Tapping into New and International Markets

This report explores the global business environment in which small and entrepreneurial businesses operate, analyzes the threats and opportunities faced by SMEs in a competitive global environment, determines the advantages of international trading blocs and agreements, and explains various tariff and non-tariff barriers in international trading environments. The report also evaluates different methods for SMEs to tap into international markets and compares the pros and cons of each method.

Unit 43 Tapping into New and
International Markets

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SECTION 1......................................................................................................................................3
Explain global business environment in which small and entrepreneurial business operates.3
Analyse threats and opportunities that faces SME in an increasing competitive global
environment............................................................................................................................4
Determine and analyse the advantages of international trading blocs and agreements.........5
Explain various tariff and non-tariff barriers that exist in international trading environments.
................................................................................................................................................6
SECTION 2......................................................................................................................................7
Advantages and disadvantages of importing and exporting with a secure deal.....................7
Difference between merchandise and service imports and exports........................................9
SECTION 3....................................................................................................................................10
Evaluate various methods in which SME can tap into international markets......................10
Compare and contrast various modes of SME can tap into international markets, assess pros
and cons of each method......................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCE.................................................................................................................................13

INTRODUCTION
International marketing is a concept of marketing principles which are undertaken with
the aim of satisfying the needs and demands of consumers across nation. In order other it
includes activities of more than one nation which is termed out as global marketing worldwide
and customizing according to the preferences of consumers of different nations. By gaining entry
at new international market of different nation, a company seeks to attain growth and
development in a small period of time (Vasishth and Guleria, 2017). In which the present report
is based on British Millerain which is a small and medium enterprise located in UK. This
company deals in textile industry, founded in 1880's and now wish to expand its business at
international level. The following projects explores about global business environments together
with the impact of key driving forces of industry. As well as it includes different non-terrif and
tariff barriers. Moreover, it deals with benefits and demerits of importing and exporting in
between merchandise & services. Additionally various ways to gain access into international
countries.
MAIN BODY
SECTION 1
Explain global business environment in which small and entrepreneurial business operates.
Global business environment can be defined as a environment that primary sovereign &
secular nation as well as bears the decision which are linked with the capabilities along with
resources. It consist huge number of internal and external factors which affects business
operations along with entities (Frahm 2018). In context of this, it has been analysed that is vital
for business in UK to devise effective decision according to the needs of global business with
this marginal limitation of Britain, small business unit provides substantial contribution as well
as earn millions of revenue.
By taking advantages of funds and resources from large companies, SME able to attain
their goals in effective manner within stipulated time frame. This refers to imposition of lower
tariff rules for smooth running of operations and flow of goods and services. Besides from rules
and regulation of different nations, it has been seen to encounter dynamic market. In regards
effective example can be Brexit, which majorly affects the trading of business for those which
perform outside of nation. After implementation of Brexit policies, it affected various drivers and

that influences overall performances of SME along with workforce. Country like UK which
Develops state economy and that provides development and growth for small and large
enterprise. As this country have a god GDP ratio which serves a lucrative place for companies to
establish small SME and creates job opportunities for longer time period. When a large number
of small firm operates its business at international level it will increase economy and contributes
in high income group. This significant contribution of SME towards country economy can
acknowledge with the assistance of political unset. Such types of firm mainly contributes to
foster the different economy in effective and appropriate manner. So significant entrepreneurial
and small business plays important role in order to uplift the economy of nation.
After the implementation of Brexit, UK companies face so many challenges to run their
business alongside the workforce. During that SEM are those companies that help nation to
improve the nation's economy and GDP as small businesses contribute to the nation's growth and
development. The GDP report offers profitable business services to build small SMEs and
develop job opportunities for seekers. When a large number of small businesses run their
business globally, there will be an increase in the economy which will contribute to the high
income group.
PESTLE analysis:
Pestle analysis is defined as a strategic framework that is used by an organization in order
to identify the impact of external and macro environmental factors on operations and activities of
an organization. The pestle analysis of British Millerian is given below:
Political factor: It is determined as the extent to which government interference the industry. It
involves factors such as fiscal policy, tax policies and many more. In context to British
Millerian , it is analyzed that government of UK support small and medium enterprises to expand
its operations which has a positive impact on the performance of respective company.
Economic factor: This factor includes interest rate, economic growth rate, foreign exchange
rate, inflation rate and many more. With reference to British Millerian, it is analyzed that people
of UK has high spending power which help company to gain higher profits in an effective
manner.
Social factor: It involved determinants such as demographics, cultural trends, population
analytics and so on. It is analyzed at British Millerian focus on satisfying the requirements of
people so that it’s offers is accepted at marketplace.

