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Exploring New and International Markets

University: Regent College London

  • Unit No: 13
  • Level: High school
  • Pages: 20 / Words 4923
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 308
Question :

This sample will let you know about:

  • Discuss factors required for expanding business.
  • Explain implications on SMEs.
  • Discuss the various methods of tapping into international market
Answer :
Organization Selected : Barclays PLC

INTRODUCTION

The current market conditions and huge competition demands the organisation to expand their operations on  to a global level. A business seeks to achieve its goals and objectives in terms of growth and development by planning all the course of action efficiently and effectively (Najmaei and et. al., 2017).  The foremost step in the growth plan is to establish the company's branches within different developing nations apart from its originated country. This enforces a firm to enhance the functioning level of a business's trading, production, marketing and sale to a whole new level of market. In this context the management can use several tools and implement all those principles  of working into new and international market.

This report is prepared for Barclays PLC, a most efficient global financial organisation which majorly offers services regarding investment and various financial services. The SME which is selected for the expansion purpose is Ella's Kitchen which is planning to expand in Australia. The effect of all the global factors on an entrepreneurial organisation will be examined. In relation to this the report also comprised of opportunities and challenges of global business, pros of custom duties  andnon custom duties and the global trading blocks. Moreover the trading, importing & exporting, etc. are such major key factors which can be practised to capture  more on international level.

Introduction to the chosen country and region and explain the global environment in which small and entrepreneurial businesses operate.

The analysis for the report is performed on the aspects of United Kingdom, as the nation is  well known with  fact that a a lot of small and medium enterprises are contributing efficiently to enhance national economy (Mahajan, 2012). The UK is the most developed and constant growing part of the Europe continent. The UK is ranked on the  6th position among the world  in respect of its nominal GDP which impacts majorly on the  development of nation as well as of its people. The nation is recognised for the continuous trend evolvement in the sector of education, business and technologies. With such growth the country provokes a huge number of small medium enterprises for the expansion and higher growth  of their operations. The governing rules and regulation authorities provide subsidies for SMEs to set up their ventures as well as to increase their scale of operations. Certain other assistances are provided by the locally governed authorities to potential start-ups and other organisations in order to enhance the industrial capacity and capital earnings of the nation.

These support and assistance of external factor enables those business entities to perform the optimum utilization of resources for getting maximum output. These measure helps an organisation to grow and develop on a higher scale to achieve more profitability. Thus when these SMEs practices and develop their operations in the nation and outside of it, the strength and economy of respective country gets a huge encouragement.

Detailed global business environment with respect of the country determines that the political factor of UK is more consistent. By this it can be understand by the manager of organisation  that the political regulations as well as their governing policies will remain stable. The basic knowledge of British laws helps the organisation to execute the planned actions and applying selective curse of action with respect of the laws and legislations. These aspects ultimately makes the business process more efficient to achieve the major portion of market share. The big and small ventures provide employments to nearly 16.3 million person, which is equal to about 60% participation of overall employment need of the nation. Small level industries plays an efficient role to raise the economy of the country as they maintain a proper balance among financial conditions and social values.

An analysis of the global business environment and the influence of key global drivers specifically in relation to the United Kingdom

Global business environment captures the overall transformation in business, which are erupted by the globalization of trading factors and other technological factors. These environmental aspects effect the political, social and economic conditions of the respective nation (Topol, and Sherman, 1994).  Major key decisions for cooperative actions can be taken by analysing the nature and position of all the business factors as per the global environment. Small business organisations  provides optimum contribution in the national revenue as approx 11 million pounds and  medium scale business enterprises gets approximately about 50 million pound of revenue.

The trade and operations of SMEs are enhancing due to the higher acknowledgement and necessary aids  of United Kingdom with the help of globalisation.  This leads to a decrement in custom and other trading restrictions, which is responsible for the smooth flow of production and marketing.  As the market of United kingdom is more dynamic and flexible. The BREXIT policies of UK affects business significantly as it limits the base of consumer. The other segment of SMEs also negotiate while participating in European trade activities after implication of BREXIT. The key global drivers of business underlies by four sets of organisational management conditions in every condition the driver create influence and potential for the respective industry to operate   its trading on a global level. Get help with USA's leading online assignment helper!

