Tapping into New and International Markets: A Case Study of Oak Cash & Carry Limited

Tapping into New and
International Markets
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Table of Contents
INTRODUCTION............................................................................................................................... 3
SECTION 1...................................................................................................................................... 4
GLOBAL BUSINESS ENVIRONMENT IN WHICH SMEs OPERATES.................................................4
THREATS AND OPPORTUNITIES FACED BY OAK CASH & CARRY IN AN INCREASINGLY
GLOBALIZED ENVIRONMENT......................................................................................................6
ADVANTAGES OF TRADING BLOCKS FOR FIRMS........................................................................8
VARIOUS TARIFF AND NON-TARIFF BARRIERS...........................................................................9
TRADING BLOC AGREEMENTS..................................................................................................11
SECTION 2.................................................................................................................................... 14
IMPORT AND EXPORT PROCESS TO AN OAK CASH & CARRY LIMITED......................................14
JUSTIFIED RECOMMENDATIONS..............................................................................................16
SECTION 3.................................................................................................................................... 17
DIFFERENT MARKET ENTRY METHODS.................................................................................... 17
CONCLUSION............................................................................................................................... 20
REFERENCES.................................................................................................................................21
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INTRODUCTION
The companies can develop new customers and increase demand for their products by tapping
into new and international markets. The well-prepared plan is needed by companies that are
trying to tap the international market (Eaton et al. 2016). This report will include the impact of
the global business environment on SMEs. It will also include threats and opportunities to tap
into international markets. The second part of the report will include the export and import
process along with the advantages and disadvantages of exporting and importing. The various
methods by which the SMEs can tap into new and international markets will be discussed in the
last part of the report.
Oak Cash & Carry Limited is a company that offers a wide range of products in bulk for offices,
newsagents, and retailers. The number of employees working in the company is 37 and it is
located in the United Kingdom. Oak Cash & Carry was founded in 2000 and it is a non-
specialized wholesaler of beverages, food, and tobacco.
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SECTION 1
The global business environment affects companies when trying to tap into new and
international markets. The high-level competition exists among businesses when operating
globally. The company also needs to compete with the local business in the country it is
tapping. There are many factors and market risks that hinder the company in tapping into
international markets (Hamilton and Webster, 2018).
GLOBAL BUSINESS ENVIRONMENT IN WHICH SMEs OPERATES
The vital role is played by the SMEs in the economic development of the company. The new
business challenges are faced by Oak Cash & Carry in a competitive business environment. The
PESTLE analysis tool will help in understanding the global business environment in which SMEs
operate (Adagba and Shakpande, 2017).
Political factors- The Oak Cash & Carry has to face many political challenges when tapping into
international markets. The government regulations and rules in new markets should be
followed by Oak Cash & Carry (Hans, 2018). The rise or low in corporation tax by the
government impacts the profit of the company. The company needs to consider different
political factors like tax policy, government stability, etc.
Economic factors- The economic factors of the countries in which SMEs operate affect the
operations of the Oak Cash & Carry. The economic factors include interest rates, inflation,
exchange rates, recession, demand/supply, and many others (Adagba and Shakpande, 2017)
Social factors- The cultural aspects of the country are included in social factors. The social
factors that affect Oak Cash & Carry are buying habits. Education level, CSR, etc.
Technological factors-
The use of advanced and updated technology is needed by Oak Cash & Carry to compete in
different markets (Hamilton and Webster, 2018). The technological factors include the
existence of 3D technology for food, beverages, and tobacco, internet connectivity for fast
services to customers, etc.
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Legal factors- There are different laws and regulations in international markets which include
health and safety law, import/export law, consumer law, etc. These laws should be used by the
Oak Cash & Carry to protect its labor and consumers.
Environmental factors- The demand pattern of different products and services of the Oak Cash
& Carry is affected by changes in factors like weather, temperature, etc. Oak Cash & Carry
should consider these factors due to increasing environmental awareness (Hans, 2018).
The global business environment in which the Oak Cash & Carry is planning to operate requires
huge planning. The market analysis and internal analysis of the company is very important
before entering into the international market. The company should invest in advanced
technology to gain a competitive advantage. Oak Cash & Carry should come up with innovative
products and services for increasing its customer base in the new market (Hans, 2018).
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THREATS AND OPPORTUNITIES FACED BY OAK CASH & CARRY IN
AN INCREASINGLY GLOBALIZED ENVIRONMENT
THREATS
Finance and technology are the major threats faced by Oak Cash & Carry. The key issue faced
by the Oak Cash & Carry is keeping up with technology. The experts are required for
cybersecurity, online marketing, and compliance. The Oak Cash & Carry won't always have
these specialist skills employees available. The planning to cope with the financial crisis will be
made by Oak Cash & Carry (Stankovska et al. 2016).
The real economic concern includes the weakening oil sector and slows down in China which is
the threat for Oak Cash & Carry. The unstable growth in the Eurozone and weak Euro in the
wake of the Greek debt crisis and migrants affects the Oak Cash & Carry. The plan will be made
by the company to cope with a global financial emergency (Masood and Sonntag, 2020).
The prices of fuel play important role in the profitability of the Oak Cash & Carry as it is a
wholesaling company in which the products are transported. The total operating costs of the
company are affected and some SMEs do not afford these.
The currency fluctuation is also a threat for Oak Cash & Carry as it directly impacts the pricing
when selling and buying overseas. Oak Cash & Carry overcome this barrier by using a forward
contract which leads to the amount paid to foreign suppliers in advance. The Oak Cash & Carry
will be protected from any drop in the value of the pound (Van Roy et al. 2020).
The willingness of the Oak Cash & Carry to grow its business is impacted due to uncertainty and
ambiguity caused by the EU. The biggest uncertainty for the Oak Cash & Carry is a possible exit
from the EU. The company makes sure that the plan for research and all eventualities into the
probable implication of Brexit for overcoming this barrier (Van Roy et al. 2020).
Oak Cash & Carry needs to use AI and robotics for making its operations more efficient and
smarter in international markets. A huge investment is required for this technology
advancement. Trained and high skilled employees are needed to use them effectively (Van Roy
et al. 2020).
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