Tapping into New and International Markets

This presentation explores the opportunities and challenges of expanding business internationally, with a focus on the United Kingdom. It discusses the advantages of tapping into new markets, the influence of key global drivers, and the benefits of specific trading agreements. It also provides recommendations on appropriate methods and countries to meet UK's business requirements. The presentation is relevant for anyone interested in international trade and business expansion.

TAPPING INTO NEW
AND INTERNATIONAL
MARKETS

Introduction
• The UK is one of the largest players in the international trade. According to World
Bank, trade accounted for sixty two percent of its Growth Domestic Product in the
year 2017.
• United Kingdom is the sixth biggest importer of commercial services, the world’s
second largest exporter of goods.
• The United Kingdom imports majorly transport and machinery equipment,
manufacturing products, chemicals, food, fuels, live animals, beverages and crude
materials.
• The United Kingdom is located in the European region. The country enjoys
regional trade with its neighboring countries in Europe. Such regional trade are
conducted through trade blocks such as the European Union and the United Nations
Trade and Development organization.

Analysis of Global Business
Environment
• Currently, the United Kingdom is one of the world’s top ten manufacturers (6 of
the world’s top ten vehicle makers are located in the United Kingdom) and the
world's biggest economy (BARTLETT, C. and BEAMISH, P, 2011, pp15).
• United Kingdom is the 6th biggest trading country and also the world’s 2nd biggest
exporter of services after the United States. The county continues to be the most
appealing location in Europe for European headquarters: majority of the oversees
organizations have European headquarters in the United Kingdom compared to
Germany and France put together.
• The United Kingdom is the simplest location to run and set up a business in
Europe. A study conducted by World Bank notes that it takes thirteen days to
establish a business in the United Kingdom, contrasting to the average of fifteen
days of the OECD.

Influence of Key Global Drivers In
the United Kingdom
•Rule of Law
•UK’s rule of law is well developed, and the World Economic Forum’s 2017-2018 Report for Global Competitiveness positioned the United Kingdom eighth out of one hundred and
thirty seven. Secluded examples of corruption and bribery come about in the UK but are vigorously prosecuted.
• Government Size
•Forty-five percent is the highest rate of income tax, while twenty percent is the highest rate of corporate tax. Other taxes include environment and value added tax. The general
burden of tax is equal to thirty three percent of the accumulated domestic income.
•Regulatory Efficiency
•UK’s regulatory atmosphere is transparent and efficient. Beginning a business in the United Kingdom consumes less than a week. The labor market is comparatively efficient, and
bankruptcy proceedings are direct.
•Open Markets
•United Kingdom has an accumulated value of imports and exports that is equivalent to 62 % of the Growth Domestic Product. Two percent is the average applied rate of tariff. Some
of the European Union focused non-tariff trade obstacles including product-specific and technical subsidies, regulations and quotas can be removed or adjusted after Brexit.

Rationale for SMEs to Expand their
Business Internationally
•New Markets
•For many organizations, global expansion provides an opportunity to reach more of consumers and overcome new grounds, thus intensifying the sales. With the opening of international markets, United Kingdom will be
able to get more customers for their goods thus leading to increased sales.
•Diversification
•Several SMEs in the United Kingdom extend globally to broaden their assets, an act that can safeguard an organization’s bottom line against events that are unforeseen. Organizations with global operations can
counteract negative development in one market by functioning effectively in another.
•Access To Talent
•United Kingdom SMEs will profit from global trade through the opportunity to get access to new pools of talent. In a number of instances, global trade can provide SMEs with exceptional benefits in form of advanced
language skills, increased productivity, diverse educational backgrounds and more..
•Foreign Investment Prospects
•United Kingdom SMEs are also able to benefit from the extra opportunities of investment that are provided by the foreign markets (Greenhalgh, C., 2013, pp105). For example, several SMEs are able to forge
significant connections and establish new resources through running in the international markets.
•Competitive Advantage
•SMEs in the United Kingdom also opt for international markets to get a competitive advantage over their adversaries. For instance, SMEs that extend in markets where their contenders do not function frequently
have a first mover benefit that enables them to establish robust awareness of brand with customers before their contenders..

Opportunities and Challenges for
Economic Growth
• Opportunities
•Studies indicate that SMEs that trade internationally are more productive, profitable and more innovative than SMEs that do not
•Involve in the trade. Apart from exporting and importing goods to international markets, some of the most important prospects can be
found in the supply chain. International trade makes it possible for SMEs to get external partners contacts, which assist the SMEs to
improve productivity, reduce costs and find new markets.
•Challenges
•Present concerns concerning international trade concentrate both on sections where international trade rules subsist but where moderate
global competition is obstructed by persisting state support and high barriers. Distortions in markets continue to be central in crucial
areas of international trade. Agricultural products tariffs are around 3 times greater than subsides for industries. Furthermore, as
technology is transforming how and what SMEs trade on.