Ella's Kitchen is currently operating business in various countries such as China, Norvey, Denmark, Sweden etc. The global market is very competitive for the organisation because there are various other companies that are selling same food items that are offered by it.

The level of competition in the global business environment is increasing continuously. It is very important for all the companies to deal with it properly so that competitive advantage could be acquired. There are various factors which are required to be focused by Ella's Kitchen which is planning to expand business in Australia. All of them should be analysed on international level. Description of all of them is as follows:

Political Factors:  As situation of politics in Australia is very good and a kind of stability is there. It is very beneficial for an organization and also opportunities can be gained for expansion of business. This is helpful for providing growth to Ella’s Kitchen in the market and is going to give positive response in developing business. 

Economic Factors: Various factors are there which comes under economy that is inflation, unemployment, deflation and exchange. These are required to be focused upon. Managers of all organizations is planning  for operating its business into a different country.

Ella’s kitchen has to plan for expansion of its business in Australia then its manager should analyse these elements. Moderation in rate can be helpful in capturing market at large

Social Factors Under this all factors that is related to culture, morals, ethics and taste of people living in society is covered. So, Ella’s Kitchen has to expand itself and for this purpose it needs to know taste of people which is going to help in establishment at faster rate.

Technological factor: These factors is related to all the technological development taking place in the world. It is important to be taken care by Ella’s kitchen because it is going to help in increasing production which is going to help in covering of market.

Environment Factor: These factors are related to climate, flora and fauna which ahs to be takencare. Ella’s kitchen has to take this factor in mind because its going to  attract eco friendly customers and sale is going to increase.

Legal Factor: These are those factors which contains various types of laws and rule to work and prform operations in an organization. Ella’s kitchen has to take this factor at most priority because it is going to help in keeping operations smooth.

This analysis of global business environment has been analysed and various oppurtinities and problem can be faced by Ella’s kitchen. These are explained below       

Opportunities: Stable political situation of Australia is an opportunity for the organisation because it will be beneficial for it to establish the business successfully. Another opportunity for the SME is lack of political interferences in business process as it will help to ignore additional expenses on granting permission to operate business.

Impact of opportunities: Both the opportunities will leave positive impact upon business because it will help the management to grow the business in various countries and enhance profitability.

Threats: The major threat for the organisation is sudden changes in economic situation which may leave negative impact upon functionality of business because it results in lower purchasing power of customers.

Impact of threats: The threat for Ella's kitchen will be negative because it will affect the growth of business in Australia.

Rational for SMEs to expand their business internationally

Certain various measures for SMEs are there Which enforces them to do business in  multiple countries.  Major rational behind international business can be termed as many foreign nations acts as the hub of new innovations and technologies. This renders all the potential SMEs  with a scope to save cost and time and generate the optimum revenue. Major SMEs are able to establish their distribution, servicing and production plants across developing nations as the preferred countries can be India, China, Malaysia, Japan etc. This will help the business to obtain the opportunities of  cost cutting in the  business with cheap labour and other resources. Certainly the business authorized centres enhance the more customer interaction with the parent company. As also it builds a good brand image in the market which helps the company to launch its new products and trying innovations in their foreign subsidiaries. 

By investing into the foreign markets and trading with them enforces small and medium enterprises to attain comprehensive knowledge and other valuable information of various market demands and needs. These information plays a vital role in selecting the plan and implementing the principles in market. Also the new innovations and experiments of company gets more open market area to be executed, and chances of success  gets increased.

SMEs take advantage of international opportunities and overcome barriers for global growth

A pool of opportunities and challenges is connected for the assistance of growth of organisation on a multinational level.  When companies seek to do business in foreign markets, the chances of high cost of operations are increasing (Meredith, 2000). Today SMEs are making use of international business strategy by the help of these strategy the sales volume of the business gets increased. Increased sales brings enhanced revenue to the organisation which helps in settling the production onto higher standards by putting influential cost methods in manufacturing and overall business process.  To handle the rivalry competition of the company on the global level  in an efficient way, SMEs can use the solution of bringing up with innovations and business  disruptive offerings in a quick period of time.

