Issues in Global Businesses and Consultancies - Essay Example

? Issues in Global Businesses and Consultancies Outline Executive Summary 2. Introduction 3. Thesis ment 4. Research Methods 5. Discussion I. New consumers in emerging markets II. Pertinent power growth III. Salaries and wages IV. Changing relationships with health care practitioners V. Nature of conversations VI. Issues associated with inflation 6. Conclusion 7. References Issues in Global Businesses and Consultancies Executive Summary If at all the global businesses intend to survive and be successful in the future, then they must abide themselves to the healthiness of the complex global system. Usually, such a system is constituted of three subsystems, which are independent in nature. These includes; the natural environment, global economy as well as the political and social systems (Morrison 2009). These global companies and consultancies are essential and as such, they play a vital role in the three subsystems. Global businesses rely on the three subsystems in order to flourish. Generally, individuals tend to believe in a market economy that is strong. As such, the market economy acts as a vehicle in which the human progress as well as growth prevails. This then follows that the standards of living of these individuals rise (Morrison 2009). However, contemporarily, the world is going through a time in which there is unprecedented change and as such, it is therefore evident that the current frameworks within which the global market operate are resulting the businesses into outcomes that are not only unreliable but also unsustainable. As such, there are graving issues that have not been resolved by the market as well as the political systems. Global businesses and consultancies can be attributed to the force for the good and it is usually held that they are placed in a unique way in regards to the delivery of the practice solutions, which are required urgently to address the underlying issues concerning international businesses (Morrison 2009). Introduction A business or consultancy that devises and carries out its transactions across various national borders in an effort towards satisfaction of objectives of organizations, individuals or even companies can be said to be a global business or consultancy. The underlying transactions assume various forms and as such, they relate to each other. Those businesses that undertake trade involving imports and exports as well as those that undertake foreign direct investment are referred to as primary global businesses (Hill 2008). Usually, foreign direct investments businesses exist in various forms, that is; subsidiaries, which are owned wholly; and joint ventures. Other forms of global businesses and consultancies include licensing, contract management and franchising global businesses. Just as the definition holds out, the key tenet associated with global businesses is satisfaction. A global business is just like any other local business since the basic principles of a business apply. The difference comes from the application of thaw global business, its complexity as well as the intensity. These aspects vary substantially (Hill 2008). For a global business to operate across several borders, an organization ought to ensure that it adheres to international standards and laws and as such, the organization must incorporate them into their planning process and decision making. However, global businesses and consultancies do experience challenges arising out of the environmental factors. Since these businesses operate across national borders, there are some constraints and some frequent conflicts that are brought about by the different laws, societies as well as cultures (Hill 2008). A good example of a global business and consultancy is GlaxoSmithKline, a British multinational business dealing with pharmaceuticals, vaccines, biologics as well as consumer healthcare. Thesis Statement With reference to GlaxoSmithKline Company, this paper will critically analyze the issues facing global businesses and consultancies and thereby establishing ways in which these issues can be effectively handled. Research Methods Many organizations encompass the use of research, particularly where activities related to marketing are concerned. As such, marketing research is usually essential as it is through it that potential markets, wants and the needs of such markets as well as how these needs and wants can be effectively met, are effectively identified (Morrison 2009). Business organizations can indeed conduct marketing research without necessarily employing advanced research skills. There is a number of marketing research methods used and they includes; Questionnaires, checklists and surveys They are usually made use of whenever there is an urgent need for information from participants without any perceived threat (Morrison, 2009). Interviews They are usually used when the researcher need to fully comprehend the participants’’ experiences as well as expressions. Moreover, it is used when one wants to learn more in regard to their answers to the questions in the questionnaires (Morrison 2009). Documentation reviews This research method is usually utilized when the researcher want to obtain the impression concerning how a certain program operates while ensuring that the program is not interrupted (Morrison 2009). Focus groups This research method tends to explore the topic deeply and this is done through discussions in a group (Cavusgil, Knight & Riesenberger 2008). This method is usually essential as far as marketing as well as evaluation of a business are concerned. Case Studies This method is useful where the researcher needs to fully understand and even in-depth depiction of the experiences of the client in a program. Further, it is useful whenever a researcher wants to conduct an examination comprehensively. As such, this research method basically involves business cases and as such, they are usually cross compared (Cavusgil, Knight & Riesenberger 2008). In this report, the research method used to identify issues within and outside the global businesses and consultancies is the case studies research method due to its viability in depicting in-depth experiences in regard to these businesses Discussion New consumers in emerging markets In 2008, Andrew Witty took over GlaxoSmithKline as the company’s CEO and thereby set his ambitions in regards to the future growth. Just like other leaders in of the global businesses and consultancies, the CEO hopes that the emerging markets will indeed sustain the growth of the industry looking ahead, ten years from now and even beyond. However, the company must establish ways necessary to capitalize on these markets that are emerging. As such, GlaxoSmithKline can opt to not only change its business model but also have to change its outlook. Witty concluded that the company had to stop producing white pills for