International Business in Globalization Era

1. Introduction

The international business management refers to the trade of the goods and services as well as the capital, knowledge, technology across the national borders at a global scale, where the organisations try to be involved with the cross border transactions of the goods and services between the two or more countries. In the recent era of globalisations, there are multinational corporations as well as the small and medium sized business entrepreneurs, who try to expand their operations across the international borders to access the global markets and run the business efficiently. Hence, the international business management is a critical task to meet the organisational vision and secure future sustainable development. Through this paper, it is possible to explore the business activities of the two organisations, which are running their business in two different sectors. The organisations are such as McDonalds and Nike, which are famous in their own field and expand their business operations across the globe. Both the companies are the multinational corporations, where McDonalds operates in the restaurant and fast food industry and on the other hand, Nike operates in the global sport apparel industry.

In order to progress in the study, it is also essential to choose two different countries in which both the companies operate, where one country will be developed and another is developing or emerging economy so that it would be possible to analyse the organisational operations in different international markets and identify the international trade blocks for supporting the business operations. Additionally, through this study, it is also possible to analyse the reasons of internal business, types of finance available in the companies and role of trading blocs on international trade. This discussion will be helpful for understanding the international trade initiatives and brand strategies to expand their services across the globe. The study also provides a scope to identify the features of globalisation that affect each business so that it would be possible to evaluate the impact of globalisation on the business over the last 5 - 10 years. Hence, the research is helpful to analyse and evaluate international trade of the two business firm Nike and McDonalds in such an era of globalisation.

2. Operational process of the business

2.1 Operations of each business

Organisational background

McDonalds is an American fast food company, founded in the year of 1940, where the organisation is operating across the globe and become successful to gain high market share. The organisation McDonalds provides the best quality products including the hamburgers, chicken, French fries, soft drinks and milkshakes as well as salads, desserts, hotcakes, coffee, breakfast and wraps. The quality and quantity of the food items are best at the company McDonalds, where the organisation is successful to retain more clients across the globe. The area served by McDonalds is more than 119 countries across the international markets where it offers both the counter service and the drive through services, with indoor and sometime outdoor seating arrangements. Hence, diverse service innovation further retains the customers across diverse international market to enjoy the food items that are offered by McDonalds. There are separate stations for placing, paying and picking up the order through Drive-Thru, Auto-Mac, Pay and Drive, or "McDrive" as it is known in many countries (McDonalds, 2021a). McDrive are the locations near highway that offer no counter service or seating arrangements. McCafé offers McDonald's restaurants, where the customers can come and enjoy their food and quality time successfully. Hence, the operational activities of the company as well as the best quality of the products are the major success factors through which the organisation is able to prove the best quality services to the customers. The product range and the quality of the products, freshness and organic ingredients are also other tactics to create strong customers base, where the customers trust the organisational products at McDonald's restaurants for having safe and the best quality foods and beverages (McDonalds, 2021b). On the other hand, Nike is another American corporation that is engaged with the design, development, manufacturing and worldwide marketing and sales of the footwear, sport equipment, apparel accessories and other services. The major products of the company are athletic footwear, sport apparels and accessories, athletic and recreational product as well as others services that are essential for the athletes. The company is successful to expand their business across the global markets, in order to secure their market position and strengthen the customer’s base of the company Nike, in order to run their operations profitably. The worldwide operations are useful for Nike to expand their activities and retain more customers towards the company of accessing the best quality athlete’s products and services (Nike, 2021a). Combining these sneakers, leggings, sweatpants, crop tops and tracksuits with regular chic street clothes such as jeans, skirts, leg warmers, slouch socks and bomber jackets are effective for Nike to maintain strong product range and service the customers efficiently as per the market trend and customers preferences. Particularly popular products are the unisex spandex Nike Tempo compression shorts worn for cycling and running, which had a mesh lining, waterproofing and other benefits. Nike have introduced a premium line, focused more on street wear than sportswear called NikeLab. In March 2017, Nike announced its launch of a plus-size clothing line in order to target diverse customer’s base across the globe. The Nike shoes are famous for its comfort, the best quality as well as the new design which retain more athletes towards the organisation (Nike, 2021b).

Types of business

The types of business are mandatory trough which it is possible to understand the business operations. Nike is the multinational enterprise where it is successful to develop strong market base by exporting their products and developing the production hub in different international markets (Nike, 2021a). It is mainly a public organisation founded in the year of 1964. On the other hand, McDonald's is also another public organisation, and this multinational corporation is successful to manage their operations across the globe. Multinational Corporation is an enterprise producing goods or delivering services in more than one country. Both the companies are the multinational companies that offer the best quality products and services to the customers. The product range and the strategic planning are effective to reach the customers and deliver quality products and services to all the customers across the globe. The multinational companies generally have offices and/or factories in different countries and a centralized head office, where they coordinate global management. Both the companies are efficient to manage their operations through different regional offices and also being connected with headquarter so that the management team can handle the globe operations efficiently cooperatively.

Revenue and sales volume

The revenue generation and sales volume of both the companies Nike and McDonalds are increasing over the period of time, due to is high quality products and services, where the brands are successful to satisfy the customers in long run. In the last year, the revenue generated by the company McDonalds was 21,077 million US $ and the net income was 6025 million US $ (McDonalds, 2021b). Price per share at the company is also increasing it was US $ 166.06 in 2019. On the other hand, Nike has generated US $37,403 million revenue in 2020 and net income was 2539 million in US $ (Nike, 2021c). And in this year, the revenue volume of Nike is approximately US $44538 million along with 5727 million net incomes. Hence, it can be stated that the sales volume at Nike is increasing at a rapid rate which contributes in increased revenue and net income of the company.

