Tapping into new and international market

This report discusses the global business environment in which small and entrepreneurial businesses operate. It analyzes the threats and opportunities faced by SMEs in an increasingly competitive global environment. It also explores the advantages of international trading blocs and agreements, and explains the various tariff and non-tariff barriers in the international trading environment. Additionally, it determines the advantages and disadvantages of importing and exporting, and explains how to secure a deal. The report provides insights into the methods SMEs can use to tap into international markets and compares the pros and cons of each method.

Tapping into new and
international market

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain the global business environment in which small and entrepreneurial businesses
operate..........................................................................................................................................1
P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment.................................................................................................................................2
TASK 2............................................................................................................................................3
P3 Determine and analyse the advantages of international trading blocs and agreements.........3
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.................................................................................................................................4
TASK 3............................................................................................................................................5
P5 Determine the advantages and disadvantages of importing and exporting and how to secure
a deal............................................................................................................................................5
P6 Explain the differences between merchandise and service imports and exports...................7
TASK 4............................................................................................................................................8
P7 Evaluate the various methods in which SMEs can tap into international markets.................8
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
International market expansion is undertaken as the most efficacious aspects which is uses
by organisation for tapping into new and global marketplace with intent of obtaining success and
growth. The main aim of this report is to understand about international market where numerous
opportunities as well as threats are determined which may be enhanced at environments of
business (Akcigit, Pearce and Prato, 2020). As per the scenario the undertaken company for this
report is Airdri which is known to be the hand dryer manufacturer entity and developed in year
1974. The topic which are going to be discussed in this report are description about international
business environment into SMEs, evaluation of threats and opportunities, identification of
advantages of international trading blocs as well as agreements. Along with this, the barriers
such as non tariff and tariff, exporting as well as importing pros and cons, comparison between
merchandise and service’s imports and exports and explained. Beside this, several methods by
which SME’s tap into international market area along with its benefits and drawbacks are also
described in this report.
TASK 1
P1 Explain the global business environment in which small and entrepreneurial businesses
operate.
This has been analysed that United Kingdom is stated to be a stabilized region which is
recently facing economic crisis but still be innovative affirmative, forward looking as well as is
opening for new business or entity. It has been also monitored which legal authorities and
government of particular countries are so much incorporated into rendering facilities to small and
medium size enterprises as this is called as backbone for country’s economy (Al Abdulrazak and
Razak, 2020) . It results in contributing their market share towards enhancement of region’s
GDP. This will leads towards development of economy which generates job opportunities within
entity. UK is growing country with aids of their private sector enterprises and obtains 6th position
into all over the world wide. In addition to this, the manufacturing sector of United Kingdom that
contributes highly into growth of economic systems which is around 80% of overall gross
development product which generates basically from SME’s. It is also regarded that small and
medium enterprises is considered as organisation which usually operates their practices of
business with small level and limited to only some specific countries. In regards of United
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Kingdom, it is considered that small business consist employees less than 50 as well as annual
turnover is below 10 million pounds. Along with this, medium sized enterprises are stated around
250 or less than as well as gross turnover is about 50 million pound or less than that. There are
entities which operate in such kind of atmosphere within which they imports goods and services
from numerous other region in order to perform their enterprises efficaciously as well as exports
overall their manufactured products into many countries across worldwide (Azad, 2020). In
about whole small and medium enterprises along with entrepreneurial firm of United Kingdom
mainly operates their practices within the environmental of global business which is supported
by its regulatory as well as government bodies. It has been analysed that various SME’s into UK
perform their activities within European countries where they export its products to numerous
countries into Europe which involves Spain, France and many more. Within this regards, overall
transportation cost will be decreased because of European unions, small and medium enterprises
should not have to pay more amount at the time of exporting goods or services.
Apart from this, within United Kingdom small and medium enterprises develop their
overall global environment with aids of this they may efficaciously perform its enterprises within
marketplace of America, ASIA and some areas of African regions. It has been summarised that
atmosphere have been increased which modifies the opportunities to build at competitive
marketplace which leads towards firm contribution to overall gross domestic products of
country.
P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment.
