Advantages of International Trading

This article discusses the advantages of international trading, focusing on the benefits of trading blocs and the opportunities it presents for small and entrepreneurial businesses in the competitive global environment. It covers topics such as the description of the global business environment, threats and opportunities faced by SMEs, and the advantages of international trading. The article also evaluates various tariff and non-tariff barriers in the international trading environment and explores the advantages and disadvantages of importing and exporting. Additionally, it discusses different methods SMEs can consider while tapping into the international market and compares and contrasts various ways in which SMEs can tap into the international market.

Tapping into New and
International Markets
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Description of global business environment in which small and entrepreneurial businesses
are operating...........................................................................................................................3
P2 Threats and opportunities faced by SME's in this competitive global environment.........5
TASK 2............................................................................................................................................6
P3 Describe the advantages of international trading..............................................................6
P4 Evaluate various tariff and non-tariff barriers which take place in the international trading
environment............................................................................................................................7
TASK 3............................................................................................................................................8
P5 Explain the advantages and disadvantages of importing and exporting...........................8
P6 Explain the difference between merchandise and service imports and exports................9
TASK 4..........................................................................................................................................10
P7 Evaluate various methods which SME's can consider whiling tapping into international
market...................................................................................................................................10
P8 Compare and contrast the various ways in which SME's can tap into international market.
..............................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
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INTRODUCTION
International marketing is a wide concept which is based on many principles and its
primary objective is to satisfy the needs and demand of customers across the globe. The
companies entering into international market have to consider various factors and have to take
actions according to the rules of government and the needs of customers (Liu and. et. al., 2019).
A market is referred to the place where two parties gather in order to proceed the process of
exchange of goods and services. In addition to this international market facilitates the exchange
of goods and services across the national boundaries and it is used to get tap into the new and the
international market along with the business aim that targets to achieve the higher market share,
profit and sales. This report is based on Warburton Building Services as it is based on the
modern offices and warehouses in order to offer suitable electrical and mechanical services
regarding the maintenance of developing overall industry. Moreover, company was established
in 1979 in UK to make sure the effective standards for the suitable service by its qualified
engineers. The company is providing effective services such as plumbing, heating and electrical
engineers. The topics covered in the report are description of global business environment,
threats and opportunities for the firms that is increasing in the global environment, advantages of
the trading blocs for the company, analysis of the importing and exporting process. Moreover, it
includes the way for the SMEs for tapping into the international market.
TASK 1
P1 Description of global business environment in which small and entrepreneurial businesses are
operating.
Global business environment is defined as the process in which organisation considers
the environment of various countries in which they are operating and identifies various factors
which are different as it has direct impact on the decision making process. The main focus of the
business organisation is on effective use of resources by considering the internal and external
environment (Steiner and Fan, 2019). In the context of the small business organisations they are
contributing effectively in the global business by generating employment opportunities and by
increasing their profit and revenue margins. The SMEs business has performed its operations at
the small scale along with the less coverage area of the market. The small business of the UK has
comprises the number of employees that is less than 50 and generated the annual revenue of less
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the 10 pounds. The entrepreneurial ventures and small business has provided the huge support
and contribution to the UK government, as there are over 98% of the business which are covered
by the small business. SMEs has done the maximum exports all the around the Europe as after
the impact of the Brexit transportation cost has been reduces so now they have to pay less and
gain more profits along with the growth in the larger market area.
SMEs are those organisations who maintain prominent revenues and assets as they tends
to offer suitable kind of category which relies on the number of characteristics. SMEs are
important for the economy considering the development and growth that offer prominent
employment opportunities and open new market area for them. They also create an effective
group for the talented and skilled manpower to support future business expansion in market.
(Source: Contribution of SME, 2019)
In context of the Warburton Building Services the PESTEL analysis will help in
evaluating the situation of global business environment. Political factor- This factor plays important role in the carrying the business operations
in the effective and efficient manner. In context of Warburton Building Services they are
operating in UK and is able to established its brand name in UK market. The company is
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Illustration
1: Contribution of SME, 2019

focusing on expanding its business where it will require more employees to carry its
operations effectively. Hence it will help government by generating employment
opportunities. Furthermore, in order to deal with the prominent situation of the political
parties in regard of government intervenes in overall economy. For this, the political
issues which can impact Warburton Building Services include taxation policy of UK,
suitable level of bureaucracy, foreign trade policy, small business funding and many
more that leads to impact the expansion of an organisation (Ram and Liu, 2019).
