GLOBAL BUSINESS ENVIRONMENT

Global Business Environment

Global Business Environment

Introduction

The study is related to the changing business environment and the opportunities or risks faced by the export/ import oriented industry. It is observed that during the past few years, there is a change which is observed in the international business environment; similarly, in the case of UK, where the change in the business environment has impacted almost every industry.

Discussion

Changing Business Environment

All organizations can be affected to a lesser or greater extent by macro forces that include the economic and technological factors; whenever companies in the industry of Airline and Banking occasionally try to influence legislation or through R & D pioneering new technology or changes to strengthen its strategic position or to discover new opportunities. Macro forces generally are not under the direct control of companies' airline and banking industry of UK; therefore, the purpose of the strategic direction is to enable the organization to act effectively to threats and environmental constraints and opportunities emanating from the same (Faust, 2010, 3-20). To meet this objective, strategic leaders must identify and analyze how expression of these changing business environment in relation to the company so that these industries are getting affected by economic and technological factors.

Economic Forces

Business environment or external frame is not an area is a whole and does not allow its development. Thus, the company can be considered as an open system to the environment in which it operates, which influences and is influenced. Economic force makes a significant high impact on operations of the companies of Banking industry of UK as compare to the Airline industry of UK. This includes the gross domestic product. Refers to the total annual value of production of goods and services a nation. Sustained moderate growth of gross domestic product generally produces a healthy economy in which businesses are a growing demand for its products due to the growth of consumer spending, opportunities abound for both established businesses, and the new, and a decrease of gross domestic product usually reflects the reduction in consumer spending and therefore low demand for the productions (Friedman, 2007, 16-38). When the gross domestic product declines in two consecutive quarters is considered the national economy into recession. During these periods increases dramatically competition, profitability and business suffers lost growth rates, although for some companies of banking sector of UK, these situations offer opportunities.

In addition to this, the Banking industry of UK also get affected due to the short and long terms interest rates that ultimately affect the demand for products or services of UK. Interest rates short terms, for example, are beneficial to the dealers of credit, while for other businesses long term loans are beneficial. The levels of interest rates greatly affect strategic decisions of banking industry of UK in comparison to the Airline industry of UK. Normally high rates discourage business plans to obtain loans in order to make technological changes, while low interest rates are more tax for capital spending on mergers and acquisitions, although some companies and ...