Technological factor: In the present time period, people prefer to buy those goods that is
innovative and new at marketplace. In context of respective organization, it make use of new
innovative technologies in order to perform operations and providing service to customers which
in turn positively impact on its performance level.
Legal factor: It is vital for every organazation to follow all the legal policies, laws so that
activities is implemented systematically and effectively. It is analyzed that British Millerian
follow all the laws and legislations so that it can effectively execute activities without any
interruptions and penalties.
Environmental factor: It involves factors such as surrounding environment, weather,
environmental offsets, global change within climate and so on. The respective organisation
follow all the environmental laws and ensure to protect environment that help in maintaining
brand image at marketplace.
Analyse threats and opportunities that faces SME in an increasing competitive global
environment.
SME companies have opportunity to expand and gain growth at vast level. For which it is
important for a company to have operational activities outside from the borders in order to
increase living standards and employment. In context of this some of threats and issues that may
be faced by SME are as follows:
Threats for SMEs:
SME companies includes limited number of staffs along with turnover and due to this
they may faces some issues in order to operates business function at global level in this
competitive world. One of the most issues faced by them is lack of resources such as highly
skilled workforces, finance, land, market accessibility which bound business and influences
overall business performance in adverse manner (Liow, Liao and Huang, 2018). Another
influencing challenge could be deficiency of economic scale and in result it control SME for
attaining pre-defined goal. SME companies need to focus on specialist/ niche strategy. The risk
in devoting SMEs themselves to specific –local segments is evident, since globalisation makes it
easier for big companies to influence niches. As well as it become difficult to understand the
culture and language of global market for expander, for which they take time to learn the
significance of various culture in order to succeed across the border.

Opportunities for SMEs:
Increase revenue potentials: Major advantage that can be gain by SME for dong
business at global level could be increment in revenue by increasing the consumer base as it
directly increases profit margin of company. Selected firm could offer better services in
expanding nation for increasing sales. This will help it in capturing large market share over
rivalries in limited time. In this globalisation is a prime sources for attaining desire objective in
effective manner.
Diversifying company market: Another advantage of global marketing that can company
take is they will able to meet different types of market and which develops diversification for
company. In this understanding of culture and needs plays vital roles and by under sting that it
increase the sales of company at larger level.
By launching innovative product/ services at global market they can give competitive edge
to other players of local market. As when companies introduce innovative services to market
copycats are waiting to pouch the ideas and launch that on other market so it make them famous
and give the success in development.
In order to globalise the business unit, small business unit use E-commerce as a tool which
includes virtual shopping cart, secure online payments and make company available on social
media for creating awareness about to consumers. By doing this they will easily able to grasp
more new consumers towards their services easily as well as able to make their aim successful.
Determine and analyse the advantages of international trading blocs and agreements.
Trading blocs tends to a kind of inter government agreement or contract in order to
eliminate all restriction and limitation of trading in between different nations so that all nation or
states will able to take participate in trading. It has been often said that trading blocs &
agreements is a contract between different nations as it helps all participates of all nations to
trade freely in each and every nations as per agreements. Additionally, this help in facilitating
industrialisation for improving the overall economy of country.
Trades blocs offers various benefits to companies with in region in order to carry out
operation or trade freely in different nations as well as not liable to pay any kind of taxes. It has
been analysed that United Kingdom was effective member of European Union which as a result
permits UK to trade within any region of European nation. But after the implementation of
Brexit UK got separated from EU and has signed different sort of trading agreements. Which

