Tapping into New and International Markets

This report explores the global business environment for small and entrepreneurial businesses, analyzing the threats and opportunities they face in a competitive global environment. It also discusses the advantages of international trading blocs and agreements, as well as the various tariff and non-tariff barriers in the international trading environment. Additionally, it examines the advantages and disadvantages of importing and exporting, and provides insights on how to secure a deal. The report focuses on the case of Airdri, a warm hand dryers manufacturer based in the United Kingdom.

Tapping into new and
international markets

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain the global business environment in which small and entrepreneurial businesses
operate..........................................................................................................................................1
P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment.................................................................................................................................2
TASK 2............................................................................................................................................3
P3 Determine and analyse the advantages of international trading blocs and agreements.........3
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.................................................................................................................................4
TASK 3............................................................................................................................................5
P5 Determine the advantages and disadvantages of importing and exporting and how to secure
a deal............................................................................................................................................5
P6 Explain the differences between merchandise and service imports and exports...................6
TASK 4............................................................................................................................................7
P7 Evaluate the various methods in which SMEs can tap into international markets................7
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Global market expansion is stated as the vital efficacious aspects which is usages by firm to
tap into international marketplace along with intent of acquiring success and growth. The main
objective of this report is to obtain understanding related to international market where many
threats as well as opportunities are determined which may be enhanced at business surroundings
(Diener and Piller, 2020). As per the scenario, the undertaken SME’s is Airdri, it is a warm hand
dryers manufacturers having headquarters is in Oxfordshire, United Kingdom. The points that
are going to be discussed in this report are international business environment description into
SMEs, determination of threats as well as opportunities, identification of international trading
agreement and blocs advantages. Additionally, barriers like non- tariff and tariffs, exporting as
well as importing pros and cons, differentiation between service and merchandise imports &
exports are explained. Beside this, the many methods with assistance of which SME’s may tap
into international market with its benefits and drawbacks are also stated in this report.
TASK 1
P1 Explain the global business environment in which small and entrepreneurial businesses
operate.
United Kingdom is considered as one of the stabilised country which at recent times facing
economical crisis but then also are very much affirmative, future seeking as well as always open
to new business of company. It has been also analysed that government as well as legislative
authorities of particular country are incorporated into rendering services to SMEs as they are
highlighted as the backbone for the country’s economy. These results in contributing their
market share towards enhancement of Country’s GDP. This leads towards economic
development which generates job opportunities within company (Gardner, 2020). As UK is
growing country with aids of their private sector enterprises and obtain the sixth position in all
over the world. In addition to this, the United Kingdom service sector is contributing more
within growth of economical system which is around 80% of total gross domestic products
which is gained mainly from SMEs
It is also undertaken that SMEs are firms which usually operates their practices at smaller
level and confines only to some specific countries. In relation to United Kingdom, it is
determined that small firms incorporate less than 50 workers and also annual turnover is not
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above 10 million pounds. Along with this, a medium enterprise incorporates not more than 250
employees as well as annual turnover is approx 50 million pound or less. There are organisations
which operate in such surrounding where they imports goods or services from various other
regions to run their business in successful way and exports overall their manufactured products
into several countries across the world. Whole SMEs with entrepreneurial firms of united
Kingdom mainly operates their practices within global business surroundings which get
supported by its government as well as legislative bodies. It have been identified that various
SMEs within UK operates their activities into European region where they export their goods to
many European countries which incorporates Spain, France and so on. In this context, overall
transportation cost will be reduced because of EU, SMEs needs to pay fewer amounts during
goods exportation.
Additionally, Within United Kingdom, SMEs develops their overall global atmosphere
with aids o that they may successfully perform its enterprises with market of America, Asia and
other areas of African region. It has been concluded that surroundings has been enhanced which
modify the opportunities to develop and grow at competitive marketplace which leads to firms
contribution towards overall GDP of particular country.
P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment.
Global business surrounding along with influences of vital international drivers
This is determined that atmosphere of global business of UK marketplace are so much
dynamic which modifies itself by changes into external environment elements. External
surroundings are recently tackling huge issues and challenges because of new guidelines in
relation to raising BREXIT at work areas. SMEs of United Kingdom has been allowed to do
trading in freely way within several European countries without facing any forms of confines
before implication of BREXIT, but present SMEs as well as entrepreneurial entities has to pay
some reasonable amount of exchanges rate. There are many forms of global drivers which have
competencies to influences overall economic system of country (Goodman, 2020). Some of main
drivers are workforce, finance and many others. There human resource within United Kingdom
marketplace is so much expensive because of which respective countries SMEs procures
personnel from the region of Asia, this will aids them to decrease their overall cost and assists
them in efficient and optimistic manner. Instead of this, in respect of productivity as well as
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investment factors, they have proficiency to influence the economic system of country in both
manners negatively and affirmatively.
