International Business: UHT Milk, Trade Barriers, Ethics and Social Issues

This report covers several dimensions of international business in order to perform business operations in international market. In this project a brief description of UHT milk is explained along with different ethical and social issues which arise in an organisation. This report briefly explains different trade barriers which are present for international business in order to conduct fair trade practices. A brief explanation of corporate social responsibility is mentioned in a precise manner in order to perform social welfare of different sections of the society.

International business

Executive summary
This report covers several dimensions of international business in order to perform business
operations in international market. In this project a brief description of UHT milk is explained
along with different ethical and social issues which arise in an organisation. This report briefly
explains different trade barriers which are present for international business in order to conduct
fair trade practices. A brief explanation of corporate social responsibility is mentioned in a
precise manner in order to perform social welfare of different sections of the society.

Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
A brief description of information about UHT milk...................................................................4
Demand of UHT milk in China and different competitors present in market for UHT milk......5
Business drivers (PESTLE analysis)...........................................................................................5
Trade barriers (Tariff and non tariff) which comes in between operations performed by a
business to sell UHT milk in domestic and international market................................................7
Ethical and social issues..............................................................................................................8
Culture at the workplace and its importance.............................................................................10
A brief description and importance of corporate social responsibility......................................10
Expansion methods chosen by a company to expand business at the marketplace...................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
In the era of globalisation and technology international business is termed as major
economic activity which is helpful in providing effective goods and services in global market
(Demeter, 2017). International business is considered as global business which performs
different tasks and activities related to economic transactions in international market. This report
covers the issues which are ethical and social that arises in a business in order to achieve
different objectives at the marketplace. This report covers all the necessary information about
UHT milk and its demand in China. This report also covers the importance of corporate social
responsibility for a business to develop social welfare. In this report different trade barriers
which are there in international market are also explained in a precise manner. In this report a
PESTLE analysis is performed in order to examine and understand different factors that are
present in external environment.
MAIN BODY
A brief description of information about UHT milk
UHT milk is ultra high temperature processed milk which is used as a part of food
processing technology. In this milk form the major aim of process is to kill bacteria which are
attached in the concerned milk. This milk production or processing technique is a modern
technique of eliminating bacteria which are present in milk. This technique of milk production
and processing is widely used in preparation of fruit juices by using high technology machines.
The process of ultra high temperature milk processing is used in soy milk, yogurt, wine, soups,
honey and stews. The art of Ultra heat treatment technique was first developed in 1960s and for
general public usage it came into existence in 1970.
Process of ultra heat treatment reduces level of sugar which is beneficial for diabetic
patients. This process of using ultra high temperature in milk processing is mainly performed to
change smell and taste of different dairy products (Fatehi, 2019). The ultra high temperature milk
is packed in a sterile container that also has a typical unrefrigerated shelf life of six to nine
months. If the life span of milk in UHT is calculated then the answer is eight to nine months in a
good and consumable condition. The milk which is produced using high technology machines is
sold in United States as organic and safe food. Importation of Milk Act 1983 was formulated by

government of United Kingdom and passed by the government which appealed in European
court of Justice that prevented government to ban importation of ultra high temperature milk.
Demand of UHT milk in China and different competitors present in market for UHT milk
According to recent surveys performed by professional bodies China’s imports of fluid
milk and ultra high temperature milk in bulk quantity. In the year 2021 China imported 980000
million ton milk and that number has increased by 5% from the year 2020. The people of China
give more preference to UHT milk rather than giving priority to normal milk. China is a major
global cow milk producer, with 31 million metric tonnes produced in 2019. According to the
USDA, China’s milk production is forecast to increase by 4.5% to 34.5 MMT in 2021. Large-
scale dairy farms have adopted state-of-the-art milking facilities and feed management
techniques, both of which have increased productivity. It has been reported that these large-scale
dairy farms account for nearly 70% of total dairy farms in 2020.
China is the world’s largest importer of dairy products, and while China’s dairy production
has been flat since 2008, growth in consumption is apparent and the gap between supply and
demand has been met by growing imports thus far. China’s imports of fluid milk, mainly pre-
packaged UHT milk, are forecast at 980,000 MT in 2021, an increase of 5% from 2020, urged on
by demand from continued consumers and the food processing sector. According to a report by
PWC, “UHT milk was the first dairy product to achieve widespread consumption, but fresh milk
is becoming popular as cold chain distribution capacity grows and as consumers look for
products viewed as more nutritious (China’s data on dairy products import, 2021). A report
by PWC states that China’s dairy farm modernization is currently highlighting standardisation,
mechanisation, genetic improvement and farm scale. The next wave will be the shift to
automated milking and feeding, and precision dairy farming. These technologies will further
improve efficiency, productivity and animal health. Automated milking systems (AMS) is only
used on an estimated 1-2% of cows in China.”
Business drivers (PESTLE analysis)
In today’s world there is a crucial need of analysing external environment of a country in
order to analyse different factors. The main element which is used by professional organisations
to determine external environment is PESTLE. The PESTLE analysis will help in understanding