Market leader

Both the companies Nike and McDonalds are efficient to operate in the market as a market leader. There are subsidiaries under Nike, who report at headquarter of Nike, such as Converse, Hurley and others. On the other hand, McDonalds is operating as a single market leader with strong product range starting from hamburgers to soft drinks, beverages, French fries, different chicken recipes and breakfast options for the customers. Nike is also efficient to utilise brand log and unique design to promote their shoes of the athletes and inspire the athletes to perform better by using the sport apparels, accessories, shoes and others. Both the companies are operating as a market leader rather than followers, and they are successful to create own brand image and corporate entity in the global market. Nike is successful and leading organisation in the sport apparel industry and also McDonalds is efficient to create brand image in the international restaurant for serving the best quality food and beverages to the customers across the international markets.

Market share

As the most popular brand of athletic footwear, Nike enjoys a market share of approximately 62% in 2020, as compared to its industry rivals Adidas and ASICS, making Nike the world's largest company in the global footwear market. Nike is hereby efficient to manage their operations across the international markets and gain high market share. Nike is one of the leading sportswear manufacturers in the world and the key player within the footwear market in the United States (Nike, 2021c). In 2019, McDonald's controlled an impressive 21.4% and it is successful to have dominant market share in the global fast food industry. The strong product range as well as quality of the product at McDonalds further retains the customer repetitively across the international markets (McDonalds, 2021b).

Numbers of employee and stores

Total numbers of employees at McDonalds is approximately 210000, where the staff members are efficient to manage the operations and provide the best quality products to the customers. All the staff members are efficient to manage the operations and meet their personal job roles and responsibilities. Total numbers of staff members in Nike is more than 75,400 in this year, where the employees understand the international operations and manage the Nike’s activities successfully to meet the company’s vision (Nike, 2021c). Both the companies are efficient to provide the best quality training and development program to the employees so that the staff members can understand the working process and contribute efficiently in the company for achieving he future success. The numbers of retail stores of the company Nike is more than 1,152, and on the other hand McDonalds has more than 38,695 restaurants across the international places. Hence, the companies are operating efficiently by store expansion strategy as well as the strong employee base is also a success factor of the company for achieving the company’s mission (McDonalds, 2021c).

Organisational structure

The McDonald's company structure is such that, at the top is the chief executive officer (CEO), followed by the chief operating officer (COO), the chief people officer (CPO), the chief financial officer (CFO) and the SVP development. McDonald's restaurants mainly have a flat structure, in which the manager in each place of the business controls the other assistants and employees. Hence, the simple structure is maintained with seniority and the assistants in order to manage the employees and lead them efficiently toward achieving the company’s goal. The managers mainly take all the decision at the brunch and can change the main functions like, R & D, marketing, finance and human resources and the other staff do the selling. The operational activities are performed and clearly monitored by the management team of the company. On the other hand, Geographic divisions are a major organizational structure characteristic of Nike, Inc., where the operations are allocated and dependent on the geographic locations and internal activities. It is basically known as matrix structure rather than flat structure where Nike consists of several divisions separated into subsidiaries: Converse, Hurley and others, which all report to Nike's global headquarters. Nike's many divisions operate pseudo-independently within the overall Nike brand name. Divisional structure is hereby there in Nike, and in McDonald's, there is flat structure as per the internal operations of the company. The working activities are dependent on the organisational structure, and both the fat structure and divisional structure are effective to run the internal operations of the brands. McDonald's develops flat structure by arranging different departments such as research and development, finance, marketing and sales production and operations (McDonalds, 2021c). There are different management team in the departments to handle the internal functions. The managers at different locations of McDonald's are managing the whole operations by cooperating with each department and leading the employees towards achieving the company’s goal. On the other hand, Nike is efficient to develop geographical division, for promoting their products and retaining more clients towards the business. There are different geographical locations, where Nike has its production house, operational activities through warehouse and lean management system or having physical store. As per the activities, the management team develop suitable structure for managing the internal functions.

Sector

Sectorial analysis is mandatory for identifying the actual sector in which the companies are operating. McDonalds is operating in the restaurant sector, mainly the fast food restaurants, where it provides the best quality foods and beverages. The restaurant industry is highly growing due to ready to eat meals at afforded price, where the numbers of customers accessing the foods and beverages of McDonalds is also growing at a rapid rate over the period of time across the international markets. On the other hand, Nike is operating in the industries of apparel, accessories and sport equipment. The company is successful to gain high market share in the sport apparel industry by providing the best quality products like sport accessories, shoes and apparels to the customers.

Business strategies

The business strategy of Nike is to invest in building the brand through emotional marketing and sports celebrity endorsements and develop products that have high-quality, market-leading technology and buy out competing sports brands. The strategic aims of the company are minimize its environmental footprint, transform its manufacturing and unleash human potential. The mission of Nike is to bring inspiration and innovation to every athlete in the world (Nike, 2021c). On the other hand, the company McDonalds strategizes the activities creatively to serve the customers successfully. McDonald's brand mission is to become customers' favourite place and way to eat and drink. Worldwide operations are aligned around a global strategy called the Plan to Win, which centre on an exceptional customer experience – People, Products, Place, Price and Promotion. The store expansion strategy along with online brand presence through e-commerce services are the best strategic planning of the company in order to serve the customer efficiently to secure future sustainable development (McDonalds, 2021c).

Headquarter details

McDonalds has it’s headquarter at Chicago, Illinois, USA, where the major operations are taken place by the efficient managerial team and the CEO of the company. On the other hand, headquarter of Nike is situated in Beaverton, Oregon, USA. Both the companies are American multinational companies operating efficiently across the globe by choosing diverse operational activities.

2.2 Reasons of internal business

The companies in the recent years try to manage their international operations through strategic planning so that the entrepreneurs can expand their operations and secure future sustainable development. McDonalds is a successful restaurant to provide the best quality food and beverages to the customers across the international market. In this regard, two countries are considered in order to develop critical discussion about the reasons of the international business management. The developed nation is USA, which is also the home country of the companies Nike and McDonalds and another is developing country that is China. China is an emerging economy\, where the multinational corporations try to expand their operations for gaining high market share and accessing strong customer’s base. The comparison between both the countries will be helpful to understand the reasons for which McDonalds and Nike expand their business in the USA and China.

