Tapping into New and International Markets

This document discusses the advantages of tapping into new and international markets for small and entrepreneurial businesses. It explores the global business environment, the threats and opportunities faced in a competitive global environment, and the advantages of international trading blocs and agreements. It also covers the various tariff and non-tariff barriers in the international trading environment, the advantages and disadvantages of importing and exporting, and the methods in which SMEs can tap into international markets.

Tapping into New and
International Markets

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explain the global business environment in which small and entrepreneurial businesses
operate....................................................................................................................................3
P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment............................................................................................................................6
TASK 2............................................................................................................................................7
P3 Determine and analyse the advantages of international trading blocs and agreements....7
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment............................................................................................................................9
TASK 3..........................................................................................................................................11
P5 Determine the advantages and disadvantages of importing and exporting and how to secure
a deal.....................................................................................................................................11
P6 Explain the differences between merchandise and service imports and exports............14
TASK 4..........................................................................................................................................15
P7 Evaluate the various methods in which SMEs can tap into international markets.........15
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method.........................................................................................17
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
In Today's Global Environment, businesses are looking forward to expand their
organisations internationally. When the product based business starts doing well, it is natural to
look new markets to increase expansion and growth (Al Abdulrazak and Razak, 2020). For
Tapping into International Market, the entity should have a good domestic track record. There
are various factors which should be considered while entering into international market they are
culture, regulatory and legal barriers, foreign government considerations, etc. The firm should
understand the market personality, market trends, financial cost pattern and other factors before
entering into market. The Rowlinson Knitwear is expanding its business into USA, the
organisation should consider these factors before entering into new market. Rowlinson Knitwear
Ltd is a textile and apparel products industry, it produces knitwear and school wear for school
students. The company was incorporated on 20 September 1972. In the Report we will discuss
about the swot analysis of the company, tariff and non-tariff barriers, advantages of imports and
exports and methods of entering into new market.
TASK 1
P1 Explain the global business environment in which small and entrepreneurial businesses
operate.
Global Business environment is defined as the environment and surroundings in which
varied sovereign countries participate on commercial basis for conducting business activities by
making more productive use of resources which are exogenous in home environment and are
necessary for conducting effective business activities (Global Business: Origins, Viewpoints and
Six Cornerstones, 2012). The Global Business Environment can also be defined as an activity
zone of respective organisation which is influenced and exposed to global power and factors
such as resources (Definition of Global Business Environment, 2020). This study focus on the
Rowlinson Knitwear Ltd which is a small entrepreneurial business is going to start new
operation in the U.S. business environment (Charpin, Powell and Roth, 2020). Global Business
Environment is described as the environment in multiple sovereign nations with factors outside
the organisation's home environment, influencing the decision making for how to use its
resources. The global environment is classified into the external environment and Internal
environment. The external environment includes social, environmental, political, technological,

legal and economical environment. To analyse the factors influencing an organisation from
outside, pestle analysis is best suited.
Small and medium enterprise (SMEs) are businesses that maintain revenues, assets or a
number of employees downwards and below a certain threshold or the break-even point. Every
country has different definition of a Small and medium enterprise (SMEs) (Owen, Deakins and
Savic, 2019). All the definition of different countries constitute some size criteria which needs to
be met by the businesses to fulfil an agreeable criteria. In United Kingdom the Small and
Medium sized organisations are denoted as heart of its economy as it holds of around 99.9% of
the business population in the nation (Kaawaase and et. al, 2019). Thus, as per the United
Kingdom the definition of and Small and Medium sized enterprise (SME's) is those entities
which have fewer employees them 250 that is who have less than 250 employees engaged in the
business and are having turnover of €50 million (What is an SME, 2020).
The Small and medium enterprise (SMEs) are the key contributors to economies around
the world and thus addressed as the pillars of the economy brining employment, money, revenue
as well as international connection and most importantly innovation too in the region where they
are being operated. More specific contributions of an Small and Medium sized enterprise
(SME's) to economy is as follows:
 Bring in innovation and employment within the nation, as with creative approaches the
company needs experts and skilled Human Resources. Hence, employment is created for
both skilled and unskilled individuals to conduct day to day activities of the operations
(Sinkovics, Sinkovics and Archie-Acheampong, 2021).
 Moreover, another contribution is on purchasing power of people and growth of
economy. With engagement of Small and Medium sized enterprise (SME's) within the
economy employment if generated offering individuals a higher purchasing power. Once
people have money they start spending it as per their needs and requirement of their
family. Hence, money flow improves within the economy offering new opportunities to
all along with a healthy and safe life to lead (Sigcha and et. al, 2020).
PESTLE ANALYSIS:
 Political Factor- Political factors are the factors which includes anything connected to
government. This include government policy, stability, tax policy, trade policy, labour
law and trade restrictions. Since apparel industry is all over the world so it greatly

