Tapping into New and International Market

This report explores the global business environments in which small and entrepreneurial businesses operate, analyzes the threats and opportunities faced by SMEs in the competitive global environment, determines the advantages of international trading blocs and agreements, and explains the various tariff and non-tariff barriers in the international trading environment. The report focuses on Verdant Leisure, a SME headquartered in London, UK, that is looking to expand its business internationally.

TAPPING INTO NEW
AND INTERNATIONAL
MARKET

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Explain the global business environments in which small and entrepreneurial businesses
operate.........................................................................................................................................1
P2 Analyse threats and opportunities that face by the SMEs in increasing competitive global
environment................................................................................................................................2
TASK 2............................................................................................................................................4
P3) Determine and analyse the advantage of international trading blocs and agreement...........4
P4) Explain the various tariff and non-tariff barriers that exist in the international trading
environment................................................................................................................................5
TASK 3 ...........................................................................................................................................6
P5 Determine advantage and disadvantage of importing and exporting and how to secured a
deal..............................................................................................................................................6
P6 Difference between merchandiser and service import and exports ......................................8
TASK 4............................................................................................................................................9
P7 Evaluate various methods for SME can tap into international market..................................9
P8 Compare and contrast various ways SMEs can tap into the new and international market
with their pros and cons of each methods ................................................................................10
Creating joint venture....................................................................................................................11
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
International market is defined as trading within overseas and used in order to enter into new
market which is placed in international territory. When a business is entering into new market
their main objective is to attain high sales and profit so as to prove their identity in global level.
This concept is highly relative in nature by which export and import procedure gets started along
with this new market regions are covered. The main aim of this report is to understand major
concepts of international market and to grab opportunities by which businesses can flourish. In
this context this report is prepared in the background of Verdant leisure which is a SME and
willing to expand their business so as to attain distinct position at competitive market. The
company is headquartered in London, UK. Verdant leisure is a company that has provide holiday
park and get operates its business within Scotland and North of England. Furthermore, in this
report various aspects are associated such as import services, tariff and non tariff barriers and
many more(Bond, 2016).
TASK 1
P1) Explain the global business environments in which small and entrepreneurial businesses
operate.
UK is the region of Europe and this is followed by various economic benefits and these
are having high political stability. Besides this some of the challenges are faced by government
of UK and these are impacting in diversified manner so that to obtain more facilitie4s for their
country. So government of UK is always trying to make subsequent changes which are
measuring their growth and diversity for their country and this is rendering them authority as
well. For UK their backbone is their economy and through which they are developing high
values and managing internal funds in effective manner. In order to develop GDP small business
are contributing in global economy and this is the reason that this sector is developed high
employment opportunities for the nation. UK is one of the sixth largest country which is
generating high economic opportunities in order to lead private sector. UK is a versatile and
globalised nation and known as financial epicentre. 80% of the net GDP is contributed by
services sector in which small and medium enterprises are included(Brace, 2018).
SME' s are those business in which their functions are operated at small scale and they
covers a very low area in order to execute their operations. Small enterprises are comprised in
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which less than 50 employees have been included and their revenue is less than 10 million
pounds. On the other hand medium enterprises are comprised with less than 250 employees and
their net revenue stands for less than 50 million pounds. There are various companies who are
working at global periphery and exporting their offerings to customer within different regions.
For government of UK entrepreneurial ventures and SME' s are having high support and for this
almost 98% business are associated with this. The functions of SME's are provided within
Netherlands, France, Spain and many forth. After the implications of Brexit the major aim of
businesses are to attain less cost along with high profits.
Verdant leisure has operated its business within UK and moreover looking forward to
expands its business over Australia. As company provides different holiday places to the public
so that they could spend some quality time with their families and friends. In this most of the
public of Australia is getting attracted by towards personal enjoyment so that larger amount of
benefit is addressed by the business as in order to enhance collective selling and revenue
generation.
P2 Analyse threats and opportunities that face by the SMEs in increasing competitive global
environment
For SMEs firms tapping into new and international market is very challenging and
difficult to sustain in the international market for a longer period of time. For this an organisation
is need to be examine the internal factors so that they can make a proper strategic plan that is
helpful in gaining more profits and revenues with longer sustainability in the marketplace. In
case of Verdant leisure, manager can focus on using the SWOT analysis so that company can
easily identified the threats and opportunities that will helps in focusing on enhancing their
market share. Below is a basic prospect of SWOT through which different opportunities and
threats of business is addressed and analysis that can be as shown below(Buyanova, 2016).
