Significance and Impact of International Trade and Global Factors on Sainsbury

This presentation discusses the significance of international trade for Sainsbury, the impact of global factors on the company, and the impact of European Union policy on Sainsbury.

Business environment
(Task 4)

Sigificance of international trade
International trade means exchange of goods and
services across international boundaries. It also aids the
organisation to flourish its business in order to fully utilize the
available resources by increasing its sales. Therefore, the
significance which Sainsbury can achieve while going
internationally is explained as below:
 Going internationally will aid Sainsbury to maintain the
balance between import and export of goods. In other words, it
can be said that it will assist company to maintain the balance
between balance of trade and payment.
 Moving towards the international trade will assist the firm to
increase its economic growth by enhancing the level of its sales
and productivity.

Contd.....
 Going towards international trade will help company to
stabilize the sales of seasonal products. It will aid the firm to
expand the sales of those products which are not sold out in the
local markets.
 International trade will aid company to increase its sales and
profit margin which in turn assist the organization to flourish
its business.
 Moving towards International trade will help Sainsbury to
increase its market share in the national and international
market both.
Thus, there are some of the advantages which
Sainsbury can achieve if they make an effort to expand its
business at international level.

Impact of global factors on Sainsbury
Global factors are available in the business environment which
affect the working of whole organisation both in positive and in
a negative way. Some of the factors which affect the working
of Sainsbury are as follows:-
 Protectionism:- It is a policy of economy which suppress the
trade between various states. Thus, global factors have made a
positive impact on the growth of company in the lieu of
protectionism.
 World trade organisation:- It is an organisation which deals
with various global rules and norms between countries. Its
function is to recognize the flow of trade to be smooth and on
fair basis. Thus, introduction of various global factors will aid
company to export and import the goods in a positive manner.

Contd....
 Emerging market (BRIC economies):- The economy of Brazil,
Russia, India and China has been increasing at a rapid rate and
there are the chances that they will lead the world market in the
upcoming year. Development of these economies can be a
dangerous for the Companies like Sainsbury which are working
under the UK economy.
Thus, these are some of the issues which company
can face due to introduction of various global factors.

Impact of European Union policy on
Sainsbury
Introduction of European Union policy have both
negative and positive impacts on the functioning of Sainsbury.
Introduction of European policy has forced all the firms who
want to work in European union countries and has to make all
the transactions in Euro currency only. Company are forced to
follow all the rules and regulations introduced by European
government. Introduction of European policy has a diverse
impact on the spending and taxation law.

Contd...
But at the same time, introduction of European
Union policy has created many positive impacts on the UK
organisation. All types of UK firms can easily exchange their
goods and services in European countries. This policy has
abolished the trade barriers. Sainsbury can easily export and
import the goods from one European country to another
European nation if they pose the licenses of trade. Introduction
of this policy has also assist National authorities to easily
monitor various activities that are being performed in the
organisation.

Conclusion
From the following presentation, it can be concluded that
moving towards international trade will assist Sainsbury to expand
its business and to increase its sales. It is also concluded that various
global factors and introduction of European Union policy has both
positive and negative impacts on the functioning of Sainsbury.

References
 Berman, S. J. and Hagan, J., 2006. How technology-driven business strategy can
spur innovation and growth. Strategy & Leadership. 34(2). pp. 28-34.
 Hill, C., 2008. International business: Competing in the global market place.
Strategic Direction.
 Palmer, A. and Hartley, B., 2008. The business environment. McGraw-Hill..
 The Impact Of Regulation On Growth A Report Prepared For The Department Of
Business, Innovation And Skills. [pdf]. Available through:
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/
32107/12-821-impact-of-regulation-on-growth.pdf>. [Accessed on 12th December
2015].

Thank You!!