influences by the global market and political forces. Rowlinson Knitwear Ltd is going to
enter in a new US market with its product. A recent election was happened in US and
newly elected PM Joe Biden it is expected to reduce the trade threats by lowering the
tariff against Europe and China which is a good news for the Rowlinson Knitwear Ltd.
 Economical- Economic factors are the factors which affects the economy performance.
The economic factors include economic growth, exchange rates, inflation rate, interest
rate and unemployment rates. The economic factor affect the purchasing power of the
consumer. Economical is a major factor for deciding the investment is to be made or not.
United States is the world's largest economy, ahead of China (Jadan, 2020). Since the
partial trade agreement in January 2020 is already approved but trade tensions are still
existing between the China and US which make it a unstable environment for every
businesses.
 Social- Social factor is also known as socio-cultural factor that involve beliefs and
attitude of the population. These factors include population growth, age distribution,
income distribution, career attitude and lifestyle attitude. These factors are helpful for the
marketers to target the certain customer. Social factor is a cause of concern for SME
because inequalities among people are rising and infrastructure are getting affected from
these issues, which becoming a hurdle in slowing down GDP growth. Due to variety of
social change and trend, so to catch on customer’s choice this, volatility will be going to
remain in the company.
 Technology- Technological factor may affect the industry by new advanced technology.
The organisation must be aware of upcoming technologies in the market. The changing in
technology can be a threat to the organisation. Being advance in technology have brought
many new opportunities to SME. By entering into the world’s largest economy it is
assumed that to compete in market Rowlinson Knitwear Ltd have to get on latest
technology as per market requirement which makes it little costly and give it a
disadvantage and advantage on others. Rowlinson Knitwear Ltd have to focus on Data
security in an international market so it is a cause of concern from company (Nongolola,
2020).
 Legal- Government policies and legislation also directly impact on businesses. For eg:
Following the government standards of product labelling, advertising standards and

several other standards which makes the works rigid because they can't invest sufficient
time in other important work and sometime it also consumes cost. Rowlinson Knitwear
Ltd organization is going to trades cross countries which make it a very tricky area to be
correct as each country has its own rules and regulations
 Environmental- Environment factor are the factors which affect the industries smooth
functioning. The environment factor includes climate change, consumer health,
availability of energy, etc. This factor is more important for the industries like tourism,
agriculture or food production. Due to lack material, high pollution level and health
hazards are increasing which then mix up with water and air and leads to certain negative
results. Government is pressuring to Small industries to reduce their carbon foot prints
and increase environmental friendly practices. Rowlinson Knitwear is investing in
minimizing the waste produced in their stores by making people aware.
The meaning of SME is small and medium sized enterprise with fewer than 250
employees. They make up around 99.9 percent of all businesses in UK. Small business employ
over 16.3 million people in UK which accounts for 60 percent of all private sector employment
(Sisodia, Alshamsi and Sergi, 2020).
P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment.
SWOT analysis is a tool used for analysing and examining the internal and external
factors of a respective business organisation commonly. But the framework can used in separate
scenarios and situation as well. Hence, it will be use for examining the strengths, weaknesses,
opportunities and threats which Small and Medium enterprises (SME's) face while they are
dealing in or plans to deal in a global business environment.
SWOT ANALYSIS:
 Strength- In today's rapidly changing world Small and medium enterprise (SMEs) are
growing at far more rate comparing to other large businesses. Small and medium
enterprise (SMEs) is far more flexible then comparing organisation. The owner or
Managers of Small and medium enterprise (SMEs) whole and sole decision makers and
this results in perfect alignment in decision-making process.
 Weakness- In Small and medium enterprise (SMEs) the entity at operational level may
face lack of technology in the respective field of work in comparison to large scale

