Advantages of International Trading Blocs and Agreements

This article discusses the advantages of international trading blocs and agreements for small and entrepreneurial businesses. It also explores the various tariff and non-tariff barriers that exist in the international trading environment. Learn how these factors impact businesses and their ability to expand globally.

Tapping into new and
international market

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Global business environment where small and entrepreneurial businesses operate...............1
PESTLE analysis of global business environment......................................................................2
Small and entrepreneurial are operating business.......................................................................3
Critically implication of threat and opportunities.......................................................................5
Task 2...............................................................................................................................................5
P3 Advantages of international trading blocs and agreement......................................................5
TASK 3 &4 ...................................................................................................................................8
......................................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCE.................................................................................................................................11

INTRODUCTION
Global marketing is consider as marketing where number of business organisation are
taking advantages to operate their business successfully. This is great opportunity for businesses
to establish their business at global level and increasing productivity as well as profitability.
There are many businesses who are running at international level by using market activities
(Jasovska, 2019). This contains planning, pricing, placing, promoting and directing the
processes in order to maintain properly. The goals of marketing is to expand their business
globally which can helps to gain high profits. In other words It is the application of principles of
marketing which satisfy the changing needs and wants of people who are residing across the
national borders. When organisation is running their business in more then one nation by
marketing activities, contained as international marketing. This helps to enter in new market
efficaciously and promote the products and services.
To understand about international marketing Barclays organization has been taken that is
financial services provider corporation providing services in their nation and other nation also.
Digital marketing and other activities are using by management which helps to run a business
successfully. This report covers different topics such as global business environment in small and
entrepreneurial business, threats and opportunities that are facing by SME, advantages of
international trading blocs and barriers that exist in international trading. Moreover, this report
also consider advantages and disadvantages of importing and exporting to securing a deal,
difference between merchandise and service, different methods where various methods of SME
can tap in to international and pros and cons of each method.
Task 1
P1 Global business environment where small and entrepreneurial businesses operate
Introduction about company – Barclays is a British multinational investment bank and
financial services organization that has headquarter in London, UK and other nation (Rana,
2018). This is established for corporate banking, investment management, personal banking and
wealth management. This was founded in 17 November, 1690 in order to providing financial
services. This was established by Nigel Higgins and Jes Staley from small level. This has made
number of corporate acquisitions by involving provincial and South Western Bank in the year
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1918. In present this is most powerful transaction industry in the form of ownership and thus
control over financial stability and market competition at global level.
Concept of international marketing
International business is connected with number of commercial activities which is used to
promote the transfer of goods, people, ideas, resources and technological advancement across the
national boundaries. The formation and operation of sale, research and development,
manufacturing are using marketing activities which helps to run a business profitably. The main
aim of business organization is to increase the productivity and profitability by using
international marketing. In context to Barclays, different type of marketing activities are used by
management which helps to improve the business at high level from the SMEs. This concept
covers Orientation to foreign trade, Guidance to sales in foreign markets and orientation to
international marketing.
Through all concept the performance of organization is increases continuously as it
involves plan, pricing, promotion and direction to increase the activities (Khan and Lew 2018).
Such concept are related with global marketing which helps to improve performance.
Global Business environment is related with different sovereign countries where business
is running by using different activities in order to make higher profits. It has been seen that
businesses are affected by global environment which refers to uncontrollable local and
international interaction that influences business and states how a company operates. In context
to Barclays, management are running their business globally by using international marketing
such as advertisement, social media, print media, you tube, online services etc. which attracts
people and helps to run a business at international level.
Analysis of Global business environment – The examination of global climate where
businesses are running is called as global environment analysis. This is evaluation process that
covers analyses, examination and assessment of business by considering consumers and
competitors (Chawla and Ghosh, 2019). Global business environment is classified in to macro
and micro business that are as defined:
PESTLE analysis of global business environment
The PESTLE analysis of Global business environment in context to Barclays is defined
as, that operate its business in different nation such as America, Europe, London, South Asia
ETC. PESTLE analysis is given below:
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Political: America is powerful nation in all over the world where Barclays is operating its
business and also dealing in foreign direct investment under effective political system. If this
system is not stable the it may become difficult to operate their business in global environment.
