Tapping into New and 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