The Most Challenging Aspects of Todays Global Business Environment

The beginning of 2007 offers a conflicting picture of the global economy for those trying to
perceive trends, challenges and opportunities. Concerns about energy security and climate
sustainability are converging finally bringing harmony in sight on the need for action in the
United States. But prospects for breaking the global stalemate are still years away. Though
some developing countries are succeeding in bringing hundreds of millions out of poverty,
too many are still caught up in a doom spiral of conflict, poverty and disease despite the
entry of new benefactors, advocates and global corporations into the field of
development. Chinas projected 9.6 percent growth rate is sending ripples to the farthest
reaches of the planet, creating opportunities but also significant risks. The United States
remains in the goldilocks zone, but this is premised on continued borrowing from abroad at
historically unprecedented rates while many Americans worry about widening inequality and
narrowing opportunity. While the United States concentrates on civil war in the Middle East,
most leaders in the region are preoccupied with putting an outsized cohort of young people to
work and on the road to becoming productive citizens.

Introduction

The globalisation of business has become an increasingly significant reality worldwide. Even
as a small business, you operate at some level in the global economy, and the fate of world
economics may ultimately impact how you do business. While the world faces global
environmental issues, your small piece of the environmental infrastructure plays a role.
Foreign competition impacts local competitiveness and security is a priority that challenges
every business owner. To maintain your viability in the increasingly global marketplace, you
must consider the challenges and how you will address them.
The rise of globalisation posits a number of important challenges to a business seeking
international presence.

Some of the challenging aspects faced by global business environment are as followed.

Internal coordination of marketing activities

The global marketing challenge today is a challenge of execution. Doug West, Global
marketing Director, ex Rentokil-Initial.
The bigger the brand, the more links in the chain. Organizational HQs have historically
struggled with rolling out coordinated marketing campaigns across multiple territories. Today
we have vastly improved systems and communications, but also higher expectations for
relevant, localized execution. How best to achieve maximum impact? Internal coordination of
complex campaigns across business units remains a key challenge on the desk for global
marketers.

How to reach customers in a meaningful way

That knockout creative concept that ticks all the boxes in one territory may fall flat in another
for any number of reasons. Adapting an idea to suit different cultures and outlooks while
remaining true to the key messages behind the campaign remains a major challenge for the
global brands we spoke to. Stewarding these creative, intellectual and emotional elements
safely across territories is one mighty task. But figuring out digital media on a global scale
with all the technical, media and channel options available makes the picture even more
complex.

How to handle the creative development process

There are differing schools of thought on how to achieve this on-going hunt for global
campaign but the mantra of act global think local remains a central tenet for global
marketing directors.

Localisation of the big idea for different territories is the default for all global brand
guardians, but the methodology for doing so is somewhat polarized. Whatever route people
are taking, its clear that localisation and a focus on smart implementation are firmly on the
agenda when it comes to rolling out global creative that resonates wherever it lands.

It adds up to a complex picture but one in which the best managers find systems and partners
to manage creative development for a wide range of implementations.

Understanding customer wants and needs across different segments

The need to align campaigns to differing cultural and social sensitivities is well-established.
Its just part of the jigsaw our marketers need to piece together. But targeting messages on a
global scale also requires a deep understanding of how industries, geography and
demographics will affect messaging. Brand affinity and buying preferences are affected
further by the relative strength of country economies, yet another layer of complexity.

Digital, social and the new marketing

How to integrate social into a wider campaign remains a focus for many global marketers.
Reliable reporting about the impact of social on awareness and sales remains elusive despite
the deluge of data available. Such reporting is sometimes hard to align with the more
traditional ROI markers from advertising or direct marketing.

Digital media is forcing campaigns to be much more engaging. The new media is designed
to allow people to talk back. Ronnie Beltran, Group Brand Strategist, Red Fuse
Communications

Marketers understand the value of social but it seems its unpredictable nature is harder to
control.
Compliance and Regulations

Whether you are a small business shipping homemade handbags through a website or a
consulting firm offering your services to multinational corporations, you must understand and
follow various rules and regulations that govern your goods and services. You must comply
with the tax laws of different countries as well as statutory export regulations. Some countries
have strict policies about the types of business practices allowed in their countries that often
include human resource and pension restrictions and rules if you hire a foreign workforce.

Culture and Language

If your sales are increasingly going overseas, you have to find ways to navigate the language
barriers that may crop up in emails and phone calls. At the same time, cultural differences can
play a big role in your success in the global market. For example, in China, the color red is a
symbol of luck, while in other countries, it represents a warning sign. Religious and cultural
boundaries must be understood to run effective marketing campaigns abroad.