allows them to trade freely and connect with other nations across the world. It has been found
that one of the trade blocs holds CARIFORUM- UK economic partnerships agreements (Xie and
Li, 2018). With the assistance of this, the SME of UK can freely & trade in various countries like
Barbados, Bahamas and in different eleven nation.
Additionally, in context of united kingdom another most trading agreement is SACUM-
UK economic partnership agreement ( EPA ). According to this trade blocs business entities are
liable to made trade with different southern countries like Africa (Hollinshead, 2020). For
instance South Africa is found as a region which are rich in various natural components. So if
UK companies will carry out any mode of tapping with this agreements, they can easily imports
their product in effective manner without paying any charges.
After implementation of Brexit, it has been said that UK nation become liable to trade
effetely by following the rules of WTO which explains the trade agreements of UK with different
163 others nations. Which provides various benefit of increasing growth and development of
business of UK as it tends towards fair trading with fair prices.
Type of trade Blocs
There are several types of trading blocs such as ASEAN, APEC, EU, NAFTA BRICS
ETC.
Regional trading blocs is considered an important aspect in context of economic and political
globalisation. Those who are the part of trading blocs may get benefit of enhancement intrare-
gional trade greater economic and political stability as well as closer co-operation within
neighbouring countries.
Advantages of trading blocs are:
Foreign direct investment: This mainly aids in attracting foreign direct investment and
that provides benefits in term of developing economy for longer range. As well as it build large
market shares which results in low cost product and that will become affordable to all middle age
group.
Trade effect: Trade blocs reduces the tariff and that ultimately reduces the cost by
improving and importing goods (de Oliveira and Rottig, 2018). Further he demands changes &
offers better choices to users for buying products at lowest possible prices.
Stimulation of global growth for SME:

International blocs & agreement are highly stimulated the international growth for SME
as with the assistance of free trade agreement SME can import and export goods or services from
various different nations for paying zero or less taxations.
Explain various tariff and non-tariff barriers that exist in international trading environments.
A tariff refer to a tax that is imposed by the government on goods and services which
imports from other countries. It may be charges per unit, like per barrels of oil, per new car or
may be % of value of goods like 7 % of a $ 700,000 shipment of clothes. Which serves for
increasing the price and making less desirable import or less competitive for domestic goods and
services. These are normally imposed in term of restricting the trades from a specific country as
well as reducing the import of different goods and services (Minkman and van Buuren, 2019).
For instance United States has protective tariff on imported poultry, textile, clothing etc. in 2018
where as japan impose 60 % tariff on US cigarettes. All these are carried imposed for various
reason such as national security in which countries enforces tariff and non-tariff barriers in order
to protect the security of nation for example defence sector of UK, retaliation- in this government
of country intervenes in trade policies for acting as a bargaining tool as well as this agreements
helps countries for permitting free trade among them. Some of the tariff barriers are as follows:
Tariff barriers:
These are the taxes on certain imports it enhance the price of imported goods in order to
make import less competitive.
Transit duties: It is considered as a taxation policies which is mainly charged by
government authorities on that goods/ services which are transmitted from one place to another
place (Fernando and Dasanayaka, 2018). This refers to one of the major barrier for SME
companies while trading at international level.
Export tariff: This is a responsibility that is imposed on products by exporting nation on
its exporters. In this most of the minerals and agriculture products are taxed.
Import tariff: It is considered as a custom responsibility that is imposed by importing
country i.e. the tax impose on imported goods. It is levied in order to increase the revenue as
well as for protecting domestic industries.
For instance US trade bodies has recommend 50 % tariffs on importing of washing
machine especially from South Korean manufacturing IG and Samsung.

Custom duties post Brexit- In case, if UK leaves the single market as part of Brexit
process there will be custom forms and regulation in order to meet the export and import. These
rules and regulation offers a significant barrier to trade.
Non-Tariff barriers: These are the non-taxes restriction such as government policies and
regulation along with procedures that influences the trading of overseas. It could be in form of
subsidies, embargo, quotas etc.
Quotas: It refers to a numerical limited of quantity that are imported or exported during a
specific time frame. In context of chosen firm they only import limited quantities of product
while expanding their business (Brent, 2019). The quantities may be stated in licenses of firm. If
importer import more that stated quantity then they has to pay penalty or fine.
VER (voluntary export restraints: It tends to a Quota on exports fixed by exporting
nation on request of importing country. In this exporting country fixes a quota related to
maximum amount of quantities that will be exported to specific nation.
Subsides: This is a payment made by government to domestic producers so that they will
able to compete with foreign goods. It helps local firm in by reducing the cost & gaining control
over markets.
Embargo: A complete ban on import from a certain country. For instance US embargo with
Cuba it is basically applicable due to political reason. After Fidel Castro came to power, the US
imposed a trade embargo on Cuba that was strictly enforced.
SECTION 2
Advantages and disadvantages of importing and exporting with a secure deal
The operation and process of bringing product and service from one country in context of
reselling in another country. This is termed as importing. Importing of good and services from
one international boundaries to another in such a preface to make tend as globalisation of
company and product. This help to fulfil need and customer expectation, and help to raise
organisation in global level (Dell’Agostino and Nenci 2018). Whereas, exporting is defined as
international trade of good and service to customer in others countries. This importing and
exporting helps a business to grow rapidly expand their potential market. As per this British
Millerain a manufacturer of waxed cotton and world supplier of heritage textile expand their