companies. At some point starting a new Small and medium enterprise (SMEs) can face
competition in pricing of products in comparison to other economies in global
competitive market. While expanding into new markets the operation of Small and
medium enterprise (SMEs) find hard to get loan at better rate or if they get a loan it will
be on higher rate comparing to others which make its profit in doubts in global markets
and global business environment.
 Opportunity- Small and medium enterprise (SMEs) have access to new market which
leads to better sales and new opportunities which will leads to large number of customer
base. A Small and medium enterprise (SMEs) has the option and the opportunity to
engage in market as joint venture or provide franchise to some other retails operator will
be helpful in brand building. Small and medium enterprise (SMEs) will always be in
advantage by moving into markets and new place of work where it can take innovative
approaches for developing its brand and enable to gain higher revenues and profits in
foreign markets (Ariansyah, Asrul and Eymal, 2021).
 Threats- While single person owned responsibility of all work some time it is not
possible for Small and medium enterprise (SMEs) to take care of all legal responsibilities
which leads to government take action against them. Small and medium enterprise
(SMEs) try to avoid as much as unwanted expense it can avoid but sometime unexpected
cost can cripple the entire business. For e.g. A recession which lead many close their
business and firstly affects an Small and medium enterprise (SMEs).
TASK 2
P3 Determine and analyse the advantages of international trading blocs and agreements.
Trading blocs are the agreement between the countries to reduce and remove the barrier
to trade within the member country (Kawasaki and Tsubota, 2019). It is an Intergovernmental
agreement, where regional barriers to International Trade are eliminated among participating
countries and allow them to trade with each other. International trade agreement opens up new
opportunities for the exporters. There are different types of trade blocs such as free trade area,
customs union, common market, economic union, etc.
TYPES OF TRADING BLOCS AND AGREEMENTS:

 Preferential Trade Area- This form of trading bloc exist when countries in particular
geographic region agrees on reducing the tariff barriers on chosen articles and offerings
which are being imported from other member countries. This is a common type of trading
bloc which is used by countries for offering easy access to trade in their location and
areas. Free Trade Area- This is a trading bloc in which member countries of a geographical
areas agrees on reducing trade barriers for all importing goods form different countries
with which business relations are developed and who are member of the agreement. Customs Union- As per this trading bloc the member countries agrees and removes tariff
barriers and also with agreement adds common external tariffs against those who are not
part of the agreement and do not holds the membership.
 Common Market- This is a practice taken place for one unified and integrated economy
which develops when member countries are in trade with free accessibility to all
economic resources which are both tangible and non-tangible in nature (Trading blocs,
2021).
THE ADVANTAGES OF INTERNATIONAL TRADING BLOCS AND AGREEMENTS: Free trade within the bloc- The trading blocs enable the users that is businesses like
Rowlinson Knitwear Ltd is free flow of trade with less of barriers and hindrances. This is
a huge benefits for organisations as it allows them to engage in larger market with easy
access to larger customer base and more resources. Wider Market access- As discussed that the businesses gets hold of wider market and
resources it is a benefits as the organisations can easily get hold of better importing and
exporting services and even enjoy more productive resources for their business to be
conducting appropriately. In the same manner the entity that is Rowlinson Knitwear Ltd
will be benefited and can have more access to resources and better productive customer
base (Strange, 2020).
 Economies of Scale- Another major advantage which is imposed and offered by trading
bloc to both businesses and consumers is economies of scale. Here, the manufacturer of
products are benefited with reduced cost of production and procurements of raw materials