Population

The current population of the United States of America is 333,664,823 as of November 2021, based on World meter elaboration of the latest United Nations data (Worldometer, 2021a). It would be great for McDonalds to expand their business across the United States, in order to retain ore long run customers for their tasty and quality foods and beverages. There is strong customer’s base that can be accessed by the organisation in order to strengthen their client base and retain more old and new customers of their products. On the other hand, Nike is also efficient to access the US market and retain the customer for the quality sport apparels and shoes. On the other hand, the population of china in this year is 1,411,778,724 where there is also strong customers base that can be accessed by both the firms for retaining the clients for the quality organisational goods and services (Worldometer, 2021b). Both the organisations aim at accessing the markets of developed and emerging nation, in order to expand their operations and retain more customers in the countries. Strong customer base can be generated by expanding the business operations across the international markets.

GDP

In 2021, current-dollar GDP increased 7.8% at an annual rate, or $432.5 billion, in the third quarter to a level of $23.17 trillion, where China is able to enhance economic growth by managing their international trade. USA is also successful to maintain the GDP of the country and in this year, the GDP of the USA is $22.675 trillion Current-dollar GDP increased 13.0% at an annual rate, or $684.4 billion, in the second quarter to a level of $22.72 trillion (Trading economics, 2021a). According to the International Monetary Fund, USA and China are the highest ranking countries in the world in nominal GDP with 20.49 trillion and 13.4 trillion respectively (Trading economics, 2021b). Hence, the target international markets are effective for both the organisations, Nike and McDonalds to utilise economic growth and operate efficiently for further band expansion. The production and operations of both the target countries are growing proficiently with business creativity and technological innovation and this business phase contribute positively in the firms to operate in the market and gain high market share in near future.

Infrastructure

In the USA, infrastructure is composed of public and private physical structures such as roads, bridges, railways, tunnels, sewers, electrical grids, water supply and also telecommunications (including Internet connectivity and broadband access) that have crucial impacts on the organisational activities. The USA is a developed country with adequate infrastructure where the business firms can renovate their operations by utilising the country infrastructure. According to the World Economic Forum's Global Competitiveness Report, in 2019, the United States has been ranked thirteenth in the world in a broad measure of infrastructure. Additionally, China developed infrastructure as a part of its industrial policy drive. As a developing country, China invested in industrial zones and transport networks so that industrialisation process would be smooth and the corporations can operate in the market efficiently. China's cabinet also approved the 2021-25 plans for the infrastructure construction, aiming at increasing domestic demand, promoting economic transformation and increasing growth momentum. The development of the Chinese logistic sector is closely related to that of China's infrastructure, where the Chinese infrastructure is developing over the period of time in terms of roads, railroads, ports, air transport, and electricity. Hence, the organisations Nike and McDonalds can utilise the country infrastructure for expanding their business and running their operations smoothly.

Government in power

The United States is a constitutional federal republic, in which the president (the head of state and head of government), Congress and also the judiciary share equal powers reserved to the national government, and the federal government shares sovereignty with the state governments. Hence, there is structured government and stable state and federal government who cooperate with each other for managing the activities in the economy. On the other hand, the Communist Party of China maintains that despite the co-existence of private capitalists and entrepreneurs with public and collective enterprise. It is not capitalist economy, rather than there is socialist development and there are five levels of local government including provincial, prefecture, country, township and village. The government has the power to control the activities of the business and the operations in the economy. The U.S. is a mixed economy, exhibiting characteristics of both capitalism and socialism, for which the companies can run their business individually and also the entrepreneurs follow the government policy to respect the government and run the business ethically. Hence, structured government and stable political power influence the organisations Nike and McDonalds to work efficiently under suitable economic structure and political power.

Employment

In 2020, the U.S. employment rate stood at 56.8%, which indicates that the country is able to generate employment opportunities for the candidates in USA (Trading economics, 2021c). there is economic growth along with social development, where the educated candidate are searching for better job opportunities and the companies are able to create job in the economy for increasing employment rate. On the other hand, due to the recent pandemic situation, in 2020, the unemployment rate among the United States population ranged at approximately 8.31%. In the emerging economy China, the employment rate decreased to around 63.5%, from 65.1% in the previous year 2020. China is the world's most populous country and its rapid economic development over the past decades has profited greatly from its large labour market (Trading economics, 2021d). Hence, both the organisations try to expand their business in China to access such populous country and create new job opportunities for the candidates. Nike and McDonalds are able to run their operations in both USA and China, for such economic growth and social development. In 2020, the rate of registered unemployment in urban areas of China increased to about 4.2% due to the recent COVID-19 pandemic, which is also less than the unemployment rate of the USA. Hence, the business firms would be profitable in expanding their operations in the emerging economic China.

Literacy and Numeracy rate

Literacy rate and numeracy rate are important factors that support economic growth and social development. The organisation focuses on country’s literacy rate so that they can hire the efficient and knowledgeable employees of the country. In 2018, adult literacy rate for China was 96.8 %. Adult literacy rate of China increased from 65.5 % in 1982 to 96.8 % in 2018 growing at an average annual rate of 10.52%, which indicates that there is good infrastructure of schools and colleges for enhancing educational activities. On the other hand, the U.S. literacy rate is about 99% and it has been ranked as 7th in literacy 2020. Hence, the developed and emerging nation are effective to ensure social development through increasing their literacy rate by promoting education, influencing child enrolment and providing learning opportunities through schools and colleges (Statista, 2021). The organisations Nike and McDonalds are effective to run their operations by utilising economic growth and social development. Nike is successful to hire local employees who are educated and knowledgeable in working successfully. McDonalds also focuses on creating job opportunities in the USA and China, for running their business efficiently and securing future sustainable development. For the above mentioned factors such as high population, economic growth and social development, the organisations Nike and McDonalds target the developed nation USA and also emerging economy China to expand their business and contribute in the economy sustainably. The organisations are efficient to utilise the country’s infrastructure and technological innovation for managing the business operations. There are advanced roads, railways and airports in the USA and China which provides scope to the business firms to access the transportations system for transacting their good and services across the international borders. Additionally, the technological advancement in both the countries are innovative with software system, ERP and GPS system, Information and communication technology, through which Nike and McDonalds can manage the market communication and develop integrated process to run the operations creatively.

