International Business Analysis of the Macro Environment

Question: Discuss about the International Business Analysis of the Macro Environment. Answer: Introduction The present business report focuses on the features that are involved in the process of international business. With the advancement of globalization, the barriers of international trade have been neutralized and it is possible for the Multinational companies to expand their business territories in the market of many different countries. According to Hirst et al. (2015), the globalization of market and the globalization of different products have been the main driving force of globalization in all the major nations of the globe. In the current context all the major companies of the world has been successfully able to establish themselves as the major global brands. The two of the major types of international business includes the import and the export based types of business. In case of import based business, the sourcing of the supplies is done from the oversea areas. On the other hand, in case of the export based international business, the products or service is being delivered to the overseas customers. It is essential for an international company to deal with the political and economical conditions of a nation, where they are planning to do their business. Considering the legal matters is also one of the important parts of the international business. The local culture and lifestyles of the people of the nation also has a major impact on the business as it helps to decide the demand of a product. The current business report focuses on the Company named Tyson Food, which is an American based meat and food processing company and they are planning to expand their market in the Australian region. Brief Introduction to the Company The Tyson Foods Inc. is one of the leading multinational companies of the world that is considered to be one of the leading meat and food producing brands. It is an American based company, which has its headquarter in the Arkansas region of United States. The company is considered to be the worlds largest producers of beef, pork and chicken. It is also considered to be one of the largest exporter of all types of meat in the world and it is has a significant market share in the meat and food processing industry, in all the major nations of the world. The company was established in the year of 1930. In the early years the company has to struggle especially during the time of World War II, when there was shortage of food. Nevertheless, due to high level of cultural diversity within the company, they have been able to establish themselves as one of the leading meat and food processing brands of the world. The company is one of the leading procedure of meat and other poultry products in the world. In the fiscal year of 2013, the company has been able to invest $15 billion to all the independent farmers, who has been able to supply live stocks for the production of processed meat. There are more than 11,000 farmers, who are directly dependent on the company for the sale of their products ("Tyson Foods: Around the World", 2017). The company also has been working directly with the poultry farmers, and provides them with assistance regarding the increasing the rate of their production, which has allowed the company to meet the global demand of meat and other, processed foods. The use of the latest technology along with the findings in the advanced poultry products is being applied in all the poultry that has helped the company to increase the rate of production. The wide range of processed food and meat products that are available within the market has helped the Tyson Food Company to have wide range of market share in the respective domain. With the introduction of the processed foods, it is possible for the company to deal with the increased demand of foods within in all parts of the globe. The Tyson Foods is also the largest suppliers of meat to all the major fast food companies of the world including KFC, MacDonald and Dominos. Many of the major retail companies of the world including Wal-Mart and Kroger and many other small scale industries depends on Tyson Foods to get the supply of raw meat and other processed foods. Brief Introduction to the chosen country The Tyson Foods in the recent years have planned to expand their range of international business in the market of Australia. According to the report of the Australian International Business, the nation has been considered to be one of the best destinations of investments by the foreign companies. With effective support from the government of Australia all the major global brands have been get wide range of business opportunity and expand the business in the nation. With the change in the life styles among the people, the food habit of the people of the people of Australia has changed significantly in the recent years. More number of people is dependent of processed meat products that can easily be stored and used for longer period of time. With the advancement of food technology and better processing unit in the food industry, it seems to have a huge potential. During the present days, there are no major international companies in Australia that has been introduced the business processed meat and food. However, with the current trends of the people off Australia and their food habit style, the processed meat and food industry is one of the fastest growing sectors of the nation. As no major international brands have established the business in the Australian region, the Tyson Food Company has good opportunity to penetrate the industry in the consumer market of Australia. In spite of being one of the major producers of raw meat nations of the world, the meat processing industry of Australian has not been able to grow due to lack of investment in this sector. The domestic production of raw meat in the Australian region has witnessed tremendous improvement in the recent times, which provides sufficient opportunity for the meat processing companies to get sufficient supply of raw