Tapping into new and international markets

This document discusses the advantages and disadvantages of importing and exporting, and provides insights on how to secure a deal. It also explains the differences between merchandise and service imports and exports. Additionally, it explores the documentation required for tapping into new markets. Finally, it evaluates various methods for SMEs to tap into international markets.

Disadvantage Foreign exchange goods are
eliminating the presence of domestic
market due to this they may lose the
business which may cause total
collapse of the local industry.
Further this will also discourage the
local manufacturer to produce product
due to this inflation may be occur and
leads to the small economic growth.
Importing of goods may increase the
price of the product which lead to the
erosion of the domestic market and the
national economies specifically is
affected when the trade deficit occurs.
Exporting reduce the value of
the product such as crude oil,
minerals, ores and the country
will lose it resource value
which cannot be replenished.
Furthermore, the export
products are subjected to the
quality standard and the bad
quality product are
minimizing the product value
as well as countries
reputation.
In addition to this, small and
medium enterprise face
various kind of issues as
which make it difficult for the
company to expand the
business and to sustain for the
longer time duration.
In order to secure the business deal both the parties have to agree the terms and
condition which agreed to a statement which help in achieving the desire aims and
objective. In order to secure the business deal company, have to bring out right people
who can able to secure the deal. There must be proper tool which help in achieving the
desire result effectively. For the ovation system the management have fulfil all the needs
and follow all the instruction among the parties to accomplish desire aims and objective
effectively.
INTRODUCTION
International marketing is the application of marketing principles which used to
satisfy the different needs and wants of the different people across the nation. In other
words, international marketing activities involves more than one nation which is known
as global marketing worldwide and customizing it accordingly as per the preference of
the different nation.
P5 Determine the advantages and disadvantages of importing and exporting and how to
secure a deal
Basic Importing Exporting
Advantage
s
This help in expanding the
profit margins across the globe.
High tax, wage minimum and
material cost in the certain
countries which make it more
useful to import the product from
those countries whose tariff are
considerable low.
The main advantage is that it
helps in providing better quality
services. Each nation has its own
strength and when it comes to
export. As it also help in
providing vast variety of product
from the different nation.
The major of exporting is
that the global market can be
captured as this will help in
earning foreign exchange in
the well define manner.
Along with this, it helps in
creating employment
opportunities for which is
useful in making increasing
per capita income. Hence
this will help in increasing
per countries economy for
betterment and growth.
Tapping into new and international markets

Documentation required while tapping into new markets
There are different kinds documentation are requiring for trading the goods and
services in the well define manner. Such kind of paper are requiring reducing theft and
uncertainty present in the business. Apart from this different country have their own set of
rules and regulation which is fulfilled by the proper paperwork. Here are some of the
documents are briefly described as follows: -
Letter of Credit: This is the letter from the bank guarantee that a buyer payment
to the seller has to be received on the time and also the correct amount. In the case the
buyer is unable for repay the amount the bank is liable to recover the full amount of the
purchase. As per international export it has become difficult to identify the party so the
use of letter credit has become more very important aspect of international trade.
Packing List: This is the list which include documents which include the detail
about the content of package. The main function of packaging list to aware about the
content package to different transport agencies, government authorities and the customer
about the detail knowledge regarding the package. This is essential to have proper listing
about the product as it helps easily to track the goods anywhere in the world.
Commercial Invoice: This is considered as the most important documents in the
international trade and for freight shipping. It is the legal document which is issued by the
exporter to the importer in the international transaction which serves as the contract and
the proof of sale between the buyer and seller. Unlike the bill of landing, commercial
invoice does not indicate the ownerships of the goods nor it carry the tittle to be goods
sold.
P6 Explain the differences between merchandise and service imports and exports
Merchandise and service imports: This is defined as the process of flow of
goods and services from one place to another from the reach of domestic market. Such
kind of imports are mainly done by the different organisation in the bid to attain growth
as well as development for the short period of time. The main purpose of the organisation
is to fulfil the lack of availability of offering in the domestic market. This help in
improving the growth in the rapid growth of time and improve the job opportunities
present in the market.
Merchandise and service export: This is mainly referring as the mode of
business expansion where exports generate international earning. The company can
individual receive the payments while importing. The main objectives behind doing so is
generating extensive foreign income for the entailment of growth and development.

