Tapping into International Market

This document provides an overview of the global business environment for small and entrepreneurial businesses. It explains the challenges and opportunities they face in a competitive global market, including the advantages of trading blocs and agreements, various tariff and non-tariff barriers in international trading, and the advantages and disadvantages of importing and exporting. It also discusses the differences between merchandising and service import and export.

TAPPING INTO
INTERNATIONAL
MARKET

Table of Contents
INTRODUCTION.......................................................................................................................4
LO1..............................................................................................................................................4
P1) Explain global business environment in which small and entrepreneurial business
operate.....................................................................................................................................4
P2) Analyze threat and opportunities face by SME in competitive global environment........5
LO2..............................................................................................................................................6
P3 Determine and analyse advantages of trading blocs and agreements................................6
P4 Explain various tariff and non tariff barriers exist in international trading environment . 7
LO3..............................................................................................................................................8
P5 Determine advantages and disadvantages of importing and exporting ............................8
P6 Explain differences between merchandising and service import and export.....................9
LO4..............................................................................................................................................9
P7 Evaluate various methods in which SME can tap in international market........................9

P8 Compare and contrast various ways in international market including pros and cons of
method...................................................................................................................................10
CONCLUSION..........................................................................................................................11
REFERENCES..........................................................................................................................12

INTRODUCTION
Environment of all those countries in which a business operates and effect of all those
environment factors on decision making and operations of business is considered as global
Business Environment of a business. International market is global market which is situated
outside territorial boundaries of country (Lee and Chen, 2019). Home country market is
domestic market in which company is trading efficiently. Bank of London is a local bank in
UK. It is planning to expand its business or to open new branch in Germany. It is dealing in
services like retail banking, commercial banking and investment banking as well. The report is
providing knowledge regarding international trade. In these students have to prepare contents
of web page for country Europe. The report will be examining challenges and opportunities
global country trading blocs and travel agreements are discussed in report. Process of import
and export have also been discussed in this report. Ways in which companies can enter
international market is also discussed in report.
LO1
P1) Explain global business environment in which small and entrepreneurial business operate
Global business environment is business environment of different countries other than
home country. Global environment is wide and have several opportunities for new entries to
grow in other countries. Small business are selling their products in global market and
increasing their business effectively. Small business are growing as compared to other local
economies. Small economies are helping in economic growth along with employment
opportunities.
There are drivers of global business environment which are increasing international
business. Nowadays technology is used by people and even by companies. So, companies are
using new technologies and increasing their business. These business can be increased by way
of expanding business in local as well international market. Technology is used by companies
for communication as well. Internet and web pages will include information regarding good
and services given by company. Global business environment is free for new entrants but
competition is so strong in global market that it will have effect on sales. Changing economies
for different countries which will also include different culture of different country which has
to be followed by company. Bank of London is planning to enter European market and for
company has to look after the factors which will affect business in negative and positive way.

Trading blocs are also drivers of global business, in trading blocs various countries
sign free trade agreement. For example European union and south Asian free trade agreement
and many more. These trading blocs are promoting business with free trade zones and also
eliminating trade barriers for small business. Companies are earning more profits by entering
global market as compared to local markets. In every country there are different tax rules and
also have different tariff rates. So, before entering global market company will look for tax
and tariff rates. Midst all this various factors SME's are successfully operating in a highly
competitive global business environment, in this they have to compete with national big
organisation, international big organisations and international SME's which are operating in
global business.
P2) Analyze threat and opportunities face by SME in competitive global environment
Opportunities
Emerging markets
In global business environment there are many companies which are trading in market.
It is wide market place and company with good and innovative products can attract customers
in effective way. Wide market will have large number of customers and so, it will increase
business of company. It will increase sales along with productivity. Many developing
countries are entering global market and increasing their business. It will lead to global growth
and local economy will also be increased.
High rate of profits
Many companies are entering global market for increasing sales and earning huge
profits. Companies are trading in local market, but they are not able to earn profits as
compared to global market. In many cases company is earning huge profit in global market as
compared to local market. Domestic market is limited and have minimum number of
customers but international market is wide and have large number of customers. Bank of
London is entering global market for increasing sales because company is not able to earn
profits by local market.
Increasing favor from global organisation
Various global organisation are increasing their favor for SME's which is a big
opportunity for SME's. They are availed various financial and non-financial supports so that
they can grow.

