Analyzing the Global Environment for SMEs in the UK

This webpage analyzes the global environment in which small and medium-sized enterprises (SMEs) operate in the UK, with a focus on Aston Chemicals. It discusses the products, location, and number of employees of Aston Chemicals. It also explores the various ways SMEs can tap into international markets, including licensing and franchising agreements, joint ventures, partnerships with larger organizations, and establishing outlets abroad. Additionally, it examines the factors that need to be considered while tapping into international markets, such as social, cultural, political, economic, and global factors. The webpage also provides an explanation of import and export, advantages and disadvantages of importing and exporting, and the differences between merchandise and service imports and exports. Finally, it evaluates the methods SMEs can use to tap into international markets, including the use of local partner networks and social media platforms.

Select a country of your own choice and prepare a webpage on the
chosen country to analyse the global environment in which small and
medium-sized enterprises SMEs operate.
What product, location and how many employees, where do they operate.
Select organization and country.
Organization- Aston Chemicals
Country-United Kingdom.
Power point LO2
Tariff and non-tariff barriers international trading environment. (CHOSEN
ORG)
Bureaucratic and administrative delays at the border.
Foreign exchange controls and foreign exchange restrictions.
Import deposits
1. Imposition of tariff. Analyse the global environment in which Aston
Chemical operates either as a small and medium-sized enterprise.
Aston Chemicals is medium sized, self-governing distributor of cosmetics
in the European Union. The organization offers Speciality cosmetics with
high quality raw materials innovative and outstanding levels of customer
service. The company works in a competitive environment across Europe
with several competitors producing similar products. The Company
provides its European customers with an amalgamated service, from
efficient delivery of products to dedicated R&D support to manufacturing
plants.
2. What product, location and how many employees, where do they
operate.
Aston Chemicals deals with several products, which include active
ingredient, anti-inflammatory, anti-per spirant, moisturiser, emulsifier,
anti-inflammatory, anti-ageing and anti-oxidant chemical among others.
The company is located at Coldharbour Way, Buckinghamshire. The
organization operates in Aylesbury in United Kingdom. The company has a
total of ninety four employees who serve in the different departments.
Task 2
The various ways SMEs can tap into international markets:

Please state the advantages and disadvantages for each of the
following below:
1. Licensing and franchising agreements
Advantages
It provides the liberty to come up with an exclusive approach of
marketing.
It creates opportunities of self-employment
.
Disadvantages
It brings forth dependencies for the licensor.
It brings an added competition in the market place.
2. Creating Joint ventures
Advantages
It creates new expertise and insights.
The parties involved are able to share costs and risks.
Disadvantages
Restriction of flexibility can arise.
It can be hard when one partner wants to move out of the joint venture.
3. Establishing connections and partnerships with larger organisations
Advantages
Less official with a few legal duties.
Easy to start since it requires little capital.
Disadvantages
Unlimited liability for the organization and partners involved.
There is limited access to capital especially from banks since most of the
banks do not trust partnerships.

4. Setting up and establishing outlets/branches abroad.
Advantages
It offers a chance to widen registrations into other markets and an
opportunity to extend a company’s property rights.
Establishing outlets abroad makes customers to trust it more.
Disadvantages
Costs are usually high in case things go wrong
The organization requires to comprehend employment, corporate and tax
law in the new location, and utilize local specialists to assist the it.
Task 3
Global and Business Environment
The following factors have to be considered while tapping into
international market.
Please explain each factor
1. Social factors. Every population in a country has its own special way
of coexisting. Therefore, Aston Chemicals is supposed to consider
the way of living of the population especially where they set an
international outlet.
2. Cultural factors. Every community in a country has its own belief,
therefore Aston Chemical is supposed to consider the beliefs of a
population culture before setting up a business in another country.
3. Political factors. Political environment such as political rivalry
between nations can make it had for the Aston’s investment to
thrive in an international market.
4. Economic factors. An international market with a weak economy can
create a big issue when it comes to the development of Aston
Chemical. Therefore, a good economy is required for the
organization to thrive.
5. Global Factors. Global factor such as quotas, trade blocs can affect
how Aston Chemicals undertakes its activities in a global market. A
trade quotas in an organization can limit the number of goods which
an organization exports to another country