ANALYSE
Opportunities Threats
 The main opportunity for Verdant
leisure is the emerging and
understanding youth who can aware
about the gaining knowledge. Due to
 The major threats of the Verdant leisure
is that it has no strong position in the
Asian market in comparison of
European market due top this they
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this Verdant leisure can increase their
services to provide the financial
knowledge among the young
generations.
 Another opportunity of the Verdant
leisure is that it has large number of
services due to this they can attracts
more and more customers.
 Australia is having fastest growing
economies and development within
Asia that assist the business to gain
higher economies of scale within
limited time period.
 The Verdant leisure achieve higher
benefits as they have get better return
on investment at infrastructure. As
public is more attractive towards the
tourism and travel thus in this if some
new business is launched that offer
creative and innovative spacing to
people that they could become more
familiar with the working surround.
cannot earn high market share.
 Because of a Bank the major threats is
there economic stability.
 The exchange rate of Australia is quite
high by which profit ration that is
achieved by the business as while
offering different products and services
to its customers is decreases.
 The country has been destruct
environmental protection under which
it is required for the business to
maintain and follow all the rules and
regulations related to environment
protection. In this favourable ending is
generated so that productive amount of
changes is addressed over continuous
time period.
By analysing the factors of SWOT, Verdant leisure can face the threats so that they can
reduce it and focus on the opportunities for enhancing the businesses in the relative country of
the Europe. As SMEs firms can feel free as compare to large organisation in terms of
government imposed tax and other rules and policies. Due to Brexit the company may face the
threats like high labour cost because employees can be mainly select the UK countries because
of not good image in the Asian counties labour cannot be hire from that. But providing servicing
to the youth generation helps in gaining more profits and revenues. Due to this it people of the
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society liked that and company will enhance their growth and development(Hollender, Zapkau
and Schwens, 2017).
TASK 2
P3) Determine and analyse the advantage of international trading blocs and agreement.
The trading blocs are defined as different agreement between inter government which are
associated with different limitations and restriction and related to trading between various
countries. In this context government is looking into various issues in order to eliminate the same
so as to develop their participation in businesses. The trading blocs is the agreement in which
contract is made between various countries and in order to make free trading economy of various
nations so as to improvise national economy.
Trade blocs and agreement are associated with various region in which tax agreement is
made between UK and EU in order to trade with high perfection. After the implication of Brexit
other nations are emerged with opportunities of enhancing their trade with another nations. Trad
bloc is absorbing CARIFORUM-UK economic partnership agreement and this is providing
high trade opportunities to UK for creating easiness to trade in another 11 countries.
SACUM-UK economic partnership agreement (EPA) is considered as an another
agreement in which UK is developing trade with southern areas in order to develop their
mechanism. This is creating high ease for SME's to trad with achieving high cost profit benefit.
After the implication of Brexit UK is making high regulations with WTO and this includes
trade agreement with another 163 members.
Stimulation of global growth for SMEs
Trade blocs and agreement is facilitating more growth in which high consideration is
drawn in order to perform with foreign countries in order to pay lesser tax by which overall
expense can be reduced and growth of the country and business can be measured(Khakurel,
Melkas and Porras, 2018).
There are different trading block that has been used by Verdant leisure and few of them is
as explained below as:
Free trade area: It is a block in which it is required that each and every member must get
agree to abolish and reduce working barrier as like quotas and tariffs. In support of it Verdant
leisure have develop its own quotas and tariff as with respect to non members.
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Common market: It is basically a custom that is utilised by Verdant leisure in which
different members must have agreed so as to reduce certain level of restriction by which
production movement is addressed with continuity. In this barrier is reduce and in support of it
sales maximisation is enhanced as in advancement of finance and people.
There are various trading agreements that is followed by Verdant leisure and few of them
is as addressed below as:
Unilateral trade agreement: It is basically occur as when trade restriction is imposed by
a country and it is not reciprocate as well. It is rarely happen as in this foreign market assist to
make emerged market strength so that better economic growth is measured by Verdant leisure.
Bilateral trade agreement: In this two country has involved and in this both of them has
loosen its trade restrictions by which business opportunities is expanded. The reduction in tariff
is preferred by each country so that certain amount of negotiation is addressed.
P4) Explain the various tariff and non-tariff barriers that exist in the international trading
environment
The international trading environment is known as amalgamation of different
surroundings in which international trading is included which are related with various countries.
Trading is known as the process in which restriction is enumerated for facing different
challenges which are termed as tariff and non tariff barriers. The tariff barriers are forced for
earning appropriate revenues which are directly related to custom duties and rate of interest. The
non tariff are imposed with major objective of binding import and export for business
offerings(UK trade agreements. 2019).