Threats
Increase in competition
As Bank of London many other companies are grabbing opportunity of entering global
market and increasing business. So, there is increase in number of new entrants in market.
These have increased competition in global market. Every company is entering market with
new and innovative products which will be attracting customers towards them. Companies are
using various strategies which will increase the business in global market.
Wide market place
There is wide market place for companies but customers have variety of choices in
global market. In these wide place there is large number of customers along with company
will have to spend huge cost on marketing of products. Due to increase in competition
company have to aware customers about products and their special features. Companies will
take time for marketing of products in global countries. In case customers are more and
company is not to deliver products on time then it will result in negative impact on company
image.
Increasing requirement for Resources
SME's in global operation requires high rate of resources of all forms whether they are
financial, physical or human resources. SME's can only operate successfully if all these
resources are available to it.
LO2
P3 Determine and analyse advantages of trading blocs and agreements
Agreements are free trade agreements developed with aim to manage the trade relation
between two countries. Trading blocs are those group which are made of two or more
countries which agree on common agreement for reducing trade barriers among them. Nafta,
Asean, European union are example of such trade blocs.
Free trade agreement have increased trade between two countries. Due to increase of
free trade agreements there is increase in economic growth. Economy of countries is rising and
their will be increase in UK economy by 0.5%. Free trade agreement is providing more
dynamic business climate. Business were protected by way of agreements and so it is relating
in increase in trade agreements. In these agreements' government is spending low cost on trade
ad in rerun these funds are used by government for better use. Foreign direct investment is

increasing because of increase in domestic business. Technology transfer is received by way of
multinational trade agreements. These multinational companies are providing job training or
local employees. So, these free trade agreements are increasing business and companies are
achieving long term goals.
Trading blocs are group of countries which are signing agreement for reducing trade
related barriers in global country. Due to trading block tariff charges are removed and because
of that price of product is low and it will be resulting in greater opportunity for exporters.
Increase in trade will give benefit to economy is on large scale. Lower cost of products will
increase output and it will be resulting in increase in sales. Is giving small business and small
countries to grow and make suitable place in global market. Increase in competition is good for
consumers because tariff are removed and it will be resulting in variety of choices for
consumers. These trading blocs are increasing trade as well as productivity. Trading blocs are
building strong relation between countries and many countries are part of these trading blocs.
Benefits of Trading Blocs includes benefits of trading blocs like EU which are it
creates influential economic block. All the locations which are part of EU are equally gets
benefit of all its financial and business policies and it creates economic stability in the region
and also brings equality in context of economy of the region.
P4 Explain various tariff and non tariff barriers exist in international trading environment
In the Global business environment various types of barriers exist which are affecting
business. Two of these barriers are tariff barrier and non tariff barriers. Tariff refers to tax
imposed on products which are imported form other countries. Tariff barriers occur which are
occur in process of import. Non tariff barriers are other types of restriction by government on
import like import quota, embargo. In import quota list of commodities is available online for
UK customs and borders. Embargo is complete ban on importing and exporting of products.
These types of products are usually weapons which are used for defense purpose.
Most common tariff barriers which are affecting international business are specific
tariff and ad valorem tariff. In specific tariff fixed fee is levied by government on one unit of
import of good. Government is levying tariff according to demand of product in market and
according to value of product. In ad valorem tariff, tariff is charged according to the value of