2.3 Types of finance available in the companies

There are diverse financial options which can be accessed by the business firms in order to run their operations, and the financial options are such as prepayments, letter of credit, bank loans and export credits. These are the financial options, through which the multinational corporations to utilise the financing options in the firm and arrange investment capital for running the business sustainably. The financing strategy Prepayment is an accounting term for the settlement of a debt or instalment loan in advance of its official due date. In the organisation, a prepayment may be the settlement of a bill, an operating expense, or a non-operating expense that closes an account before its due date (Van Assche and Gangnes, 2019). The organisations can repay the loan within the due date and it provides positive brand image to sustain in the market. Prepayment mainly includes loan repayment before the due date, salary, insurance premium, prepaid bills, rent, credit card bill, income tax, sales tax, line of credit, etc. Nike is a famous organisation to sustain in the market by arranging capital for effective loan repayment. McDonalds is a successful firm in generating revenue and it is also efficient to manage net income and profit margin for loan repayment before due date. The liquid cash is there in the restaurants, where the company is able to utilise this financing option of prepayment for running their business without debt and secure future sustainable development by arranging investment capital. A letter of credit is essentially a financial contract between a bank, a bank's customer and a beneficiary, where the agreement is secure and there was secure transaction of cash and goods under government rules and ethical practice. Generally it is issued by an importer's bank, where the letter of credit guarantees the beneficiary will be paid once the conditions of the letter of credit have been met (Gereffi and Wu, 2020). During international trade, the exporting companies issued the letter of credit to ensure that the amount will be credited in the bank by the beneficiaries. A letter of credit is mainly a document sent from a bank or financial institute that guarantees that a seller will receive a buyer's payment on time and for the full amount. During the international transactions, where Nike exports the sport shoes and apparels and other sport accessories, and the company issues the letter of credit in order to ensure full payment from the customers within the specific period of time. Nike is efficient to manage their operations worldwide and the firm is successful in exporting the goods and services across the international markets where the payments are conducted through issuing the letter of credit. Export credits are the government financial support, direct financing, guarantees, insurance or interest rate support provided to foreign buyers to assist in the financing of the purchase of goods from national exporters. Both the companies Nike and McDonalds are efficient to manage their financial transactions under the export credit options and also though letter of credit. There is direct financing options and the insurance in the company for securing the international trade activities. The organisation Nike also focuses on managing finance through such credit options in order to secure the payments from the buyers. Additionally, bank loans are a common form of finance, like trade credit and overdraft facilities that hep the organisations for arranging capital for business investment (Lechner et al., 2020). There are different types of loans available including mortgage and offset facilities. For short-term needs, such as managing the cash flow, an overdraft or business credit card may be more suitable options. Nike is efficient to manage the business credit cards for arranging capital for further investment. On the other hand, McDonalds is also another famous organisation in arranging investment capital by bank loans and export credits. The organisation is successful to manage their financial operations safety under government rule and international laws so that the business operations can be conducted ethically. Hence, through the financing options in the business, the organisations Nike and McDonalds aim at managing their international trade in order to secure future sustainable development. For direct exporting, they utilise letter of credit to manage their client and run the business ethically. On the other hand, bank loans are effective for both the companies to manage their investment capital and run their operations safely across the international borders.

2.4 Analysis of the support that is available to each

The United States Department of Commerce is an executive department of the U.S. federal government concerned with promoting economic growth and ensuring smooth international trade management. The mission of the International Trade Administration (ITA) is to create prosperity by strengthening the international competitiveness of the U.S. industry as well as promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreements (Van den Bossche and Zdouc, 2021). There is structured trade laws and agreement to conduct international trade where the government is operating with the private entrepreneurs to enhance export and important volume in near future. Additionally, The U.S. Trade and Development Agency is also there who helps the companies to create U.S. jobs through the export of U.S. goods and services for priority infrastructure projects in emerging economies. USTDA links U.S. businesses to export opportunities by funding project preparation and partnership building activities which is considered as a great opportunity for the business firms like Nike and McDonalds to access the trade agreement and the services of USTDA for running their international trade. In 2021, every $1 USTDA invested in its programs has generated a record of $117 in U.S. exports. USTDA also facilitated more than $76 billion in U.S. exports since its founding in 1992, supporting 4,000 infrastructure activities in 139 countries. Partnership with government is beneficial for the private organisations to run their operations smoothly (Meng et al, 2021). The Export-Import Bank (Ex-Im Bank) is the official export credit agency of the United States and the mission of the bank is finance the export of US gods and service to the international markets. Additionally, the Small Business Administration (SBA) also offers loan guarantee programs for the small business exporters to obtain working capital and finance pre-and post- shipments. These agencies are effective in the USA to guide and support the organisations like Nike and McDonalds to manage their finance and ensure smooth export activities for running their operations across the international markets. In addition to this, China became a member of the World Trade Organization (WTO) in 2001, after the agreement of the Ministerial Conference. The admission of China to the WTO was preceded by a lengthy process of negotiations and required significant changes to the Chinese economy (Nachum, 2021). There are trade fair and government aid to the export companies for running their operations efficiently. The organisations like Nike and McDonalds are efficient to access the USA economy and also emerging market of China for running their operations efficiently. As a WTO member, China is bound by the General Agreement on Trade in Services (GATS) for providing the cope to the export companies to manage their business smoothly and under ethical considerations. As the multinational operations, Nike and McDonalds try to manage their international operations by arranging investment capital and following the trade agreements. There is government support and the international trade fairs through which the companies are supported for managing their international operations. Hence, the supporting agencies are playing an important role in order to manage the organisational international operations by promoting international trade (Khan, 2020). The agencies also contribute positively in the organisational success by managing the international trade, enhancing export functions and promoting smooth transaction of goods and services across the global markets. Nike as a famous sport apparel company utilise the rules and legislative structure of the international trade agencies so that it would be possible to export the goods of Nike effacingly as per the market trend and the customers’ orders. McDonalds focuses on store expansion strategy and there are franchising and licensing options to operate across the global markets, in which the international trade agreements must be followed by the firm to operate ethically. The government of China is also cooperative and welcoming the foreign direct investment in order to ensure industrial growth and technical advancement.

