International Business Development: Opportunities and Threats for House of Dorchester

This report discusses the opportunities and threats of House of Dorchester in the global business environment by using PESTLE analysis. It also outlines the tariff and non-tariff barriers, trade blocs, and available modes of expansion for the company. The report advises the company on whether it is beneficial to import or export merchandise and/or services and compares and contrasts the available modes of expansion.

INTERNATIONAL
BUSINESS DEVELOPMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1. Global business environment and threats and opportunities of company by using PESTLE.3
2. Case for company for expanding its business in foreign market............................................4
3. Trade blocs and Tariff and non-tariff barriers.........................................................................6
4. Advise the house of Dorchester to determine whether it is beneficial to import or export
merchandise and/or services.......................................................................................................7
5. Compare and contrast the available modes of expansion for the house of Dorchester...........8
6. Explain the process of the company’s expansion i.e. house of Dorchester to export to the
foreign market...........................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
International business development is the process that uses to evolve through the normal
processes of having the trade, foreign direct investment, capital flows and the advancement of
the technology in the under developed countries. The current project is based on the House of
Dorchester that is the premium chocolatier which uses to produce the wide range of high quality
of chocolates. The reports will outline the opportunities and threats of the business by using the
PESTLE analysis. Further it will outline the tariff and non- a tariff barrier that exits in the
internal trading and it will also analyse the trading blocs and agreements. This project will
outline the advantages and disadvantages of importing and exporting and the differences between
the merchandise and service imports and exports. At last this report will outline the various
methods in which the small-medium enterprise can tap into the international markets and it will
compare and contrast various ways with its pros and cons.
1. Global business environment and threats and opportunities of company by using PESTLE
The global business environment refers to the environment which uses to define the
environment of the different sovereign countries by stating the different other factors. The
company after identifying the other factors can operate in the global business (Thomas and et.al.,
2021). The company must focus on the various factors like geographic location, politics,
technology and thee economic status of the countries where the organization has to do business.
PESTLE analysis is basically the tool that used to describe the external factors affecting
the company and its effects on the profitability of the company (Nandonde, 2019). The
opportunities and threats by using the PESTLE analysis of the company are as follows:
Political factors: The political factors may have an impact on the survival and
profitability of the company. The political risk varies from the nation to nation. In case of doing
the international business the political factors may affect the company in order to earn the good
profits. The increase in the corruption and many laws that the country enforces affected the
company. This factor may be threat for the company as the political factors used to change from
nation to nation and affect the profitability of the company.
Economic factors: The economic factors include the factors such as inflation, interest
rates, growth rates, gross domestic product and the current economic situation of the company
(Gupta, Gupta and Gupta, 2019). These factors use to have an impact on the aggregate demand

and aggregate investment of the business. The economic situation of the country such as increase
in the inflation and interest rates will be threat for the company in order to trade globally. The
organization has not control over these factors as these factors affect the overall economy as a
whole.
Social factors: The social factors used to have impact on the reflection of the society that
includes the culture, beliefs, attitudes, and values of the country. The increase in the population
also includes in the social factors as society is always related with the community population.
The company may get affected by the differences in the background of the people as different
people have their different views. But there is an opportunity for the company that the increase in
the population will increase the demand of their chocolates in the global market.
Technological factors: Technology used to change on the rapid basis and increases the
competition in the market. It is very important for the company to adopt the new technology in
order to do fast production to trade in the global market. The impact of the technology will
improve the profitability of the business and make the organization successful. This is the
opportunity for the company to adopt the new and innovative technology and increase its
profitability.
Legal factors: The legal factor includes the policies and laws of the government that used
to affect the economy as a whole. In today’s world the policies are not enough to control and
protect the workers; the government has to take legal action against company if they are
following the laws. The organization should not discriminate their workers on the basis of
gender, caste and wages. If company used to do this there will be a threat for the company in
order to survive in market.
Environmental factors: Different companies used to hold the different standards of
environmental protection in order to survive in the global market (Tumaku and Ren, 2020). This
factor makes the company know that they must protect the environment by manufacturing their
products and services. The change in the weather conditions may affect the transportation of the
company and will be threat for the company to earn profits.
2. Case for company for expanding its business in foreign market
The house of Dorchester is used to expand its business in the foreign market and the
company used to decide in order to expand its business in India. The organization can also check
the external environment of the country where it is expanding its business by using the porter’s

