Assignment ( Reflective journal A ) Essay Example

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Reflective Journal A 4



There are generally four factors that can affect the operation of a business. They are:

  • Cultural factors.

  • Economic factors.

  • Political factors.

  • Legal factors.

There explanation in relation to how they affect the operations of two companies Ford and Wal-Mart are provided below.

(1)Cultural Factors

This includes the beliefs, practices, customs, traditions and behavior of people of a given geographical locale. The language that inhabitants of a place speak is vital to an investor wishing to supply good or services. Convincing and bargaining are all business aspects that are not possible in case there is language barrier as discussed by Hoang & Niyato, (2016.Pg.78). Wal-Mart is a global business and the cultural impression it makes is likely to affect its markets significantly. A recent move by Wal-Mart to defend its gay employees for instance might serve to draw far its clients who are against gays. Ford on the other hand has to for instance be wary of markets not to explore based on cultural hindrances. For example regions in Africa whose inhabitants still use animals like donkeys as a transport mean.

(2)Economic Factors

The level of economic development of countries can determine a business success or failure. The level of per capita income determines the nature of goods and services supplied as shown by McGovern, (2016.Pg.34). Ford will be keen not to have its cars exported to a country that has low income earner whose priorities are basic goods and not luxurious goods. Based on these same per capita criteria Wal-Mart can differentiate the qualities and quantities of what it supply to different parts of the world.

(3)Political Factors

Businesses will always thrive in countries that are politically stable. Both Wal-Mart and Ford companies will thus be keen to have their retail shops and outlets in countries that have stable political systems as illustrated by Cai et al, (2016.Pg.45). These companies both blossom in countries like the USA, England, Japan and France all of which are known for having long history of political stability.

(4)Legal Factors

This includes matters of registration, trademarks, patents, and taxes. Both Ford and Wal-Mart will for example prefer establishing stores in countries that have reasonable taxing systems in place as this will see their business rip profits that they can thus take back home to their motherlands as well as expand operations as discussed by Trevino & Nelson, (2016.Pg.44). Wal-Mart has in recent time seen itself being accused that despite its net income of $11 billion it still has not addressed income inequalities complains internally.

Perfect Competition

This is a market structure characterized by many small buyers and many small sellers. Sellers sell identical goods and none of them can control the market unlike in a monopoly and an oligopoly market structure as discussed by Crane & Matten, (2016.Pg.31). The buyers usually have complete knowledge about the market.

Examples include: Street food vending and agricultural markets.

N/B: These two examples only come close to meeting these markets requirements but in reality this market does not exist.

Monopolistic competition

Unlike in a perfect competition, this is market structure whose sellers or producers sell differentiated goods. This can for example be through branding and quality. Unlike in an oligopoly or monopoly market structure, no single business has control over the market and it’s also characterized with many buyers.

Examples include: Hotels, Pubs and Coffee shops.


This is a market structure that is characterized by one firm dominating a particular industry as opposed to a perfect completion and a monopolistic completion where sellers hardly have control over the market. The firm is commonly referred to us a monopolist and usually has control over price as suggested by Cai et al, (2016.Pg.55). This is so because the good supplied by a monopolist usually does not have close substitutes.

Examples include: British telecom and Microsoft.


This is a type of market where a few number of firms have the majority share of the market. As opposed to perfect competition where products are identical, here products can be differentiated or identical as discussed by Projogo, (2016.Pg.67).

Examples include: Auto industries like Chrysler and petrol industries like Total.

Ethical Dilemma

This is a situation that is problematic morally. It entails a situation with choices to be made between often two options that do not resolve the situation in an ethically acceptable way as suggested by Crane & Matten, (2016.Pg.55). An example of this is personal friendships for instance X falling in love with Y who is the girlfriend of his childhood friend D. In this situation Y also falls in love with X and X is torn in between who to disappoint.

Ethical Decision

This is a situation that provides the person in a dilemma with two options to pick from where one option is right but does not solve the problem at hand and the other one is wrong but solves the problem as discussed by Trevino & Nelson, (2016.Pg.77). For example a student considering whether or not to use leakage in order to pass an exam that he did not prepare for well.

Ethical lapse

This is a situation where one makes a decision that is unmistakably unethical for example a student choosing to use a leakage in order to pass an exam that he never prepared for.


This involves buying products overseas and selling them in your own country as illustrated by Hoang & Niyato, (2016.Pg.33). For example the USA imports petroleum products from the Middle East at a tune of $ 444 billion and sells it domestically.


This involves selling products manufactured or produced domestically to foreign countries. For example USA produces machinery like computers domestically and exports it around the world to a tune of $ 190.5 billion.


This is a method used by companies that want to enter into the international business quickly and with minimal financial and legal risk as shown by Antoshchenkova & Bykadorov, (2017.Pg.88). A foreign company thus enters into a licensing agreement where it sells the products of a producer in exchange for royalty fee. For example Sublicense Agreement between Ligand Pharmaceuticals and Retrophin that deals with medicine.


This is an arrangement where a company grants a foreign company the right to use its brand name and to sell its products or services as illustrated by McGovern, (2016.Pg.67). Examples of franchisees include the McDonald’s and KFC.

I would choose licensing over the other methods of overseas operation expansion as then it will be possible to avoid complex procedures of acquiring trademarks copyrights and patents which can be both costly and time consuming.

Reference list

Antoshchenkova, I.V. and Bykadorov, I.A., 2017. Monopolistic competition model: The impact of technological innovation on equilibrium and social optimality. Automation and Remote Control, 78(3), pp.537-556.

Cai, D., Feng, T. and Zhang, Z., 2016. The Fit between External Involvement and Business Environment: Evidence from Chinese Manufacturing Firms. International Journal of Information Systems and Supply Chain Management (IJISSCM), 9(3), pp.46-64.

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Hoang, D.T. and Niyato, D., 2016, February. Information service pricing competition in Internet-of-Vehicle (IoV). In Computing, Networking and Communications (ICNC), 2016 International Conference on (pp. 1-5). IEEE.

McGovern, E., 2016. International trade regulation (Vol.2) Globefield Press.

Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in delivering business performance. International Journal of Production Economics, 171, pp.241-249.

Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do it right. John Wiley & Sons.