Currently, company opt local power structure as they tends to deal at the domestic level
and to expand at the international level it leads to negatively impact the performance of
Warburton Building Services. Economical factor- This factor covers wage rate, employment rate, inflation rate, etc.
which has direct impact on the working of Warburton Building Services. In UK the wage
rates and the inflation rate are quite low hence Warburton Building Services has greater
opportunity to expand its business in international marketplace. These factors are
concerned with the effective performance of the economy that leads to impact the
operations of SMEs and decision making of company (Minkman and van Buuren, 2019).
By undertaking the pandemic, it leads to bring economical crisis in whole world that
leads to negatively impact the operations of Warburton Building Services. To overcome
from this factor, respective company conduct market research in order to mitigate risk
factor. Social factor- These factors are influence by the latest trend in the marketplace and has
direct impact on the performance of the company. In context of Warburton Building
Services, they are able to serve UK market effective as they have proper knowledge
about the market and the latest trends. For business expansion they need to study the
market and the latest trends of the country in which they want to enter (Vézina, Selma
and Malo, 2019). In regard of this, there are several socio-economic factors that leads to
impact the overall performance of Warburton Building Services by effectively examining
the ethical condition of UK, cultural and other demographic factors that leads to impact
the overall demand for the small products and services and its suitable operations. By
considering the cultural factors of UK Warburton Building Services need to undertake
strategic formulation and also tends to respond over operations according to the success
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strategy. For this, Warburton Building Services improving support for the renewable
energy can impact the operational efficiency as it is a threat for Warburton Building
Services. Technological factors- In context of Warburton Building Services they are dealing in
electrical engineering and are using latest technology with the motive to deliver effective
services to its potential customers. They are providing quality products based on latest
technology to attract more number of new customers. These factors leads to impact the
functioning of Warburton Building Services and their products and services within the
market. It is useful for the owner of small business in order to evaluate the prominent
status of current business environment that can become opportunity for them (Fforde,
2019). In relation with this, enhancing the adoption of digital technology can become
opportunity for respective company and make things easier regarding the payment and
digitalisation that can positively impact the operational efficiency of Warburton Building
Services. Legal factors- In context of Warburton Building Services they are providing services in
UK market where government is having various laws, rules and regulation which are
effectively followed by the business organisation. Hence in the process of business
expansion it will be able to function according to the rules and regulation of the country
in which they are planning to enter (Dwyer and Vongvisouk, 2019). For this, it
undertakes the suitable rules and regulations that can impact the overall performance of
small businesses regarding the operations and profitability of Warburton Building
Services. For this,Warburton Building Services must have proper reach of its intellectual
property protection laws in terms of making online presence that can become opportunity
for company for their operational efficiency.
 Environmental factors- In context of Warburton Building Services it is focusing on
sustainable development, hence carrying its activities and task by considering
environment. They are using less plastic with the motive to control the level of pollution.
This factor tends to undertake the overall environmental factors that leads to impact the
functioning of Warburton Building Services within the suitable sector including the
tourism, farming, climate and many more. Here, respective company need to take
initiatives to preserve oil resources in order to grow global energy consumption that can
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further become opportunity for Warburton Building Services and put positive impact on
the operational efficiency of company.
From the above PESTEL analysis it has been identified that Warburton Building Services
is doing quite good in UK market and is capable to expand its business in international market.
Hence, it is being analysed that the framework is helpful in order to identify risk factors for the
small businesses and also tends to analyse ways to overcome these factors in order to have
smooth expansion in market.
P2 Threats and opportunities faced by SME's in this competitive global environment.
In context of SME their main focus should be on expanding its business in those areas of
international market which has less competition and is growing fast (Steiner and Fan, 2019). In
context of Warburton Building Services they are dealing in services from quite long time and has
the ability to expand its business in international marketplace.
The threats which are faced by Warburton Building Services are as follow-
 Experience level- The major threat which Warburton Building Services might face in
international market is due to no prior experience working in the new market. Hence they
don't know their trends and how to handle the problems or issues taking place in the new
business environment (Wang, Helms and Li, 2020). They have to spend more time in
understanding the market and the nature of customers before entering into new business
environment.