products. It is custom duty which is Calculated on basis of value of product. These tariff
barriers are decreasing business opportunities for new entrants along with customers are not
able to use variety of products.
In non tariff barriers, there are licensing, import quota and voluntary export restraints.
In licensing, license are granted to companies by government which will allow business
organizations to import certain type of goods and services. There are restriction made by
government on import of medicines and drugs because these can be used by people in illegal
way. This is resulting increase in prices of products which will have negative impact on
consumers.
In import quota restriction is levied by government on particular goods. There is list
made by government for import quota and good are added in that list are restricted and has to
follow rules of import quota. In voluntary export restraints, restriction are levied by exporting
country and not importing country. These process will include reciprocal of goods for example
in case of Canada is importing products from japan but japan is exporting product on request
of Canada. So Canada will also do reciprocal of and will charge tax on products which is
being exported to japan.
LO3
P5 Determine advantages and disadvantages of importing and exporting
In international market goods are imported and exported from one country to anther.
Import is referring to purchase of foreign goods and bringing it to home towns. Export is
selling goods from domestic country to foreign country.
Advantages and disadvantages of import
Advantages
Extend profits margins because companies are setting high profits margin on import of
goods. High taxes, min mum amount of wages and material cost are lower than compared to
domestic countries. Better quality of products are delivered to customers because other
countries are preparing products with high quality and these products are in demand in
domestic countries (Najmaei and et.al., 2017). Government assisted trade is agriculture
because in many countries trade is managed between local farmers and importers.
Disadvantages

There are some foreign goods which are substituting domestic goods. Due to these
local companies feel difficult to survive in market, and they face huge losses. There is foreign
exchange loss to country because of importing good and these will have impact on economy
of country. Import is discouraging local manufacturers and these are creating inflation in
country. Local manufacturers are discouraged, and they are not able to work in effective way.
Due to inflation unemployment is increasing and it is having huge impact on company sales
(Izberk-Bilgin and Nakata, 2016).
Advantages and disadvantages of export
Advantages
global market is helping country to earn more profits as compared to foreign exchange.
These foreign exchange will build economy of country and export is generating huge
employment opportunities for talented candidates. Foreign companies are hiring talented
candidates from all countries. Due to global market and export economy of country is
increasing and it will result in developed economy of country.
Disadvantages
Export is depleting sources like crude oil and many more. Many countries can loose
their resources which can never be replenished. Export products are fulfilling quality standards
because bad quality of the products will have impact on country image. Export is leaving
additional remarks on country name and it is having negative impact on country image. Low
value of export products will result in earning less foreign exchange (Turkina, 2018).
P6 Explain differences between merchandising and service import and export
Merchandising export and import
In merchandising exports goods are sent out of country. Merchandising import, goods
are brought in to country. Export merchandise means applying all principles of product
merchandising. Marketing personnel determine businesses in retail location and also it will
sell export quality product in locations. Company have to incur huge cost on export
merchandising (Solheim, 2016). Small business have to fulfill all need of other country and
then business will be able to see products in that country market. Nowadays internet is cheap
and better alternative for small business to sell their products in global market. Companies are
able to sale their products in global market with the help of social media. These all is having

impact on international market and so, domestic businesses are not able to survive in market.
In import merchandising good are imported by country and people are not able to survive in
market. Good are brought by local people but these goods are imported form other countries,
and they are not able to survive in market.
People of various countries are able to increase the area of their choice of goods which are
available to them. Along with this one negative impact is that sometimes it hampers local
businesses of the country.
Service export and import
In service export and import companies are individually selling their products across
countries and receiving payments in effective way. Company is paying for services and also
company is collecting money for services rendered. Service export is increasing in global
country because export will increase because of increase in technology which will also require
installation, trouble shooting and maintenance of equipment. Service import is imported
foreign goods and services by local people (Chen, Kim and Kohli, 2017). Even tourism
related products and services are rendered globally. Service export is helpful for company in
financial way. It will help company to analyze financial status after rendering these services.
In these cloud based software are used and also services are delivered by people.
There are various benefits of service exports like it gives benefit of superior service to those
who do not have resources and expertise to have that service in their own region and country.
Bank of London also provides financial services.
LO4
P7 Evaluate various methods in which SME can tap in international market
Direct exporting is used by companies for selling products in inter national market.
Many companies are establishing sales program by way of representing them in market. The
company will have choice of distributors and agents to present them in the market. Products
are exported directly to other countries by way of online selling and many more (Mohezar,
Zailani and Tieman, 2016).
Licensing is arrangement of firm which will transfers right to use products and services
of another firm. It is useful strategy which Will have license of selling products in global
market. License can be used by company for marketing purpose as well.