Threats and opportunities into competitive international environment
SMEs incorporates limited personnel as well as turnover because of it, they might face
some difficulties for performing their business practices. Therefore, they main influencing issues
that is tackled by firms is lack of resources which includes proficient workforce, market,
property, finances, and many more which confines enterprises and have affects on overall firm’s
profitability in negative manner. Beside it, the very much influencing challenge is lack of
economies of scale which results in controlling SMEs in order to accomplish their goals.
Along with this, the problems and challenges tackle through SMEs so it is also undertaken
that there are some opportunities which enhances overall business functionality as well as firm’s
activities in appropriate manner. The government of UK has initiated many types of guidelines
with aids of which various SMEs can become capable to operates their practices without paying
high taxes.
TASK 2
P3 Determine and analyse the advantages of international trading blocs and agreements.
Trading Bloc is regarded as form of inter governmental contracts within which overall
constraints in relation to trading between many countries can be eradicating for overall
participating regions. It have been also undertaken that trading blocs as well as agreements is
stated as contracts among regions which aids to allow all countries that are incorporated within
specific agreements so that they will bale to trade freely. This will also helpful in rendering
industrialisation and growth of overall economy of country.
Trade blocs as well as agreements rendered benefits to firms within countries that assists
them to do trading efficaciously within several countries and is not liable to pay any forms of
taxes (Hossain, 2020). It is also undertaken that United Kingdom was efficacious European
member which as a results, allows them do trading in any European states. But while on other
side, after implementation of BREXIT, United Kingdom have signed many types of trading
contracts which is allows them to connect with other regions across the world. One of these trade
blocs incorporates CARIFORUM-UK economic partnership agreement. This aids SMEs of
United Kingdom to trade in free way within many regions such as Bahamas, Barbados and many
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11 countries. In context of Airdri, this assists in enhancing competiveness those outcomes in
inducing firm’s growth and productivity with their practices. Also, this allows respective
organisation to do trading freely without paying any kind of taxes. In respect to UK, the other
main contract is SACUM-UK economic partnership agreement (EPA). This aids firms to do
trading with several southern countries of Africa. As South Africa is known to be region that is
rich into natural elements within which y using respective contracts UK’s entities can easily
imports product in efficacious manner without paying any forms of taxes.
Advantages of Trading Bloc for Airdri
The key benefits of trading bloc for Airdri is the maximising competitive resulting into
inducing productivity as well as growth of company, their practices, operations and others.
Moreover, this also motivates competition within sector as well as the practising countries that
creates individuals and business enthusiastic to bring innovation as well as work in creative way
(Williston, 2020). The other aspect is product cost are minimised as if supply enhances then this
will outcomes in maximisation of sales and revenue.
After BREXIT implementation which enhances so UK become liable to successfully trade
under the guidelines of ETO which explained as trade agreement among United Kingdom and
many 163 members. This as a result facilitates benefits to UK’s business as it leads towards fair
trading on reasonable cost (UK trade agreements, 2019).
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.
The business global environment regarded as combination of trading environment in which
entities of several countries trade with each other appropriately. Additionally, this is trading
process which is restricted by imposing barricade that incorporates overall non- tariff and tariff
barriers. Instead o it, this has been determine that tariff barriers are considered as taxes which is
imposed on specific imports with an intent to obtain efficient revenues with aids of custom duties
along with interest rate. On other side, non- tariff barriers are that generally incurs with aim to
confines export and import of some forms of products. Also, this incorporates guidelines and
policies which create trading more difficulties.
Moreover, it is considered as tariff trade barriers as restrictions which results in limiting
overall entities to trade goods exportation (Hurmelinna-Laukkanen, Haapanen and Holma,
2020). Few illustration of it are transit tariff, specific duties, import and export tariff and others.
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These are obstructions which incorporates imposing tariff on goods before permitting them to
enter into new country. It have been identified that there are many forms of tariff barriers within
international surroundings which confines entities to do trading because of that they have to pay
more taxes as well as interest rates. All these constraints incorporates cost controls, licensing
needs etc. In addition to this, it has been also determined that customer rates and taxes some
kinds of barriers which have to be paid by SMEs before doing any trade activities.