 High competition- There are many business organisations which are operating in
international marketplace and has able to establish its brand name in marketplace (Majid,
2019). In context of Warburton Building Services they are having many competitors in
market, hence it is essential for them to formulate effective marketing strategies in order
to obtain desire results.
 Political factor- Every country has set of different rules and regulation and for
Warburton Building Services it will be difficult to function as they have to make changes
in its existing system according to the rules and polices of the different countries in which
they want to established its business.
In the international market, there are some opportunities which are present and
Warburton Building Services must focus on them that can increase its revenue and profits.
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 New and innovative product- In context of Warburton Building Services they have to
focus on producing new and innovative products in order to attract more number of
customers (Milburn and Guertin-Martin, 2020). As people are preferring innovative and
unique products hence it will help the organisation to effectively established its business
in new marketplace. Rebates and subsidiary provided by government- Warburton building services must
focus on expanding its business in those countries in which rebates and relief is provided
from government side. As this will help the company in expanding and growing its
business in other parts that is in new marketplace.
 Keeping up in market: It depict that company tends to make suitable update regarding
the identification of changes that occur in market and also leads to analyse them
effectively (Jancenelle, Javalgi and Cavusgil, 2018). It also become opportunity for the
small businesses which is helpful to mitigate risk to take decisions by considering the
businesses and advanced information.
TASK 2
P3 Describe the advantages of international trading.
Trading bloc refer as the trade agreement between different countries government where
support is been provided by government that is trade barriers are reduced so that interstate and
inter country trades are carried in effective manner. Trading bloc is the type of intergovernmental
agreement which is the part of regional intergovernmental organisation in which regional barriers
to the international trade tends to get eliminated among the suitable states (Jancenelle, Javalgi
and Cavusgil, 2018). For this, various types of trading blocs are discussed as: Free trade area: In this, the members of trade union tends to eliminate the trade barriers
including tariffs among themselves. They also tend to maintain their own tariffs with the
non-members. In this, all the members are quite free for the import and export of
products and services and also maintain independent policy at the time of dealing with
other organisations (Wang, Helms and Li, 2020). Customs Union: In this, the other member of countries does not tend to eliminate the
internal trade barriers and also leads to opt common policies in terms of dealing with the
non-member countries. Here, the countries who consider custom unions tends to get
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agree in terms of eliminating restrictions for the movement of suitable factors including
people and finance. Common market: Here, the members leads to reduce internal trade barriers in order to
opt common external trade barriers and also permit for the free movement of resources.
For instance, labour of various countries by considering their common market (Ram and
Liu, 2019). Preferential trade area: In these areas they tend to have the lowest level of commitment
regarding the elimination of trade barriers. For this, the members lower down the trade
barriers and does not eliminate the barriers among them (Liu and. et. al., 2019). It leads to
undertake the suitable agreement that does not address that how a single member can deal
with those people who are not the member of trade union.
Advantages of trade blocs and agreements: Catch-up effects: Countries who tends to join the suitable trading bloc is beneficial from
the viewpoint of inward investment and leads to enhance trade opportunities (Tuan,
Thanh and Le Tuan, 2019). For this, Eastern European countries tends to make
considerable progress to catch up with the average income level in western Europe. Foreign Direct investment: Here, the investors of Warburton Building Services tends to
keep adding capital for the expansion of local industries and develop domestic
businesses. Higher Competition: The prominent elimination of tariffs leads to create suitable choice
for their customers as domestic organisations have great incentive in terms of cutting cost
which is helpful for SMEs to remain competitive in market (Minkman and van Buuren,
2019).
Disadvantages of trade blocs and agreements: Job outsourcing: Eliminating tariffs tends to allow Warburton Building Services for the
expansion to the other organisation. Moreover, without tariffs, imports from other
countries with low cost leads to eliminate living cost as well (Ram and Liu, 2019). It also
leads to make things difficult to compete with other industries by reducing workforce. Natural resources exploitation: Emerging market does not have various environmental
protection as free trade tends to develop depletion of minerals and other natural
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resources. By considering the background and functioning of respective company, they
tends to exploit natural resources that can become barrier for company.