business in Sweden. So, the advantage and disadvantages of exports and imports which help in
further expansion of business.
Advantage of imports business
 The most effective quality of product should be prepared.
 Which core competencies in some material, while of importing these material are used as
common.
 Tax concession which is also affect the globe market, British Millerain just attentive to
pay less tax. Try to adopt culture of country where the expansion should done, analyse the culture of
Sweden to expand business.
Disadvantages of imports business
 The poor quality of product and service are also faced in some cases, so as per this British
Millerain have taken vision and mission to provide the quality of product.
 Requirement of license and document for imports of good because number of times it
will create troubles.
 Sometime importing of product and good destroy domestic business. So British Millerain
look at this that have domestic supplier are available or not. In this it also decrease economic process of country.
Advantages of Exports
 In the context with British Millerain they think this help him commercialism which is
type of compelling, the changes and rates help firm in benefits of exporting.
 This exporting help British Millerain to enhance sales and profit. Whereas, this exports of
product and service in market helps to boost the sale and enhance revenues (Jarvis and
Valdes‐Donoso2018). Moreover, the sale of foreign over long period of time helps to
gain the profitableness of firm. Most business are came in zone of competitiveness in local market before they create
venture with international borders.
Disadvantages of exports
 As per the context with selected firm there are disadvantages of exports include benefits
of merchant user and out and this create negative impact in business.

 In this it will take longer period of time to formulate market, and also payback duration
are far longer. Prices of promotional tools are higher, personal expenses to travel and
substitute prices are linked to encourage the product can stress financial resources of
small size enterprise.
The exporting and importing are dealing in such a way where scenario which include
taxation, extra prices and other prices total. This open context help to develop fair deal among to
different countries. This approaches are drive by British Millerain while expansion of business.
Difference between merchandise and service imports and exports
The merchandising business which is termed as merchandisers, this is most common
business. It is type of business which used to purchase finished product and resell them to
customer. There are various store and outlets which used to purchase product and goods in
wholesale from a distributor or to direct from manufacturer and made it available for customer.
The ability of store is to purchase in large quantities, in which they offer product in such a cost
reduced way to gain some margin of profit on them. British Millerain used this techniques while
they used to purchase raw of cotton from supplier. This help him to low cost and maintenance
charge is also low because of product or good are directly supplied from manufacturer in their
wholesale rate (Nazarczuk and Umiński 2018). After that they must to fix their other charges
which is applied on that product to sell in market. This strategic-thinking help the firm to get
maximum profit.
The service imports and exports are termed as organisation which provide imports and
exports service face day to day legal intervention of dealing with law and rules which help to
govern firm. The service of imports and exports which based on law and legal assets which is
fixed by regulating body for smooth functioning. Importation of good from other countries
involves the ability to recognise and follow number of domestic and international law that
regulated the way of product. The export and imports service are also login with logistic
management. So, as per this British Millerain must go through this while in expanding of
business and create recognition in international trade. In which selected firm must follow the
rules and law of authority countries when they exporting their product and service to native
countries. There are various difference are arises in merchandise and services of imports and
exports few are stated that merchandise help to purchase product direct from manufacturer.
Imports and exports services are directly associated with international business which have law

and legal boundaries and fix taxation and requirement of logistic is essential to move product and
services to various marketplace (Van Ha and et. al., 2017). As per this the pricing decision are
changes in change with countries, the expansion British Millerain in Sweden so, it is necessary to
completed legal formality before exporting and importing of goods.
BASIS MERCHANDISE IMPORTS AND
EXPORTS SERVICE IMPORTS AND EXPORTS
Meaning
It is a process of importing and
exporting of tangible things from one
border to another. For instance the
chosen company important or export its
product implies to merchandise imports
and export.
Whereas it is related with the intangible
things. Expertise are an example of such
service important and export.
Scope
This is related with import and export
of goods that could be distributed by an
organisation.
While it holds number of scope like
professional training, infrastructure
development and technologies
instalments.
Cost
The cost required in merchandise is
high as compare to services because tax
policies on raw material and
manufacturing products.
On the other hand it acquire low because
there is no function that is related with the
development of merchandise.
SECTION 3
Evaluate various methods in which SME can tap into international markets.
Each and every organisation besides size and nature have some sort of modes and with
that they can easily operates their business function effectively at international markets which aid
them to increase their market shares along with profitability. In regards to, some of the methods