diamond theory. The porter’s five forces used to describe and analyse the operating environment
of competition of the business (Wellner and Lakotta, 2020). There are basically five factors
which used to define the India’s external environment as company has to expand its business in
market f India. The five forces are as follows:
1. Threats of new entry: New entrants in the market basically put the pressure on the
organization and used to gain market share of the country. As the company wants to
expand its market in India, there is a great threat of entry of the new other business of
chocolates to enter (Irfan and et.al., 2019). This turns into the pressure on the factors
like price, costs and the investment rates in the market. If the entry on the new market
barriers are high there is less chances of entry of new firms in the market.
2. Threat of substitutes: Substitute is the same kind of product that is sold by the
different firm in order to earn more profit from the competitors. The competitors used
to sell same variety of product but at lower rates and there is change in the quality of
those products. As the company used to sell chocolates there will be threat of
substitutes to the organization as there are many other competitive chocolates
available in the market.
3. Bargaining power of customers: This force used to describe the market of the output
and the ability of the customers and this factor also affects the customer’s satisfaction
to the price changes. As it is the reputed firm the bargaining power of the customers
is very low as the customers have to but the product at the noted rate.
4. Bargaining powers of suppliers: The bargaining power of the suppliers used to
describe the market inputs such as suppliers of the raw material, components, services
and labour. As the company used to produce the chocolates of different varieties it
increases the bargaining power of the suppliers related to the raw materials. The
suppliers may refuse to work with the organization and may charge the high prices for
getting the unique resources.
5. Competitive rivalry: For many industries there is high intensity of having the
competitors in the market. The company must focus on the competitors in the market
where it has to expand its market. As there are many rivalry firms which may affect
the profitability of the company.

3. Trade blocs and Tariff and non-tariff barriers
Tariff and non- tariff barriers are basically the restrictions that are imposed on the
movement of the goods between the different countries. These factors are levied on the exports
and imports of the goods in the different nation (Kinzius, Sandkamp and Yalcin, 2019). Tariff is
the custom, duty to the tax that is imposed on the products that used to move across the borders.
This is the most basic instrument that is used in controlling the imports and exports across the
nation. There are some tariffs barriers which will have impact on the organization in order to
expand its market are as follows:
Import tariff/ duty: This is basically the custom duty that is imposed on importing the
goods in the countries and taxes also imposed on this trading. The duties are being levied in
order to raise revenue and protect the domestic industries.
Export tariff: It is the custom or duties that are imposed on the products in order to export
in the different counties and nation. This factor may have impact on the organization in order to
expand its business in the global market.
Transit duties: These duties are levied on the products that are produced in the one
country, cross another and transported to another country (Vakulchuk and Knobel, 2018). Transit
duties are levied by the country by which the products passed. This used to increase the cost of
goods and the reduction in the amount of the products traded.
Non- Tariff Barriers
Specific duty: This duty or tax levied on the specific kind of goods having the physical
characteristics of the goods. This is the fixed amount imposed on the specific kind of weight and
measurement of the commodity. If the organization is use to sell more than the fixed weight than
it has to pay this duty weight.
Ad valorem duty: These are the duties that are imposed on the basis of the commodities
traded between the different countries. It is basically imposed on the fixed percentage of the
invoice value of the traded goods.
Trade blocs are the agreements that are made by the different countries as a group which
use to promote the trade together. These groups or blocs are made in order to remove the trade
barriers, having the same currency or increasing the taxes on the products which are purchased
from the outside the trade blocs or groups (Ogbor and Eromafuru, 2018). The company can use
the best trade blocs which help in expanding its business in the foreign market. The best trade

