BP & Aston Martin International Business – Assignment

Deshawn Rahman P1 – P2
.P1
BP & Aston Martin
International business – The conducting of all commercial activities that take
place to promote resources, transfer of goods, and services.
Emerging Countries – A developing nation that is becoming more involved with
global markets as it develops and grows even more. An example of countries
like this would be India Saudi Arabia and Russia.
Developing Countries – These are predominantly poor agricultural countries
that are seeking economic growth in a lot of areas and social growth. An
example of countries like this is Afghanistan and Iraq.
Developed Countries – These are also known as industrialized countries they
are always high in wealth and often measured in GDP. Furthermore these
countries have much more developed infrastructure technologically. They also
offer the widest range of services in comparison to other types of countries.
Examples of these countries is the UK, USA, and Australia.
In this task I will be comparing two contrasting businesses who operate
internationally BP & Aston Martin.
(BP) is a gas and multinational oil company based in Britain that had its first oil
find in May 1908 headed by explorer George Reynolds and under the
concession granted to William Knox D’Arcy (pictured right) by the Shah of Iran.
The company was originally called the Anglo-Persian Oil Company (APOC)
Besides the United Kingdom BP is a worldwide company based in countries
such as Russia, Portugal, and France.
BP roughly employs 70,100 workers. They need this large workforce because
the service they provide is a necessity of today meaning they can sell
worldwide at any given price as it is an inelastic good.
I think BP decided to become an international business because the products
they sell hold very high value nationally but also globally meaning they can
successfully distribute their good around the world.
BP’s chosen market is developed countries such as the UK and the USA. They
can benefit from this because the majorities of the population have more than
average wealth BP can make more sales for higher prices this way.

Deshawn Rahman P1 – P2
BP could suffer from this as there are different companies based in these
countries who may offer better services than them.
Aston Martin was founded in 1913 by Lionel Martin and Robert Bamford. The
two had joined forces as Bamford & Martin the previous year to sell cars made
by Singer from premises in Callow Street, London where they also serviced
GWK and Calthorpe vehicles.
Aston martin do business in 53 countries and they have access to over 160
locations displaying and sharing its brand worldwide with one of the largest
infrastructures in martin history.
The headquarters are located in {ANBURY ROAD, GAYDON, WARWICK, CV35
0DB} https://www.astonmartinlagonda.com/about-us/locations
In similarity to BP, Aston martin manufacture worldwide however Aston
Martins price ranges are all of high value they can do this because of the brand
awareness and reputation of clean quality behind them.
I think they chose to expand and become international to reach different
landscapes to showcase their brand and also reap the benefits of other
developed countries with strong currencies and other rich
developers/manufacturers. Aston martins chosen market is the Developed
Market.
This can help Aston martin as they have more access to other countries
facilities and equipment.
However in Foreign countries there are many other big car competitors which
could decrease the sale percentage of Aston martin if quality doesn’t impress
its customers.
In conclusion I believe that BP has chosen its market in the most efficient way
as they not only produce in developed countries but also developing and
emerging countries giving it a vast and large market.
P2
In this report I will be explaining the different methods of finance that are
available for international businesses to access upon request.

Deshawn Rahman P1 – P2
Prepayment by the importer
This is when a business or company pays somebody or another organisation in
advance to receive goods and services. They can only receive these when they
have paid in advance. This proves beneficial to a business because firstly it is a
low cost and secondly it provides guarantee to the exporter.
Letters of credit
This is basically when a bank gives u a verification that you will receive
payment from your buyer in the correct amount. If the buyer is then unable to
pay this the bank is then obliged to cover the full amount of this payment. This
proves beneficial to a business because there is no risk of issues with money
and the buyer as u are fully protected. The seller is also free of credit risk.
Export Credits
This is direct financing, Government Financial Support, and it also guarantees
insurance and interest rate support to those who are foreign purchasing in a
different currency. This proves beneficial to businesses as it does not tie up any
assets associated with them. Furthermore cash payment is received via
shipping or commissioning.
Bank loans
A set amount of money that’s been borrowed from the bank but has been
agreed to be paid back in a schedule. This is beneficial for a business structure
as they are guaranteed money for about 3-10 years.
Appropriateness of methods
Prepayment by importer – This Method should be used if there is little trust
between the buyer and seller as it takes away all risk of losing money
Letters of credit – This should be done if you need receipts and verification of
payments that should be payed to you the bank also fully covers any losses.
Export Credits – This method should be used if u are trying to purchase
something in a different currency and unsure of the rates. I recommend this
because it gives u guaranteed help with the specific issue.
Bank loans – This method should only be used if you are sure and planned
about your ability to pay back large loans. For example business can use a bank

Deshawn Rahman P1 – P2
loan to start a business properly and pay this back when the profit margins are
higher
Finally, I believe that when conducting business, the most appropriate method
is letters of credit. This is because everything is covered by the bank if anything
comes to a fault this makes it much safer than the other options such as bank
loans which can cause debt.