Economical: America is having largest economy in the world which is operating
business by following low interest rate (Kearney, 2018). Barclays is operating its business
smoothly as it is following all economical standard and providing good wages rate to employees
who helps in business activities.
Social: People are demanding new things or services in America and other nation which
is providing by Barclays as per new trend and choice which has impacted positively on global
business environment. There is estimated population is 329.45 million who are residing and
living their life that is providing opportunities to such organization.
Technological: Growth of business and nation is based on technology which is adopting
by Barclays in America and other boundaries which helps to become leading organization in
compare to others. So this is impacting good on business environment.
Legal: To run a business in global environment Barclays is following all several act
which are helping to enter in to new market and set their business. Such as organization is
following employment act, equality act, minimum wages etc. which helped in Global business.
Environmental: This is also important which is used to run a international business such
as Barclays is setting business by focusing on environmental act in which it participate in CSR,
environment safety act etc. that helps to operate business successfully.
Small and entrepreneurial are operating business
There are different reasons due to which organization wants to go internationally (Nordin and
Lindbergh, 2019). The rationales are as defined in context to Barclays:
Improving profit margins: Companies who are domestic level looks for opportunities
for the purpose of adding customers and revenue streams. Barclays also having such dream
which helps to perform well at national level as encourages to seek out international business.
Competing for new sales: Companies who wants international business is also desire to
increase their sale by operating business in other nations which helps to improve the overall
revenues by increasing sales.
Diversifying business: International businesses allows organization to diversify their
business in to couple of keys by taking risk which helps to become a rationale to go international.
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P2 Threats and opportunities that face SMEs in increasing competitive global environment
Small and medium organization are running their business and wants to compete with
global environment in order to expand business activities as well as profits (Milburn and
Guertin-Martín, 2019). Barclays is international organization which faced different types of
threats and opportunities while entering in to global environment. For understanding the threats
and opportunities different types of strategies are using by organization that are as defined:
Porters Diamond theory: This theory is used by Barclays organization to know the
competition while going in to internationally such as:
Firm strategy, structure and rivalry: This states that organization should have proper
strategy and structure which helps to take competitive advantages. Domestic competition for
Barclays become a opportunity to develop unique, sustainable strength and capabilities which
helps to improve the business in order to take competitive advantages.
Factor condition: This states as in other country natural, human, capital and other
resources which helps to run a business. In context to Barclays, it faced resources problem while
operating business in other nation (Wang, Helms and Li, 2019). Such as while establishing
business in America it needs highly skilled and competent employees, capital and new
technology to perform well which helped to upgrade them continuously.
Demand conditions: This states how home demand affects a favorable industry in some
nations and how it can become internationalism. Demand position from local customers pushes
to grow the company by innovating and improving quality which helps to get the advantages. For
instance, Barclays is providing financial services which is demanding at local as well as
international level that helps to gain competitive advantages efficiently.
Related and supported industries: This provides foundation where focal organization
can excel. Business organization are often dependent in alliances and partnership with other
organization which creates value for customers and making more competitive. In context to,
Barclays, banking industry and wealth management are crucial who come up with new
innovation and providing high quality of services, timely feedback and short line communication
which helps to get the competitive advantages.
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Critically implication of threat and opportunities
Before entering in to new business activities in to other nation Barclays is needed to
recognize the challenges and opportunities which helps to make decision to go internationally or
not. The opportunities and threats in context to chosen company is defined as:
Opportunities Threats
 To expand their business in other
nation by generating profits and
building brand image by increasing
market share.
 To gain competitive advantages by
providing better quality of financial
service.
 Favourable economic condition that
support to earn huge profits.
 New rules and regulation which need to
follow by Barclays while entering in to
new or internationally.