bloc that the company can use is the Economic union bloc in order to trade in the foreign market.
This type of bloc helps the company to have the common market and also to coordinate with the
economic policy. The benefits of this trade depends on the member’s states took an agreement.
This used to lower the prices and sell the variety of products in the larger market. It also used to
encourage the specialization in the trade market.
4. Advise the house of Dorchester to determine whether it is beneficial to import or export
merchandise and/or services.
When products or services that are made or sourced in the home country sale by the
company in foreign countries is known as exporting. On the other hand, when they buy products
or services from international countries and bringing those goods or services back into their
country is known as importing.
Advantages and disadvantages of importing and exporting
Advantages- exporting and importing is one of the simplest way to enter into the market of trade
globally and it is one of the most famous career opportunity for those who want to take
advantage of employment in the field of global trade (NGUYEN and KHOA, 2020). This
requires less investment which attract most of the people to enter in this sector and make career
opportunities. It requires less investment in terms of money and time so mostly people are more
interested in taking benefit of trading (Advantages and disadvantages of exporting, 2022). This is
less risky as compared to other international business, along with this with the help of export and
import people can better control over the system of global trade.
Disadvantages- export and import of goods or service requires extra attention and protection
which creates pressure on people to invest more on items (Hasanov, Liddle and Mikayilov,
2018). It requires extra transportation fees, insurance costs which increase the items’ total cost. If
people who has entered this market of export-import are not careful towards domestic and local
market they can lose grip and cannot satisfy the needs of new customers and lose grip on the
existing customers.
Import and export process

The very first stage is to complete an import transaction, such as doing trade enquiries
related to sales and purchase of goods. In order to complete the procedure of import and export,
people needs to ensure license and compliance and obtaining necessary/ important documents
before shipping any products or goods materials, after that they need to arrange for transportation
and keep the goods at warehouse. After the placement of goods at warehouse, the next step is
unloading of goods and getting customs clearance as well as tax paying process can be done
before the release of goods. In the recent years the volume of both the imports and exports has
grown steadily and rapidly in the UK. Therefore, every business in the import export industry
and house of Dorchester needs to follow this procedure in order to secure a deal.
Difference between merchandise and service imports and exports
The major difference between service-based business and merchandise exports and
imports is the presence of inventory.
Service Merchandise
Service based business related to exports and
imports do not sell goods to customers.
Services means the economic output of
intangible commodities or goods/services that
may be produced, consumed and transferred at
the same time period.
On the other hand, This types of business sell
products, service and goods to customers as per
their requirements.
It also refers to bringing tangible goods from
international areas and sending tangible goods
to foreign country.
By applying the proper procedure of import and export, firm needs to apply for
international process related to merchandise.
5. Compare and contrast the available modes of expansion for the house of Dorchester.
In order to enter a foreign market, the firm needs to adopt these following methods and
increase its sales and profits. It has been noted that investing in another industry or market can be
risky for the business and require a lot of investment, money and capital whatever it can be
(Stoian, Dimitratos and Plakoyiannaki, 2018). By selling service or goods international country,
it is necessary to introduce brand name to huge markets and gain brand recognition which is
beneficial to gain marketplace. There are various ways such increase sales and profits, reducing
risk by operating in single market and business expansion keeping in mind about product’s life
cycle.

Exporting- when the company direct sale it goods or services in another country or
foreign country it is known as exporting. This is the most popular and possibly the well-known
strategy used by many companies to enter a foreign market (Xie and Li, 2018). This method is
less risky in nature and cost effective because there is no need to invest in production facilities in
specific country. House of Dorchester needs to produced goods in home country and then sent to
foreign countries for selling of goods or services.
Wholly owned subsidiary- This method of business expansion is somewhat similar to
international direct investment because amount of money being invested into different company.
With the help of wholly owned subsidiary, the business of foreign country is bought outright.
This process is basically depending on owner of the company whether they want to continue to
run business like this or they take more control of the wholly owned subsidiary.
Licensing- with the help of licencing, company can target another country to use
property situated in that country or area. The property can be intangible such as patents,
trademarks, and others. This method requires a little investment because to complete this
methods licensee need to pay a fee in order to be allowed the right to use the property in the
country. In addition to this, licensing can provide a high return on investment done by company
and also take care of costs of marketing and manufacturing procedure in the international market.
Joint venture- joint venture means when two firms establishing a jointly owned business
for expanding its operations. These companies would provide the business in innovative way and
using new methods with a management team and share control. They would be responsible for
the development of enterprise or any project for profitability. These two parties seek the
improvement of its product or service and sharing the risks associated with its growth and
development.
Franchising- This method is same as licensing because intellectual property rights are being
sold to a franchisee. This technique is used by company which can be based on a marketing
concept and also adapted by them as a business strategy to expand its services or goods. In other
words, if house of Dorchester needs to expand its business they can build relationship with other
business and develop terms with entities wherein they allow another to sell its goods or services.
The major purpose of using this method to build customer loyalty and satisfy them by providing
them products or services they want and attract more new customers with the help of market
knowledge.