Trade Agreements
• The United Kingdom takes part in the arrangements of free trade of
the European Free Trade Association (EFTA) and the European Union
(European Union).
• The UK is a participant of the World Trade Organization. As a member
of the European Union, the United Kingdom is inevitably part of about
forty agreements of trade, which the European Union has with more
than seventy nations (Gruber, W., Mehta, D. and Vernon, R., 2017,
pp20).

Trade Blocks
• In the past forty-four years, the United Kingdom has depended on the
European Union to reach out for deals of trade, however, the bloc has
effectively acquired thirty-six agreement of trade for it member
countries, traversing more than sixty nations.
• United Kingdom also possesses trade blocs with the OECD, World
Trade Organization and United Nations Trade Development.

Main Partner Countries
Main Partner Countries
Main Customers
(% of Exports) 2016
United States 15.0%
Germany 10.6%
France 6.4%
Netherlands 6.2%
Ireland 5.6%
See More Countries 56.2%
Main Suppliers
(% of Imports) 2016
Germany 13.8%
China 9.4%
United States 9.0%
Netherlands 7.4%
France 5.6%
See More Countries 54.7%

Advantages of Specific Trading
Agreements
• Undertaking trade with the EU nations provides several crucial
advantages to United Kingdom businesses.
• The European Union’s countries comprise of the world’s most
productive and wealthiest nations.
• The European Union is a big market in which to sell services and
goods (Goldstein, M. and Khan, M.S., 2014, pp1044) is easy.
Moreover, the trading bloc also provides the United Kingdom to
access big source of suppliers.
• At the center of the European Union trade bloc is the single market

Evaluation of How the European Union Trade Bloc
Stimulate and Generate Global Growth
•Wide-based growth of the economy is key for socially –inclusive development and long-term
sustainability of the United Kingdom.
•The growth of the economy due to international trade establishes opportunities of income required to
lift people out of poverty and to raise the living standard of the people of the United Kingdom.
•The EU activities focused at fostering the growth of the economy in affiliate nations emphasizes on
assistance for regional economic integration, aid for trade, private sector development and public
finance macroeconomic evaluation.

Advantages and Disadvantages of
Different Types of Exporting
•Advantages
• The advantages of exporting to international markets include greater production that can
lead to better margins and huge economies of scale.
• The United Kingdom could substantially broaden its markets, making it less reliant on a
specific one and United Kingdom budget could work tougher since it can alter the current
goods to match modern markets.
• Disadvantages
• The disadvantages of international trade to the United Kingdom include losing concentration
on its existing customers and home markets, intensification of costs may upsurge as the
United Kingdom may have to deal with regulations of export when trading outside the EU,
the hardship of controlling relations that are more remote, that are normally a big distance a
away.

Documentation Required for
International Trade
• In a transaction of international trade, there exists a time lag through
conveying goods by the exporter to the importer together with the
transmission of payment by the importer to the exporter.
• To safeguard both teams from counter party threats, several
documents are initiated and utilized that include bill of exchange,
letter of credit, inspection of certificate, certificate of origin of goods
and bill of lading.

Methods of Tapping into New
International Markets Including its
Benefits and Limitations
• 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.
• 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.

Recommendations on Appropriate Methods and
Countries to Meet UK’s Business Requirements
• The United Kingdom should create a “blended finance” authority fund
for outward investments belonging to the LIC (WALL, S. and
MINOCHA, S, 2015, pp46).
• A blended finance is a capital that is concessional created to take
threats that are above the role of institutional private sector
financiers.
• Blended finance tools comprise of financing, not just grants, and can
be created to obtain a return. In the case of the United Kingdom,
“blended finance” would result in elevated investment, trade and
increased jobs.

References
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Society, 35(4), pp.583-607.
• BARTLETT, C. and BEAMISH, P, 2011. Transnational Management: Texts, Cases, and Readings in Cross-Border Management. 6th Ed.
Maidenhead: McGraw-Hill.
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Press.
• Greenaway, D., Hine, R. and Milner, C., 2015. Vertical and horizontal intra-industry trade: a cross industry analysis for the United Kingdom.
The Economic Journal, 105(433), pp.1505-1518.
• Greenhalgh, C., 2013. Innovation and trade performance in the United Kingdom. the economic Journal, 100(400), pp.105-118.
• Goldstein, M. and Khan, M.S., 2014. Income and price effects in foreign trade. Handbook of international economics, 2, pp.1041-1105.
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