Exploring International Markets

This assignment explores the global business environment in which small and entrepreneurial businesses operate. It analyzes the threats and opportunities faced by SMEs in an increasingly competitive global environment. It also determines the advantages of international trading blocs and explains the various tariff and non-tariff barriers in the international trading environment. Additionally, it discusses the advantages and disadvantages of importing and exporting and provides methods for SMEs to tap into international markets.

EXPLORING INTERNATIONAL
MARKETS

Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P 1 Explain the global business environment in which small and entrepreneurial businesses
operate..........................................................................................................................................3
P 2 Analyze the threats and opportunities that face SMEs in an increasingly competitive global
environment.................................................................................................................................4
LO 2.................................................................................................................................................5
P 3 Determine and analyze the advantages of international trading blocs and agreements........5
P 4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.................................................................................................................................6
LO 3.................................................................................................................................................7
P 5 Determine the advantages and disadvantages of importing and exporting and how to
secure a deal.................................................................................................................................7
P6- Differences between merchandise & service imports and exports.......................................9
LO 4...............................................................................................................................................10
P 7 Evaluate the various methods in which SMEs can tap into international markets..............10
P 8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method..............................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
International markets are different geographical regions where companies in today’s
competitive business environment could conducts their venture that is outside territorial frontiers
of an organization home nation. In recent time many organizations either small or large conduct
business expansion practices in systematic manner through which they could sell existing
products and services as well as new things to target segments. The current assignment will be
based on Filigree Holdings Limited, which falls under category of SMEs that has been operated
its small business in the UK. This study will explain global venture environment in which
entrepreneurial and small ventures operate. It will define opportunities and threats that SMEs
face in increasingly competitive global atmosphere.
Furthermore, this report will justify benefits of global trading agreements and blocs and
will also describe different tariff as well as non-tariff obstacles exist in international trading
environment. This assignment will clarify advantages & drawbacks of exporting and importing
and ways to secure a contract. Moreover, this study will justify differences between service and
merchandise exports and imports and will also explain varied approaches in which small and
medium size could tap into global markets.
LO 1
P 1 Explain the global business environment in which small and entrepreneurial businesses
operate.
The term of global business environment means a place where all the competitive
companies offer their products or services and compete with each other with a strategy to survive
in the market. Although companies maintaining their operations on a small scale might face
difficulties because they do not have ample amount of resources to go global so they remain or
operate in areas that are feasible to them and limited to public. Entrepreneurs have to enter the
market with conducting all the research necessary as they have to compete with a lot of
competition. Other than this they have to look for the condition of the economy and then present
their ideas as per the market. There are many other factors which entrepreneurs and operators of
small scale businesses have to go through. For instance there are many products that requires
import or export which is basically trading to other countries. In order to set the product as

finished product small businesses have to import materials from other countries which is difficult
for them as they have to comply with many laws of trade and deal with international buyers and
suppliers. The conditions of international market cannot be assessed by small scale companies as
it can be easily influenced and affect their business. This way they may lose their ability to
import materials and incur huge losses. There are risks as well as advantages to companies
available because of market being global. This can be complied with two environments that is
task environment and general environment. It is necessary that entrepreneurs prepares for these
two environments as any change can disrupt their flow of work. The more they keep themselves
prepared more they will be able to remain safe of the influences that can affect their business
(Khalifa and et.al., 2019).
P 2 Analyze the threats and opportunities that face SMEs in an increasingly competitive global
environment.
Threats-
Inadequate access and platform of marketing-
Small scale businesses have clearly not powerful links through which they can promote
their business. Other than this there are many factors such as limited support from government,
facilities and strategies for marketing which limits the sale of their products. They always lack to
trade internationally because of the limited amount of capital and resources they have. This has
also affected the chances of growth.
Lack of access to new technology-
Even though the technology has advanced small scale businesses use gadgets which are
low in performance and because of that they have to face issues in productivity. Due to these
reasons they are not able to compete with other firms (Singh and Delios, 2017).
Lack of required credit-
This is the area where most of the businesses of small scale get stuck in the aspect of
achieving growth. This is because they do not get enough credit from the market or institutions.
This is because they do not have enough collateral to give them in return and even if they get
loan the rate of interest for them is unbearable (James-MacEachern and Yun, 2017).