The trade tariff barrier are restricting the limitation of SME and trading of export goods
and services. These barriers are related to the tariff charge while making new entry within
specific areas. This includes international trading by which SME's are required to pay high taxes
and interest rate. This is associated with various barriers in which some measures are included
such as control of prices, license and many more. The custom and taxation is another barrier
which are followed by SME's trading(Khan and Lew, 2018).
Along with this non tariff trade also get restricted within international trading and this is
not imposed within revenue and interest or tax. This includes different barriers like procurement
rules, labelling of product, subsidies and restriction imposed due to quality.
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By growth and development of SME's or entrepreneurial ventures tariff and non tariff
barriers get influenced. Along with this some of the restrictions are imposed by which discipline
is being industrialised. This is the barrier in which more earning is earned which is form of high
profit can be gained. Export and import is helpful to restrict import as in form of labelling,
packaging and many more. This is the main reason by which barriers and stability get balanced
and several legislations such as employment law, import licensing and many more(Ryan and et.
al., 2019).
Tariff barrier of Verdant leisure:
Import and export tariff:In this goods and originated from home location and it is
furthermore schedule at international boundaries. It restrict import and export as economic
stability has been fluctuated so that working condition is managed in terms of profit generation.
Transit tariff: It is levied on the origination of commodities through which cross services
are consigned. It also being reduced to enhancement of product cost by which commodities
trading is reduced.
Specific duties: It includes different taxation policies that is required and essential to
follow by Verdant leisure and in this profitability is business is reduced with balanced continuity.
Non-tariff barrier of Verdant leisure:
Quotas: It is basically a quantitative restriction that usually imposed of import and export
by which specific amount of changes is altered with perfection. It is directive form through
which trade communities is being managed at specified time.
Import deposit: It is a form through which trade regulations has been required so that
adequate amount is paid to central bank as for definite period and it should be equal to imported
goods thus it is hard for Verdant leisure to maintain its working with easiness.
Embargo: It define total ban within trade of specified commodities so that import and
export of specified goods is imposed. It is a legal barrier that is implemented by government
indication that has measure successful achievement of political and economic goals.
TASK 3
P5 Determine advantage and disadvantage of importing and exporting and how to secured a deal
Importing
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This term refers to the process of selling of goods and services from one country with the
objectives of resale that in the home country or some other country for gaining profits. It is
happen when the goods and services are not available in the nation or there is a problem of high
cost. In context of Verdant leisure, it depicts some benefits and drawbacks that can be shown
below.
BASIS Advantage Disadvantage
Meaning The major advantage of importing the
goods and services like Verdant leisure
is that it helps in generating high
profits and revenues by importing the
offerings that are available on the large
cost
The major disadvantage of importing the
goods and services is that organisation
may pay high amount of tax because
without it they cannot trade with the
other countries
Purpose This also helps in saving the tax
amount(Sirisena and Shneor, 2018).
Due to importing local firms faces major
loss due to this unemployment in the
country is enhancing.
Exporting
It refers to that term in which trading of goods and services are done between the two
countries in which one nation buy the offerings of another nation in this sellers is the exporter. If
one country exports more than it will show the strong economy of the nation. In case of Verdant
leisure exporting products and services to the other nations is shows some pros and cons that can
be shown below(Tidd and Bessant, 2018).
BASIS Advantage Disadvantage
Meaning The main advantage of exporting the
goods and services by the company
helps in earning more profits and
revenues.
Exporting for a company is also
considered some drawbacks that includes
the payment that was receive by the firm
in lieu of goods and services is done
according to the buying nations currency.
Purpose It also helps in enhancing the customer It also have the issue of stealing the use
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base of of the organisation in the
international market due to this firm
will sustain for a longer period of time.
It also providing employment to the
unemployed person on the global level.
of products with the technologies due to
this value is to be reduced.
For dealing with the foreign countries it is very essential for the organisation to securely
done so that problems can be minimised. For securing deal company can take the advance
payments for their selling goods so that deal should be fixed. For securing the deal business
enterprise can focus on the packaging of the offerings so that it can be transported to the
destination safely.
P6 Difference between merchandiser and service import and exports
Basis Merchandiser import and export Service import and export
Definition This term explains the procedure that is
related to the movement of the goods and
services that are tangible in nature. In
case of Verdant leisure they offers the
varieties of products to their customers
like gadgets and is related to internet
banking(Wang and et. al., 2019).
It refers to that type of export and
import in which movement of
services is done from one country to
another that are intangible in nature.
In this Verdant leisure can pay the
amount to different companies for
importing their services to another
company in the different country.
Cost The cost included in importing and
exporting of merchandise goods are high
because it requires more safety, raw
material, investment and also the capital.
