leads significant decrease in the sales turnover. Meanwhile, competiveness of the global businesses was reduced.

An interview was conducted with the customers resulted to analyse that inflationary pressure reduces the purchasing power of the consumers as the prices of utility, goods and services along with healthcare, transportation and hosing are increased. Furthermore, it was analysed that their wages and salary were also negative impacted as the local businesses and organisations face challenges in the operation of business in the inflationary business environment.

Recommendations to the local council

Based on the primary and secondary research, it has been recommended to the local council to control the financial supply in the economy to mitigate the adverse situation of inflationary pressure. It has been suggested that the local council can control the prices of raw material and labour by suppressing the push inflation of wage to improve the situation of business in global environment. In addition to this, it has been recommended to the local council to minimize its private spending by way of increasing tax, leads to regulate the monetary supply in the business economy. It has been suggested that the local council can help the general public to balance the cost of living by aiding support through subsidies and by decreasing the housing and consumer goods tax.

Briefing 2: Brexit and new immigration trends

Background

Brexit refers to the process of withdrawal of the UK from the EU. Article 50 with the European Union Treaty regulates the process of withdrawal from any of the member state. As a result of Brexit, there is a significant opportunity loss related to employment, Healthcare and growth, leads to arise new trends in immigration.

Situational analysis

Impact of Brexit on entrepreneurial growth

There is a massive adverse impact of Brexit on the entrepreneurial growth of the businesses within local area (Olusola et al, 2022). It leads to economic migration by changing the demographics, arises from the issues related to the shortage of labours. This leads to reduce the efficiency and profitability of the small or medium sized local businesses and decreases the chances of growth and development. In addition, bexit has a negative impact on business in the context of reducing their investment capacity, lowers the innovation and creativity level and acts as a constraint in the future development. For example: Jaguar Land Rover (JLR), one of the largest manufacturers of automobile sector in UK has adversely affected by Brexit (Mazzucato, 2023). It causes disruptions in the supply chain and enhances the cost of inventory, results in arising logistic challenges and financial strain.

Moreover, Brexit leads high complexities for the business to compliance with the regulatory changes and acts as a barrier for business and trade. The application of the global competition model assists the businesses to analyse its competitiveness in adverse social, political and financial economies (Edmiston et al, 2022). This will result in analysing the actual position of the business within the current business environment.

New Immigration trends

Brexit results in the arrival of new trends of immigration by changing the migration composition which was adversely impacted (Brown et al, 2020). There is a change in the immigration tends with an update in visa policy to the skilled workers, international students and care workers to balance the Brexit impact. The implementation of Article 50 of the TEU is a legal provision provides the extensions and conditions of complex negotiations by covering the potential business aspects to cope with the new trends of immigration (Tiwasing, 2021). The new immigration trends includes the salary increment of the skilled workers and changes in the visa polices, provides the growth opportunities to the businesses and skilled workers. It was reported that there is an increase in the grant of visa by 7%, reported to reach at 1,440,611 from 2022 to 2023 (Kania, 2024).

Data collection and analysis

The analysis from the survey report based on the five small businesses of the local area of Mansfield Nottinghamshire in the UK, it was revealed the aspects of immigration and brexit. It has been analysed that Brexit result into multi-faceted and complex impact on the development and growth of the business. Compliance with the regulatory policies, custom procedures and new tariff rules leads to increasing the operational and administrative cost. This in turn adversely influences the profitability of business. In addition to this, it was resulted from a survey that immigration trends leads to labour shortage, has an adverse impact on the efficiency of business.

Furthermore, brexit leads to arises trade barriers, has an adverse impact on the business growth and expansion, due to decline in multinational trade and sales across nation. The survey report resulted that new immigration trends leads to enhance the vulnerabilities as well as risks for the businesses related to the legal compliance, privacy and security. Also it was analysed that new immigration trends related to the change in visa polices. This resulted into the development of new growth and business opportunities with the market expansion and facilitates innovation across nation.

Recommendations to the local council

It has been recommended to the local council that an action plan required to be constructed with an aim to ensure the efficiency and profitability of the business. The local council can aid the national government to negotiate with the TEU to remove the trade restrictions to improve the adverse business situations. In addition, it has been suggested that the local council can grant the subsidies and reduces the tax rate for the business which are adversely affected by the brexit. This will help the businesses to maximize the rate of profitability and revenue turnover. Furthermore, effective wages policies can be incorporated by the local council to attract the skilled workers towards the domestic businesses to reduce the situation of labour shortage within business organisations.

Conclusion

It has been concluded that inflationary pressure is the major concern issue prevailed in the global business environment, has an adverse impact on the profitability and purchasing power of the consumers. Furthermore, it affected the cost of living of the consumers with massive increase in prices. In addition, impact of brexit and new immigration trends were concluded in this report.

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References

Books and Journals

• Brown, R., Kalafsky, R.V., Mawson, S. and Davies, L., (2020). Shocks, uncertainty and regional resilience: The case of Brexit and Scottish SMEs. Local Economy, 35(7), pp.655-675.
• Di Giovanni, J., Kalemli-Özcan, Ṣ., Silva, A. and Yildirim, M.A., (2022). Global supply chain pressures, international trade, and inflation (No. w30240). National Bureau of Economic Research.
• Edmiston, D., Begum, S. and Kataria, M., (2022). Falling faster amidst a cost-of-living crisis: Poverty, inequality and ethnicity in the UK.
• Hampden-Turner, C., Trompenaars, F. and Hampden-Turner, C., (2020). Riding the waves of culture: Understanding diversity in global business. Hachette UK.
• Mukherjee, K. and Ouattara, B., (2021). Climate and monetary policy: do temperature shocks lead to inflationary pressures?. Climatic change, 167(3), p.32.
• Olusola, B.E., Chimezie, M.E., Shuuya, S.M. and Addeh, G.Y.A., (2022). The impact of inflation rate on Private consumption expenditure and economic growth—evidence from Ghana. Open Journal of Business and Management, 10(4), pp.1601-1646.
• Tiwasing, P., (2021). Brexit and skill shortages: An empirical analysis of UK SMEs. Economics and Business Letters, 10(1), pp.9-15.

Online

• Kania, E., (2024). Report: New Evidence on Post-Brexit UK Migration Trends. [Online]. Available through: <https://www.brunel.ac.uk/about/brunel-public-policy/news-and-events/news/Policy-papers/Democracy-election-and-politics/Report-New-Evidence-on-Post-Brexit-UK-Migration-Trends-%E2%80%93-F.-Filauri-M.-Pazzona-M.-Rosina#:~:text=Work%2Drelated%20non%2DEU%20immigration,December%202022%20to%20December%202023>.
• Mazzucato, M., (2023). Running out of battery: how post-Brexit Britain is failing to set up a future-focused economy. [Online]. Available through: <https://www.theguardian.com/commentisfree/2023/may/31/brexit-britain-future-economy-jaguar-land-rover-industrial-strategy#:~:text=Jaguar%20Land%20Rover%20had%20previously,100bn%20a%20year%20in%20output>.
• Statista, (2024). Global inflation rate from 2000 to 2022, with forecasts until 2028. [Online]. Available through: <https://www.statista.com/statistics/256598/global-inflation-rate-compared-to-previous-year/#:~:text=A%20series%20of%20compounding%20issues,increase%20in%20inflation%20since%201996>.