LO3
Brochure
Explain import export
Import. It is the act of moving services and goods into a nation from abroad for sale.
Export. It is the act of sending services or goods to another nation for sale.
How to secure a deal. (Import and export deal)
1. Securing and negotiating the deal by the importer.
2. Payment phase by buyer or importer.
3. Delivery and logistics 3 main parties with the exporter or seller.
4. Imports when the bill lading has been sent and the goods have been shipped.
Advantages of importing
Widening the margins of profit. A significant reason that organizations across the globe
prefer to prefer to import goods is to widen the margin of profit. Wage minimums, high taxes,

material costs in some countries make it more beneficial to import products from a nation
where wages, fees and material costs are significantly lower.
Good quality. At some instances, SMEs would like to merchandise a good or item, which is
not native to its region. In this scenario, it is good to get the product from the source, since
the SMEs are likely to get products that are of a high quality.
Government-assisted trade. In many nations, for instance the UK, the authority plays some
role in controlling trade between importers and local farmers. Not only does this reduce
vulnerabilities, but in some instances, the authority offers added benefits and support to
importers including assistance with customs and reduced taxes.
Disadvantages of importing
Importation of goods has a number of disadvantages. Importation of
goods can result to the loss of the domestic market. It also intensifies the
vulnerability of getting the ‘eco-bug’ that is mainly experienced in the
warm weather. Importation of goods also leads to the reduction in the
number of jobs that are available in the nation getting the goods.
Disadvantages of exporting
Exports that are low-valued can only get a minimal profit.
Labor and investment flows in export sector. Exporting of goods in other nations can lead to
labor and investment flows of other in the export sector.
Exports can result to the loss of essential technologies.
Explain merchandise and service imports and exports.
Merchandise imports. These are imports that show the C.F.I worth of goods from the rest of
the globe valued in present United States dollars.
Merchandise exports. This is the export of tangible goods. It is the export of goods but not
services.
Service export. This is a service offered by a resident in one nation to companies or people
from another.
Service import. This is a service that is retrieved from another country by the companies and
people of the foreign country.
Differences between merchandise and service imports and exports.
Merchandise export or import deals with physical goods for instance toasters, cars, furniture.
The goods, which are physical, are made in one nation and are sold and exported in another.
Services imports and exports entails providing intangible goods for instance web hosting,
accounting services and consulting from another nation. These are goods offered by another
country and they do not involve products.

Evaluate the various methods in which SMEs can tap into international
markets.
Utilizations of Local Partner Networks
Online partner marketing is a well-established channel of sales for several businesses. Local
partner networks could prove helpful in the United Kingdom foreign market mix. With the
exception of huge international partner networks, there are several others functioning
exclusively within the regional market. Apart from increasing sales, the use of local partner
networks is crucial for establishing the UK’s brand.
Use of Social Media Platforms
Many SMEs in the United Kingdom profit largely from well-managed campaigns of social
media in both the domestic and International trade. Social media is advantageous to many
marketing and sales functions, including competitor analysis, market research, customer
service and CRM. Using local social media skills within an international market can assist the
United Kingdom evaluate the response of international market to the country’s foreign roll-
out and direct traffic to UK’s website that is localized.
Various ways SMEs can tap into international markets, assessing the pros
and cons of each method.
Pros of using social media platforms to tap into international trade
Increased brand awareness. Most of the international customers are able to understand the
brand when social media platforms are used.
Increased visibility. With the use of social media platforms, the country’s goods become
more visible to international markets.
Cons of using social media platforms to tap into international trade
Increased exposure online has the probability of attracting threats. Threats can include
hacking, information leaks and negative feedback.
Lack of a clear social media or marketing strategy can result in minimal benefits for the
international trade.
Pros of using local partner networks to tap into international trade
It becomes easier to get development information in a sector, industry or market.
It becomes simple to comprehend the documentation and regulations for licensing authorities
or overseas customs.
Cons of using local partner networks to tap into international trade
Selling complications in case the local partner network is not united
Lack of stability.