This importing and exporting is not
much costly because it does not
involves the high capital, raw
material due to this their operating
cost would be low.
Scope The scope of merchandise import and
export is narrow as it is not dealt by the
organisations import and export.
According to the basis of
comparison this is quite wider as it
includes the various services like
technological installations,
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professional training, development
in infrastructure etc. that all includes
in the exchange of
money(Williamson and Yang,
2018).
Export It is a tangible goods and services that is
sent out by the business as from its
country. In this revenue generation is the
basic formulation so that constrained
amount of changes is addressed on
repetitive mode.
It usually produces non product
earning at international platform
under which Verdant leisure has
received certain payment to make
service report.
Import In this merchandise import is brought
into the business so as to figure out more
profit and better sales through which
positive outcome is generated in terms of
sales increment.
In this Verdant Leisure has designed
a service flow in import so that
enhance pay and earning source of
business.
TASK 4
P7 Evaluate various methods for SME can tap into international market
The business may be small, medium and large but only a few of them are operating their
functions at international market in order to develop their market share and to make more profits.
By tapping into international markets SME's can intensify their market share and this lead them
to acquire high customer base and profit as well. This can be supportive for the company and
may develop high revenue and profits for the same and in this way market share of the SME's
can be increased. There are various methods which can be used by SME's in order to tap into
new market in order to satisfy their objectives and the same are elaborated as under:
Franchising: This is defined as the agreement in which two parties are associated. One
party is known as franchiser and another one is known as franchisee. Within this agreement
permission is given to franchisee for using brand logo and name for selling goods and services of
franchiser by using their name. This is a method which provides a binding agreement in which
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quality of the offerings are maintained by which brand equity can be enhanced(Witz and
Oehmen, 2018).
Joint venture: Within this method companies of various regions get agreed in order to
work together for some project by which high benefits can be provided to both the parties. This
is an another form of partnership and this is made for a limited period and exhales high
opportunities to grab certain opportunities in international market. Joint venture is helpful in
expanding business as this minimise risk factor and provide high term opportunities for
expansion and inhale growth options.
Licensing: This is another method of entering within new market and this is associated
with forming an agreement between two parties in which right to access patent and other trade
secrets are rendered in order to maintain quality and product image. This is highly essential for
the business in which new market can be explored and along with this new market opportunities
can be explored.
Assessing markets: It is a basic prospect under which Verdant leisure must have
recognise different working prospect. In this market acceptability is addressed so that productive
amount of modifications has been induced so that moderate level of changes is addressed with
suitability. It is essential to assess different conditions of market so that perfect induction of
strategy and policy is induced with certain perfection.
Financial support: It is most required prospect under which Verdant leisure make sure
that sustained support in terms of finance is addressed. In this company has acknowledge
different funds that is necessary to make positive and adequate changes as in business
performance.
P8 Compare and contrast various ways SMEs can tap into the new and international market with
their pros and cons of each methods
There are different ways for the SMEs to tap into the new and international market such
as joint venture, licensing, Franchising etc. that includes some pros and cons that can be shown
below.
Pros
Licensing Franchising
The major benefit of using this method by the As it is more effective form of method for the
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SME is that it helps in enhancing the market
share because in this information related to the
local market is available properly due to this
risk can be low.
SMEs firms because using this does not needs
to be more funds and financial resource and
also have low risk.
Cons
Licensing Franchising
The main disadvantage of licensing for the
SME is that they get face many issues related
to non payment and non refundable royalty
that will includes major losses.
Adopting this methods by the SMEs firms is
creating a major problem in reducing the image
of the quality products and services that will
reduced the brand image.
Creating joint venture
Pros cons
In this SME firms enjoys more benefits as
they get the more resources and expertise. IN
this type of methods risk can be shared
between two joint ventures companies.
In this method organisation may face the issue
of rigidity and also includes the employees de-
satisfaction due to this earning profits will be
reduced(Witz and Oehmen, 2018).
In order to expand market size Verdant Leisure may opt for joint venture, in this manner
the company can unleash higher market size along with dealing with market complexities as
well. This could be highly beneficial for them to meet their business target and long term goals
as well. With the help of joint venture Verdant Leisure can explore new market heights by which
they can expand their business in positive manner.
CONCLUSION
From the above explained report it is to be concluded that the for SME firms global
business environment provides the various opportunities and benefits that involves advanced
technology and also offers more employment opportunities so that it will benefited the nations.
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Despite of this these firms faces many challenges like more competition , stability in financial
resources etc. In also inculcates the various trading blocs that is effective for involving in the
global nation because it helps in trading easy and by using the different exporting process. All
this methods helps in tapping into the international market such as franchising. Exporting etc.
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