the markets in the western countries and start treating diseases in the therapeutic and technology rich regions such as Asia and Africa (Cavusgil, Knight & Riesenberger 2008). This ambition is essential but it will take a long time to realize this ambition. However, GlaxoSmithKline digs deep beneath the aspect of emerging markets. Contemporarily, GlaxoSmithKline and other global businesses have shown interest in middle income countries which includes; China, Brazil, Indonesia and Thailand among others. These countries have relatively substantial and affluent middle income earners and as such, they are ideal markets for pharmaceutical products. However, most people in these countries live under extreme poverty conditions. Consequently, the affiliations for healthcare services overwhelm the healthcare systems which in most cases are underfunded (Cavusgil, Knight & Riesenberger 2008). To respond to these dynamics, GlaxoSmithKline Company came up with a unit called Developing countries Market Access. The intention of this unit was to increase the access of patients to GlaxoSmithKline medicines as well as the company’s vaccines. Still, the unit was intended to help company establish itself as a long-term investment in the developing countries. Since the company is widespread across many countries across the world, it places several individuals to head the branches (Rugman & Collinson, 2009). These individuals are referred to as country managers. The country managers in less developed countries are supposed to report into the established unit. This poses as beneficial as it assists these country managers to assume an approach that is more consistent and integrated in efforts towards increasing of the patient’s access in these countries. Switching to more specialized products and services In reference to GlaxoSmithKline Company, the understanding in regard to diseases develops and this is one thing that leads the company towards medicine that has been personalized. This can only be forthcoming if there emerges specialist drugs within the industry. Global businesses and consultancies experience a rapid growth in regards to its size and further, they experience solvability of markets that are still in their development stages. Consequently, these companies increase their attractiveness and thus people invest in them through purchase of shares. However, the aftermath of this investment is what an issue worth consideration becomes. As such, this situation creates an inflationary pressure in the emerging markets (Rugman & Collinson 2009). Salaries and wages IN regards to the developed and developing countries, there is usually a substantial difference in aggregate salaries and wages. This is important as it leads to an increased need for globalization of firms. Further, the difference increases the need for workers who are low skilled residing in developed countries to upgrade themselves in terms of skills. Pertinent power growth Contemporarily, the consumer society as well as the internet can be sad to be the strongest forces attributable to the facilitation of pertinent power development. However, such a movement seemingly still has a long way to go. In recent times, the giant British GlaxoSmithKline in some way has been struggling in its efforts towards establishing itself around the needs of the patients (Goffin & Mitchell 2005). However, it is not the only affected global business. As such, even the England’s NHS has been struggling in this context. This condition has been brought about by several barriers that these global businesses find hard to break. The major barrier include the cost as well as insufficient information on how to build itself in regard to the patient’s meaningful choice which is essential as it helps or encourages provision of better services to the patients by the global businesses and consultancies (Goffin & Mitchell 2005). If the pharmaceutical industry in general finds ways to align it with the aforementioned aims, it will be ‘on massage’, that is, the industry will be in the right track and the players within the industry will practice efficiently and effectively. However, the company should not entirely concentrate on these aims but rather; it should ensure that it takes complexities evident in care of the patient, healthcare systems as well as those related to politics into consideration. As such, not only should they consider them but also they should take them with due caution (Goffin & Mitchell 2005). Limited number of blockbusters and smaller budgets GlaxoSmithKline and other major players within the pharmaceutical industry in the global context sometimes back experienced mighty amounts of revenues. As such, the huge revenues come from great blockbusters associated with these major players. These blockbusters include; Lipitor, Zocor as well as Losec. In regard to these, they prove essential as they assist or allow the global pharmaceutical and other global businesses and consultancies to re-invest the revenues realized from sales as well as marketing (Hill 2007). However, in regard to the contemporary times, this notion is no longer there and as such, the marketers no longer entice tremendous amounts of resources. In addition to this, the marketers are often pressurized to demonstrate investment returns (Conrady 2007). Changing relationships with health care practitioners In the month of June, GlaxoSmithKline made it public that the company would find it hard to sponsor doctors attending the international conferences. Such is an example of latest development in regard to the global pharmaceutical businesses. Generally, global businesses tend to shift away from the responsibility of providing the funding for the expenses incurred by the consultancies when they hold international conferences (Hill 2007). During a conference held in Istanbul recently, the C.E.O of a global pharmaceutical company called AZ indicated that the company will no longer fund international trips. He however indicated that the company would still continue paying the heath industry practitioners to speak whenever local conferences are held. Usually, global pharmaceutical companies, with GlaxoSmithKline leading the pack, are not usually trusted that much by some small proportion of stakeholders. Some global pharmaceutical companies make payments to the health care practitioners and as such, these payments become subjects of controversy (Conrady 2007). In a global business or consultancy, any practice that is in itself attributable to malice can lead to the bad image of the entire industry in which the business is operating under. The digital World Global businesses, pharmaceutical business in particular, are mostly aware that the internet age as well as the digital marketing is essential as they transform the world at large. However, the businesses cannot tell how it changes the respective industrial marketing. This follows that anxiety