3. International trade

3.1 Role of trading blocs on international trade

A trading bloc is a group of countries that work together to provide special deals for trading and it promotes trade between specific countries within the blocs. The purpose of the trade blocs is to free trade from protectionist measures and to create an enabling environment for trade among the members. Hence, the trading blocs are effective for the organisations Nike and McDonalds to operate across the global markets smoothly under ethical considerations and government regulations. It also removes the trade barriers and establishes monetary, commercial, financial and economic co-ordination and co-operation amongst the countries involved (Ponte, 2019). Regional economic groupings also aim to accelerate economic growth and development of the participating countries. Internal boundaries can be removed under the trading blocs. World trade organisation or WTO is also playing an important role as successful trading blocs. It is the only international organisation dealing with the global rules of trade (Savchuk et al., 2018). Additionally, the major function of WTO is to ensure that trade flows as smoothly, predictably and freely as possible. The organisations must follow the rules of WTO in order to conduct international transactions of goods and services (Kano, Tsang and Yeung, 2020). WTO regulates the international trade by administering the WTO trade Agreements, handling internal trade disputes, monitoring the national trade policies and providing a forum for trade negotiations. Hence, the organisations Nike and McDonalds can follow the regulations of WTO in order manage their international operations smoothly. Providing technical assistance and training for developing countries, and ensuring cooperation with other international organisations are also possible under such WTO agreement. Hence, the trading blocs are important or smooth transitions of goods and services from one country to another under structured riels and policy framework. Nike exports the shoes and other sport accessories abroad through such WTO agreement and McDonalds is also utilising the legislative structure for working internationally and gaining high competitive advantage in the restaurant industry (Johns and Pelc, 2018).

3.2 Features of globalisation that affect each business

There are different features of globalisation which has crucial impacts on the operational activities of the organisations. In the recent era of industrialisation, the features of globalisation must be critically evaluated in order to analyse to influence in running the business operations internationally. The features of globalisation are such as,

International mobility of labour and capital

International mobility of labour and capital is the main feature of globalisation, where there is smooth transfer of labour and capital from one country to another in order to contribute efficiently in the production and operations in the country, the organisations utilise this feature for managing their operations smoothly (Jiang, 2019). The mobility of labourer are effective for the business firms in the recent era of globalisation, where they can hire experienced employees from international country in order to manage their operations efficiently. Additionally, the internationalisation of the business is also increasing in the current phase of globalisation, where the organisations are able to hire the local employees and also transfer the experienced staff to another country for suitable management. For example Nike and McDonalds are efficient to transfer the human resource and capital from one country to another in order to maximise their productivity. Hence, it is one of the important features through which the organisations can expand their business functions and increase the overall performance of the business by hiring the experienced staff and arranging capital.

Liberalisation of Import-Export System

Liberalisation stands for the freedom of the entrepreneurs to establish any industry or trade or business venture, within their own countries or abroad. It is one of the features of globalisation, where the small and medium sized firm can establish new and unique business firm in any industry of their choice (Crothers, 2021). Liberation of trade functions, export and import re also effective in such an era of globalisation, were the organisations try to manage their operations smoothly. This feature affects the organisations Nike and McDonalds to manage their operations efficiently and establish the firm with financial stability. The import and export system become efficient under the WTO and the international trade agreements, where the firms can run their operations smoothly.

Privatisation

Globalisation stands for keeping the state away from its ownership of means of production and distribution by letting the free flow of industrial, trade and economic activity among the people and their corporations (Cook et al., 2018). Privatisation is increasing in the recent of globalisation, where the entrepreneurs renovate their business and establish individual entity in the market. The numbers of competitors is also increasing due to privatisation of the business, where the entrepreneurs have the power to manage the operations and ensure high standard organisational activities. Globalisation hereby increases the pace of industrialisation for managing the organisational operations individually and generates profitability in long run. It has direct impacts on the operations of Nike and McDonalds, as there is intense competition, free flow of goods and services as well as threat of substitute products.

Multinational corporations

In the process of globalization, MNCs play a significant role where the multinational corporation try to manage their international operations efficiently. The business creativity and continuous technical innovation provide scope to increase the numbers of MNCs across the globe. The job leads to investments and goods being traded, that contributes to interconnections between different nations (Matejowsky, 2017). These companies are often managed from and have a central office headquartered in their home country, but with offices worldwide like Nike and McDonalds. Both the companies have headquartered in the USA, and there are international offices of the companies through which both the firms to operate globally. Globalisation hereby gives birth of increasing numbers of MNCs in order to access diverse international markets and run the operations efficiently.