which are highly used by management team of a company to tap into new and international
market as follows:
Franchising: This tends to an agreement which forms in between two parties. In this one
act as franchiser and other one party act as franchisee. Franchiser permits franchisee to use logo,
brand name or product and then sell that in order to gain profitability. Such types of methods
bound both the parties to carry out their function by considering all rules of contract in an
effective way. Additionally, in this companies needs to maintain the quality of services for
increasing the image of business. Through this method, British Millerain will effectively able to
open their store at Sweden with franchisor. It allows executive of marketing department of SME
to use brand and method of franchisor to distribute their offerings to users.
Licensing: Similarly to franchising, licensing is another method of tapping into new and
international market which includes a contract among all parties which wish to carry out
licensing as it permits licences in order to access patents and royalty values. This tends to an
agreement which does not bound the licence for maintaining any kind of quality of product or
services offered by them (Kaur, Kaur and Singh, 2017). With the assistance of this method,
entities of British Millerain will effectively able to tap into new international market as it allows
to use patents, design, intellectual along with copy rights of well-established company in global
market.
Joint ventures: According to this method, all business entity of different nation needs to
agree at all points who are performing together for a specific task which as result provides them
equal benefits to all companies. This is a method which act as a partnership between two entities
for a particular period of time in order to expand business function in effective manner. By
opting this method British Millerain will able to easily enter into Sweden market of similar
textile industry by agreeing the pool of resources of each ion order to accomplish common goal
of specific task.
Partnership with large business organisation: As the chosen company belong to clothing
firm and wants to expand their business in Sweden. In order to enter into Sweden market they
can do partnership with large organisation of similar industry who are well known in market.
Through this they will able to get knowledge about market also they can use partner strategies
too for selling their product.

Business planning in order to expand business into international market: With relevance to
this, selected company wish to expend its business in Sweden so that market will be Sweden. As
it is a small business and for collecting fund they can go with crowd funding method. For them
relating will be the best approach of transportation and distribution by opting all international or
legal laws of Sweden country. As the chosen firm wish to expand its business in Sweden market
so they can target those people who are interested in cotton waxed manufactured clothes. In
order to enter in new market they believes in partnership with so many other industry of leading
brand and driven the growth as a globally respected manufactured of fabric of outwear. In order
to collect funds they can go with crowd funding as it is easily and low risk associated sources of
funding. so it makes them beneficial for them.
Compare and contrast various modes of SME can tap into international markets, assess pros and
cons of each method.
Small and medium business units can tap into new and international markets with the
assistance modes various modes such as licensing, joint ventures as well as franchising. But
these methods also have some pros and cons and that are as follows:
Franchising Licensing Joint ventures
Cons
It involves risk in term of
threat of reducing the brand
image if franchises are not able
to maintain effectively. In such
approach, there is lack of
control over franchisees. As
well as require high cost and
payment along with strict rule
related with product.
In this individuals can faces
some problems that are linked
with the non-payments of
royalty and which ultimately
links with the loss of business
units. In this approach,
licensor lost its control over
intellectual property. For
generating revenue they realise
skill, ability and potential of
licensor.
In such types of methods, all
the involved parties needs to
share profit margin equally and
that might create conflicts
among all parties.
Additionally, if the SME opt
this method of tapping of
international market they faces
so many problems related with
the stability & rigidity
(Najmaei and et .al., 2017).
Pros

In such types of methods there
is not requirement of huge
investment of funds. So it is
considered as affordable
method and possess low risk.
This is easy approach in order
to get advice about it.
With the assistance of this
mode business entities can
capture huge market share as it
involves low risk.
In such types of methods
entities enjoy combination of
expertise along with effective
resources. In this risk will be
equally bear by all entities who
are involved.
CONCLUSION
As per the above discussion, the selected firm wants to expand their business.
Globalisation help organisation to create maximum profit and revenue time to time. As per this,
there are various factor and approach which is needed to introduce product and service in globe
include understanding of business environment on global levels, various type of threat which
create stearic hindrance in businesses, tariff and non-tariff barrier and various phenomena which
is described above for smooth functioning of organisation in international levels. This all
resemblance is discussed by taking small medium enterprise, which expand their business on
global level, so the above factor and matter is help to grow business effectively.

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