International Business: Industry Background, Business Drivers, Trade Barriers, Ethical and Social Issues

International Business

Executive Summary
The report outlines the industry background of UK and China Market. The project highlights
the business drivers, trade barriers, ethical and social issues which must be considered by SME.
It also includes the significance of culture and expansion method which Company must choose
while expanding their business in International Market.

Table of Contents
INTRODUCTION...........................................................................................................................4
Business Driver behind Company’s Expansion...............................................................................4
Business driver for Internationalisation for UK-SME............................................................4
Porter’s Five Forced Factors..................................................................................................5
Trade Barriers..................................................................................................................................7
Trade Barriers.........................................................................................................................7
Consequences if Trade Barriers get Ignored..........................................................................8
Business Uncertainties and Opportunities..............................................................................8
Ethical and Social issues to be Considered by UK SME.................................................................9
Importance of Corporate Social Responsibility.....................................................................9
Theories on Ethics................................................................................................................10
Cultural Preference to be Considered by Business........................................................................10
Significance of Culture.........................................................................................................10
Expansion method..........................................................................................................................11
Potential Internationalisation Method..................................................................................11
Strategic Evaluation..............................................................................................................11
CONCLUSION..............................................................................................................................12
RECOMMENDATION.................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
UHT stands for Ultra-high temperature processing; it is a technology through which milk is
heated at a temperature above 135 degree Celsius, it is required to kill the bacterial endospores
and it is heated for only 2-3 seconds. In 1993, UHT milk was introduced to United States by
Parmalat but American people are uneasy about consuming milk which doesn’t require
refrigerator. In 2008, UK Government proposed to produce UHT milk as they think that the
properties of milk will cut the need of refrigerator and reduce the greenhouse emission which
creates benefit for environment (Ruiz-Pava and Forero-Pineda, 2018). In UK, UHT Milk is
widely available and become a sort of fall back product which can be thrown in cupboard for
emergencies. UHT Milk came as a blessing in Europe especially in Southern Europe as it is one
of the hottest Countries. The Milk didn’t go off in high temperature and didn’t need to keep
under refrigerator. The Milk market in China consist fresh liquid milk, powdered milk,
concentrated milk and Ultra high temperature processing milk which comes from diary. China is
an emerging market oriented economy and world’s largest economy and exporter of goods.
China plays prominent role in International trade, largest sector of Chinese economy are
services, manufacturing and agriculture (Ashournia, 2018). The report is based on UK SME,,
there objective is to tap into Chinese market for their UHT Milk for children aged from 3-11
years. The SME Company is focusing on specific target audience within Chinese Market that
would see UHT Milk from UK as a better proposition compared to the current local options. The
Chosen SME for this project is Udderly Fresh Raw Milk it is an UK based Company that deals in
dairy product. They want to expand their business in Chinese Market and increase their growth
and productivity.
Business Driver behind Company’s Expansion
Business driver for Internationalisation for UK-SME
Business drivers are the activities that drive financial and operational results of business.
The business drivers being company expansion are competition and expansion of technology.
Competition-
Udderly Fresh Raw material is looking to expand their business in Chinese market; they
may face heavy competition as there are several companies who already produce UHT Milk to
Chinese people. So, it becomes difficult for SME to create their presence in Chinese Market. The