International business communication

Business communication is another important feature of globalisation, where the organisations are able to manage their operations smoothly. There is information and communication technology or ICT through which the organisations can collaborate with each other and develop integrated system for communication. Telephonic conversation is utilised for sharing information and getting engaged continuously with others in the organisation (Panwar and Patra, 2017). Both Nike and McDonalds are efficient to enhance internal and external communication by adopting different technology. Globalisation enhances both the internal and external business communication. Apart from the telephonic conversation, there is website development and ICT software, through which the companies and enhance communication. The employees as well as the customers can engage with each other through the organisational official website. Both Nike and McDonalds have the official website, through which they try to develop strong connection between diverse stakeholders including the employees, managers, sales person and marketing team, finance officer, operational head customers and the suppliers (Anaf et al., 2017). Hence, in the recent era of globalisation, technical advancement is the key process of enhancing communication and further promoting the business growth through internal and external communication. Apart from the website and telephonic conversation, the organisations have social media page through which they are successful to promote the organisational products and services and retain the customers in long run. Social media in the recent years is playing a crucial role in managing the organisational activities, strengthening the customer’s base and promoting the products and services of the firms. Both Nike and McDonalds are able to manage their social media activities very efficiently. Nike has its own Facebook page and Instagram to engage with the diverse social communities across the international borders, from which the customers can access all the information about the brand Nike, their available products and latest renovation. McDonalds also handles its social media account, Facebook promotional activities and Instagram in order to promote their offers and available products in the global restaurant industry. Hence, globalisation enhances the access of social media were the social communities are nagged with each other and can access all the necessary information about the particular brand (Macdonald, Johnson and Lingard, 2020). Both Nike and McDonalds are successful to manage their social media account for promoting the brand and engaging the customers across the international markets. In addition to this there is online rand application through which the customers can communicate with the organisational representative and place their orders as per their personal choice and preferences. Hence, the social media activities as well as technological innovation provide diverse communicating modes, through which the organisational representative of Nike and McDonalds can engage with the customer and the social communities as a whole and strengthen their customer’s base in the recent globalisation era.

International payment systems

In the recent era of globalisation, the payment system becomes upgraded with latest technology and safe practice. The customers can choose diverse options for making their payments for getting the products and services from the organisations. The major payment options in the recent globalisation era are such as cash payment, electronics payment system as well as PayPal. The international payments are conducted through PayPal, which is highly secured application for making diverse payment options with different international currency. In addition to this, the organisations utilise the Goggle pay options in the recent years in order to manage the payment of the customers (Radović-Marković, Brnjas and Simović, 2019). The customers are also convenient to make their payments through the secure application such as Google pay, where the money is transferred under data protection and security. The personal information of the customers is secured under this application. Additionally, the debit card and credit cards are also adoptable or making payment apart from the cash payment options across the globe. Hence, globalisation increases the payment options for the customers with technological advancement, so that the customers can feel safe in transferring money and making payments for purchasing the quality products and services as per their personal need and preferences. In this context, both Nike and McDonalds are efficient to utilise all the above mentioned options for providing the payment options across the international markets. it is beneficial for the companies to make the payment easy for the customers and retain more trustworthy clients in near future (Shrestha et al., 2020). The currency transactions can also be done efficiently through measuring the current exchange rate, where the organisational representatives can manage the amount of the payments and ensure safe payment overseas.

Raising standards

Globalization does not only increase the overall standards and quality of products, but the quality of life itself. The people have increased their living standards due to global trends. The citizens of one country can see how other people live in the world and adapt the good ideas, healthy diet and new activities in life, that way they can also demand an increase in the standard of living in their countries (Watson, 2020). Globalisation hereby provides a chain of reaction where the people will be motivated to take their fates into their hands and change everything around them. Hence, through diverse technology and business creativity, the organisational products and service quality is being increased in the recent globalisation phase and in the overall context, he standard of living of the individuals is increasing over the period of time.

Free trade

It refers to free flow of trade relations among all the nations. It stands for keeping the business and trade away from excessive and rigid regulatory and protective rules and regulations. The free trade agreement is developed under strict rules and regulations and it further help the organisations to access the international markets and expand their operations ethically. The companies Nike and McDonalds can expand their export activities across the international nations under free trade agreement. Globalisation in this regard increases the access of different international market for running their operations. free trade agreement along with WTO agreement and EU nations policies are effective for the multinational corporations to run their international trade activities smoothly, where there is free trade areas for transacting goods and services without any tariff and quotas. Increased Collaborations

Encouraging the process of collaborations among the entrepreneurs with a view to secure rapid modernisation is possible under this globalisation era, where development and technological advancement is the main feature of Globalisation. Industrial collaboration is possible under such globalisation period, where the organisations can handle the whole operations smoothly through increased collaboration (Tien, 2019). There is integration of the business process through the computerised system, for which the organisational management team and employees are able to work as a partnership working practice. It is also possible for the organisations to cooperate with different brunches of the company across the international markets though telecommunication and advanced technology. It further provides a scope to the biasness leaders of Nike and McDonalds to enhance their creativity and develops integrated business process for serving the customers with the best quality products and services.

