Level 1 Business Studies AS90838 Demonstrate an understanding of external factors influencing a small business BS 12/2/2

Business Opportunities from Global Connections Students will develop an awareness of the global marketplace and identify business opportunities arising from this environment. Define the global business environment Explain the costs and benefits of operating in the global business environment

Global Business Environment A term used to collectively describe all commercial transactions that take place between two or more countries or nations beyond their political boundary.

Global Business Environment e.g. a New Zealand business selling their products to consumers in another country will place the business in a global business environment Usually, private businesses undertake such transactions to increase sales and profit.

Global Business global business is a company doing business across the world.

Benefits of operating in a Global Business Environment Global market – huge increase in potential customers widening customer base and gaining access to markets around the world. Lower cost raw materials – ability to source inputs / raw materials from anywhere in the world. This may lower costs and improve quality.

Potential Customers billion and increasing.....

Benefits of operating in a Global Business Environment E-business – increase potential to do business electronically. The Internet allows small businesses to reach national or global consumers with their products and services, increasing their sales and profits.

Benefits of operating in a Global Business Environment Flexible working - Offering employees flexible working conditions reduces costs, contributes to business performance, improves motivation and productivity, helps access a wider talent pool, and helps retain employees through an improved work-life balance.

Benefits of operating in a Global Business Environment Increased exposure to new innovations and technology – this helps to ensure businesses continue to be globally competitive

Costs of operating in a Global Business Environment Increased competition –competition increases from New Zealand businesses to potentially all similar businesses in the world Difficult customer relations - Consumers traditionally place high value on customer service in the physical business environment. Creating this same type of positive customer service is difficult for global businesses, considering that their customers may be hundreds or thousands of miles away from the business’s operations.

Costs of operating in a Global Business Environment Logistics and distribution – increased transport and sales costs Cost of Localisation - the process of adapting a product or service to a particular language, culture, and desired local “look-and-feel.” Translation – the possible need to convert information from one language to another, without loss or alteration of meaning.

Costs of operating in a Global Business Environment Exchange rate fluctuations – this is an important issue when trading globally Possible tariffs and customs costs – many countries apply tariffs and customs costs to certain imports Regulations - products and services are regulated differently in different countries Protection of a brand at all costs. Protecting a businesses brand means protecting the company's image as well as its intellectual property.