through trading blocs. This ultimately impacts upon reduction in costs of end products
and services will help the organisation that is Rowlinson Knitwear Ltd to capture more
audience and attract larger customer base.
 The prices go down due to heavy competition. Consumers can buy at best price and even
they can buy more which helps to boost the economy. This will help Rowlinson Knitwear
in increasing their sales because of higher customer base.
 When trade barriers let fall, different countries manufactures compete directly with each
other. This will help an organisation in reducing the legal issues that result in
achievement of better outcomes within minimum time period. In context of Rowlinson
Knitwear, lack of trade barriers helps them in its business expansion in USA successfully.
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.
Tariff and Non-Tariff barriers are the restrictions which is imposed between the countries
in the movement of goods. In simple words, Tariff is a tax. The taxes owned on imports are paid
by the domestic customers and it is not imposed directly on the foreign countries export. The
Goods from abroad are cheaper as they offer cheap labour cost and capital. Tariffs are created to
protect the industries and economies but is also used by more modern economies and developed
Industries. The tariff and non tariff barriers will affect the Rowlinson Knitwear as their are many
restriction which will be faced by the company while entering into new market. The organisation
have to pay the custom duty, transit duty, export duty and various other taxes. There are also non
tariff barriers which will restrict the company to enter into new market. The Tariff and Non-
Tariff Barriers in International Trading Environment are as follows:
 Tariff Barriers- Tariff is a tax, custom and duty which is imposed on the goods that
move across the countries boundary. It is an instrument which is used to control the
imports and exports. Here are the following tariff barriers:
◦ Import Duty- It is a custom duty which is imposed by the country on goods which is
being imported. A tax is collected on the products by importing country. Import duty
is also known as custom duty, import tax, tariff and import tariff. It is charged to raise
revenue and save the domestic industries (Chen and Mao, 2020). These import duties

are needed to be paid by Rowlinson Knitwear Ltd while doing business in global
environment and serving its offerings in an international marketplace.
◦ Export Duty- It is a tariff which is forced by the exporting countries on the goods
which is being export. The tax levied on agriculture products and minerals. The
export duty will be paid by Rowlinson Knitwear Ltd in domestic market to the
government for conducting business in international environment. These tariff barrier
can be removed as well if the global country is member of the same trading bloc as of
the United Kingdom.
◦ Transit Tax- It is a tax which is imposed on the commodities passing through one
countries, cross another and route to another. Transit tax are charged by the countries
through which the products are passed. It increases the cost of the commodities and
reduce in amount of goods traded.
 Non-Tariff Barriers-Non-Tariff Barrier is an another way to restrict trade using trade
barriers other than tariff. Some countries use non-tariff barrier as their political and
economic strategy to restrict the amount of trade they lead with other countries. Non-
Tariff barriers includes quotas, embargoes, sanction, etc. The following are the non-tariff
barriers-
◦ Quotas- It is a limit on quantity of goods which is being exported or imported during
a specific time period. If the importer exceeds the amount of import, then they have to
pay a penalty and fine. Rowlinson Knitwear Ltd can be facing consequences of this
non-tariff barriers where they have to limit their exporting units of goods (Yean and
Yi, 2019).
◦ Voluntary Export Restraint- It is a quota that is fixed on the export by exporting
countries on the request of the country that is importing the goods. The exporting
countries fix a quotas of maximum quantity of products that is being exported to
concerned nations.
◦ Subsidies- It is a payment that is made by the government to the domestic producer
so that they can compete with foreign trader. It can be tax holiday, cash grant,