Franchising is process in which company is operating form other country by way of
market expansion. Franchising is working in effective way by way of business models which
can be easily delivered to other markets. In franchising business is operated from other
country and outlets are opened in other country which will increase business in large scale.
Joint ventures are form of partnership in which two companies are involved, and they
both are signing deal. These both companies are investing in global market and both will have
opportunity to increase the sale because they have invested in these joint venture. The venture
is successful in case of both companies are sharing the risks and profits in effective way
(Milner-Gulland and et.al., 2018).
Alliance with big organisation which are already existing in global market is one way
in which SME's can enter in gloabal market. They can provide their supportive services and
create various program through which both big organisation and SME's can have mutual
benefit.
P8 Compare and contrast various ways in international market including pros and cons of
method
Direct exporting
Direct exporting include exporting directly to customer which wants to buy products.
In direct exporting there are some advantages and disadvantages as well. There are some of
potential benefits which will eliminate intermediaries. In these every one will know who are
customers and have detail about customers. Customers will feel secure while trading along
with they will do business directly. In advantages, direct exporting will require more people
and more power. It will require more time and energy. Customers are communicating with
company by way of local agents. In case of technological products customers will find no one
through which they will ask questions and solve their queries (Rana, 2018).
Franchising
Advantages of franchising will include risk of business failure is reduced and it will
have well established market for trading. One can recognize company by brand name and also
franchiser is supporting business. Franchisee has power to compete with big business along
with it will have certain rights can duties which need to be fulfilled towards franchiser.
Disadvantages of franchising are that cost of franchising is high and it will include restriction
which can run business in effective way. Franchiser will go out for business and it will have

bad reputation which is difficult to sell products in market. In this franchisers share all the
profit.
Licensing have some advantages which will include opportunity for passive income. It
will create new business for opportunities. In licensing it will reduce cost of both parties and
also it will create and easier way for entering foreign market. It will also create self
employment opportunities. In disadvantages, it will increase opportunities for theft and it is
quite depended on licensee. It will add competition in market place and it is offering limited
time for work. Licensing can result in royalty ligation and it will take time for royalty
payments as well. In licensing there is no guarantee of revenue (Leung, 2017).
Joint ventures have advantages like it will be providing improved resources and it is
only short term. In these both organisations share risk and cost it will also provide flexibility.
There is not point of exit in joint venture. In joint ventures one will build relation and
networks. Joint venture have some disadvantages as well. Flexibility in venture can be
restricted and there is no equal involvement of both parties in venture. In joint venture there
are, eliminating opportunities for working in other countries.
Alliances have various benefits like use of expertise, resources which suggest that
SME's should use this as a way to enter in global market.
CONCLUSION
From the above report it has been concluded that global market is having impact on
working of companies. Various other companies are planning to enter global market and
looking after the factors which can affect them in effective way. There are various methods
which will hep them to enter global market is direct exporting, franchising, joint venture and
licensing. Companies are not entering market by these ways and also importing and exporting
goods in global countries. Countries are importing products and also country is levying tariff
on import. This is having impact on increasing price of products. Export is exporting of
products on large scale in which products are sold across other countries for domestic country.
The report is also discussing merchandising and service import and export. These all will
include trading blocs and trade agreements which will work in effective way. The report is
providing knowledge regarding company and global market which will also provide
knowledge regarding global market.

REFERENCES
Books and journals