Globalisation in the European Business Landscape: Balancing Cooperation and Competition within SME Clusters

INTRODUCTION

Globalisation is termed as a process of integration and interaction among business organizations, individuals and governments from different places. As influenced by Hassi and Storti (2017), globalisation is termed as a process driven through international investment and trade driven by the implementation of information technology. Similarly, for centuries, corporations and people have invested in business in other countries to facilitate exchange of ideas and cash. As stated by Groenland (2018), globalisation can be termed as a source of scope as well of threats. Specific advantages obtained from the global market are exploitable by large organizations unless the SME can find a possible solution that allows them to cope with the existing business opportunities, without suffering due to resource limitation, coupled with the risk of direct investment. Judging from the European experience, the regional cluster related to SME have turned into a peculiar competition.

In terms of the European context, regional clusters related to SME have termed extremely competitive and both at once, cooperative and competitive. The relationship is strongly dependent on cultural affinity and geographical proximity. Tomalin (2018), thanks to the recent development pertaining to information technology, the replication of similar industrial models in principle be obtained in spatial distribution of business models. Companies may encounter a series of technological challenges such as training the workers, poor system of transportation, weak communication facilities. Decentralisation of power, coupled with improved governance, economic efficiency is the possible scope of advantages. The series of negative outcomes may include increasing levels of inequalities and poverty.

MNE and SME

Small businesses are often subjected to varied business challenges and landscape as compared to the multinational corporations. As influenced by Brown et al. (2019), operating a business that targets local marketplace demands a distinct strategy as compared to doing business on the global platform. Despite the continuous uphill battle smaller business organizations have the scope and strength to play within the competitive industries

SWOT ANALYSIS

SWOT analysis is termed is a useful and simple framework used for analysing the strength, weakness, threat and opportunities. It can help in building in what the business is lacking and minimising the possible risks, while enhancing the possible advantages of success.

Reasons for conducting a SWOT analysis

SWOT analysis can work on giving a detailed and unbiased overview of business as whole for specific campaigns. It can additionally help the marketing manager to consider every factor that could possibly impact the business. If the business is facing a tough situation of a particular strategy, SWOT lights up the details, for formulating suitable action plans. As stated by Planing (2018), SWOT analysis is important to make sure that the business is not off guard and a robust nature is maintained for ensuring that the business is rightly progressed. The benefits associated with SWOT is one of the prime reasons that makes it easier to use. As stated by Bohn (2018), SWOT is often conducted due to the cost effective strategy and anyone with a clear understanding of the business can work on performing the SWOT. The aspect of time constraints can be easily addressed through SWOT. Another advantage of the chosen mode of analysis is that it concentrates on the core factors influencing the business. While concept related to globalisation is answered, it extends to the international business running through SWOT filter, producing a remarkable overview of the phenomenon. Through the implementation of SWOT, one can:

Understand the business in a better way

Address the possible weaknesses

Deter the expected threats

Capitalise on the expected scope or opportunities

Take advantage of the possible strengths

Develop business strategies and goals and work towards achieving them

Opportunities

Allpress Espresso Bar: The freshly ground coffee can be termed as one of the biggest opportunities in the chosen business. The British based business has a greater advantage over the consumers as it can produce services and products as per the demands of the customers. The business needs no stringent market research and development. The affordable price range can further work on attracting the customers from all the sectors, irrespective of economic status

Starbucks: The business is the chosen scenario and has the scope of expansion. In case the business fails to maintain a strong foothold at one place, it can switch to a different geographical location as per the customer choice. The products can be customised as per the choice of the customers.

The awareness of the opportunities if rightly leveraged can be implemented in developing better business operations. SME can work on reducing the cost through the aspect of globalisation. However, companies like Starbucks, operating on a larger basis may fail to provide the expected results. Thus, the aspect of standardisation gained an immense importance in the mentioned scenario. As stated by JS and Babu (2020), standardisation is termed as the process of creating and promoting standards of technology that are equally compatible, within the chosen industry. The standard of product quality can work on maintaining the consistency and quality, thereby ensuring high levels of compatibility and safety. Thus, it can be conclusively stated that the aspect of globalisation can bring opportunities of growth in both cases. The SME can work on developing business to other geographic areas, whereas the business in MNE can work on enhancing their product range to meet the demands of the customers.