Beside this tariff barriers, it is also undertaken that there are some non- tariff barriers
which controls entity to do trading in international market. These are trading barriers which do
not implemented of obtaining incomes with aid so interest of taxes. Some effective examples of
non- tariff barriers are quotas, voluntary export restraints, subsidies and others
Both barriers such as tariff and non- tariff influences SMEs growth and success. It have been
ascertained that there are some drawbacks which are essential to maintain discipline in
industrialisation (Reny and Barreto, 2020). These barriers ensure whole countries in obtaining
some profits margin from trading. Along with this, it will also assist overall country to confines
offering exports and imports. Also, the main aim behind implementing both barriers is to balance
stableness into guidelines of whole trade which incorporates overvalued currencies, import
licensing and many more.
TASK 3
P5 Determine the advantages and disadvantages of importing and exporting and how to secure a
deal.
Importing: This is defined as purchasing international goods or services process by local
economy. This particular method aids in maintaining balance into economy and promote new
goods (Manikandan, 2020). Moreover, it has several pros and cons which are stated underneath:
PROS CONS
 This aids SMEs to buy raw material
and labour at lower cost that are
accountable for low down the
manufacturing cost.
 The developed countries government
supports their SMEs for importing
 Company has to pay high GST and also
other taxes upon imported an goods
which leads towards decreasing in margin
of profitability.
 Unemployment maximises due to goods,
labours imports of specific entity does not
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goods which aids them in business
development.
acquire opportunity to manufacture
products.
Exporting: This is defined as process of selling commercial goods to global countries or
trade into internal market. It aids to obtain revenues and maintain economy balance (Petrou and
et. al., 2020). In similar way, exporting has also its pros and cons which are stated underneath:
PROS CONS
 It aids to explore product life cycle by
identifying exporting market.
 The large production leads towards
greater economies of scale and
effectual revenues
 The regulatory or economical
restrictions lead towards monetary risk
maximisation.
 SMEs need huge funds and time
because of particular country’s
government policies and guidelines.
Mainly, exporting is divided into two such as indirect and direct. Direct exporting is
regarded as goods sells into internationally without any intermediaries where as indirect includes
intermediaries to import their products. Some main forms of indirect exports intermediaries are
purchasing agents, exports administrative entity and so on. This is not so much risky methods
and cost incurred is also low but along with limited margins of profits as intermediaries cost are
included in it.
The both importing and exporting deal can be protected by completing official form to
meet country’s policies and guidelines as well as value of particular documentation is that it may
do effectual trades between two entities who does not even understand each other. In addition to
this, documentation required exporting declaration, origin certification, commercial invoices and
many more. Apart from this, some countries government requires licenses of packaging as well
as purchasing list.
P6 Explain the differences between merchandise and service imports and exports.
It is regarded that goods export as well as import are crucial for entity who desires to enter at
international market (Moorman and Stricklen, 2020). Additionally, it has been undertaken as
there are some vital differentiations which depend upon nature, meaning and scope. In relation to
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present scenario, some essential differentiation for merchandise and service exports & imports
are stated underneath:
Basis Merchandise import and
export
Service import and export
Meaning It is regarded as overall
tangible products imports &
export which can be sold
simply and purchase among
many other countries
(Pattnaik and Pattnaik, 2020).
Like Airdri is entity which
renders some efficacious
offerings to their outside UK
clients.
The overall services trading
is undertaken to be intangible
exchanges. In relation to
Airdri, it pay to firm for
service import like experts
comes from many countries
for rendering some services.
Cost The cost occurs within
merchandise production and
trading is high where they
needs to effectually obtain
overall raw material as well
as investment to convert them
into finished goods.
This is undertaken as simplest
method as essential services is
traded into similar manner
which decreases operative
cost of entity as there is no
merchandise practices
progress.
TASK 4
P7 Evaluate the various methods in which SMEs can tap into international markets.
Whole entity instead of their nature and size rendered some methods that is helpful in
operating its business practices into international market. As this assists them in gaining more
market share as well as profitability (Myklebust, 2020). So, some methods that can be more
applied by SMEs to tap into new marketplace are stated underneath:
 Franchising: This is regarded as agreement which is formed between two or above that
individuals in which franchiser is one who permit franchisee to use brand name, logo,
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product etc. as well as thereafter sell them to gain higher profitability. Therefore, this is a
method which confines both parties to follow the contract in effective manner. Such as
Airdri and the person who has undertaken franchisee have to maintain quality of offerings in
order to enhance brand reputation.