Atmosphere of international business along with essential global drivers influences
It is regarded that atmosphere of UK global business marketplace are so much dynamic
which modify itself by changes into elements of macro surroundings (Beirinckx and et. al.,
2020). External atmosphere is recently facing huge issues and challenges because of new policies
associated with BREXIT enhances at workplaces. The small and medium enterprises of United
Kingdom has been enables for trading in freely way into numerous European regions without
going through any kinds of restraints before inference of BREXIT, but present small and
medium enterprises as well as entrepreneurial entities needs to pay some reasonable exchanges
amount of rate. There are numerous types of global drivers which have competencies to
influences all economical system of country. Some of these main drivers are workforce, capital,
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productivity and others. The personnel within marketplace of United Kingdom is so much
expensive because of that respective countries small and medium enterprises procures people
from the region of Asian, this will aids them to reduce their overall cost and also helpful in
positive manner. Rather than this, in regards of investment as well as productivity aspects, this
has capacity to influences the economic system of country in affirmative and negative way as
well.
Opportunities as well as threats within competitive atmosphere of international
SME’s includes limited human resource as well as turnover because of that they might face
some challenges for performing their practices of business. Therefore, the main influencing
issues faced by organisation is shortage of resources which incorporates proficient workforce,
property, finances, openness of marketplace and many more which restrict business and have
affects on overall profitability of entity pessimistically (BELYI and PIEBALGS, 2020). Beside
this all, the very much influencing challenge is economies of scales lacking which results in
controlling businesses like small and medium sized for accomplishing their goals.
Along with this, the problems and challenges that small and medium enterprises goes
through, it is undertaken that there are several opportunities which enhances overall business
functionality as well as organisation’s practices in appropriate manner. The government of
United Kingdom have initiated many types of policies with aids of which numerous small and
medium enterprises can able to operate their practices without paying any kind of higher or more
taxes.
TASK 2
P3 Determine and analyse the advantages of international trading blocs and agreements.
Trading blocs is stated as the kind of inter governmental contracts or agreements within
which overall restraints associated with trading between several regions can be eradicating for all
countries who are participating. It has been also regarded that trading blocs as well as agreements
is stated as contracts among regions which aids in allowing whole countries that are incorporated
into specific agreements so that they will trade in freely way (Bortz and Toftum, 2020). This will
assist them to provide industrialization as well as within development of overall economy of
country.
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Trade blocs as well as agreements renders benefits to organisations within countries that
assists them to trade efficaciously within several regions and is not responsible for paying any
kinds of taxes. It is also stated that United Kingdom was effective European unions which as a
results allows them to trade in any states of Europe. But while on other hand, after implementing
BREXIT, United Kingdom have signed several types of trading contracts which will allow them
to interact with other region or countries across the world, one of these trade blocs incorporates
CARIFORUM-UK economic partnership agreement. With aids of this type of trading
contracts, small and medium enterprises of United Kingdom can efficaciously and generally
trade in freely way within numerous regions which are Bahamas, Barbados and many other 11
countries.
In regard to UK, the other some essential contracts or agreement is SACUM-UK economic
partnership agreement (EPA). With aids of particular trade blocs, it has been identified that
entities will be responsible for performing trading along with numerous Southern African
countries. As South Africa is stated as the region which are too much rich in numerous natural
elements where by using respective contracts the entity of UK can easily import their products in
very efficacious and well defined manner and without paying any taxes.
After BREXIT implementation which enhances so UK become accountable for appropriately
trading under the rules of WTO which is undertaken as trade agreement among United Kingdom
and many other 163 countries. This as a result renders benefits to the UK’s businesses as it drives
towards reasonable trading on effective costs (Felstead and et. al., 2020)..
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.
The global business atmospheres stated as accumulation of trading surroundings within
which numerous countries entities trading with each other efficaciously and properly. Along with
this, it is methods of trading which is restricted by imposing barricades which consists overall
non tariff as well as tariff barriers. Rather than this, it has been initiated that tariff barriers are
usually incurred with essential intent of obtaining revenues with aids custom duties with interest
rates. Whereas on the other hand, non- tariff barriers are simply incurs with aim of confining
exportation as well as importation of some specific types of products.
It is regarded as those tariff barriers of trading undertaken as restraints which results in
limiting all entities for goods or services exportation trading. These are obstacles which consist
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imposing tariff on goods before enabling them to enter into international atmosphere which
restricts entity to do trading because of that they have to pay more taxes as well as interest rates.