Trading blocs and agreements and advantages

Those official agreements which are regulated with a vision to exclude the trade barriers  between two or more national territories are termed as the trading blocs or mutual agreements.

Major advantages of trading block and agreements are as follows :-

Technology transfer– innovative and unique techniques of business processing helps in settling the trade alliances and agreements which leads to create a tech savvy image of  business association ns, the E- commerce and various modern innovations helps the business to transform from one place to another place either horizontally or vertically in an effective manner.

Improvement of exchange – Flexibility in the exchange policies, emphasising  more on decreasing the limitations of exchange and strategies of foreign trade. Exchange functions has the nature to provide solutions to the business practices across different countries. It enables to understand the policies  and regulation of respective nations.

Advantages of international trading blocs and implications on SMEs:

  • International trading blocks are very helpful for an organization as it is going to help in removing additional tariffs.
  • The certain other advantages of trading blocs are as they remove all the unnecessary barriers of business. This helps the business to focus more on its growth rather than limiting the operation of company in other subsidiaries and nations.
  • Trading blocs are very beneficial for SMEs because with the help of them companies such as Ella's Kitchen can grow effectively and attain the long term goals.

Various tariff and non-tariff barriers that exist in international trading environment

Tariff and non tariff barriers are encountered while performing the business within the global market by maintaining the trade networks among SMEs and the foreign marketplace as  such barriers are:-

Tariff barriers

Specific duty – These are the barrier related to the direct charges of trading into a particular nation that is charged by legal authorities. That leads to raise cost of business, which affects the price,sale and profits.

Transit duties – the taxation charges which is charged by governmental authorities of a country on the transmission of products and services from location to location are known as transit duties.

Import policy barriers – the import policy barriers are those restriction which affect the organisation's global  trading in a negative manner. It is necessary for business to undertake such barriers tactfully to  carry out the business effectively.

Service barriers – These restrictions are placed in order to monitor and control the distribution of product and services through out the respective nation while performing the international trade. 

How international trading blocs and agreements stimulate and generate global growth for SMEs?

Trading blocs gives proper assistances on trade affairs on national and international aspects. As per the BREXIT, all the major trade practices are as generally signed by the UK legal authorities on a mutual agreement with other trading countries (Luo,  1999). In Barbados and Bahamas, certain trade affairs and other executing option are there to do business freely according to CARIFORUM-UK economic partnership agreement. These agreements helps in performing the international business more transparently and effectively in order to achieve the objective of maximum expansion of organisation.

Discuss pros and cons of importing and exporting and how a deal can be secured?

Export

An export is an international trade in which goods and services produced within one country are purchased by someone in another country. In simple words, the person who buys goods and services is an importer while seller is an exporter.  There are various methods of exporting goods and services such as mail, air shipping and hand delivery and many more. Numerous way of exporting is to be analysed which can be found by right alternative only. So, managers has to find it. In the context of Ella's kitchen, the merits and demerits are presented as follows:

Advantages of Exporting: Exporting allows a firm to gain exposure to new market, innovative ideas and management practices in order to gain competitive advantage within the market. One of the advantage is that exporting allows firm to expand their market beyond the limit which help to boost sales and thus, increase the profit of a company. Greater production provides large access of market which leads to economic growth of a country. This provide an opportunity to the Ella's kitchen to expand its operations beyond in order to increase the profitability.

Disadvantages of Exporting: In a global environment, there is a severe competition in the market. It is difficult for small firms to raise financial resources as it has to develop new marketing campaigns with attractive packaging which increases the cost of product (Contractor,  Kundu and Hsu  2003). Also, there is a transportation risk while exporting the goods such as risk of damage, spoilage, theft etc. The cost of Ella's kitchen would increase as it has to spend more on advertising and packaging so as to attract their customers. 

Import

Import involves the process of bringing goods or services into one country that was produced into another country. It imposes tax on goods and services that is subject to an agreement according to jurisdictions. An import on services in a global economy is rendered by non residents to residents of a country through electronic means. This process is to be followed by Ella’s Kitchen through collecting of material from its units.

