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International Business - Tesco PLC PDF

Added on - 22 Jan 2022

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International Business
Contents
Introduction:....................................................................................................................................1
LO1 Debate key contemporary issues relating to organizations involved in international business.
.........................................................................................................................................................2
LO2Identify and evaluate the global context within which international business must
function in the twenty-first century.................................................................................................5
LO3 Appraise alternative methods of entry into foreign markets...................................................7
LO4Explainwhycompaniesmaydecidetointernationalizeandalternativetheoriesof
internationalization..........................................................................................................................9
LO5 Discuss the impact of multinationals on both the home and host nations.............................12
LO6 Select analyze and evaluate data on country markets...........................................................14
Conclusion.....................................................................................................................................19
References......................................................................................................................................20
Introduction:
Business isn’t now at the local market. Every industry tries to spread their product to the
international customers to get a large amount selling their produced goods. It also increases the
chance for the customers to take the advantages of their product. As a result, every business
increases their business activities outside from the local atmosphere to the worldwide to get more
advantages. The main purpose of the research project is to identify the clear object of the
international business. Here Tesco PLC will be selected to provide the right observation about
the international business implementation in a different part. The critical issues will be discussed
to prevent the obstacles that may arise in the organization internally. The global context and
other business functions will be identified and evaluate according to the twenty-first-century
background. The most attractive method will be shown as the best way to enter a foreign market.
The research project prepared according to the famous theories that are followed by the
international business. At the last stage, the impact will be evaluated and the data will be
analyzed to recommend the suggestions for the company betterment. It helps to take the action
for the long-term business expansion and implement the proper business plan.
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LO1Debatekeycontemporaryissuesrelatingtoorganizations
involved in international business.
Tesco Plc is the largest retail company in the world. Tesco is a multinational grocery and general
merchandise retailer which was started its business in 1919. To accomplish business activities,
Tesco faces many international rules and regulation. The contemporary issue that faces by Tesco
and other multinational company are given below(International Labour Migration, 2010).
Trade protectionism
Trade protectionism is one kind of government strategy to protect the country-specific area of
industry form international influences. The main aim of the Trade protectionism is to reduce the
unfair competition among the international company. Monopoly and another kind of unfair
business policy are protected by the trader protectionism act. The Trade protectionism act make
the business environment less competitive and facilitates the international trade. Tesco needs to
care about the Trade protectionism act that is imposed by the international association. The key
contemporaryelementsofTradeprotectionismaretariffs,importsquotas,government
regulation, and policy(Hollensen, 2014).
Tariffs:Basically, tariffs are imposed on imported goods and services. The tax rate that
is imposed according to the tariffs acts is varied based on the goods uses and types.
Which economy has floating export tax rate can impose export tariffs to control the
international competition. The export tariffs hunting the local business organization. On
the other hand, import tariffs help the local business organization(International Labour
Migration, 2010).
Import quotas:The import quota is imposed to reduce the import quantity and increase
the market price of specific goods and industry product. The effects of import quota are
similar to the tariffs.
Administrative barriers:To reduce the import quantity and increase the country
product price, the government imposed some extra barrier and various rules on specific
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industry and organization. Some key acts that are imposed by government are food safety
acts, electricity security regulation, environment standard act etc.
Anti-dumping legislation:Some multinational organization uses dumping policy which
means selling lower prices product in the foreign market than the local market sales
prices. It means import will be cheaper and that affect the local market. Local industry
has to close their business.
Also, some other kinds of trade protectionism are direct subsidies, export subsidies, international
patent system, political and social impact on business. To run business in international market
the trade protectionism act and policy should be considered.
The ethical and social issue to be considered by the multinational company
The multinational company maintains ethical and social issue in a time of international business.
To grow the international business, the company should take more responsibility regarding the
social welfare. The social responsibility is maintained based on the ethical issue practices. The
multinational company perform and honor local tradition, respect human rights and protect the
environment. Honoring local tradition is one of the main responsibility of every organization. A
multinational company runs their business activities in another nation. The protect types, features
and requirements should have matched based on the local customer requirements. For example,
Tesco offers their product in Asian country based on their tradition and reformation. Respecting
human rights is another responsibility of the company. Tesco ensures health safety, security, and
regular life well-being of both customer and workers. Tesco provides the proper benefit of their
476,000 employees. Another social and ethical responsibility is protecting the environment.
Today British and American company are more careful about environment protection of their
host country to do business. Multinational company fine if they affect the local environment. The
environment protection policy also develops the public relation. Tesco has good relation with a
global association like Trade Union, EU, and World environment protection association(Griffin
and Pustay, 2013).
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Some other key contemporary issue that must be considered by Multinational company:
Foreign laws and regulations:The international laws are exercised by MNCs that expand and
contractthebusinessareaandoperationpolicy.EUandTradeassociationimposedan
international law that affects the international business. British government faces some problem
for Brexit policy in the recent year.
Universal payment methods:To protect the MNC trading payment security, global association
imposed some universal payment system. In USA credit cards, eWallets are very popular for
internationalpayment.In Europecreditcard,pan-Europeanarepopular.DineroMailand
MercadoPago are tow secured method of international payment in Latin America.
Currency rates policy:For accomplishing the regular payment currency rate is a vital issue that
should be considered. Some country maintains fixed exchange rate system, some are maintained
flexible exchange rate system. The exchange rate policy that is maintained by the host country
should be considered by the company(Collier, 2013).
Political issue:Political instability impact on the international business. There has a negative
impact on the business organization. The government decision, implement policy on trade
protectionism reduce the profitability of the multinational company. Some political problems are
civil war, terrorism, coups, riots, currency felicitation, and tariffs policy. A higher degree of
political risk reduces the business freedom in the international market.
Bothmacro andmicroenvironmenthavea positiveand negativeimpacton international
business. The organization should consider the current environmental issue to run business
internationally. The political and social risk increase the financial and economic risk. That
affects the international business in the longer time(Griffin and Pustay, 2013).
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