International Business: Trade Policy, Cultural Factors, and Trade Barriers

International
Business

Executive summary
International business is defined as the trade policy in commodities, resources, information,
money and expertise. It comprises the exchanges between the two different countries between
products and services across borders. However, global business environment includes the
economic risk, people have different background and cultures, legal problems because
organisation operate their business in various locations so they have to follow different rules
and regulations and exchange risks as well as taxation problems as countries have distinct
policies of them. International business is essential in order to maximize competition in local
market which leads to develop more opportunities in global market.

Table of Contents
INTRODUCTION.................................................................................................................................4
Business drivers.................................................................................................................................4
Cultural factors..................................................................................................................................6
Trade Barriers; Tariffs and non-tariff................................................................................................8
Ethical and social issues....................................................................................................................9
Methods of expansion......................................................................................................................11
CONCLUSION...................................................................................................................................12
REFERENCES....................................................................................................................................14

INTRODUCTION
International business signifies that buying and selling of goods and services as well
as commodities from outside the borders (Birru and et.al., 2019). It increases the competition
by innovating new things in global market to remain in competitive advantages by having
more funds in their business venture. This not only means to deliver their products
internationally but it also states that use of capital, technology, patents as well as copyright
which helps them to expand their activities and operations. Ultra high temperature processing
refers to the method where food is processes using technology which heat their product to
make them liquid and kill multiple bacteria by heating above 135 degree. This is the process
which is mostly used in milk as it is established in year 1960 but the use of this heated milk is
consumed in year 1970s. It is packed in containers which have life of more than seven
months to consumer. London Diaries is considered in this report. It is run by their family
members in New Covent Garden London, UK. This organisation is founded in year 1995 by
Simon and O’Mahoney. They sell different type of good or services such as eggs, milk,
juices, cheese, cream and many more. They have to tap into the Chinese market in order to
expand their business. This report includes business driver to conduct PESTLE analysis,
cultural factors which include Hofstede’s theoretical framework trade barriers, tariffs as well
as non-tariffs, problems related to social and ethical, significance of corporate social
responsibility and method of expansion.
Business drivers
The demand of UHT milk in China is growing day to day in the country. China
imports their UHT milk in huge quantity as their need is to drink liquid form of milk rather
than milk powder. In China, urbanisation is rising and more than 60% of their population of
milk consumption recommends Ultra High temperature Milk. The competitors who are
managing and operating their business in China are Yili, Mengniu and Bright Dairy. To
identify and understand business driver London Diaries has adapted PESTLE model which
are mentioned below:
Political: It comprises of government policy, political stability, corruption, tax policy, labour
law and trade restrictions.