Environmental Impact

Recycling is rapidly becoming a common practice in most U.S. companies as business

leaders realize the impact their behavior has on global environmental issues. You may be
challenged to incorporate successful recycling programs because they may be cost-
prohibitive or just inconvenient. Energy-saving devices such as compact fluorescent light
bulbs make a dent in world energy consumption, but they may not be viable for your office.
Challenges abound for developers looking to build new factories or office space. Food,
energy and transportation companies all face environmental pressures to use fewer natural
resources and offer products made with recyclable materials.

Technology and Communication

One of the biggest challenges facing globally competitive marketplaces is the communication
issues that crop up when technology doesnt keep up in every sector. When your company
relies on disparate systems that cant communicate with each other, your bookkeeping gets
bogged down, and orders slow or cease. Access to vital information may be compromised
when technological systems are not standardized. Youve got to rely on translations and
reports from foreign staff members instead of using a centralized system when the technology
you rely on to run your business isnt compatible with the technology used by your buyers,
foreign offices and global sales force.

Conflict and Poverty

In a world where boundaries and borders have blurred, and where seemingly distant threats
can metastasize into immediate problems, the fight against global poverty has become a fight
for global security

Global Imbalances

Today's interconnected world is in uncharted territory: the world's sole hegemonic power, the
United States, nurses an addiction to foreign capital, while up-and-coming powers such as
China and oil exporters sustain surpluses of increasing magnitudes. Some worry that the
world is at a tipping point, where only a dramatic shift in economic policy can alter the
looming trajectory. Others see underlying structural factors perpetuating gross imbalances for
a sustained period.

Rise of New Powers

The rise of "emerging powers a group that usually includes the so-called BRICs (Brazil,
Russia, India, and China), but which sometimes is applied more broadly to include South
Africa, Mexico and others, is reshaping the global economy and, more gradually,
international politics. Growing much faster than the rest of the world, these economies are
changing the structure of international production and trade, the nature and direction of
capital flows, and the patterns of natural resource consumption. At the same time, the growth
of these countries is beginning to shift the global distribution of power forcing the great
powers to come to terms with the reality that they will need to share management of
international rules and systems in the coming decades.

Economic Exclusion in the Middle East

The Middle East has before it what could be one of the greatest demographic gifts in modern
history-a potential economic windfall arising from a young and economically active
workforce. Today, young people aged 15 to 24 years old account for 22 percent of the
region's total population, the highest regional average worldwide. With the right mix of
policies, this demographic opportunity could be tapped to spur economic growth and promote
stability.

Global Corporations, Global Impact

The private sector is becoming a significant player, indeed some might say the dominant
player in shaping the global economic and development agenda. Multinational corporations
with operations that span the globe, and in some cases capacities and networks that match
those of governments, have a particularly important role to play in helping to spread the
opportunities and mitigating some of the risks of globalization.

Global Health Crises

From responding to the threat of pandemic flu to efforts to control the spread of HIV/AIDS,
the world has begun to realize that global health issues are relevant for any citizen, regardless
of nationality, residence or status. Despite improvements in the world's collective ability to
battle disease with advances in medicine and technology, global health needs remain unmet,
making the entire world vulnerable to health crises. In particular, the poor continue to suffer
disproportionately from inadequate health services, exacerbating their struggle out of poverty.

Global Governance Stalemate

Today's global challenges-nuclear proliferation, the deadlock of global trade negotiations, the
threat of pandemic flu, and the fight against global poverty-cannot be solved by yesterday's
international institutions. To resolve the world's most pressing problems, which touch all
corners of the globe; we must adapt our global governance approaches to be more
representative and thus more effective by encouraging and enabling the key affected
countries to take an active role in generating solutions.

Global Poverty: New Actors, New Approaches

The challenge of global poverty is more urgent than ever: over half the world's population-
nearly 3 billion people-lives on less than $2 per day; nearly 30,000 children die each day-
about 11 million per year -because they're too poor to survive. With such a toll, addressing
poverty in new and more effective ways must be a priority for the global policy agenda.
Fortunately, a variety of new actors are bringing new perspectives, new approaches and new
energy to the challenge.

The Impact of Political Risk

Political risk was defined by Wells (1998) as the challenges faced by investors that result
from some sort of government action, and sometimes inaction. Political risk implies negative
business consequences due to the behavior of governments and public sector organisations
(Suder 2004).

References:
TOP10 GLOBAL ECONOMIC CHALLENGES AN ASSESSMENT OF GLOBAL RISKS
AND PRIORITIES
FEBRUARY 2007 | PRESENTED BY BROOKINGS GLOBAL ECONOMY AND
DEVELOPMENT

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