whole market situation of China as well as it will help in prediction of market. PESTLE analysis
of China in order to analyse external environment of the country is mentioned below:
 Political factors- In the functioning of country political factors play a major role in
determination of current market situation of that country. The political factors in China
are generally in favour of several business organisations. The country supports different
companies who are entering the Chinese market and also support foreign companies to
perform investment. Rules and regulations which are formulated by government directly
or indirectly effect on different functions of a business entity.
 Economic factors- The government of China focus on development of precise economic
policies which are favourable for the whole business environment in the country.
Monetary policy of China is also effective in dealing with the situation of inflation and
recession from time to time (Ferdows, 2018). Many companies come from other
countries come for investment in China due to the support of government formulated
economic policy. The gross domestic product and national income of China is also high
so it facilitates development of several businesses which are present in the economy.
 Social factors- As far as social factors are concerned the social condition of China is also
good enough to maintain good standard in the society. It is the major responsibility of
government to serve different sections of society for development of different sections of
society. The living standard of people of China is also high which a major indicator of
growth in the country. The social development is main motive of government in order to
decide different aspects of social welfare.
 Technological factors- In the era of information and technology the market of China is
dominated by various technological factors. The China uses advance software and
computer systems which are essential in development of different operations and
activities. China is also known as digital country which is majorly dedicated to use
different approaches and techniques of information and technology in production of
goods and services.
 Environmental factors- The environment related factors are considered as major factors
which are concerned with welfare of surroundings and atmosphere. Chinese government
introduce different environment related policies which are effective in delivering
sustainable practices. The government of China is majorly focusing on welfare of

environment in order to perform sustainable operations. Many famous companies and
industries which are present in China comply with rules and regulations formulated by
government to conduct ethical business.
 Legal factors- In China there are various legal frameworks and policies which are
developed by government to maintain legal environment. The local authorities who are
present in major cities of China also try to impose specific legal guidelines on a business
to develop legal and lawful operations (Hannibal, 2018). The legal factors are considered
as major part of a business to perform lawful operations at the marketplace in a precise
manner. Major companies which are functioning in the Chinese market follow different
rules and regulations formulated by government in order to conduct ethical business at
the marketplace.
Trade barriers (Tariff and non tariff) which comes in between operations performed by a
business to sell UHT milk in domestic and international market
In international market there are different trade barriers which create a challenge for different
organisations to gain competency edge at the marketplace. It is the major responsibility of a
business organisation to face trade barriers in a precise manner for business development. The
companies take support of skilled and trained employees in order to deal with different trade
barriers. It is compulsory for a company to formulate a strategy with the help of professional
strategic management to deal with consequences created by international trade barriers
(Hannibal, 2018). The international trade barriers are present to stop malpractices in business and
for development of global economy. Major companies which are involved in selling UHT milk
in different parts of country and outside country face several trade barriers. Different trade
barriers that exist in international market are mentioned below:
 Taxes- It is important for a global business organisation to follow tax policy that is
imposed by governments of different countries. Heavy taxes that imposed by government
of different countries are major challenge for international organisations. Companies’
faces huge financial loss in business related transactions while paying taxes to
government of several countries. In selling UHT milk there are huge taxes imposed are
imposed by different governments which are essential to be paid within specific time
frame. China earns a good amount of revenue in the economy by imposing heavy taxes
on UHT milk.