government equity participation, etc. It helps the domestic producer to reduce their
cost and have control over the market.
TASK 3
P5 Determine the advantages and disadvantages of importing and exporting and how to secure a
deal.
IMPORTING
Importing refers to buying of goods and services from other countries, rather than buying
domestically produced items whereas exporting means goods or services are produced
domestically but then sold to customers residing in the foreign countries.
ADVANTAGES OF IMPORTING:
Importing means purchasing a product or services from another country. There are taxes
which is levied on the goods being imported. The advantages of Importing are as follows-
 Introducing product to new market- Rowlinson Knitwear is expanding its business in
USA, they are introducing their products to new market. The Entity look out the market
size and purchasing power of the consumers in USA. If the products are attractive
enough, they can import it. The Rowlinson Knitwear Ltd can conduct market research
before importing certain products. Rowlinson Knitwear Ltd can get the advantage in
introducing the product and enhance its profitability level (Tien and Ngoc, 2019) .
 Save cost- It is a major benefit of importing, that it reduces the manufacturing cost of the
product. Businesses find importing products, parts of products and the resources
affordable instead of producing them locally. It minimise the cost as they get the goods at
better price with good quality so, they don't have to invest into expensive machinery, they
choose to import goods. Rowlinson Knitwear Ltd find the best option for itself option
which can be produced at low level and try to import those product which incur high cost
in producing.
 Acceptance and Approval- While importing quality goods, the consumer generally
accepts the goods if they are of better quality. For Rowlinson Knitwear it is important to
satisfy the people of USA with their products. If the people accept the product,

Rowlinson Knitwear Ltd sales and growth will automatically increase, the firm has to
grab the customer’s loyalty towards themselves.
DISADVANTAGES OF IMPORTING:
 Dependency- The dependency on other countries arises due to import and export of
products and services. It is not good for the exporters and the growth of country. The
Rowlinson Knitwear has to depend on the other countries which will result in increased
cost of products and ultimately customer will going to bear it (Kim and et. al, 2019).
 Out flow of foreign exchange of country- It is a biggest disadvantage of importing as
when country purchase the products from other countries they have to pay them in their
currency and when the importers buy foreign currency it leads pressure on domestic
currency which leads to reduction in foreign exchange of the country. Rowlinson
Knitwear Ltd have to bear the currency conversion cost and other sort of taxes which
affect the profitability level.
EXPORTING
Exporting is another business practice which is carried out and belongs to the global
business environment where the entities are engaged in sending products out of their domestic
market to a new international market for the purpose of making sales and earning revenues.
ADVANTAGES OF EXPORTING:
 Increase Goodwill- If the products of Rowlinson Knitwear are successful in USA, it
builds name, reputation and goodwill in the market. The goodwill earned by the
Rowlinson Knitwear Ltd is the assets of the manufacturers. The company will also get
benefited with getting loan at lower interest rates (Wu, Wei and Wang, 2021).
 Opportunities- When the new product is launched, it just grabs all the attention of the
importers and exporters all over the globe. In such times, it is an opportunity for the
Rowlinson company to earn maximum profits with new ideas and innovations.
Rowlinson Knitwear Ltd get access to new market and can easily sell its unique product
all over there.

 Reduce Vulnerability- When Rowlinson Knitwear exports its products than it is no
longer dependent on sales within domestic market. The company should not depend on
the single export market as this can make vulnerable to fluctuations in that market.
Rowlinson Knitwear Ltd profitability also get enhanced by new market as the region will
enable the brand a new pace of growth and popularity amongst new customer base and
public.
DISADVANTAGES OF EXPORTING:
 Competitors- Competitors should not be avoided while exporting of goods or services.
The Rowlinson Knitwear Ltd should know their competitors in the market, they should
know their competitive advantages to stay ahead with the competition and also be
successful in the market. New market also bring new difficulties, it makes hard for new
player to enter and establish (Cuervo-Cazurra and Li, 2021).
 Market information- Finding information on the new market in which the organisation
is expanding its Rowlinson Knitwear Ltd can be extremely difficult. Before expanding
into new market, the firm should have a detailed knowledge of the competitors and the
marketers of the country.
SOME OF THE NECESSARY PROCEDURES IN SECURING A TRADE:
There are certain steps and stages through which ever entity have to go through in order
to secure trade. This procedure includes number of steps and stages which are as follows and
needs to be followed by Rowlinson Knitwear Ltd.
 International Purchase Order- It is a document that replaces the revenue contracts in
transactions of small amounts. This is serves as a document of authentic proof for the
transaction taking place amongst two businesses in global business environment.
 International Commercial Invoice- The commercial invoice is one of the most
important document used in global business. It is a legal document issued by exporter to
importer in an international transaction and also serves as proof of sale transaction took
place between the buyer and the seller belonging to separate regions.
 Packing list- A packing list is a document used in international trade, that provides the
parties involved in trade transactions about the information for the shipment. The

