International Business - 21496486 UNIVERSITY OF WEST LONDON| 16.05.2021 SME Based in UK Module:International Business Student Number:21496486 Assignment Name:Individual International Business Report (100%) Lecturer Name:Mr. Chrishain Jayalath (CJ) Word Count:3651 1
International Business - 21496486 Executive Summary International business is conducted by companies that operate across national borders and is tied to trade and investment operations. This project defines the Chinese UHT milk market from its inception in late 1999 to the present day. As a result, China's urban population has been quickly growing, outpacing the local supply of UHT milk. When expanding a firm to a foreign market, the study's major goal is to identify significant business drivers, overcome trade restrictions, and determine the best growth approach. As a result, UK SMEs have expanded their company operations in the Chinese market, with market trends rising every day, according to UK statistics. The PESTEL analysis method is then used to assess the market and find the key business drivers in the Chinese market. The researcher then investigates the trade restrictions that are likely to stymie the UK SME's ability to enter the Chinese market. Because CSR is the ethical and social concerns that UK SMEs examine, the necessity of Corporate Social Responsibility for SMEs extending their operations to China is being explored. Finally, the internationalization methods are defined to determine which ones are most appropriate for a UK SME. 2
International Business - 21496486 Contents Executive Summary................................................................................................................2 1.0Introduction................................................................................................................5 2.0Business drivers behind company expansion in China............................................6 2.1PESTEL Analysis....................................................................................................6 2.1.1Political Factor.................................................................................................7 2.1.2Economical Factor...........................................................................................7 2.1.3Social Factor....................................................................................................7 2.1.4Technological Factor.......................................................................................8 2.1.5Environmental Factor......................................................................................8 2.1.6Legal factor......................................................................................................8 2.2Trade Theories........................................................................................................8 3.0Trade Barriers............................................................................................................8 3.1Tariffs......................................................................................................................9 3.2Regulation................................................................................................................9 3.3Subsidies..................................................................................................................9 3.4Exchange Rate Controls.........................................................................................9 4.0Ethical and Social Issues...........................................................................................10 4.1Corporate Social Responsibility...........................................................................10 5.0Cultural preferences to be chosen by the company................................................11 5.1National Cultures as a Point of Reference...........................................................11 5.2The People Factor.................................................................................................11 5.3Building Cultural Awareness...............................................................................12 6.0Expansion method to be chosen by the company...................................................12 6.1Methods of Internationalisation...........................................................................12 6.1.1Export-based methods..................................................................................12 6.1.1.1Indirect Exporting............................................................................12 6.1.1.2Direct Exporting...............................................................................13 6.1.2Non-Equity Based Methods for Internationalisation.................................13 6.1.2.1Licensing............................................................................................13 6.1.2.2Franchising........................................................................................13 6.1.2.3Management Contracting................................................................13 6.1.3Equity-Based Methods for Internationalization.........................................13 6.1.3.1Acquisition of a firm.........................................................................13 3
International Business - 21496486 6.1.3.2Joint Ventures...................................................................................14 6.1.3.3Merging with a firm.........................................................................14 6.2Strategic evaluation framework...........................................................................14 7.0Conclusion.................................................................................................................15 8.0References..................................................................................................................16 Appendix 1: List of Figures Figure 1: UK Market Trend........................................................................................5 Figure 2: Chinese market trends................................................................................6 Figure 3: PESTEL Analysis Model............................................................................7 Figure 4: strategic evaluation framework of SME..................................................15 Appendix 2: List of Tables Table 1: Benefits of corporate social responsibility................................................10 4
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