Strength

Allpress Espresso Bar: The strength pertaining to globalisation within the chosen industrial domain can enhance the demand for domestic goods As influenced by Gooberman (2020), the demand for domestic goods has been increasing paving a way for the downstream industries to come forward and grab the scope related to the domestic market. The production of high quality goods and services within the domestic market widens the existing scope of reaching beyond the existing domestic boundaries. Abundance of skilled human resources at affordable cost is an additional benefit for the SME. The presence of skill based labour in bulk amounts have made them readily accessible in low cost, paving the way for globalisation

For Starbucks, globalisation into the developing countries such as in India may be deemed suitable. India has a population which is equal to the total population of 10 million people moving in the cities on an yearly basis. The scope of growth coupled with the development of the country’s infrastructure. Inflow of Foreign Direct Investment of FDI across the chosen industrial sector. Developing countries are chosen as a hotspot for globalisation. The regulatory environment in terms of FDI has been eased to make it investor friendly. The changes are done continuously to increase the flow of foreign investment

Thus, it can be conclusively stated, opportunities in business within MNE and SME are immense. However, it is important to understand that business needs to leverage certain aspects in order to thrive on the opportunities. As influenced by Sinclair (2017), SME are often provided with an opportunity to ensure product and service specificity. However, MNE struggle with the aspect of specificity making things difficult in the longer run. Thus, globalisation can confer opportunities to both the organization (SME and MNE) allowing the business to grow at a rapid pace.

Weaknesses

Allpress Espresso Bar: Is still dependent on subsidiaries for obtaining the raw materials. The lack of export and the subsidy related to export is known for being abused. For instance, some exporters are seen to declare the value of their goods to benefit more from the export related subsidy. Such schemes are provided by the government to enhance the level of industrialisation and boost the economic condition. However, it has become a scope for organizations which take undue advantage of such schemes (Cohen, 2017).

Starbucks: The increase in the aspect of globalisation can bring better prospects related to the working culture. Hiring the people with different cultural backgrounds can help the business to cope with the business needs and work on ensuring that the business profits are rightly maintained. Thus, it becomes important to understand that SME may fail to hire people from different cultures due to poor capital finance and limited scope of growth on the global fields. The weakness in case of Starbucks may be the lack of cultural understanding. The cultural understanding is important in ensuring globalisation at the right pace. In similar regards, delays related to the completion of the project may be common in case of Starbucks, due to high chain of operational efficiency; however, the same may not be true for SME as the chain of decision is usually small, making implementation of a particular decision really quick. As stated by Dayal and Palsapure (2020), delays are often seen to increase the burden of cost on the companies. The burden of cost can be borne by the multinational enterprises. However, the cost may be extreme for the small businesses hampering their operational efficiency

Threats:

Allpress Espresso Bar: As stated by Dayal and Palsapure (2020), globalisation can provide ample scope to business like economic scale specialisation and access to larger capital markets. However, globalisation can enhance the level of competition and increase in demand for labour that can create problems for small or individual businesses like the chosen one.

Starbucks:Globalisation is termed as an active process related to corporate expansion and possible economic linkages. The aspect of free trade may be termed as a scope of expansion; however, it is often laced with legal challenges.

However, like the aspect of free trade, globalisation is often seen to have an aura of virtue. As per the study conducted by Dayal and Palsapure (2020), just as said freedom must be good, thus globalisation hints towards internationalism between two geographical locations as opposed to the variables of protectionism and nationalism that may give rise to negative outcomes. For SME, the chances of cross border trade and the related investments may be economically damaging. As perceived ideological constraints, globalisation connotes not only internalisation and freedom, but helps in realising the benefits related to free trade. As stated by Lambregts et al. (2016), globalisation is seen to have a direct manifestation on the democratic condition. The business environment at both local and global level are in between anti-democratic counter-revolution. The process is highly destructive in nature, as it serves a global minority while damaging the majority of the population, which can increase the level of problems and existing environmental crisis. The destructive tendencies have high chances of producing explanation if not the right process is properly established

DISCUSSION

The aspect of globalisation has gained immense importance. However, due to increasing levels of challenges it becomes difficult for the business organizations to keep a competition. The newly ground espresso can be named as perhaps the greatest open door in the picked business. The British based business has a more noteworthy bit of leeway over the buyers as it can deliver administrations and items according to the requests of the clients. The business needs no stringent statistical surveying and advancement. The moderate value range can additionally take a shot at pulling in the clients from all the divisions, regardless of monetary status (Lambregts et al. 2016). The business is the picked situation and has the extent of development. In the event that the business neglects to keep up a solid a dependable balance at one spot, it can change to an alternate geological area according to the client decision. The items can be tweaked according to the decision of the clients.