3.3 Analysis of the barriers to each of operating internationally

The organisations face several barriers to conduct international trade across the international borders. The three major barriers to international trade are natural barriers, such as distance and language; tariff barriers, or taxes on imported goods; and nontariff barriers (Crane et al., 2019). Tariff barriers are critical to resolve for the companies as there is high imposition of tariff on the export products which further raise the overall pricing of the products and services. On the other hand, the nontariff barriers to trade include import quotas, embargoes, buy-national regulations, and exchange controls (Sharif, Afshan and Qureshi, 2019). Nike Inc., Adidas AG and other footwear companies urged President Donald Trump to reconsider his tariffs on shoes made in China as it is considered as catastrophic for the customers. The protest comes as U.S.-China trade tensions escalate and Trump threatens to impose tariffs as high as 25% on Chinese goods -- including all types of footwear, from sneakers to sandals, as the export and import of the leather products become difficult for the organisations to trade. Imposition of high tariff on the company Nike is a critical situation because shoe companies already pay some of the highest duties in the U.S (Tien, 2019). Hence, as compared to other industries, the U.S. footwear sector is highly protected by import tariffs. The rate of tariff substantially affect the production cost as it rise the overall cost and final costing of the product in the shoes manufacturing industry (Berger‐Walliser and Scott, 2018). There are also other technical barriers in the sport shoe manufacturing industry where Nike is also facing threat in managing the international trade sustainably. Sustainability issues are also increasing over the period of time, where the company Nike face the issue of utilising natural resources and lack of management of greenhouse gas emission. On the other hand, McDonalds also faces some critical issues in managing international trade which may have serious impacts on the brand operational activities in the recent globalisation era. In case of inflation and changing interest rate, the company faces the issue in setting the price for their products and services. Food chains as McDonald’s tend to import the biggest part of the raw materials to certain territory if there is a delivery lack ad in such condition, exchange rate fluctuation have serious impacts on the price of the raw materials (Steger, 2017). This further affects the company negatively to control the price of the raw materials and final pricing of their products (Witt, 2019). There are certain international markets that include different problems such as various area of health, protection of the worker, and environment for which the company may face issues in managing the international trade. The political influence is also there, for example, there are certain groups in Europe and the United States, which demand the acts of governmental power for concerning the medical values of meal of fast food. This creates barriers for the company McDonalds to run their international operations smoothly. There is technological innovation for arranging ‘loving it’ campaign as well as their promotional practice and this requires financial arrangements (Mura and Ključnikov, 2018). This is also another barrier to operate smoothly and entre into the international markets efficiently. The environmental barriers are also there, where the company face difficulties to manage the quality of raw material, inclusion of the organic products in the food preparation and maintaining waste management. These are the major barriers for the company to conduct international trade effectively (Coulibaly, Erbao and Mekongcho, 2018).

4. Evaluating the impact of globalisation on the business over the last 5 - 10 years

Globalisation has its great impacts on the business of McDonalds, with technical innovation and business creativity. There is economic growth and social development in the countries across the globe and McDonalds is efficient to utilise such market condition for expanding their business across diverse social communities. Globalisation features are effective for the business firm to utilise the company’s infrastructure and access the international markets for further growth. The organisation McDonalds has the purpose to feed and foster communities with the best quality products and services (Cherunilam, 2021). The mission of the company is to create delicious feel-good moments for everyone and the core values are serve, inclusion, integrity, community and family. The company put the customers in the first priority in order to serve the best quality foods and beverages according to their taste and preferences. Inclusion of all the stakeholders further increases engagement and create strong corporate relationship for running the business operations smoothly (Schwertner, 2017). Managing integrity as well as community engagement is also beneficial for the firm to develop good corporate branding in the international restaurant industry. Globalisation is hereby effective to guide and provide information to the firm about managing people. The employees are the main stakeholder of the company, where McDonalds tries to manage all the staff members efficiently. The organisation is efficient to hire more than 210,000 employees directly in the offices and if the franchised are included, there are more than 1.5 million people, engaged with the organisation. Globalisation is hereby beneficial for the firm to hire the experienced staff and develop strong employee base the organisation is efficient to manage all the employees successfully by equality and diversity, transparency and accountability management and freedom at the workplace. Globalisation enhances the freedom to speech as well as raise standard in employee management. McDonalds is successful to manage the people engaged with the organisation an also provide high return on their investment in order to create values for them. The freedom to speech is another feature where the company leader and managers provide equal opportunity to the people to provide their opinion and contribute efficiently in the organisation. Hence, globalisation is successful to have its critical impacts on the operations of McDonalds, where the company hires experienced staff and manage the people internationally by develop strong employment rules and following the ethical practice of people management. The high standard in the organisation with the corporate governance are also other effects of globalisation, where there is freedom to work with others and harmony in the workplace. Hence, McDonalds is able to provide suitable wrong circumstances to the entire staff member to work efficiently and maximise their performance. Quality and diversity management further reduce cultural diversity where cultural globalisation is possible smoothly (Gopinath, 2018). Accepting all the cultural people and developing harmony in the society are possible under such globalisation era. Fostering safe, inclusive, and respectful workplaces are there along with health and safety at workplace practice, and this further create trust and bonding among the employees. Hence, the company is successful to utilise the rennet globalisation phase and manage diverse people in the organisation for better operations. There are compensation and benefits as well as other developmental activities where globalisation is playing an important role at McDonalds. In the recent phase of industrialisation, the organisations provide monetary and non-monetary incentives in order to manage the employees across the international borders. Hence, globalisation increases the standard of management and provides a scope to the company McDonalds to develop strong corporate governance of running the operations smoothly. In addition to this, globalisation increases the access of the international markets where the companies can expand their business operations smoothly through export and importing facilities. The company McDonalds is successful to run their operations worldwide over 119 countries. The organisation focuses on store expansion policy along with franchising option, and the total numbers of restaurants of McDonalds is more than 38,695 across the international countries (Watson, 2020). Globalisation hereby has positive impacts on the operations of McDonalds where it helps to access diverse social communities across the globe for expanding their business activities. This further helps the firm to increase rand visibility and promote the organisational products and services through positive branding. Globalisation is hereby effective for the business activities of McDonalds to access international countries and ensure transfer of labour and capital. The huge numbers of employees are working at different stores of McDonalds and there is transfer of capital and labourers for managing the international operations of McDonalds the managers can be transfer from one place to another in order to review the operations and develop alternative strategic planning for operating efficiently in the market. Additionally, McDonalds also hires the local employees for managing their operations and serving the best quality products to the customers (Crothers, 2021). Hence, apart from the employee’s management and store expansion facilities, globalisation also ensures high standard of the products and services of the firm. globalisation also helps the firm to conduct in depth research and development which further increases the quality of products and arrange capital of further investment. The financing team is efficient to access different financial agencies and options of bank loan and letter of credit for making the export of goods and services safe. On the other hand, the product quality is also increasing over the period of tie through research and alternative solutions, such as using quality ingredients, organic vegetables and instant cooking facilities, so that McDonalds would be able to secure future sustainable development. The product range of McDonalds become strong in the recent globalisation era, where the products are such as hamburgers and cheeseburgers, Big Mac, Filet-O-Fish, several chicken sandwiches, Quarter Pounder with Cheese, wraps, Chicken McNuggets, salads, oatmeal, shakes, McFlurry desserts, McDonald's Fries, sundaes, soft serve cones, bakery items, soft drinks, coffee, McCafé beverages and other beverages (Radović-Marković, Brnjas and Simović, 2019). This strong product portfolio management along with different breakfast options, Egg McMuffin, Sausage McMuffin with Egg, McGriddles, biscuit and bagel sandwiches, oatmeal, breakfast burritos and hotcakes are effective for the firm to retain the customers and satisfy them by delivering the best quality foods and beverages. Hence, the organisation McDonalds is efficient to utilise the globalisation era and adopt creative business solutions and technical advancement for running their operations internationally (Matejowsky, 2017). Product portfolio management and roe in depth research are hereby enhancing the business creativity to strengthen their customer’s base and run their operations smoothly. There is service innovation, through which McDonalds is able to provide the best support to the customers by adopting latest technology, where the social communities are feeling engaged with the organisation (Cook et al., 2018).