as well as uncertainty in regard to how to proceed prevail (Hill 2007). Today, the internet as well as various forms of digital devises is increasingly becoming entrenched in the lives of the individuals and as such, there ought to be a great consensus entailed by the global pharmaceutical industry that the players be present in the digital world (Conrady 2007). The major hardship in regard to this is the question, how do the pharmaceutical businesses do it? And if the opportunity is capitalized, to what extent? However, the global pharmaceutical industry has a prevailing wisdom in regard to this issue. The industry regulators explicitly declares that each global pharmaceutical business is required to establish an open conversation with its stakeholders, that is the companies must ensure that they engage the individuals who have invested within the company in an open discussion in regard to the effective way forward of the company. The stumbling block for this wisdom is that, the internet initiated conversations are spontaneous and as such, it is not the global pharmaceutical industry’s stronghold (Drucker 1985). As for GlaxoSmithKline, its management has recently indicated that it will establish dialogue where it will engage all users and as such, it will take Public Relations beyond the traditional PR activities. An example of a global pharmaceutical business, which has established an online conversation, is Bayer Company where it has a facebook page and as such, it hopes to engage its visitors and stakeholders to the social network (Drucker 1985). According to the company CEO, the main aim of GlaxoSmithKline is to demonstrate to the people across the world the best approach it can responsibly adopt taking the diversity of the activities involved into account. He further asserted that the underlying aims are realizable and as such, they seemingly met GlaxoSmithKline’s top line that the company’s management requires in order to promote the image of the corporate in regard to the global medium (Drucker 1985). Nature of conversations The global pharmaceutical businesses and consultancies often struggle as far as a clear value in relation to communication spending in regard to the online conversation is concerned. The idea of communication involving the global businesses with their stakeholders across the word through the internet is of optimistic nature. However, the major issue that comes with online communication is that the conversations based on the web often tend to impact an ill temper on the parties communicating. Moreover, the internet based conversation is sometimes of childish nature and at times superficial (Daniels, Radebaugh & Sullivan 2009). Therefore, in general, global businesses should not rely on internet based conversation as their major ways of communicating to their stakeholders. GlaxoSmithKline and other global pharmaceutical business should not regard this as the only place where they will initiate communications concerning the nuance of the global pharmaceutical industry as well as its value in regard to the society and particularly to the patients. On the other hand, social sites have an appealing attribute in that pharmaceutical industry, just like other global business industries, are no longer entirely dependent on the mass media to communicate to the stakeholders across the world (Daniels, Radebaugh & Sullivan 2009). However, the issue arising from this communication is that, while some global companies establish sites but fail to maintain them, others have out of date sites and as such, it must be that such companies must identify considerable amount of resources aimed at facilitating the management of such internet based interactions irrespective of their levels being of relatively low in regards to their importance (Wild, Wild & Han 2003). Issues associated with inflation Inflation is one aspect that greatly diminishes the purchasing power of a county’s currency. Companies operating within a country experiencing a high rate of inflation are in most cases forced to close down. Usually, the prices of any particular product or service shoot up without due notice and as such, people living within the boundaries of that country experience hardships trying to sustain their living standards. Therefore, the economic power of the country goes down. It is the businesses within that country that are greatly affected. As such, they produces products but due to the high prices, the company’s prices don’t move from the shelves more often and this means that the amount of revenues fall tremendously (Wild, Wild & Han 2003). This follows that these businesses fail to realize significant amounts of profits and at times, they make losses. Global businesses are no exception. Due to the fact that they have a mother company and branches established across the world, they are in many cases hit by inflation. As such, it might be that a wave of inflation will hit a certain region and, the global business such as GlaxoSmithKline having established a large network in such an area, would be hit and this might lead to the management in the mother country deciding to close down these institutions until inflation is contained. Consequently, GlaxoSmithKline Company will generally lose revenue and due to the temporary closedown, employees would be laid off (Wild, Wild & Han 2003). Conclusion From this analysis, it is evident that global businesses, particularly those operating within the pharmaceutical industry such as GlaxoSmithKline Company do experience both internal issue as well as issues within the industry. Global businesses and consultancies do experience challenges arising out of the environmental factors. Since these businesses operate across national borders, there are some constraints and some frequent conflicts that are brought about by the different laws, societies as well as cultures (Wild, Wild & Han 2003). Such issues include; new consumers in emerging markets, switching to more specialized products and services, salaries and wages of the employees of the global business, growth of the pertinent power, limited number of blockbusters and smaller budgets, changing relationships with health care practitioners, the digital World, nature of conversations as well as issues associate with inflation (Wild, Wild & Han 2003). A Global business, regardless of the industry it operates within, must establish ways to contain issues as if left to surface, a company may end fatally. They may seem insignificant but according to the recent research studies, it has been found that indeed they have adverse effects. References Cavusgil, S., Knight, G. & Riesenberger, J., 2008. International Business, Strategy, Management, and new Realities. Pearson: Prentice Hall. Conrady, R., 2007. Trends and issues in global tourism. Oklahoma: Springer. Daniels, J. Radebaugh, L and Sullivan, D., 2009. 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