Opportunities
Leveraging the e-commerce trend-
Companies operating on small scale have the opportunity to avail or claim the option of
dealing in online platforms. This will help them to increase their venture and improve their
portfolio so that they can fight with high level of competition they face in the market. this way
these companies can gain advantage over their competitors.
Adoption of technology-
Businesses or entrepreneurs maintaining operations on a small scale has the opportunity
to claim the advantage of using phones, social media and cloud computing so that they can cover
vast area with more convenience and flexibility. This way they will achieve efficiency and better
results.
LO 2
P 3 Determine and analyze the advantages of international trading blocs and agreements
 When the barriers of trade are removed, manufactures in different countries have to come
up with different strategies so that they can compete with each other. This has helped
them to get more efficient in maintaining their services through which they have been
able to focus on increasing their share.
 This is believed to be considered as a good deal for their customers as they easily get
products that are imported at a very less rate if compared with the normal one.
 There is a high level of competition in the market which helps in reducing the price and it
is considered as one of the biggest advantage of trading blocs as people get more value
for their money. Many of the people tend to buy more when prices gets reduced which
also helps to increase the economy.
 Small businesses have to look for countries they trade with because every country has
their own trade which can be either skilled labor, or excessive raw materials with high
quality. Management of small scale businesses can agree with them and tie their hands

with them so that they can sell these benefits and use it as a option to trade which will
help them to achieve growth.
 With the help of specialization they will be able to work on achieving economies of scale
through which they can increase the level of efficiency.
 If the small scale businesses are able to achieve growth than they can also help to the
economy by generating more sales.
 Other than this with the ability of trading blocs they can eliminate the tariffs which will
be helpful to businesses in many ways.
 It will be treated as a union for economy in one single market as it all the rules and
regulations will be common to each other (Højland and Rohrbeck, 2018).
P 4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment
There are various tariff and non tariff barriers which businesses needs to keep in mind.
Tariff Barriers-
It is a custom, duty or tax that is levied on products that has come across the border of the
country. This is done so that imports and exports can be controlled.
Import Duty-
This is a custom duty which is set by the country who is importing goods. It is done in
order to protect the industries of the country and increase their revenue and profits.
Export Tariff-
This duty is set on those goods which are used to export by the specific country who do
export them. The goods that are taxed are of sector of mineral or agricultural products.
Duties on Transit-
It is imposed on those products that are manufactured or assembled in one country and
then sold as a consignment to other country. These duties are those which is set only for the
passing of goods. Although it increases the prices of products and this is the reason why category
of products which comes under this aspect are sold less (Gilmour, Dang and Ma, 2020).

Non Tariff Barriers-
These are meant to be those on which there is no restrictions for tax such as regulation of
government or the policies or procedures formed by them which affect the trade in the overseas
market. There are different forms for that such as quotas, subsidies and embargo etc.
Quotas-
It is a limit set on numerical basis as per the quantity of goods through which they can
import or export the goods. The quantity for the goods is mandatory to be mentioned in the
license of the business. There will be a fine if company more goods in comparison with the
registration of license.
Subsidies-
This is considered as a mode of payment initiated by government to the producer of the
goods in support of their business so that they do not struggle much in fighting with their
competitors. This way small business are able to win a fair amount of share in the market.
LO 3
P 5 Determine the advantages and disadvantages of importing and exporting and how to secure a
deal.
Extend the margin of profit-
Many of the companies such as Filigree holdings limited consider it is because it helps to
increase their level of profit. Many of the companies imports materials where cost, taxes are less
which makes it cheaper for the product to assemble and helps (Ayden and et.al., 2020) the
business to earn more out of it.
Better Quality-
Filigree holdings limited gets their products for wood furnishing from those countries
which have better and best extraction of the product so that they can use that to make the
attributes of their product similar and offer the same quality (Scott, Loonam and Kumar, 2017).

Disadvantages-
Legal Documents-
In order to import goods it is important that company must have legal documents such as
license prepared by the government bodies. This is not easy as government checks the eligibility
of the business as well as the quality of the products.
Economy of Country-
More the no of imports increases, more the process of the economy reduces which affects
most on the domestic business.
Exporting
Advantages-
Limitless Market-
It is beneficial to the businesses because it helps them to extend the size of their market
from covering to one city to wherever they want to sell their products. Especially for the
companies such as Filigree holdings limited it is limitless. It is important for the businesses to
plan as per the needs of the market and then enter their market.
High Prices-
Companies such as Filigree holdings limited have to keep their prices low in home
country because they are facing high amount of competition but if they are exporting they can
increase it because the amount of competition will be less but it all depends on the nature of the
business and the product (Lynn, Rosati and Cummins, 2020).
Disadvantages-
Rate of exchange-
The rate of exchange is the power of purchasing of one country as compared to the other.
If the rate of exchange for the country increases it will be beneficial for the Filigree holdings
limited but if it decreases then they will have to face losses.