P7 Evaluate the various methods in which SMEs can tap into international markets
Every firm want to expand their business at international marketplace because through it
they able to attract more and more customers. Similarly, SMEs also want to expand their business
at international level because through that they able to attain numbers of benefits as well as it will
also help them in gaining competitive advantage at market by growing business. There are
numbers of methods which a small and medium size company may adopt in order to expand their
business at international market, from which some major are given below in respect of Ovation
system: -
Joint venture: It is considered as process in which business unit created through two or more
parties or company and they are normally characterized by shared risk, ownership, shared return
and shared governance. In respect of Ovation system bank, they can conduct joint venture through
different bank of different location or nation. This is so because through it they able to operates
their business at various location at international level which help in increasing customers shares
and profitability ratio. Through this respective bank can attain several advantages such as it
minimises production cost, share risk, get access to different distribution channels and so on.
Licensing: This is considered as business arrangement according to which one firm gives
permission to another company for manufacturing its services or products for a particular payment.
It is a faster as well as profitable method for expanding business through licensing trademarks,
designs, patents, copy right and so on. In respect of Ovation system bank, they can provide license
to another bank of specific location where they want to expand because through it, they able to
operate business there. There are several advantages of respective method such as it incurred low
financial risk, low cost for entering into market, help in gaining knowledge of local market and so
on.
Selling via overseas distributors or agents: According to this method a company can expand
their business through selling their products and services via distributor or agent of specific
location. In respect of Ovation system bank, they can adopt this expansion method for growing
their business at international market. According to this respective bank can sell their financial
services to other nation's agents or distributors and they will further market services and attract
customers. Advantages related to respective method are less transactions to handle or record,
agents are specialising in particular market which help in attracting customers and so on.
Export directly to international customers: In refers to this method company will take online or
telephonic booking of products and services; then accordingly they will supply offering directly to
the international customers. In respect of Ovation system bank, they can develop online website at
which national and international customers can order finical services according to their
requirement. After that they will directly export services to customers. The advantages of
respective method are it attract more customers, cost effective, direct customers relationships and
so on.
These are some of the main methods of internationalizing markets that can be used by
SMEs. From all these method Ovation systems can adopt Joint venture in order to expand their
business at international market.

P8 Compare and contrast the various ways SMEs can tap into international markets, assessing the
pros and cons of each method
For expanding the business this is essential for the Ovation system to figure out the pros
and cons which help in minimizing the risk and uncertainty present in the market. Small and
medium business often meet at the point where the top management has to decide whether to
expand and grow the stable business for the longer time period. The joint venture with the
different international market also provides benefits to small and local business to expand the
business. This is essential for Barclay to have to analyse the market and do proper research thus
aid in reducing the risk of discrimination against the company. Here some pros and cons which are
explained below:
Advantages:
Attract new customers: The main advantage of the SME for going at the global level
help in capturing larger market share in the limited time frame. Hence the Ovation system can also
provide services to the new customers as per the needs and requirement of the user and the firm
have the opportunity to add the new product-service to its portfolio which help in creating
advancement at the international level.
Economic of scale: When the SME expand the business, this is often spread the risk of
doing business for improving the better service and the product capabilities. Operating in the
multiple market which help company to increase the revenue which aid in sustaining for the longer
time period.
Exporting and strategic alliance: The exporting refers to the method in which the
company use to directly export the product and use to manage the work effectively. Where in the
strategic alliance is the method where the two companies have to manage and take joint venture to
fulfil the need and requirement of the company.
Licensing and franchising: Licencing is the process in which the company use to take
licence for the other company whereas in franchising the one part use the brand name and some
money for carrying forward the business effectively.
CONCLUSION
As per the above stated report this has been identified that it is essential for the company
to expand the business globally for earning more profit. Global business environment has the major
impact over the SME. Apart from this it has been identified there are different aspect such as tariff
which slow down the sales of the organisation at the global level. There are several advancements
for expanding the business such as improving the revenue in effectively manner.
Disadvantage:
Capital requirement: This is the major drawback for the small and medium enterprise company as
for tapping in the international market firm require large amount of capital. This often led towards
debt and unexpected downturn in the market. Due to inflation and slow down the organisation may
face financial trouble for the longer time period.
Challenges of different culture: Although a global plan of action can face the challenge of
different culture and environment which reduce the flow of expansion and growth. Because
different nation has various ethnic and background. In order to overcome such issue SME
companies has to identify the culture with the help of research as this will reduce the risk of
uncertainty.
REFERENCES
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Fletcher, R. and et. al., 2016. Questioning REDD+ and the future of market‐based conservation.
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