All these limits involve cost controls, licensing needs and many more. In addition to this, it has
been regarded as customs rates as well as taxation are some kinds of barriers which need to be
paid by small and medium enterprises before operating any kind of trading.
Instead of this, tariff barriers, it has to be regarded that there are some non- tariff barriers
which controls entity to perform any types of trade within international marketplace
(Hollinshead, 2020). These are the barriers of trading which are not implemented for obtaining
revenues with aids of interest or taxations. Some of very much efficacious example of non- tariff
barriers which includes goods labelling, limited quantity, procurement norms and others.
Both the barriers of non- tariff as well as tariff influences success, growth and development
of small and medium enterprises. It has been identified that there are restrictions which are
essential in order to maintain discipline within industrialisation. These barriers ensure whole
countries are obtaining some margins of profit from trading. Along with this, it will also assist
overall countries to restrict importing as well as exporting goods or services. Also, they main aim
behind implementing both barriers is to maintain stableness within norms of whole trade which
involves import licensing, currencies overvalued, health and safety and many more.
TASK 3
P5 Determine the advantages and disadvantages of importing and exporting and how to secure a
deal.
Exporting: Exporting is stated as procedures of selling commercial goods to global
countries or trading into international market area (Krefting and Prince, 2020). It aids in
obtaining revenues and manage economical balance. In likely way, exporting has also its pros
and cons which are discussed underneath:
Pros Cons
 This assists to vital exploration of their
market areas.
 The large production leads towards
large economies of scale and effectual
revenues.
 Within it, there is threat of damages,
losses or theft.
 Small entity needs more time and cost
because of government rules as well as
norms.
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 It assists to extend product life cycle by
identifying an export market.
 The benefit of this particular method is,
it reduces vulnerability through not
depending upon local marketplace.
 This is also helpful in enhancing
competitiveness through obtaining new
thoughts, administration, activities, and
techniques of marketing as well as
competing ways.
 Also, through selling products at high
cost, margin of profitability may be
maximised.
 The limitation of governments or
economy leads towards monetary risk
maximisation.
 For developing export marketplace, this
required huge amount of funds as well
as too much time taking.
 It is time consuming procedures of
accumulating payment rather than risk
of non-payment.
 The less information about rivals have
put pessimistic impacts upon the
competency to perform effectively into
international marketplace.
 Also, the modification of product
requires to meet protection as well as
safety.
Importing: It is stated as the methods of purchasing international goods or services by
local economy. This particular method aids in maintaining balance into economy and promote
new goods. There are numerous pros and cons of importing which are discussed underneath:
Pros Cons
 It maximises the margins of profits as
by importing goods from that countries
labour as well as material cost gets
minimised.
 With aids of it, small business can buy
labours and raw materials at lower cost
that become accountable for lowering
down manufacturing costs.
 The government of developed countries
render supports to their small entities
 Entity must has to pay high GST as
well as any other taxes upon imported
goods which leads towards
minimisation within the margins of
profits.
 Job opportunities maximises due to
importing goods, labours of specific
entities does not gain opportunities to
generate products.
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for importing goods which aids them to
formed business.
Exporting is mainly divided in two that are indirect as well as direct. Direct exporting is
undertaken as the sale of goods within aboard without involving any third parties where as
indirect exporting involves intermediaries in order to import their products (Lise and
Bayramoğlu-Lise, 2020). Some essential types of indirect export intermediaries are purchasing
agents, export management entities, commission agents and many more. This is also considered
as the method which incurs less cost and risk but with restricted margins of profit as it consists
third parties cost.
The deal of exporting and importing can be secured by attaining the official form in order
to meet the countries rules and policies as well as value of specific documentation is that they
can become capable to do appropriate trading between two entities who does not even
understand each other’s. The documentation requires commercial or custom invoices, export
declaration, insurance certification and so on. Moreover, some government requires licenses of
purchasing as well as packaging list also.
P6 Explain the differences between merchandise and service imports and exports.
Merchandise and service imports & exports is undertaken that goods and services export as
well as imports are so essential for entities who desires to enter at international market areas
(Ogunleye, 2020)(Sheth, 2020). In addition to this, it have been regarded as there are some
essential differentiations which depends upon meanings, cost and scope, nature. In context of
resent scenario, some key comparison among services as well as merchandise export and import.