 Reduces tax revenues: Most of the small organisations tends to face struggle in terms of
replacing revenues which are lost from the import tariffs and its fees (Xie and Li, 2018).
As the member of country is no longer subject for the import taxes because they need to
undertake new method to compensate to eliminate tax revenues.
P4 Evaluate various tariff and non-tariff barriers which take place in the international trading
environment.
There are various set of tariff and non-tariff barriers which take place in the international
trading environment with the motive to look after the goods which are being exported and
imported. Many companies import goods at possible low price and on the other hand some
countries are charging different type of taxes with the motive to provide benefit to the exporting
company (Vézina, Selma and Malo, 2019). Moreover non-tariff barriers are those by which
government tries to restrict the trades (Fforde, 2019). These are the legislative tax which are
imposed by the government on trades. Many countries are using this on frequent based with the
motive to restrict the trade for effective implementation of political and economic strategies. In
context of Warburton Building Services they have to focus on tariff barriers as it has direct
impact on the performance of the organisation.
Tariff barriers: These barriers lead to undertake certain imports that leads to increase the
price of imported commodities in order to make import less competitive of the small
organisations. As these are the government induced restrictions over the international trade
(Jancenelle, Javalgi and Cavusgil, 2018). In relation with Warburton Building Services, few
chemical which is imported by company tends to face tariff barriers.
Non-tariff barriers: These barriers undertake suitable rules and regulations that leads to
make trade more difficult (Dwyer and Vongvisouk, 2019). As it is the better way to restrict trade
by using trade barriers in the suitable form of tariff. As it includes various barriers like: Quotas: Most of the countries tends to issue quotas in regard of importing and exporting
the products. For this, countries tend to get agree over the specified limit for suitable
commodities which is being allowed for importation of country (Liu and. et. al., 2019).
Furthermore, Warburton Building Services need quotas in terms of having international
presence by developing trading licensing agreements.
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 Voluntary export restraints: It is used by exporting countries as it leads to set limit over
the number of goods and services as the specific country tends to export for the particular
country as these are based on the political alliances and availability. Subsidies: It is used by the domestic manufacturer or probably by small organisations in
order to eliminate the domestic cost and limit their imports (Kuppuswamy and Bayus,
2018). In relation with Warburton Building Services, currently they are dealing at
domestic level and for them subsides is suitable factor that leads to reduce additional cost
by limiting the imports of company.
 Embargoes: These are used when the countries tend to ban the trade for the specified
products and services with the another country (Wang, Helms and Li, 2020). For this,
government tends to take suitable measure in order to support for the particular political
or economic goals. In terms of Warburton Building Services, the harmful products which
are banned by the government can relies under this barrier.
Export and import duty- This is a type of tariff barrier in which taxes are been imposed
by the government on the export and import of products. The main earning from export are from
agricultural products and minerals. Whereas import duties also play important role as it is
implemented by countries with the motive to safe guard its trade activities (Vézina, Selma and
Malo, 2019). Many countries charge high on import duties such as Nepal, India, etc. In context
of Warburton Building Services, it can consider these countries and have to understand there
working nature.
License- This is one of the most common non-tariff barriers through which the main
focus of the government is to regulate the imported goods. By issuing license government give
the permission to carry the import and export activities on specific goods for a certain period of
time (Fforde, 2019). In context of Warburton Building Services they are not involved in import
and export services, hence they should take license for working effectively in the international
marketplace.
TASK 3
P5 Explain the advantages and disadvantages of importing and exporting.
Import and export activities play important role in the business environment as its
contribution is high in increasing the profit and sale margin of the business organisation.
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Importing and exporting depict the foreign trade as it being carried out for suitable products and
services that undertake exports, imports and balance over the foreign trade. For this, exporting
depict the selling of products and services from the domestic country to the foreign nation
(Steiner and Fan, 2019). Meanwhile, importing depict the purchase of foreign commodities in
order to bring them to the home country (Ram and Liu, 2019).
Advantages of export
 By exporting goods Warburton Building Services would able to expand its business and
it will help in overcoming the dependency on UK market. It will help in increasing the
reach in the market and also help in increasing the brand image of the business in the
marketplace (Liow, Liao and Huang, 2018).