materials. The political, economic and the cultural background of the nation are highly responsible for the rate of success of the international business in the Australian region. With the help of the friendly business environment and high demand in the consumer market, it is possible for the Tyson Foods to make strong establishment in the region. Economic Analysis The Economic factor of a region is one of the primary determinants of factors that help in the process of international business of the multinational companies. The economic policies of a nation prepared by the respective governments that includes all the taxation policies have major impact on the international business that is being practiced by the multinational companies (Rahman Mamun 2016). The specific policies have includes all the major tax regulation rules that will help in the development process of the business. The rate of success of the international business and the level of profit that is earned by the international companies depends largely on the role played by the International Monetary Fund (IMF) in making economic rules. The IMF has its base in 188 nations of the world and it is the duty maintain foster in the global economic condition of the world. With the help of the economic policies, it is possible to decide upon the foreign exchange rates, which decide upon the rate of conversion of the currencies from one nation to another. The international financial market plays a significant role in the controlling the international capital market of international business. The value of currency of Australia is totally dependent on the rate and the nature of the foreign exchange market in US and China. Australia being one of the developed nations of the world is known to have highly stable economic condition that can provide good opportunity for any multinational companies to expand their level of international business. Australia is considered to be one of the leading economic powers of the world with the net GDP value of AUD$ 1.62 trillion, which was considered to be one of 12th largest in the world. The rate of growth of GDP in 2016 was calculated to be 1.7%. With the occupancy of 68% of the total economic growth the service sector is the leading contributors to the economy of Australia (Hellwig McAllister 2016). In spite of the recent crisis of in the global financial and economical sectors, the economy of Australia has not witnessed any major setbacks. This stable economic condition of the nation has encouraged high rate of foreign cash flow in the nation. The International Monetary Fund has also predicted Australia as one of the major advanced economies in the world. The level of corruption is also one of the leading factors that help to decide upon the economic condition of a nation. With high level of corruption with the government administration of a nation, there is high chance of poor economic condition of the nation that is major barrier in the path of economic development. Hence, is important to have low rate of corruption in the market economy of a nation, which will help to deal with better position related to the international business. With higher rate of corruption within a nation the rate of business taxes that are charged by the government increases, thereby increasing the cost of the business. In Australia the tough and extreme form of laws have ensured that there are almost negligible loss of government from any forms of corruption, which has created a good condition for the international business. The Tyson Foods being one of the major American Multinational companies, it is possible for them to explore the business opportunities, which exist in the food and meat processing industries of Australia. The economic relation between the nations of United States and Australia also will help the Tyson Foods to easily expand in the consumer market of Australia and thereby have the capacity to deal with the all the business challenges that exists within the nations. The establishment of the company is also expected to boost the economic growth of the nation as it will help in the contribution of GDP by providing employment to the people of the nation. With the establishment of the food processing industry, the dairy and the poultries of Australia is also expected to have better rate of business as they will get regular source to sell their products at a standard level of price. Political and Legal Analysis The political factors are also one of the key deciding elements that decide level of success of international business. The policy made by the government of a region also plays a major part in encouraging the performance of international business. In Australia is of federal parliamentary type that is elected by the people. According to Evans et al. (2016), Australia is considered to be one of the politically stable nations of the world, which gives rise of healthy business condition and also encourages all forms of foreign industry to establish their business in the region. The parliamentary type of government in Australia has helped to establish a healthy legal system, which provides assistance to all types of business environment. The Government of Australia is administered under the guidelines of the Australian Constitution that was established in the year 1901. The stable political situation of the nation has also helped to deal with the free trade along with import and export si tuations. There is minimal amount of risks that is involved in the process of operating business in the consumer markets of Australia due to lower level of political risks that is involved in the process. The government of Australia has also set up a stable legal system of business that ensures that all the process of commercial transaction are done in free and fair manner. There are also specific set of laws that are aimed to support the international business and thereby encourages the foreign companies to invest more in the capital market of Australia (Caldicott et al. 2014). The Australian Competition and Consumer Commission was formed by the