Basis Merchandise import and
export
Service import and export
Meaning It is regarded as exports and
imports of overall goods such
as tangible which can usually
be purchase and sold among
various countries. Like Airdri
is an entity which renders
some efficacious products to
The overall services trading
are regarded as intangible
exchange. In respect of recent
firm, Airdri is a company
which pay to them in order to
services importation like
expertise comes from
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their audiences from outside
UK.
numerous countries for
rendering some effective
services.
Scope It has been also undertaken
that, this forms of import as
well as export which does not
have effectual and the tangible
products which can
appropriately distributed by
firms.
But on other side, it has wider
scope under that there are
many services like
development of infrastructure,
competent training and many
more.
Cost The cost that is incurs within
trading as well as
manufacturing of
merchandises is very much
high under which it needs vital
to obtain overall raw materials
as well as savings in order to
transform into finished goods.
While, this is stated as simple
method as particular services
is traded in likewise manner
which reduces operative cost
of entity. As there are not any
practices of merchandise
growth.
Therefore, based upon the above determination, there is a large differentiation among the
exports as well as imports of merchandises and service trading. However, there are some
essential documentation that are needed within merchandise trading.
TASK 4
P7 Evaluate the various methods in which SMEs can tap into international markets
Whole entities rather their nature and size provided some types of techniques with aids of
which they can able to run its business practices in simple manner into internal marketplace
which is helpful for them in enhancing market share as well profitability (Steink eand et. al.,
2020). Some of these methods which are very much used by administrative group in order to tap
into international marketplace:
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 Franchising: This is stated as an agreement which is formed between two or above
parties under which franchiser is a person who permit franchisee for using brand name,
products, services, logo and other as well as then sell them to grab profitability.
Therefore, this is the method which bound both parties who are involved into particular
contract appropriately. In addition to this, organisation should manage the quality of
goods or services for enhancing brand name as well as reputation of enterprises.
 Licensing: It is stated as method which incorporates an agreement between more
individuals that aids license in order to access patent by facilitating some royalty amount
of values. Moreover, this is undertaken to the agreement which do not bound licensee for
keeping quality of goods and services as it rendered by them.
 Joint venture: Based upon this, enterprises of numerous regions required to agree upon
performing together for specific topic that as outcomes render them advantages to both
entities (Tajeddini and Ratten, 2020). Along with this, it is types of method that is also
enact as partnership among two organisations for particular duration of time in order to
extent its business practices in proper way.
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method.
Small and medium enterprises such as Airdri may into new and international marketplace
by using franchising, licensing, joint venture and many more (Uner, Cetin and Cavusgil, 2020).
But these all methods has its pros as well as cons which are discussed underneath:
Franchising Licensing Joint venture
Pros
This is regarded to be the
affordable method and also
in this entity does not has to
invest huge funds. Moreover,
it has moderate risk.
Entities can grab highest
market share by adopting this
particular method as well as is
also not so much risky.
Within it, firms enjoy
arrangement of competent
and efficacious resources.
Herein, risks are to be shared
among both organisations in
equal manner.
Cons
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Herein, there is threat of
brand image reduction if
franchisee is not capable in
order to maintain it in
efficacious way.
This can goes through some
issues related to loyalty non-
payment and leads towards
some kind of losses for entity.
Within respective method,
both parties should has to
share profitability in equally
way that might formed
disputes within organisations
(Wang, Helms, and Li,
2020). Along with this, if
small and medium enterprises
opts this particular method
thereafter they face problems
associated to rigidity.
Rather than the above differences, whole these kinds of methods has some similarities that
is, they permit small entities an opportunities for developing as well as growing within global
marketplace.
CONCLUSION
Based upon the above report, this has been concluded that the expansion of business is
essential for whole organisation as it assists them to obtain success and development within
competitive global market area. International business environment incorporate several aspects
which take into account of norms, rules etc. this as a results restrict free trading into numerous
areas. In addition to this, it has been also concluded that small and medium enterprises has to
face numerous threats as well as get chances to grab opportunities that aids to gain success at
international marketplace. Also, after finishing this particular report, it can be ascertained that
UK is a country which effectually incorporates many kinds of trade agreements. It rendered
helps to firm for trading with various countries without giving any types of taxes. Rather than
this, there are basically two kinds of trade barriers named as non tariff and tariffs. Moreover,
there are also several methods such as exporting, importing and many more that aids small and
medium size enterprises to tap into new and internal market areas in appropriate and effectual
manner.
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