 License- In the era of globalisation it is compulsory for a company to get license from
concerned government. The government of China provides authentic license to different
companies to grant them permission for selling or purchasing UHT milk in market. The
license is a legal document which is prepared or granted for specific time frame to
owners of different companies. The companies which does not have legal license of
selling different products at the marketplace are considered as void companies.
 Legal formalities- In order to perform trade in global market it is compulsory for a
company to perform legal formalities. It is compulsory for a business which is involved
in selling UHT milk in Chinese market to fill different documents. The national and local
government of China develops a full and precise process which contains several
documents. All the legal documents are to be filled by a business organisation for selling
UHT milk and the documents are checked by local and national bodies.
 Export and import duty- The export and import duty are considered as major trade
barriers for the companies which are involved in selling UHT milk at the marketplace.
Heavy export and import duty are imposed by different countries to perform trade
practices related to UHT milk. It is necessary for a business organisation to fulfil all the
formalities related to tariff on export and import (Kourula, 2017). A business faces
decline in revenue when it pays a significant amount of revenue for conducting export
and import.
Ethical and social issues
In the functioning of a business at the marketplace there is involvement of different ethical
and social issues. In order to increase efficiency and revenue of a business it is compulsory for a
business entity to deal with different issues which arise at the marketplace. The ethical and social
issues which are faced by a business organisation create a major drawback for different business
organisation. In order to gain competitive advantage at the marketplace it is essential for a
business entity to deal with different issues (Pinedo, 2017). A business organisation must take
support of professional human resource management which is present in the organisation to deal
with social and ethical issues. The different social and ethical issues which arise during
functioning of a business organisation are explained below:
 Child labour- This is a serious social issue which is a major issue in different developing
and developed countries. Many business organisations in their industries and factories

deploy children for working which is false and not accepted. Children get involved in
working for a small amount of money and spoil their academic life. Government of
concerned country should bring different laws and acts in order to eliminate child labour.
The act of child labour puts a serious impact on mental and physical health of children
which is very dangerous.
 Human rights- Human rights are considered as major and fundamental rights of different
people who live in a democratic country. In major countries there are separate ministries
and departments which look on the implementation of human rights. These bodies also
solve different complaints related to violation of human rights (Yurtseven, 2020). The
human rights related bodies also impose heavy fines and penalties on different bodies
which violate human rights. In functioning of a business organisation it is the major
responsibility of human resource management to ensure implementation of human rights
in a precise manner.
 Standard working conditions- It is compulsory for a business organisation to provide
optimum and standard working conditions to employees. The business organisations
should provide excellent working conditions to employees in order to increase their
productivity and efficiency. The main objective of providing efficient workplace to
employees is to increase overall productivity and development of the whole organisation.
Most of the companies in international market try to provide excellent working
conditions to employees for achievement of business targets.
 Grievance handling- In a business entity there are different grievances arise on day to
day basis due to conflicts between employees. It is the major responsibility of human
resource management which is present in the organisation to handle different grievances
from time to time (Sinha, 2021). Optimum solutions for grievance handling should be
provided by the business in order to increase job satisfaction of the employees. Most of
the successful companies in international market solve grievance on timely basis to
achieve different objectives at the marketplace.
 Discrimination- It is crucial for a business organisation to avoid discrimination practices
at the workplace for gaining efficiency in operations. The harassment and molestation of
women should be avoided at the workplace in order to conduct ethical business practices.