government of Australia, in order to deal with the all the hazards that are related to the legal matters of business. The competitive laws that is implemented by the government help to deal with the all the illegal actions that are related to gain competitive advantage in the consumer markets by the leading brands of the industry (Lucadou-Wells Bourke, 2015). There is also the Fair Trading Laws that helps to deal with all the trading of import and export business within the nations. The Australian Consumer Laws is also set to ensure that all the interests of the consumer groups are being protected. This will also help the consumers to take legal action against all types of fraud cases that a company imposes upon their buyers (Smith 2015). It is also the duty of the business organizations to ensure that they take full liability to ensure the safety level of the products and that no consumers are harmed by the use of the products. Hence, it is the duty of the Tyson Foods to ensure that they do not use any harmful preservatives in the food that has the potential to harm the health of the people. It is the duty of the business organizations also to ensure that they take care of the local environment. It is the duty of the Tyson Foods, to understand the legal guidelines related to the business operations of Australia, which will ensure that they are able to carry out free and fair process of business. Culture and Ethics Considering the fact that the considered organization Tyson Foods desires to expand their business in the forefront of Australia, it is essential to evaluate those cultural aspects which can possibly make potential impact on the business in future. In this context, it is required to mention that influencing factors or elements such as aesthetics, religion, education, attitude, values and language would play significant role in time of implementing the international business venture (Hoffman et al., 2014). Following the significance of the aforementioned aspects, it is essential to consider the differentiation between the applications of Hofstedes model of cultural dimension on Australia as well as on America. As per the Hofstedes model of cultural dimension of Australia, it seems that the country people have a high extent of optimism though their shared values are found out to be determined by a society that is masculine (Ng Metz, 2015). However, it is fortunate to note that the di mension is indicative of the fact that the power distance of the society is not high and most of the time, managers and employees share a flexible zone between them. It is fortunate to note that, like Australia, hierarchy is established based on convenience and similarly like Australia, Americas society is masculine, which means, as the Australians Americans are also proud of their success. Therefore, it can be said that it would not be culturally much difficult for the considered organization to expand its business in Australia. On the other hand, it is fortunate that in term of psychic distance for international business, the organization would not have to face any linguistic barrier (Caprar et al., 2015). It is because; both the foreign country and the host country have same linguistic background as both of them have English as their national language. It is to mention in this context that both of the countries have low context cultures, therefore it can be said that the organization has to prioritized verbal communication as well as has to consider the fact that Australians are culturally very punctual or time bound. Most significantly, the o rganization has to maintain a diverse workplace and should not ignore the fact that the racial and cultural discrimination level between indigenous and non-indigenous community is very high. Therefore, anti-discrimination policies should be determined considering the particular situation. Most significantly, in terms of consumer culture, the level of consumer boycott and consumer purchasing power is very high (Wood, 2015). Therefore, the organization has to consider these facts too. However, in terms of ethical obligation, it is understandable from the aforementioned discourse that in Australia, treatment of employees or other stakeholders are important needs to be maintained ethically. The organization should stay aware about issues like corruption and should consider the fact that the Australian government is very concerned regarding minimizing environmental hazards. Therefore, it has been found out that the Australian government follows environmental sustainability policy that includes, policy regarding use of energy, water use, waste recovery and policy on the use of material (Wood, 2015). Therefore, the considered organization has to oblige the policies outlined by the Australian government in order to pursue ethical business operations. Furthermore, it has been found out that the ethical priorities of Australian business is more concerned about the biodiversity, therefore Tysons main business operation, which is meat processing would probably has to face difficulties. It is because, the operations regarding the business of meat processing involves use of various chemicals and machines, which are not environment friendly. Most significantly, Australian policies regarding employment are highly concerned regarding labor payment and fair employee treatment. In order to pursue an ethical as well as successful business in the chosen foreign country, the organization would have to maintain the aforementioned aspects. Conclusion In order for a business organization to be establish as a successful international brand it is important for them to analyze the political, economic and legal aspects of the nation. In this case, the Tyson food company, who wants to expand their business in the Australian region and explore the opportunities that exist in the local market must explore the cultural and lifestyle of the local people, which will help them to meet the demand of the local people and thereby increase the reputation of the company. 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