By evaluating the study, it is recommended to the house of Dorchester use exporting
method in order to expand its business. With the help of exporting, company can export its
services or products to international countries and expand into new or emerging markets which is
beneficial for attracting more new customers (Polyakova and Meserole, 2019). By adopting this
method company can get better and effective gross profit margins compared to their home
country which is beneficial for firm to perform better. The major advantages of exporting are the
market is limitless, however exporting company’s service or goods in international market gives
opportunity to showcase talent and earn big profits and create own market or customer base.
Selling products globally will allow the company to earn more revenue and can make market
place because foreign markets sometimes can offer higher prices for the products based on
demand.
6. Explain the process of the company’s expansion i.e. house of Dorchester to export to the
foreign market.
As discussed in the above mentioned question about the modes of expansion, it has been
recommended to used exporting in order to improve its business operations and export to the
foreign market. exporting products or services to international market is one of the key business
activities, which brings foreign currency into country (Khan and et.al., 2020). with the help of
this method company can create its foreign currency reserves which helps them to perform in a
most innovative way. The major advantage of using this method is government of UK benefits
for exporters and support import and export industry a lot. Government provides offers and
rebates in Value added tax and service tax. As government being liberal towards export and
import related tax and policies, because they say the more people export, the more benefits they
will gain in industry.
Process of exporting
Exporting is the method which requires licenses as it is designed to regulate and control certain
types of products or services leaving and entering the borders of country. In order to export the
goods, it is important to get an official export license. There are basic stages which needs to be
followed by company such as sales contract documentation, opening process, shipment process
and documentation for negotiation process (Samiee and Chirapanda, 2019). Firstly, the company
needs to involve the commercial invoice and customs authority to be consider here as many
country requires the invoice to clear the import goods. After confirmation of order ensure

licensing and compliance before proceeding to shipment of goods. In addition to this, company
needs to arrange transport and warehousing facilities where goods can be kept or stored. After
that the process called unloading of goods should be done and getting customs clearance should
be followed. At last they need to pay taxed before the release of product or service and exchange
invoice of receiving and sending goods to country.
On the top of that, this method requires export letter of credit which is a conditional
payment guarantee document provided by the importer’s bank to the exporter. They receive the
goods payment guarantee just prior to the goods shipment (Basher, Haug and Sadorsky, 2018).
This process requires credit approval for the bank of exporter. Nowadays, complex set of
compliances is one of the biggest challenge faced by exporters so it is important to focus on
using compliance process and improve clarity about exporting.

CONCLUSION
To conclude, international business development plays a vital role in today’s Business
environment, because people are making their career in import and export. It evolves through a
normal procedure of trade, capital flows, foreign direct investment and international migration.
By evaluating the report, it has been concluded that house of Dorchester needs to understand its
opportunities and threats with the help of SWOT analysis and Pestle analysis can be used by the
company to identify such factors that can impact its business operations. By adopting
international trade theory, the house of Dorchester is focusing on expanding its business in
foreign countries. With the help of import and export company can expand its business and make
customer base with new ideas and activities that will also be helpful to make a business better.
By using exporting, the company can increase its revenue, sales, increase profitability, business
expansion and improve earning by building strategic partnerships and making strategic and
important business decisions.

REFERENCES
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