Additionally, McDonalds is able to enhance their revenue over the period of time, by increasing sales volume and successful customer retention. Annual gross profit of the company in the year of 2017 was US $ $10,621 million, where it has been increased to $10,833 million in the next year 2018 and $11,179 in 2019. Due to recent pandemic era of COVID 19, the gross profit margin becomes decreased in 2020 and it was $9752 million. It can be stated hat, globalisation has its critical impacts on the operations of the company McDonalds, where the organisation is successful to generate revenue and maximise profitability in long run. The revenue generate in 2019 was US $21,077 million increased from $ 21,025 million in 2018 (Tien, 2019). The organisation is successful to maximise the revenue by increasing sales volume. McDonalds also has the scope of gaining high market share and as per the analysis, In 2019, McDonald's controlled an impressive 21.4%, with Starbucks coming in a distant second at 7.52 %, KFC held 2.82% of market share, and Subway owned 2.8%, Domino's Pizza was in fifth place at 1.57%, closely followed by Pizza Hut at 1.24% in the global restaurant industry. Hence, it can be analysed that, the company McDonalds is successful to gain high competitive advantage as compared to the other competitive firms such as KFC, Subway, Domino's Pizza and Pizza Hut (Panwar and Patra, 2017). Additionally, McDonald’s has the largest market share in the fast food industry with 43% of the U.S. fast serve market. Globalisation is hereby influential factors for the company McDonalds in order to expand their brand and retain the customers for the high quality foods and beverages (Shrestha et al., 2020). The communication is also enhanced in the recent era of globalisation, where the ICT system at McDonalds is strong to enhance internal and external communication. The company is successful to arrange the workforce and develop internal communication and collaboration to work as a team and contribute positively to meet the company’s mission. The social media is playing an important role in the recent years where the company can promote their service through the social media marketing activities (Anaf et al., 2017). McDonalds has strong competitive advantage where the brand utilises social media pages and personal company official website for promoting their products and engaging with the customers. Continuous cooperation and communication with the customers through ICT and official waste further create strong customers base across the international markets. The company is also able to handle the customers by delivering the foods and beverages safely through online food delivery services, where McDonalds has its own mobile application from which the customers can place their orders make payments safely. This innovation and business creativity of McDonalds further provides a scope to the management team to run their international operations and gain high market share in the global restaurant industry (Macdonald, Johnson and Lingard, 2020). Hereby, globalisation has its positive impacts on the business operations of McDonalds where the company is able to manage the employees, enhance their operational efficiency, utilising the innovative technology and organisational infrastructure to serve the customers with the best quality foods and beverages.

5. Conclusion

Through the above analysis and discussion, it can be concluded that, both the organisations Nike and McDonalds are efficient to manage their international operations by strategizing the business activities, customer’s retention techniques and managing sales. The countries USA and China are effective to welcome more foreign direct investment and influence the corporations for managing their operations. There are high population in both the countries along with good literacy rate, employment rate and economic growth that are beneficial for the business firms to run their operations smoothly. Social development and GDP growth further influence the companies to conduct their operations in the countries for increasing their global presence and utilise the market condition for strengthening their customer’s base and maximising profitability. The organisations also try to utilise the country’s infrastructure, technological advancement in the USA and china as well as access diverse financing options such as bank loans and letter of credit for managing the export functions safely. The free trade activities for the EU countries as well as WTO agreement reshape the international trade pattern and support the multinational corporations to run their operations proficiently. The companies must arrange the resources and maximise capabilities to conduct international operations smoothly to meet the organisational strategic vision by ensuring technological advancement and business creativity. Hence, the organisations are efficient to manage their international trade and access the trading blocs for managing the international trade activities strategically. In the recent era of industrialisation, globalisation has its great impacts on the business, where the major features of globalisation are such as international mobility of labour and capital, international currencies, liberalisation of import-export system, privatisation, multinational corporations, international business communication, international payment systems, freedom standards, free trade and increased collaborations. For such features of globalisation, there are critical impacts on the operations of McDonalds and the effects of globalisation are such as increased sales volume, access of labour market, enhancing business creativity and innovation, information sharing, developing integrated computerised system and improving the global operations through e-commerce services. Hence, globalisation is playing an important role in industrialisation process and it influences the company McDonalds to expand their operation across the international markets and secure future sustainable development by gaining high competitive advantage in the global restaurant industry. It would be great opportunity for McDonalds to expand their operations through accessing different trading blocs and running their international operations ethically. Globalisation is hereby influential factor for the business of McDonalds to attract huge numbers of customers from diverse culture and retain them for long run. There is strong customer’s base at McDonalds for which the company can increase their revenue generation year by year and improve engagement with the customers through market communication and social media interactions.

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