organisation that is Rowlinson Knitwear Ltd will be using it if the goods are exported
through certain transportation techniques.
 Irrevocable Letter of Credit- An Irrevocable Letter Of Credit (ILOC) is an official
correspondence which is issued from the bank offering the guarantee of payment for
goods or services that are purchased by the individual or entity in international market.
 Certificate of Origin- A Certificate of Origin (CO) is an important global trade
document which certifies the production of a respective goods in shipment is conducted
in the exporting country.
P6 Explain the differences between merchandise and service imports and exports.
There are two major classes of things that people buy; Goods and Services, goods are
also called merchandise. Merchandise or goods are the stuff which can be touched and measured
in some unit. For example, bottle, table etc. Services on the other hand are intangible that means
they cannot be touched or measured in units. Rowlinson Knitwear has decided to start exporting
its merchandise on work on an international scale. Imports and exports of both merchandise and
services are different:
 Merchandise exports are good leaving the statistical territory of a country. Merchandise
imports are goods that adds to a country's stock of material resources by entering its
statistical territory (Ilahi and et. al, 2019).
 Services Exports and imports of reflect the value of services provided to residents of
other countries by a country’s residents and those received by residents of the domestic
territory. They are the values of credits and debits of international service transactions as
presented in the International Monetary Fund’s Balance of Payments Statistics. Services
are defined as the economic output of intangible commodities that may be produced,
transferred and consumed at the same time.
Basis Merchandise imports and exports Service imports and exports
Explanation Merchandise exports are physical
movement of goods or merchandise
out of the country for trade.
Merchandise imports are goods
brought to the country for trade on
Service imports and exports are import
and export of services which means it
generate non-product international
earnings. The company or individual
paying for the service internationally

the other hand merchandise exports
are the good sold in other countries
for trade addressing to a sales
transaction.
avails the services and hence imports it
on the other hand the company or
individual who receives the payment for
such services exports. This denotes the
exchange of intangible goods in global
business environment.
Example For example Rolls Royce exports its
cars from UK to USA, it’s an export
for US and import for USA.
For example an American tourist visits
London and stays at a motel, the tourist
will then pay for the services he availed,
this be will be called export of services
from the motel's point (Kalaitzi and
Chamberlain, 2020).
Barriers There certainly are extensive
barriers in the international trade of
merchandise, government keep a
close watch and surveillance on the
import and export of goods as per
it's norms. Government imposes
taxes and duties to regulate
international trade of goods. Along
with it the barriers of tariff's and
non-tariff's is another barrier.
There are comparatively less barriers in
the international trade of services. As
services are intangible so it’s not easy to
impose duties and taxes on the imports
and exports of services. Government
also is not able to keep a close watch on
every service.
TASK 4
P7 Evaluate the various methods in which SMEs can tap into international markets.
When a company decides to target a particular country, the organisation should know
about its competitors, consumer’s choices, preferences and various other factors. There are
various methods through which The Rowlinson Knitwear Ltd can enter into new International
Market they are as follows-