 Licensing: It is also regarded as one of the effective methods which incorporate contracts
between both parties. This aids licensee to access patent by rendering some royalty amount.
Moreover, it is undertaken as agreement which do not confines licensee for to keep their
offering quality as it is, they rendered them.
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method
As Airdri is considered to be SMEs which operates into UK marketplace so they can tap
in international marketplace by adopting some ways such as licensing, franchising etc (Park,
Villafuerte and Abiad, 2020). Moreover, these methods have its advantages and disadvantages.
Some ways are stated underneath:
Ways Advantages Disadvantages
Franchising This is undertaken as
affordable ways and also in
this firm do not have to invest
huge amounts. Moreover,
herein the risk is moderate.
The main disadvantages of
this way is, if franchisee is
not appropriate to maintain it
in effective way so there is
chances of reduction into
brand image.
Licensing Firms can acquire high level
of market share by adapting
with assistance of respective
ways. Also, in this the risk is
less as licensing agreement
provides more control into
owner’s hands that minimises
brand name misuse and
unethical activities
This drawback of this is that,
it can tackle some issues in
relation to non-payment
loyalty that leads towards
losses for SMEs.
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performance risk.
CONCLUSION
Based on the above report, this can be concluded that exploration of business is essential for
SMEs as it aids to obtain development and success within competitive global market area.
International enterprises environment incorporates many aspects which consists guidelines, rules
that as a results confines free trading into different countries. Additionally, SMEs have to goes
through several challenges and opportunities that aid to gain achievement at international
marketplace. Moreover, this is also identified that UK is a country which incorporated many
forms of trading agreements. As it renders helps to business to trade in different regions without
paying taxes. Along with this, basically there are two trade barriers which is known as tariff and
non tariff. Also, joint venture, franchising etc. are some methods with aids of which SMEs can
explore their business into new market easily and successfully.
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REFERENCES
Books and Journal
Diener, K. and Piller, F. T., 2020. The Market for Open Innovation: Collaborating in Open
Ecosystems for Innovation.
Gardner, W. O., 2020. The Metabolist Imagination: Visions of the City in Postwar Japanese
Architecture and Science Fiction. U of Minnesota Press.
Goodman, G., 2020. Cultivated by Hand: Amateur Musicians in the Early American Republic.
Oxford University Press.
Hossain, M., 2020. An Innovative Growth Model for Competitive Development of Private
Commercial Banks of Bangladesh (Doctoral dissertation, University of Dhaka).
Hurmelinna-Laukkanen, P., Haapanen, L. and Holma, S., 2020. Social media and small
entrepreneurial firms’ internationalization. In Understanding Social Media and
Entrepreneurship (pp. 141-168). Springer, Cham.
Manikandan, B. V., 2020. Role of Social Capital in Crowd Funding Campaigns: Exploring
Factors That Fuel Success in Crowd Funding Campaigns.
Moorman, J. and Stricklen, M., 2020. Smart Cities Applications of Blockchain. In Smart Cities
in Application (pp. 101-117). Springer, Cham.
Myklebust, T., 2020. Fairness and Integrity in High-Frequency Markets–A Critical Assessment
of the European Regulatory Approach. European Business Law Review, 31(1).
Park, C. Y., Villafuerte, J. and Abiad, A., 2020. Updated Assessment of the Potential Economic
Impact of COVID-19.
Pattnaik, S. and Pattnaik, S., 2020. Exploring employee performance dimensionality in Indian
public sector units. International Journal of Productivity and Performance Management.
Petrou, A. P. and et. al., 2020. Strategic decision-making processes, international environmental
munificence and the accelerated internationalization of SMEs. International Business
Review, 29(5), p.101735.
Reny, T. T. and Barreto, M. A., 2020. Xenophobia in the time of pandemic: othering, anti-Asian
attitudes, and COVID-19. Politics, Groups, and Identities, pp.1-24.
Williston, B., 2020. Philosophy and the Climate Crisis: How the Past Can Save the Present.
Routledge.
Online
UK trade agreements. 2019. [Online]. Available through: <https://www.gov.uk/guidance/uk-
trade-agreements-with-non-eu-countries-in-a-no-deal-brexit/>
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