ISAAC, Roan Marie M.

BSA-2A
Eco 3

Questions:
1. Discuss briefly the scope of global business. What are the elements that must be
incorporated in the making of a business plan in order to identify a particular
business strategy that will determine the scope of global business activities to be
carried out?

ANSWER: Global business refers to activities of a business that is not limited

to its domestic borders. It is a business activity that crosses beyond these
borders to do business in other countries or area. When entities decide to
conduct or extend their business globally, preparing a business plan is important.
The business plan is a document showing the entities goals and objectives and
the ways on how these goals and objectives will be achieved. In order for a
business to formulate the strategy that will be effective for its activities, the
business plan prepared must contain elements that will lead or derive the most
effective business strategy which includes:
 Guiding principles – the guiding principles serve as the cornerstone or
framework of a business. It is the philosophy being followed by the
business which will guide it in its years of operation regardless of changes
in goals, strategies or type of work. It is like the vision of the business
which talks about long-term goals or what the business is striving or
working hard for. It further acts as the compass in the business which
gives the management guidance regarding the path to take on with its
decisions.
 Decision circle – is a set of decisions coming from interrelated aspects
that surround the business. It includes marketing, sourcing, labor,
management, finance, law, control, and public affairs.
 Basic strategy – Of course, the basics must never be neglected when
planning. The basics include the marketing and sourcing which is the
primary thing considered when doing a business. It aims of identifying the
type of product or service to be offered in the market and the target market
or consumers of said product or services. It also aims of determining the
means on how to sustain or supply the market with said product or
services or the inputs needed for such production.
 Input strategies – which pertains to aspects that revolve around the entity
itself. These are the aspects that will keep the firm going or continue its
operations. The input strategies include labor (the employees or workers),
the management, ownership, and financial aspect.
  Legal and control – pertains also to the skills or abilities of the firm’s
management. It is about how the management answers or creates
solutions to resolve issues and how it implements such strategies by
properly utilizing the resources of the firm.
 Public affairs - is considered a basic strategy as it covers strategies of the
business in maintaining good relationship with its consumers, its suppliers
and maintaining a good reputation in the industry it belongs to.

2. Explain briefly the different categories of global business strategy. How do the
different elements be incorporated on the following categories of strategy?

ANSWER:
a. Strategic strategy – focuses on long-term commitments of the business.
These are strategies that influence a portion or the entire business itself. It
contributes to the achievement of the firm’s goals. The guiding principles
is considered when formulating strategic strategy.
b. Tactical strategy – are strategies that take a shorter period of time
compared to strategic strategy. They can be shifted in a year’s time. It
covers basic strategies and public affairs. Basic strategy can be included
in tactical as the firm does not change its products or service offerings
daily, they tend to add new products whenever they deem it is needed and
they improvise ways that maintains good relations to customer whenever
customer feedback is quite negative.
c. Functional strategy – refers to strategies that can be changed less than
one year. It refers to strategies being applied by the firm in its day-to-day
operations. The functional or the operational strategy includes the input
strategies and legal and control. The input strategies includes labor (the
employees or workers), the management, ownership, and financial
aspect) while the legal and control is considered in the functional strategy
as it is about the way how the management resolves issues that it faces in
its operations.

3. What are the different environmental factors that affect the making of a global
business strategy? Explain each.

ANSWER:
 Social cultural environment refers to the social environment as well as the
cultures of the place where business is being established. Social cultural
environment must never be neglected when deciding about the strategies
to be applied to ensure that such strategies will be aligned with the cultural
practices or behaviors of the consumers in said place. This includes the
 customer’s tastes, preferences, educational attainment as well as customs
or traditions.
 Political and legal environment refers to the factors regarding politics and
law that can affect the business. It includes the existing laws implemented
in the place of business. Firms must always follow or abide by the laws
existing in said place to avoid getting violations or worse can lead to shut
down.
 Technological environment refers to the development of technology that is
utilized in the field of business. These includes machineries or other
property and equipment that is useful in the production or other fields of
work in the business. Technologies create new opportunities for
businesses.
 Economic environment refers to all external factors that affects the
business. This determines whether the business has profitability or not. It
includes the habits of the consumers as well as the economic policies that
is existing in the location of the business.
 Demographic environment refers to the information of the whole
population or the target audience of said products or services. It includes
the age, family size, and the economic level of every person in the place.
 Physical environment includes geographical factors such as weather and
climatic conditions. Of course, businesses must asses the climatic
conditions in its target place of business to ensure that its products will be
patronized or bought by its consumers.
 Global environment focuses on imports or exports of the business. It is the
environment that is focused on whenever the business has expanded
beyond the borders of its own country.