 Health and safety of employees- It is important for a business organisation to maintain
health and safety of different employees in order to conduct ethical business. The
companies which are present in the market should follow different acts and laws which
are related to health and safety. Human resource management of concerned company
should also provide optimum health insurance for different employees in order to
maintain safety of employees. A business organisation should install different safety
related measures at the workplace to maintain safety of employees.
Culture at the workplace and its importance
Culture is considered as the main element present in the internal as well as external
environment of a country to impact on different aspects of a workplace. The human resource
management is considered as major body which is helpful in dealing with the culture of an
organisation to perform ethical business. The culture at the workplace is mainly formulated due
to the presence of people from different sections of the society (Sopadang, 2021). It is important
for an organisation to consider culture and its elements in a precise manner to enhance the
workplace experience and gain competitive advantage.
It is also important for an organisation to consider culture as a major factor in order to
minimise conflicts which arise at the workplace. In functioning of an organisation it is essential
to perform different practices which are culture oriented to effectively manage large number of
employees. In organisational development culture plays an important role as it influences various
aspects and dimensions of a business
A brief description and importance of corporate social responsibility
In functioning of a business at the marketplace it is essential for a company to do welfare
of the society for enhancement of social sections. Major companies in Chinese market follow the
practice of corporate social responsibility in order to develop different sections of the society.
The companies provide essential things to weaker sections of the society at cheap prices in order
to perform sustainable operations. The act of corporate social responsibility is helpful in
development of whole country and is also useful for whole society.
The business entities which are present in China donate a specific amount of turnover to
different practices of social development in order to develop them. Society of China is getting
different benefits and advantages with the help of corporate social responsibility in a precise
manner. Main business organisations which are earning a huge turnover at the marketplace are

involved in performing this practice in order to conduct ethical business. It is the major
responsibility of a business to follow different ethics and development related aspects in order to
conduct safe and secure practices at the marketplace (Strydom, 2021). Many companies in the
market of China donate extra share from their turnover to the development of society for
conducting legal and safe business practices. The organisations which are present at the
marketplace mainly follow the different patterns of corporate social responsibility for overall
development of the country.
Expansion methods chosen by a company to expand business at the marketplace
A company which is functioning in the global or domestic market has different opportunities
to expand current operations at the marketplace. The main objective behind expansion of a
business entity is to explore new opportunities and increase profitability in a short span of time.
It is essential for a company to expand its operations in the market for better handling different
customers and to increase range of products and services (ToÅ, 2019). The various methods of
development related to expansion which are available to a business are mentioned below in a
precise manner:
 Take over other business entities- A business organisation can completely take over
other company in order to compete at the marketplace in an efficient and effective
manner. When a company takes over other company from the marketplace there is
tremendous change in all business functions. In today’s competitive world different
business entities takes share of other company and performs full control over its
operations. The organisation culture is completely changed after take over and company
also observes change in business structure. In order to process this expansion method
there is a requirement of professional and skilled management. A huge investment is
required in order to take over a specific organisation and risk involved with business
operations is also increased.
 Enter a new market- In this process a company enters new market with a new strategy
to attract large number of customers (Wulansari, 2019). New market entry chooses a
perfect new geographical location for performing different business operations at the
marketplace. A new geographical location is selected by the professional strategic
management to perform expansion and development of the business.

 Collaboration- This is most widely used technique of expansion by different business
organisations as it formulated merging of different companies with each other.
Collaboration is a technique of business expansion which involves minimum risk
associated with the operations. The management of both the companies formulate mutual
strategy in order to gain advantage of existing market. In this technique mixed culture is
involved in business functions and activities which is essential for the organisation.

CONCLUSION
From the above stated report it can be concluded that global business is helpful in providing
necessary goods and services to several people who are present in the international market. This
report concludes that many businesses which are present in international market choose best
methods and tools of market entry to perform major business related functions. A business
organisation which is present in the global market to perform assessment of different economic
factors for minimising risk associated with the business. This report also concludes that it is the
major duty of management to hire professionally trained employees in order to deal with several
consequences which are arise during export and import related functions. In the global market
there are different companies which provide effective customer oriented solutions with help of
business operations in market. This report also concludes that strategic management is backbone
of a legal business which is present at the marketplace to earn good amount of revenue.

REFERENCES
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support the business operations of emerging clothing manufacturing micro
enterprises. International Journal of Sustainability in Higher Education.
ToÅ, A. and BajkoviÄ, S.A., 2019. The Influence Of Culture On The Operations Of
Multinational Companies. Annales Universitatis Apulensis Series Oeconomica, 1(21), pp.1-9.
Wulansari, P. and Fernando, Y., 2019. Developing Global Supply Chain Manager for Business
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Online
China’s data on dairy products import, 2021[Online]Available through:<
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