 By increasing the export activities, the company need to increase its production and able
to get benefit from economies of scale (Kuppuswamy and Bayus, 2018). In context of
Warburton Building Services they are dealing in plumbing, heating and electrical services
where they are having advantage of low per unit cost as it is helping in expanding the
business of company.
Disadvantages of export
 Exactly when associations import their product and thing it will come as a triumph for the
close by creator similarly with the imported items the idea of the thing augmentation and
simply couple of people will buy the things from neighbourhood producer (Vézina,
Selma and Malo, 2019). So Warburton Building Service moreover need to think about
these close by creators.
 At the point when organization imports their crude material from outside it will
straightforwardly or in a roundabout way will hurt the cash and the economy of the
organization. To defeat this public authority will eventually build the duty so the import
can be confined and the money won't need to endure. Warburton Building Service should
look in this issue prior to trading so they don't hurt the cash and the economy of the
nation
 Secure the arrangement – For making sure about the arrangement the Warburton Building
Service need to do different examination like which organization do they pick, they need
to pick a grounded brand so they will get a generally settled piece of the overall industry
and they likewise need to choose the organization who is having high value (Minkman
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and van Buuren, 2019). After the determination of the necessary organization Warburton
Building Service needs to consider different methods of tying down the arrangement
some to most regular ways are by joint endeavours and by getting the brand. Through this
Warburton Building Service will offer the organization high venture as Warburton
Building Service is a generally settled brand and while growing worldwide they are eager
to do high speculation and through this they will likewise offer worldwide
acknowledgement to the next brand this will be useful for both the brands. At the point
when a worldwide brand is putting resources into a neighbourhood brand it will expand
the piece of the overall industry of the nearby brand, hence helping in expanding the
deals.
International purchase order is the kind of document that leads to replace the global level
sale contract within transactions of the small amount of money and the practice of sector and
contract which is not used for the international sales. Moreover, it also undertakes basic details
regarding the exportation as it include two parties, sender who is the exporter and sometimes an
importer as well (Minkman and van Buuren, 2019). The other party is recipient which is the
importer and also consider bank to made payment by the letter of credit. In terms of Warburton
Building Services, they make this document at the time of having small transaction as it is for the
domestic purpose by indulging two parties which is sender and recipient.
International commercial invoice is the most essential document for the international
trade as it is a legal document which is being issued by the seller to the buyer for the
international transaction that leads to serve as the contract and consider as a proof of sale among
the seller and buyer (Vézina, Selma and Malo, 2019). It does not depict the ownership of
products and also does not carry the title of goods being sold. It requires custom clearance
purposes in order to calculate and assess the taxes and duties. In terms of Warburton Building
Services, it is important for them at the time of dealing at the global level and also consider as
the proof of deal as it is generated by the seller.
Packaging list is a document which is being used in an international trade that tends to
offer the exporter the international freight and suitable information regarding the shipment
(Jancenelle, Javalgi and Cavusgil, 2018). It leads to include details regarding the shipment which
is being packed and also mark numbers which are noted on the external side of boxes. It also
leads to depict the packing list which include unpacking note, bill of parcel, packing slip,
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delivery list, customer receipt and so on. In terms of Warburton Building Services, they generate
this document while exporting goods through ships by marking their number at the outside of
box.
Certificate of origin is the document which is being declared in which the goods are
being manufactured. It depicts the certificate of origin the undertake the information regarding
the commodities and the suitable destination (Fforde, 2019). It is also essential form of
agreement as it can help in order to determine the certain products which are being eligible for
import and goods which is the subject to duties. In terms of Warburton Building Services, it is
quite common document as it leads to include details about the product and specific destination.
Irrevocable letter of credit is the official correspondence from the bank that tends to
represent the guarantees of payment for the products and services which are being purchased by
the individual who is the applicant and also request for the letter of credit which is being issued
by bank (Dwyer and Vongvisouk, 2019). In terms of Warburton Building Services, they get this
document from the side of bank as the guarantee of their payment.
P6 Explain the difference between merchandise and service imports and exports.
Merchandise: It is useful for both import and export considering the tangible benefits
which is offered and needed to acquire for various countries (Steiner and Fan, 2019). In terms of
Warburton Building Service, they tend to offer suitable range of commodities considering the
electrical offerings and suitable services.