 Direct Exporting- Direct exporting is the basic way of exporting made by the
organisation, there are no mediators. The Firm decides to handle their own exports. In
Direct exporting the investment and risk are higher but the return is also good enough. It
can be further classified into two categories they are Sales representatives and Import
distributors. The Direct exporting have an advantage of selection of foreign markets.
Direct exports also have an advantage where the company that is Rowlinson Knitwear
Ltd can establish direct relationships with the customers. Business will also enjoy the
entire profit margin and it helps it to save cost. The organisation also has the freedom to
choose basis of payment and can work flexibility (Lobo and et. al, 2020). Indirect Exporting- Indirect exporting is the another way of exporting of goods and
services made by the organisation. The company work through independent
intermediaries to export their products and services. There are various types of Indirect
exports used by Rowlinson Knitwear Ltd such as, export management houses, export
merchants, export trading companies, etc. This is cost effective as the business will have
fewer transactions it handle. Hence, Rowlinson Knitwear Ltd will be getting more time to
work on the strategies and functionality of the business. Also the agents and distributors,
have specialisation in this particular field with market knowledge and existing customers. Licensing and Joint Venture- Licensing is another way to get involved in international
marketing. License grants permission to company for manufacturing of goods and
services in other country with their own name. The foreign partner also becomes the
competitors by selling their products in the same places. Rowlinson Knitwear Ltd can
also make an agreement or joint venture with an organisation working in the chosen
global market and is local to the market where Rowlinson Knitwear is planning expand.
This will help the business to enter into emerging markets along with it this strategy
reduces risk as it is shared by the joint venture partner in the new location of work. This
also will help Rowlinson Knitwear Ltd to get an already acquired market by its venture
company (Tolstoy, 2019). Foreign Direct Investment- Foreign Direct Investment is another method to tap into
international market in this the company have to make an investment in the international
country. Through Foreign Direct Investment the different modes of entering are joint

ventures, mergers and acquisitions and greenfield investment. It is an expensive method
which business make to an International Market. Rowlinson Knitwear can also enter into
new market by Foreign Direct Investment.
 Piggybacking- Piggybacking generally means when two companies work together and
promote each others product in their Home country. This method is of less risk as it
includes low capital. The businesses generally don't consider this method to enter into
new market as it needs trust on each other, the companies are not comfortable. The
Companies also take the control of the products which is sold in the home country.
Sometimes the owner can become biased while selling the product of its partner (Pratt
and Schuckert, 2019).
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method.
There are different methods that will be essential for an organisation in entering into
international market. these are direct export, licensing and indirect export. there are some pros
and cons of each methods that will be expired as below:
Methods Pro Cons
Direct export Develop a good relations with
other country and also get a
good information of feedback
from the target market.
Rowlinson Knitwear Ltd can
make better relations with
customers belonging to
separate locations in wider
market and work area (Petrou
and et. al, 2020).
Earns a greater profit through
sales in target market. It have a
higher risk and investment of
time, resources as comparison
to indirect export and an SME
like Rowlinson Knitwear Ltd
can get extremely affected due
to it.
Licensing The license helps to expand
the organisations quickly
without any hazards. It also
The license have potential
disadvantages, it has lower
income as comparison to other

create a path for future
investment in the market
(Olanipekun and Adelakun,
2020).
modes of entry.
Indirect Export Indirect export require less risk
and low investment as
compare to direct export.
It has a little or no control
over sales, distribution as
opposed to direct export.
Foreign Direct Investment The company can easily enter
into market by investing into
the country as Rowlinson
Knitwear Ltd will gain
goodwill and popularity in the
market through it.
It is an expensive method to
tap into international market as
making investments into new
market is a risky job to
conduct.
Piggybacking It is a simplest and easy
method which can be used by
an SME and in this case by
Rowlinson Knitwear Ltd for
expanding and tapping its foot
in new chosen market that is
the United States of America.
It requires trust between the
companies to sell the product
into their home country which
can cause difficulty for the
firm Rowlinson Knitwear Ltd
as the audiences to whom
goods will be provided are
unknown and their shopping
trends as well as behaviours
are not very well understood
(Oduro, 2019).
Rowlinson Knitwear should go for or can use Indirect export method to tap into new
International Market, this method has low risk and low investment. The company have to invest

less as compare to other modes of entry into international market. Hence, it is a suitable and
beneficial method for the brand to chose while moving to the United States of America.
CONCLUSION
From the above given report it is concluded that, there are various tariff and non-tariff
barriers which affects the organisation to enter into new market. The entities have to consider
these factors while entering into new market. There are various methods through which the
company can enter into new market and select the best method. The organisation should analyse
the market and its competitors, it will be easy to get access into the market. Tapping into new
International Market will increase the growth and sales of the company.

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