Internal and External Factors of Globalization

The business and trade are undergoing huge changes due to evolvement of world. Globalization can be referred as the easy availability of services, goods and connectivity amongst nations. The amendments are done in policies that have unlocked the markets not only domestically but also internationally, and now local products can compete with international products. The report will be made on Globalization as Contextual factor. The impact of internal and external contextual factor on the new start up business will be discussed. Ramro Khana Sweets and Cuisine is the new venture and the expansion of this business internationally will be mentioned in this assignment. As per the current market situation, it can be analyzed that those countries who espoused open approach for the brand of international and exposed their markets for the purpose of competing with international products, have attained a lot from globalization (Piscitello &Sgobbi, 2004).  For instance, a collective enormous like China has exposed its market for foreign direct investment and made the tactics and strategies for making them friendly towards foreign investment. This strategy is facilitated to bring the economy of china to the forefront and gave result in the form of increase in the per capita income of its citizens.

Globalization is one of the contextual factor that role is vital in the organization to stimulate the business structure and strategies. There are various internal and external contextual factors that stimulate the business environment. Internal and external factors of globalization are defined below:

The emergence of globalization can have the impact on the workforce of the organization by bringing the diversity at the workplace. The impact of diversity can be into positive as well as negative form on business structure and strategies of Ramro Khana Restaurant. Diversity in workforce makes enable the restaurant to communicate in better manner with the customers who come from different regions (Crane & Matten, 2016). Restaurant will be enabling to make good bonding with foreign people and develop new strategies for making food because the style of making food of Indian Restaurant is different from other countries. There can be negative aspect as well of diversity which may influence the new venture because the thoughts, beliefs and ideas of staff will be different from others that bring the situation of disputes and conflicts among the employees (Josling, e.d.).

Ramro Khana is the Indian restaurant and for expansion of it, it is necessary to analyze the taste and diet of other countries so that as per their taste the restaurant can move ahead with production. In general terms, The Ramro Khana needs to make amendments its menu as per the change in the locations due to globalization. It would be the challenging task for the management of the restaurant because it will lead to the restaurant to create new strategies and tactics for making satisfied the customers of other country (Dunning, 2014). The restaurant will earn potential benefits due to diversification in the products and services in the menu. The market share of the company will be increased due to effective production or manufacture.

Impact of Diversity on the New Venture

Technology is the major element for the growth of the business and the role of globalization is vital in this context because it helps to understand the up-gradations and advancements in the technology in all over the world. Ramro Khana restaurant is specialized in making sweets and Indian cuisine with core Indian ingredients. The role of technology will be helpful for the restaurant to provide the good quality to the customers because globalization brings technological advancements and upgrades. These upgrades have some potential benefits and challenges on the business structure and strategies of the firm (Maylor, Blackmon &Huemann, 2016). The benefits can be earned by restaurant by delivering right services in quick manner to the customers and provide the new technique of billing and cash due to up-gradation of the techniques. On the other hand the restaurant may face the challenge due to emergence of globalization such as staff would require time to understand the new techniques and changing environment which may bring the hassle situation for the restaurant. There are various examples such as Burger King, McDonalds and many more that have adopted the latest technology to provide the efficient services to the customers.  

Political factor involves the tax policies, trade and tariff polices and fiscal policies which are imposed by the governing authorities (Chen, 2008). Ramro Khana is the restaurants which want to expand its business globally and it is required for the business to understand the number of aspects related to the policies of the country. The restaurant will have to cope up with the political environment of the various locations and regions where business wants to expand its business. For instance it restaurant want to expand its business in United States than it would be crucial for the business to understand the market entry strategy and get knowledge about the high tariffs and protectionist policies (Export.gov. 2017). The business can get the potential benefits in the term of learning new political factor and market entry strategy. Whereas a small misunderstanding about the political term of different country may lead the company into loss condition (Meiners, Ringleb & Edwards, 2014).