Advantages of Importing: One of the advantages is that goods imported are of high quality, low cost which provide benefit to an economy. This is due to the reason of cheap labour and  low tariffs. There is huge involvement of government as it assists in providing information regarding the manufacturers that provide advantages to buyers as they buy goods of standard quality. These factors provide an enormous opportunity to Ella's kitchen as taxes rates are low and thus increase the profit margin.

Disadvantages of Importing: One of the major drawback is that it is difficult to obtain the license and documentation of foreign trade while importing goods. When there is a situation of trade deficit, at that time importing of goods leads to erosion of the domestic market.

In a competitive era, international business is competing at a global level. The deal can be secured by various ways like creating a sense of urgency to fulfil the requirements. It is very important to satisfy the needs of customers by providing goods of standard quality at a low cost. Also, the deal can be secured by overcoming cultural and language barriers by providing cultural training and also by building proper communication strategy among the countries.

By conducting proper market research, it helps to identify the customers demand so that it can provide goods according to their needs. Ella's kitchen focuses on providing best quality of food at a low cosy which help in generating maximum customer satisfaction across the globe. Thus, increase the positive reputation and boost the sale of a company. Excellent communication strategy and proper planning and coordination in Ella's kitchen could help in securing a deal which help in contributing towards the business to a next level. Need Assignment Samples.Talk to our Experts!

Distinguish between merchandise and services imports and exports

Merchandise are physical and tangible goods like cars, furniture and so on while services are intangible like consulting, accounting services etc.

Merchandise and service imports means bringing goods or services into domestic nation from the international country (Hohenthal,  Johanson and Johanson, 2003). The merchandise and services which are shipped into domestic nation through boats or other transportation medium is termed as merchandise and service import.

Merchandise and service exports are termed as selling goods or services into another countries from domestic nation.

Differences between two of them are as follows:      

Import merchandise represent high import level that is sign of great demand while export merchandise and service represent huge export level that shows high trade balance. In the context of Ella's kitchen, there is great demand of food so it there is high import merchandise while it export its product at different parts of the country so as to generate more sales.

Import merchandise and service are performed by SMEs for fulfilling demand within home nation and export merchandise and service are done by SMEs for raising global presence for improving organisational image. With reference to Ella's kitchen, it emphasises on delivering excellent services to their clients while in case of export merchandise and service, it help in improving the positive reputation in different parts of the country especially in Australia.

List of documents requires in export and import procedure:

Letter of credit: It is a letter that has been issued by a bank to another bank that act as a guarantee for payment made to particular person. In case of non payment by buyer, the bank is liable to pay full amount as guarantee is provided.

Packing list: It is a list that contain information about the content of package. It provides detailed description regarding the quantity, weight of a product.

Commercial invoice: It is the document between the supplier and the customer that provide description about goods sold and amount dues to a customer.

Terms of payment: It is a document that provides information about the amount due to a customer and period of payment. It provides a condition in which seller completes a sale and allow buyer to pay the amount due. Get Cheap Assignment Help from our verified online tutors!!

Discuss the various methods of tapping into international market

In a global market, the business environment in which company carry out its operation is regarded as dynamic. Tapping into international market offers many advantages like growth opportunities, expansion and diversification (Webb and et. al., 2014). Due to advancement of technology and transportation facilities, there is intense movement of capital. One of the advantage is that small and medium enterprises can promote their products in international market so that they can increase their sale  and profits. Thus, they can increase the brand awareness of the products and gain large exposure of market. There are various methods of tapping into international market that are described as follows:

Licensing : Licensing is very important for a business for expansion and diversification of a business. Licensing is a arrangement in which company sells the right to use intellectual property. Ella's kitchen has acquired licensing in order to provide intellectual rights to its business and thus help in diversification of a business. In the context of Ella's kitchen, the same is presented as follows:

Pros of licensing

  • The major advantage of licensing is that it provides business with multiple revenue streams.
  • Disadvantages of Licensing is that trade secrets can be leaked out.

Franchising: Franchising is an agreement in which a person(franchisor) allows another person(franchisee) to use a brand name. franchising charges fee in return for a service rendered. This is very necessary for Ella's kitchen so that it could expand its operations regionally and thus enhance the brand name across the globe. In the context of Ella's kitchen, the same is given as follows:

Pros of franchising

Advantage of franchising is that it contains low risk and gives larger access in to market.