 Variation in exchange rate and currency
rate (Verougstraete and Aras, 2019).
 High competition in other nation.
 Lack of skilled human resource
Task 2
P3 Advantages of international trading blocs and agreement
Marketing strategy is related with organization where management understand the
requirement and make strategies which helps in trading blocs and agreement. Trade agreement is
consider as rules and regulation which is important to run a business and make higher profits.
Barclays is using different types of marketing strategies in order to become internationally that
are defined with advantages and disadvantages:
Marketing strategies Advantages Disadvantages
Direct exporting: This is
attractive strategies which can
be used by business
organisation while entering in
new market and international
environment (Khakurel, Melkas
and Porras, 2018).
Barclays can maintain higher
business activities and profit
margin by satisfying people
through providing financial
and investment services in
different countries.
This is not approachable for
SME business as it require
high amounts and investment
to go internationally which
may be difficult.
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Joint venture: When two or
more than two organization
carry out their business in
domestic and other country by
performing their roles and
responsibilities is consider joint
venture.
This supports business and
grows it internationally which
helps to create trust and brand
image. Moreover, in case of
loss situation risk is bear by all
venture firms equally.
In this, organisation face
confusion and intervention of
other organisation which can
reduce the productivity and
profitability of organisation.
P4 Various tariff and non tariff barrier that exist in international trading environment
Trading blocs refers as group of nations where specific location are running their
business (Shah and Chugan, 2018). This block track to trade alleviation and trade initiation
between members which become barrier in international trade.
Type of trade blocs and regional trade agreement and their role in SME trade
Types of trade blocs:
Preferential Trade area: When nation accept to deduct or eliminate the tariffs barriers
on specified products which is imported from other areas.
Free trade area: This means barriers are eliminated or deducted when business is
running in two and more then two countries.
Custom union: This means removal of tariff barriers between participants additionally
acceptance of unified tariff.
Types of agreement:
Multilateral agreement: This means trading rules between number of nations which
helps to given a shape of international trade like WTO, EU etc.
Bilateral agreement: Herein, agreement is done by two countries in order to run
business by following rules and regulations (Ahmed and Sarwar, 2018).
Tariff barriers: This means Tax or duty which is imposed on products at the time of
reaching from one state to other. In international business tariff barriers are related with taxes
which is mandatory to follow to run a business. This is used by manufacturing industry who
import and export the products by following taxes. This involves number of tariffs:
Import Tariff barrier: Taxes are imposed on imported goods and commodities which
can limit the productivity of a nation.
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Export Tariff barrier: When goods and commodities are exported then it has to pay
taxes which can affect the business.
Transit Tariff barrier: This also refers taxes which are imposed in commodities when
they pass with the help of one country which bounds another.
Non Tariff barriers: This consider as government policies, procedure, action and
legislation other than tariff barriers. Barclays is consider as non tariff barrier which has impacted
on business by moving in to foreign direct investment. Description of barriers are as defined:
Export subsidies: In this, Barclays organization need to follow rules and regulation at
the time of exporting finance on preferential terms and agricultural subsidies which impacted on
profits directly (Non Tariff Trade barrier, 2019).
Subsidies for domestic goods: Business industry also follows rules and regulation when
it is going to be internationally from domestic.
Government policies: This also imposed regulation that shows “buy national” policies
and closed bidding which can limits the business activities (Li and et. al., 2018).
Services barriers: This limits on Barclays where it limits on range of financial services
which is offered by foreign financial institution, may be barrier to the provision of service.
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TASK 3 &4
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CONCLUSION
From the above report it can be concluded that to run a business there is need to have
information about market and legislation which helps to set a business at international level.
PESTLE analysis is used to monitor the business activities and know their impacts in context to
global business environment. Direct export, indirect export, licensing and franchising are the
different ways which helps to run a business globally. Tariff and non tariff barriers are those
barriers who arises while running a business and limits them. Merchandise is related with
importing and exporting of goods and products which are tangible where as services are
intangible which are provided by organization in order to get international image.
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