The economic factor encompasses the exchange rates, GDP, interest rates and income scale of the population. Due to globalization the entity need to face number of challenges in the form of fluctuations in the interest and exchange rates. These activities will certainly put impact on the business structure (Wild, Wild & Han, 2014). The restaurant has ability to cook the delicious food by involving the core Indian spices and ingredients but before making the same menu for different countries, restaurant must understand the taste of people of different regions and locations and make amendments in the menu as per the demand of the customers. For instance, if restaurant operates its business in that nation that GDP is lower or weak; it will influence the income level of the business. Whereas the business operates its new venture with strong GDP country in such case restaurant can earn high enormous profit (Prasad, Rogoff, Wei &Kose, 2005).

Adapting to Global Markets

There can be legal risk to expand the business globally because Legal regulations are different of each country. Due to globalization, businesses are interconnected with each other and the amendments of one’s country economy will definitely influence to another which may bring the critic condition for the business (Turnbull & Valla, 2013). It will be vital for the business to understand the legal norms of the country where it wants to expand its business because the carelessness will bring the situation of wind up. Ramro Khana has to face numerous challenges due to emergence of lawsuits.

The social factor comprised the communities and stakeholders of the business. Their role is integral in stimulating the business organization. The emergence of globalization will bring the changes in the thoughts, beliefs and way of observing along with the buying perceptions and patterns of the customers (Birnleitner & Student, 2013). In such scenario, company need to adapt the new strategies for fulfilling the requirements of the customers of different nations. The restaurant will initiate the training and development program for the staff of over there to learn the Indian recipes and special dish as per their local taste. It will consume more time and additional expenses for this program will be incurred (Griffith, Cavusgil & Xu, 2008).

Conclusion and Recommendations 

It can be concluded from above discussion that the globalization has brought people and businesses much closer. The role of globalization in the international business is crucial as it does participate to develop the strategies for making profit for the business. The potential benefits and challenges of contextual factor on the new venture have been mentioned. The report has comprised the internal and external impacts of globalization on the Ramro Khana Restaurant.  

It has been recommended to the new venture to understand the laws, policy, interest and economic condition of the country where it wants to expand its business. Due to diversity at workplace, business should provide the training program to the employees separately as they belong from different regions. Instead of seeing the profits only, company need to analyze the risks and challenges after expanding the business. Effective market entry modes should be adopted by the business and conduct market research and surveys to get the knowledge about the region and country in an adequate manner. Customer segments and targeted market should be comprised in the research.

References 

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Chen, C. (2008). Entry mode selection for international construction markets: the influence of host country related factors. Construction Management and Economics, 26(3), 303-314.

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Dunning, J. H. (2014). The Globalization of Business (Routledge Revivals): The Challenge of the 1990s. Routledge.

Export.gov. (2017). India Market Challenges. Retrieved on 10^th January, from: https://www.export.gov/article?id=India-Market-Challenges.

Griffith, D. A., Cavusgil, S. T., & Xu, S. (2008). Emerging themes in international business research. Journal of International Business Studies, 39(7), 1220-1235.

Josling, T., (e.d.). Globalization of the Food Industry and its Impact on Agricultural Trade Policy. Retrieved on 10^th January, from: https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.200.9867&rep=rep1&type=pdf.

Maylor, H., Blackmon, K., &Huemann, M. (2016).Researching business and management. New York: Palgrave.

Meiners, R. E., Ringleb, A. H., & Edwards, F. L. (2014).The legal environment of business.Ny  Boston MA: Cengage Learning.

Piscitello, L., &Sgobbi, F. (2004).Globalisation, e-business and SMEs: evidence from the Italian district of Prato. Small Business Economics, 22(5), 333-347.

Prasad, E., Rogoff, K., Wei, S. J., &Kose, M. A. (2005). Effects of financial globalization on developing countries: some empirical evidence. In India’s and China’s Recent Experience with Reform and Growth (pp. 201-228). Palgrave Macmillan.

Turnbull, P. W., & Valla, J. P. (Eds.).(2013). Strategies for international industrial marketing. Oxon: Routledge.

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