Opportunities and Challenges in Global Business Environment for SMEs

Tapping into the world

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain the environment of global business where small and medium enterprises operates.
................................................................................................................................................1
P2 Assess the threats and opportunities in competition in global environment faced by SME .2
TASK 2............................................................................................................................................3
P3 Evaluate international trading blocs with advantages.......................................................3
P4 Assess various tariff and non-tariff in international trading environment........................4
TASK 3............................................................................................................................................5
P5: Advantages and disadvantages of importing and exporting with a secure deal...............5
P6: Difference between merchandise and service imports and exports.................................7
TASK 4............................................................................................................................................8
P7: Evaluate various methods in which SME can tap into international markets..................8
P8: Compare and contrast various modes of SME can tap into international markets, assess
pros and cons of each method................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
International expansion is defined as process where business organisations are willing to
focus towards planning, pricing, promoting and further expanding their products range to a new
country across international borders with an aim of achieving higher market share & increased
profitability in the business. It is a tool that is based on the objective of enhancing the multi level
strategic plans for establishment of a global presence and enhances the level of profitability.
Present report is based on a SME organisation David canners Ltd. That is having presence in
Craigavon. UK and is part of the fruit & vegetable processing industry. They are presently
having 90 employees across this location & are generating 16.26 dollar million sales (DAVISON
CANNERS LIMITED, 2021). David canners Ltd. is willing to expand themselves to Asian
countries such as China, Malaysia. The report is based on making a analysis of global business
environment by evaluation of the threats & opportunities to determine the benefits of
international trading agreements (Najmaei and et. Al, 2017). Further there is analysis of tariff &
non tariff barriers. There is evaluation of methods that can assist SME brands in tapping in such
international markets by comparing various modes.

TASK 1
P1 Explain the environment of global business where small and medium enterprises operates.
Global business environment means changes in organisation due to fast change
technology, effect of globalization that impact on social, economic and political. These three
words define the nature of trade in international and also defined different sovereign countries in
business environment that influence decision on use of resources and their capabilities. They are
classified into internal and external business environment. In context to Davison Canner as they
are operating in UK have to take decision according to global changes effectively. In Small
enterprise provide contribution and can also earn revenue whereas in large enterprises they use
resources and funds in this way SME can achieve target in particular time this help organisation
can operate smoothly and flow of goods and services (Gilman and Salder, 2020). In reference to
Davison Canner have to expand their business in Asian countries they will engage in global
environment can be benefit for organisation or sometimes can be risky because due to changes in
global environment they affect the performance of small and medium enterprises. These
countries develop the economy of state that gives growth in SME, as GDP is good that give
opportunities to organisation to create a job opportunities. These contribute towards the economy
of country to assist the political that acknowledge political. These types of organisation stimulate
to different economy in effectively and in appropriate manner. In other words, global business
environment means resources and capabilities is linked with decision of secular nation. Those
organisations operating their business in UK in SME have to take decision and analyse the need
of global with limitation and small enterprises gives contribution can earn revenue whereas large
organisation can take benefit by funds to attain the objectives in stipulated time period. Global
business environment helps small business entrepreneur in operating its business in different
culture, belief, locations, rules and regulation which spread their brand image all over the world.
Global business environment includes culture and environment of different countries which
brings much opportunity for growth of small business. In context of selected firm, global
business environment brings many opportunities which increase their revenue and brand image.
Different culture of countries helps selected firm to innovate new products for satisfying needs of
customers.
PESTLE analysis:

PESTLE analysis is used as a tool of making evaluation of various external forces that
are affecting present functioning of organisations. In present scenario David Canners is willing to
expanding its market share across international borders that are Asia countries. For this external
analysis is mentioned below:
Political factors: There are some of the political factors that include the stability of
government based on rule of law, corruption and effectiveness of government policies. All these
political aspects are affecting the present functioning of David canners. BREXIT situation has
also created lot of uncertainty in recent times. All such factors are affecting present functioning
of David canners and are also going to help them in their future expansion plans.
As per the different statistics that are published by statistics research department in year 2021.
58% of the British people are now having an approach that is willing to leave European Union
that is 39 % of British adults. There is increasing threat because of complete changes in the legal
policies and regulations. This might possess impact in present expansion strategy of David
planners because the European Union will have application of trade agreements since 1st January
2021.
Economic factors: There are some of the economic factors that include the present GDP
trends that are ranging at 2.744 trillion UK dollars. The diverse economy is adding value to the
customer’s lives and helping in creation of high demand in the market.
The present situation of covid-19 is creating many economic issues that is present GDP of UK is
at 5% that is below the requirement of fourth quarter in the year 2019. There have been many
efforts that are reduced because of the emergency measures and situation at is arising because of
covid-19 pandemic. For David canners, there is a major issue that is in the coming time period
for low projection growth. Another major issue can be because of the reducing purchasing power
of customers as their over disposable income has also declined with time. This is creating
opportunities as different business segments can be approached by David canners for the purpose
of expanding across international borders.
Social factors: David canners has always been working on development of a social
approach where the organisation is working towards expanding of their business into new
diversified areas such as hot eat desserts so that they can develop new dessert range. As per the
preferences of changing needs of customers there can be investment in new facility and