Tapping into New and International Markets

TAPPING INTO NEW AND
INTERNATIONAL
MARKETS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO 1.................................................................................................................................................3
Global business environment in which small and entrepreneurial business operate...................3
Threats and opportunities faced by SME’s..................................................................................4
LO 2.................................................................................................................................................5
Advantages of international trading blocs and agreements.........................................................5
Tariff and Non- Tariff barriers in international trading...............................................................5
LO 3.................................................................................................................................................6
Advantages and disadvantages of importing and exporting........................................................6
Difference between merchandise and service imports and exports.............................................8
LO 4.................................................................................................................................................9
Different methods through which SMEs can tap into international markets...............................9
Advantages and disadvantages of the different modes of entry..................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Tapping into international market signifies the venture of a domestic business into an
international or global market. In the report that is been prepared for the Barclays’s the global
business environment and the threats or opportunities that it presents will be analysed. Further,
the tariff and non tariff barriers and the different modes of entry that are available to SME’s will
also be evaluated.
MAIN BODY
LO 1
Global business environment in which small and entrepreneurial business operate
The global business environment signifies the trade and business activities that are carried
out beyond the national boundaries of a country and exits between multiple countries at the same
time (Ibeh, Crick and Etemad, 2019). For smaller companies, the global market is usually the
platform where they try to gain as much competitive advantage as possible so that the customer
base as well as the market share both can be expanded. The technological advancement, the
wider options that his market provides and the strategic changes that an organisation needs to
make in order to operate in the global environment are some of the most prominent changes. The
small businesses can venture into the global markets and operate in them successfully if they
indulge in regular environmental scanning. Regular evaluation helps in ascertaining the volatility
that might arise in the global market and the trends can also be monitored regularly.
Another major factor that the small business need to keep in mind while operating in the
global market is, that, the International trading system is the major framework according to
which business takes place (Schreinemachers, Simmons and Wopereis, 2018). There are various
international regulatory bodies such as World trade organisation, etc. and the companies need to
develop actions that are in compliance with regulation and guidelines that have been developed
by such regulatory bodies. The major considerations that a small business should take also
involve analysis that whether the companies or businesses have adequate resources that are
required in order to venture into the global markets and this can be done effectively by analysing
the forms internal capacities. It should be acknowledged that after a business enters into the
global market, maintaining a successful business operation is very difficult due to the constant
threats that they face. Therefore, it is necessary for the small businesses to bear in mind that it is
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easy to enter into the international markets, but it is difficult to operate successfully in the global
context.
Threats and opportunities faced by SME’s
The global environment is highly competitive and the number of competing industries are
vast that can create threats for the small business at any time but there are vast number of
opportunities as well (Milner-Gulland and et.al., 2018). These can be analysed in following
manner:
Threats from the global environment: The most potential threat that the SME’s can face is that
the existence of socio- cultural differences in the global market is very wide because all the
economies and different cultural background companies are operating in the international
market. Therefore, identification of the products that can be used in the international market
which meets the identified market needs accordingly and helps in avoiding the rise of differences
as well. Apart from this, the major challenges also involve the time factor as well as the
geographical distance factor where the different locations and the delivery to such different
locations can prove to be a challenging task. Lastly, another major threat is that in the global
trading, ascertaining the reliable partners who can assist the business without committing any
frauds is a very challenging aspect because it is not easy to develop partners in the international
markets easily.
Opportunities from the global business environment: The international exposure that a business
is able to gain from this venture into the international market is the biggest opportunity that can
be utilised by the small and medium businesses (Solheim, 2016). Apart from this, the boost to
the brand image is another major benefit where the company can promote their brands at
international level and if once successful, the business can soon become a global brand very
quickly through such global expansion. Additionally, the company can gain a lot of competitive
advantage by the venture into international markets as it can be the best method to launch the
small and medium businesses on an international platform and thus become a player at the global
level. Therefore, expansion in the global markets presents a lot of advantages as well for the
SME’s.
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