Cons of franchising

One of the biggest disadvantages is that a wrong franchisee may spoil the company's name.

Joint Ventures: Joint Venture is an arrangement in which two or more parties combine together for achieving a common goal. Firm use their resources like capital, workforce which help in expanding their resources (Westerlund,  Rajala and Leminen, 2008). Joint venture is made for long duration in which co-venture share profit and loss at the end of period.  The firm can gain access to innovative technology which increases the productivity and efficiency of a business. The main purpose of SMEs tapping into international market is to reduce the risk of heavy investment and to expand their business globally by joint venture. This could help Ella's kitchen and help in raising the resources and therefore increase the profitability within the confines of food industry. In the context of Ella's kitchen, the merits and demerits are given below:

Pros of joint ventures

Advantage of joint venture is that it helps an firm in achieving economic scale that results into increase in output

Cons of joint ventures

Disadvantage is that joint venture can result into misunderstanding due to lack of communication.

Direct Exporting: This means exporting goods directly to the buyer by the manufacturer itself to capture large market share in international market. Organisation can sell their products to wide range of customers and dealers like wholesalers, distributors and dealers in order to boost the sale of products and increase the profits of a company. Ella's kitchen directly acquires products or services from wholesalers in bulk quantity so as to decrease the cost of production and increase the profit margin. The pros and cons are as follows:

Pros of direct exporting

Benefit of exporting directly is going to be that a firm is able to gain larger control over the aspects that are provided with transaction. It also provides protection of patents, trademark and copyright.

Cons of direct exporting

Major disadvantage of exporting directly is that in such method cost applied is more and also time is consumed alot. Risks are also involved in it which is majorly in payment collection and effectiveness in production for collection.

Compare various methods of tapping into international market with their pros and cons

There are various methods of tapping into international market like licensing and franchising, joint venture and direct exporting. Each method provide growth opportunities to a business which help in expanding, modernization and diversification of a business. This provide economic growth and increases the efficiency of business. Today, Globalization has grown due to advancement of technology and infrastructure facilities and it has led to the concept of new emerging market. This achieve large economy of scale and help firm to run the operations smoothly and successfully.

Comparison of licensing and franchising: Licensing and franchising provide growth opportunities which help in diversification of a business while franchising is an arrangement where franchisor grants rights and authorities to franchisees. One benefit that franchising provide is that it helps to find intelligent people so that they can run their business successfully at a suitable location. Also, there is little risk in case of franchising and generate high financial returns. The drawback of franchising is that there is possibility of conflict as everyone have different point of views. In case of licensing, it provides new business opportunities which help in expansion of firm. The drawback of licensing is that it provides competition in the market. The major difference between licensing and franchising is that training is required in case of franchising but no training is required in case of licensing. Franchising is considered as an appropriate method by Ella's kitchen because it provides vast opportunities to it expand its business at a convenient location but at the same time there is lack of communication which results in creating misunderstanding and confusion among them.

Comparison of Joint venture and Direct exporting: Joint venture is an agreement between two or more companies which combine together to achieve the task in an effective manner. One advantage of joint venture is that the firm can gain competitive advantage and at the same time there is possibility of cultural clashes and conflict among the members. Direct exporting means direct selling of goods by producers in order to increase the profits of a business. One of the benefit of direct exporting is that it leads to increase in sale which thus increase the profits of a company but drawback of direct exporting is that there is high risk  and it is difficult to break the market in trading blocs. In respect of Ella's kitchen, direct exporting is regarded as a convenient method as goods are directly purchased from manufacturers at a low cost which in turn increases the profit margin. This help in increasing the goodwill and thus improve the overall performance as it could plan to expand its business at different locations.

CONCLUSION:

From the above information, it can be summarised that export and import is very important for a business as it provides growth opportunities and help in expansion and diversification of a business. Thus, it increases the productivity of a business and help in conducting smooth operation of a small and medium enterprises. With the rise of digital technology, organisation have to make wide range of decisions to expand the market internationally.

Also Read- Systematic Business Decision Making

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