P6- Differences between merchandise & service imports and exports
Merchandise exports are tangible goods that SMEs like chosen one sent out of its home
boundaries. It is an approach of offering retail items for sale in foreign customer market. Many
firms across nation could maintain overall divisions devoted to search ways to better enter into
new market place through export procedure to increase sales, profits and sustain progress. While
merchandise imports consider as method of receiving products from those companies who work
in partnership. Merchandise imports & exports is quite different term from service exports and
imports. For example, it is conducted by large companies who are unable to make investment in
context of enlarging supply chain which is quite beneficial in term of increasing ability to
conduct imports and exports activities. When a toy manufacturer organization sends its products
action figures from its home town to other country, they conduct imports and exports of
merchandise practice.
On the other hand, service imports and exports are different from above process or
method as it generates non item global earnings. SMEs or other companies obtaining payment is
making a service export. Under this approach, consumers could not see goods physically which
is possible in Merchandise exports and imports act. Products through this process sent in form of
intangible goods. The differences between both terms could be define through its meaning. For
example, service export and imports as compare to above method conducted between two or
more persons who belong to similar place.
LO 4
P 7 Evaluate the various methods in which SMEs can tap into international markets
There are many methods through which company can enter their business such as
Foreign direct investment-
SMEs such as Filigree holdings limited can claim the option of directly investing in the
international market but in order to do that they will need a huge amount of capital which is not
easy to raise. This can be done in two forms and that is through acquiring an existing company or
opening up a new venture (Ahmed and Sallam, 2019).

Franchising-
Franchising can be done by the business in order to enter foreign markets as this they will
be able to give their rights to the franchisee so that they can start their business by covering a
wide area of market.
Joint Venture-
In order to work with this model Filigree holdings limited has to work with one more
company as it will be jointly owned. It gets easier for the local company as they have the support
and resources of the company of foreign land. The two companies joined in the venture whill
then share their plan and idea to the management of both the companies so that everyone in the
team is clear about the task force and the work they have to do.
Piggybacking-
For a business who is maintaining their operations on a small scale such as Filigree
holdings limited it is beneficial. In this method companies have to cross sell their products in
each other’s country. This method helps to increase the sale of the business and make reputation
in different country other than their own through which they can increase the operations to other
countries.
Licensing-
This method allows the businesses to use the property in the country they want to trade.
Mostly the property is intangible such as trademarks, patents or techniques they use in
production. In order to get this companies such as Filigree holdings limited have to pay a price so
that they can legally buy these rights and use them as their methods.
P 8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method.
Method Pros Cons
Joint venture With this method SMEs have the
benefit of entering the foreign
market with the resources of other
There are some negative factors
also for this method. As many of
the times team members of the

business which makes them (Bin,
Chen and Tran, 2019) more
powerful than before and they also
share their knowledge with each
other which helps them to come
up with better strategies as they
evaluate the market in a better way
which increases the chances of
their success.
company are not ready to work
with other company which affects
the flow of work and affects the
efficiency of business. Other than
that even management of the
companies can have issues on
investing in some areas and
deciding the share between each
other.
Franchising This method will help the
company to earn reputation as well
as cover the market easily. This
method involves earning on
selling their rights and the fair
amount of royalty decided with
franchisee.
The cons for this method are
franchisee can never do anything
new and it must always follow the
rules which is not flexible for
them. Also in order to deal with
this method company must have
something unique or established
entity so that they can be
successful.
Piggybacking This method involves very less
amount of risk as compared to
other methods. Also company can
start with this with very less
amount of capital.
The chances of this method getting
successful is very less because in
order to be worked up as a success
they need to trust each other at
high extent so that they can put
efforts for their products also.
Other than that the management of
the company is always concerned
of how they are marketing their
products by using their name.

CONCLUSION
From the above studies it has been concluded that it is important for Filigree holdings limited to
evaluate the condition and need of the market before going global as they maintain their
operations on a small scale which makes it more risky for them. This is because any loss they
have to incur will affect their business from which they may not be able to recover. Also in order
to explore international markets it is important that management of the company finds a suitable
market for the line of product they deal in as this way they will be able to assess the behavior of
consumers and dealers in their target countries and keep them satisfied. Also they must keep
check on tariffs for import and export of goods so that they can maintain the margin on profit.
REFERENCES
Books and Journal
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evidence from 3 case studies in the BOP markets. Technology Analysis & Strategic
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decision to choose a higher education institution. International Journal of Educational
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Singh, D. and Delios, A., 2017. Corporate governance, board networks and growth in domestic
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Ahmed, O. and Sallam, W., 2019. EXPLORING THE DYNAMIC CORRELATION
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Scott, B., Loonam, J. and Kumar, V., 2017. Exploring the rise of blockchain technology:
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