Service Imports and exports: The suitable service is related with trading and overall
procedure for the intangible benefits. As the respective company tends to offer paying option to
the customers for various countries undertaking importing proceeding in an accurate manner
(Wang, Helms and Li, 2020).
Basis Merchandise Service import and export
Scope The merchandiser tends to have small
range of scope including the tangible
products which are not dealt effectively
considering the export and import
(Wang, Helms and Li, 2020).
It is used for the consideration
for broad context which is
being required for the business
and also offer professional
training and development for
the overall development as in
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return on investment.
Cost This factor is used at the time of
performing manufacturing and trading
by which the basic needs of raw
materials are considered for future
development.
This factor is useful in terms of
managing and operating the
services for the elimination of
operating cost and also tends to
develop suitable products and
services (Majid, 2019).
TASK 4
P7 Evaluate various methods which SME's can consider whiling tapping into international
market.
In the present report, focus is on small enterprise which is Warburton Building service.
They are planning to tap the international market visualising the huge profit potential in this
space (Tuan, Thanh and Le Tuan, 2019). There are different considerations that company should
take care of at the time entering into international markets. The company is planning to enter in
the US marketplace with the motive to expand its business. Some of important considerations are
explained below:
 Business planning: In order to visualise growth in future, most important part that
required is effective strategies and planning. This phase will improve the effectiveness of
operations. As there is a proper planning, it will result in appropriate allocation of
resources. In addition to this, effective strategies related with marketing will help the
company to communicate better with their targeted customers, hence, this will further
improve the loyal customer base and customer retention rate (Xie and Li, 2018).
Effective strategies will also assist the management of the company to perform the
market research with better efficacy and this will ultimately result in increased
profitability and easy entrance into global market. The company must focus on the
following factors before entering new marketplace that is they should focus on making its
potential customers aware of its products and services hence, aim should be on generating
demand before vanquishing competitors. Furthermore should decide enter new market at
right time that is focus on time market entry and should not move immediately to exploit
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opportunities that is time should be invested in studying all facts and figures. In the
process of tapping into new market at the initial level they should focus on selling its
products and services through direct channels for better understanding of needs of
customers (Achieving growth by setting new strategies. 2011). Later once they are able to
capture the market should focus on leveraging its products and services through powerful
sales channels. In order to enter in the US marketplace the company need to evaluate its
internal resources so that it would able to know that if they have to make changes or add
new in the existing range of resources with the motive to successfully enter new place.
The company have to conduct the research on the needs and requirements of the US
market so that it can make changes in order to satisfy their requirements. The major
drawback faced by the organisation in business planning which has negative impact on
the performance of business is not involving right candidate to carry the business
operations. Moreover lack of accountability and poor implementation of effective
strategies lead to failure of operation and make organisation financially weak.
 Distribution and transportation challenges: In context of Warburton Building Service,
they have to focus on maintaining and regulating the distribution and transportation
challenges. Here are few methods in which with the help of location intelligence the
company would be able to manage its mitigating costs. In order to deliver its products
and services in US market the company will use diverse topography, complex road
regulation, etc. The fleet manager within the company can manage it effectively with the
help of in vehicle cameras and location tracking techniques (Logistics optimisation.
2020). It will help in management of real time traffic and tracking of driver behaviour. As
they are new in market so their main focus is on providing first mile delivery to its
customers. With this they would able to secure customer loyalty and should focus on
adopting efficient business models for better management. While going international, the
most common way of entrance is taking advantage of technology. Today's time is also
known as digital era and this time has huge potential for company to reap benefits from.
Majority of global population is connected with internet and technology and it has
converted the globe into small village. Chosen company has already created a website
and this will give it the chance to reach a wide population (Minkman and van Buuren,
2019). In addition to this, technology also provide other large number of benefits as well,
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such as, low cost of advertising, improved supply chain, better connectivity with
suppliers, improved management of employees, etc (Uner, Cetin and Cavusgil, 2020).
The major drawback of this method is that sometime due to traffic and bad weather
condition long distance overland transport of goods take more time which may have
negative impact on the brand value of the company. Moreover, the changes of damage
are high in transporting products form one place to another which lead to increase in
expenses of business. Hence, business need to consider these factors whiling planning to
enter new marketplace.