The familiarity with the chances if appropriately utilized can be actualized in growing better business activities. SME can take a shot at lessening the expense through the part of globalization. In any case, organizations like Starbucks, working on a bigger premise may neglect to give the normal outcomes. Along these lines, the part of institutionalization increased a monstrous significance in the referenced situation. As expressed by Hirogaki (2019), institutionalization is named as the way toward making and advancing principles of innovation that are similarly good, inside the picked business. The standard of item quality can take a shot at keeping up the consistency and quality, in this way guaranteeing elevated levels of similarity and wellbeing. Accordingly, it tends to be convincingly expressed that the part of globalization can acquire chances of development in the two cases. The SME can chip away at creating business to other geographic territories, while the business in MNE can take a shot at improving their item range to satisfy the needs of the clients.

The quality relating to globalization inside the picked modern space can upgrade the interest for local merchandise As impacted by Planing (2018), the interest for local products has been expanding clearing a path for the downstream ventures to approach and snatch the extension identified with the local market. The creation of top notch products and enterprises inside the household showcase enlarges the current extent of coming to past the current residential limits. Plenitude of talented HR at moderate expense is an extra advantage for the SME. The nearness of ability based work in mass sums have made them promptly available in minimal effort, making ready for globalization

Globalization into the creating nations, for example, in India might be esteemed appropriate. India has a populace which is equivalent to the complete populace of 11 million individuals moving in the urban areas on a yearly premise (Homann, 2016). The extent of development combined with the improvement of the nation's framework. Inflow of Foreign Direct Investment of FDI over the picked modern segment. Creating nations are picked as a hotspot for globalization. The administrative condition regarding FDI has been facilitated to make it financial specialist cordial. The progressions are done persistently to expand the progression of remote speculation

In this way, it tends to be indisputably expressed, open doors in business inside MNE and SME are huge. Notwithstanding, comprehend that business needs to use certain angles so as to flourish with the chances. As affected by Gröning et al. (2020), SME are regularly given a chance to guarantee item and administration explicitness. In any case, MNE battle with the part of particularity making things troublesome in the more drawn out run. Hence, globalization can present chances to both the association (SME and MNE) permitting the business to develop at a fast pace.

SME is as yet subjected to auxiliaries for acquiring the crude materials. The absence of fare and the sponsorship identified with send out is known for being mishandled. For example, a few exporters are believed to pronounce the estimation of their merchandise to profit more from the fare related sponsorship. Such plans are given by the legislature to improve the degree of industrialisation and lift the monetary condition. Notwithstanding, it has become an extension for associations which exploit such plans (Hassi and Storti, 2017). The expansion in the part of globalization can bring better possibilities identified with the working society. Procuring the individuals with various social foundations can assist the business with coping with the business needs and work on guaranteeing that the business benefits are properly kept up. In this manner, it gets critical to comprehend that SME may neglect to procure individuals from various societies because of poor capital account and restricted extent of development on the worldwide fields. The shortcoming if there should be an occurrence of Starbucks might be the absence of social comprehension. The social comprehension is significant in guaranteeing globalization at the correct pace. In comparable respects, defers identified with the finish of the task might be basic if there should arise an occurrence of Starbucks, because of high chain of operational productivity; notwithstanding, the equivalent may not be valid for SME as the chain of choice is generally little, settling on usage of a specific choice extremely fast. As expressed by Groenland (2018), delays are frequently observed to expand the weight of cost on the organizations. The weight of cost can be borne by the worldwide endeavors. Be that as it may, the expense might be extraordinary for the independent companies hampering their operational productivity.

Hence, on analysing the available literature it becomes important to conduct market research for narrowing down the consumer needs. As stated by Groenland (2018), thorough market research can work on streamlining the business needs and demands of the customers. The mentioned step can work on converting the opportunities into potential strength. In similar regards, the threats and weakness need to be addressed through the use of survey. The increase in the market research can work on enhancing the idea about the market and ensuring that the customer needs are rightly met. In similar regards, for changing the weakness and threats, it is important to hire experienced individuals. The MNE can afford to hire experienced individuals, however, in the case of SME it becomes difficult to recruit a lot of people due to limited budget. Nevertheless, the people should work on leveraging the weakness and threats for ensuring better business outcomes (Tomalin, 2018). Hiring the people of choice can be termed as the right decision or changing the scope of opportunities for gaining better competitive advantage in business.

CONCLUSION

The advent of globalisation can bring about a lot of changes and challenges. Furthermore, it is important to understand the challenges prior to the establishment of the business. Hence, it becomes important to understand the ways the challenges can be avoided. In similar regards, business organizations need to be aware of the internal potential that can be further utilised for ensuring better business. The European context the regional clusters are highly competitive in nature. The aspect of power is seen to play a major role in the aspect of globalisation and training the workers. Decentralisation of power coupled with economic efficiency and improved governance can work on enhancing the possible advantages

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