Advantages of International Trading

Tapping into New and
International Markets
1

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
2

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
3

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
4
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
5

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
6