Ansoff Matrix
It is an effective tool which is adopted by organisations with the motive to outline its
strategies for growth and development. Warburton building might consider this tool in order to
grow and expand its business in international marketplace (Ansoff matrix. 2015).
 Market Penetration: With the use of this tool the focus of the company is to increase its
sales with its current products in the existing marketplace (Oviatt, Maksimov and
McDougall, 2021).
 Product development- With the help of this tool the focus of the company is to introduce
new products and services in the current or existing market they are serving.
 Market development- With the use of this strategy the focus of the company is to enter
new marketplace with its existing range of products and services.
 Diversification- With the help of this strat5egy the focus of the company is to enter new
marketplace with new products and services with the motive to establish its brand name.
From the above evaluation, it will be beneficial for Warburton building to focus on
market development strategy as they want to expand their business into international marketplace
with its existing products (Tajeddini and Ratten, 2020). The company is planning to enter US
marketplace and from research it has been identified that the trends and preferences of people in
US market are almost similar to that of UK hence, they would able to successfully established its
business their.
There are many different method which Warburton building can consider in the process
of expanding its business in new marketplace.
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 Licensing agreement- Licensing is the process in which legal business relationship taken
place between licensor and licensee (Milburn and Guertin-Martin, 2020). It is limited
where licensor gives rights to the licensee to use certain registered trademarks of a brand.
In context of Warburton building, they can provide license to other specific authorises
established in other countries with the motive to enter into international marketplace.
 Franchising agreement- It is an agreement which take place between franchisor and
franchisee where franchisor sells right to their brand which includes products and
services, intellectual property, etc. It is basically a type of strategy in which all the rights
are given to franchisee that is duplication of the original business. In context of
Warburton building, they might adopt this method in order to expand its business in
international marketplace (Franchising vs. Licensing. 2020).
From the above evaluation it will be beneficial for Warburton Building service to focus
on, forming licensing agreement with the established brand in US marketplace belonging to same
industry. With the use of this expansion method they would be able to launch new products and
services in the other countries where they are operating in near future. This method has drawback
that is it may led to poor quality management which damage the brand reputation in marketplace.
In order to deal with this problem the company can invest more funds in order to focus on the
quality and new innovation in the products offered by the company.
P8 Compare and contrast the various ways in which SME's can tap into international market.
As talked about above there are not many courses through which Warburton Building
Service can take advantage of global market (Milburn and Guertin-Martin, 2020). These
strategies are mechanical progression, legitimate arranging and technique development, pilot
promoting, better group the board and item improvement. Every one of these techniques are bury
associated with one another. All the technique is significant for Warburton Building Service to
fill in the global market.
Pros and cons of licensing and franchising
Licensing
It helps to achieve market share growth and expand the business in foreign markets. New
ideas and business strategies can be made. It reduces risk of production and distribution of both
licensee and licensor.
Disadvantages of licensing are as:
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Licensing spoils the brand image of product resulting out of poor product management.
Loss of control on the manufactured products by the licensee.
Franchising
It helps to maintain a strong customer positing and gain competitive advantage.
Franchising help to reduce business risk and involve investment in business globally.
Disadvantages:
Huge investment is involved especially while investing in huge businesses, if the
company does not recovers this investment then it can result in losses to the company. It reduces
the creativity and innovation for generating new plans and strategies in business
Recommendation
From the above explain it would be appropriate for Warburton Building Service to adopt
the licensing method in order to expand its business in new market. Hence, with the use of
Licensing method the company would able to grow its market share and would able to introduce
new products in its existing range of products and services to attract more customers.
CONCLUSION
From the above report it is presumed that SME like Warburton Building Service need to
confront such countless issues when they are attempting to extend their market around the world.
They need to confront different issues like the issues of the exchange limitation which are there
in different nations. In spite of the fact that there is exchange limitation however there likewise
are a few advantages that are given to the SME like the advantage of expense discount and the
advantage of auxiliaries which the public authority provide for the SME, this is to build their
commitment in that area. Exchange obstructions are additionally put on by the public authority
so they can restrict the no. of product and the administration that are to be imported and traded.
Through this they can help in expanding the estimation of the cash and this will likewise help in
boosting the economy. It is likewise finish up about the different strategy through which
Warburton Building Service can grow their business internationally all these techniques are bury
identified with one another and every one of them are having their own advantages and
disadvantages.
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