Airdri: Tapping into New and International Markets - Analysis

This report examines Airdri's strategic expansion into new and international markets, focusing on the global business environment, particularly within the context of the United Kingdom. It employs a PESTEL analysis to assess the political, economic, social, technological, environmental, and legal factors influencing Airdri's growth. The report highlights the opportunities and threats in a competitive global landscape, emphasizing the rationale for SMEs to expand, including sales expansion, cost savings, and market diversity. It also discusses the advantages of trading blocs and agreements, the impact of tariff and non-tariff barriers, and the influence of international trading blocs on Airdri's business. The report concludes by introducing Airdri and its founding, providing a comprehensive overview of the company's potential for international market penetration.

Tapping into New and
International Markets

Introduction
• In the globalised era, companies are continually looking forward to new ways of
expanding at international scale.
• Gaining access into new and international markets is important for organisations
to facilitate expansion.
• It results into increment in scale of operations.

Global Environment
• United Kingdom has been chosen as the country as there are a large number of
SMEs that are operating within the confines of this nation.
• UK pertains to Europe which is acknowledged to be a lucrative continent for
commercial purposes.
• It is recognized as the 6th biggest economy of the world which promotes the
growth and development of small and medium enterprises.
• This facilitates people to build high standard of living.

PESTEL analysis
Political- Government of US has less trade restriction and free trade policies
for small size company. It is beneficial for Airdri company to expand its
business activities in US market area.
Economical- US country has one of the highest economic rates that will be
helpful for Airdri company to conduct business task in cost effective
manner.

Cont.…
Social- US country has high income population which can be consider as
advantage for Airdri company. This will help in enhancing sales as well as
profits of business.
Technological- It is crucial for Airdri company to use more modified and
updated technology in its business process. US nation has one of the most
advance technology in that will lead to have positive impact on respective
business.

Cont.…
Environmental- Airdri company will be able effective supply its products
to potential customers as US has pleasant weather and environmental.
Legal- At US government has develop various guidelines and rules for small
size company which help or develop opportunity for Airdri to conduct their
business properly.

Global Business Environment
• Global business environment is referred to as the environment in a number of
sovereign nations, with elements exogenous to domestic market of organization
that place an influence over decisions related to leveraging resources and
capabilities.
• This includes a number of extrinsic factors or conditions which largely impact
upon the operations exhibited by business.

Threat and opportunity for Airdri
Opportunities:
• Competitive global environment help respective company to hire more
skills, experienced and knowledgeable candidates from other nations.
Threat:
• This develop unemployment in the core country at which Airdri is
operating.

Rationale for SMEs to expand their business
• These are discussed in a brief manner as follows:-
• Sales Expansion:
• Cost Savings:
• Market Diversity:

Sales Expansion
• The first and most primary explanation behind undertaking an association to
another nation is to open doors for increment in volume of sales.
• There are billions of shoppers in international markets and doubtlessly not every
person who needs organisational offerings has access to them.

Cost Savings
• The subsequent motivation to get drawn towards gaining entry into international
markets is the opportunity for doing savings of cost.
• In an event that the business is vigorously production based, it is likely that such
entity possesses the potential to exhibit cost savings by executing manufacturing
operations in nations whereby land and workforce are available at moderate
rates, for example, China.

Market Diversity
• Identical to the manner in which people intend to diversify their investment
portfolio, small and medium sized businesses gain access into new and
international markets with a view to expand their existing base of customers.

SMEs take advantage of international opportunities
• There are a number of opportunities as well as barriers associated with attainment
of global growth by SMEs.
• As these firms gain entry into international market, the cost of operations for
companies tend to rise by a significant proportion.
• This can be dealt with the help of the opportunity that is present for SMEs to take
advantage of a global strategy and thereby enhance the existing volume of sales.

Trading blocs and agreements and advantages
• Inflate economic development – Owing to trade blocs and agreements,
association would have the option to enhance the growth of economy
• Technology transfer – Trading alliances and agreements tend to give unique and
innovative techniques to business associations.
• Improvement of exchange – Reduction in terms of exchange limitations and
strategies would tend to prompt improvements in exchanging capacity of
association.

Advantage of Trading blocs
There are number of advantages of trading blocks, from which some are
given below which are gain by Airdri:-
• This will help respective company to access to huge market in order to
lead or increase internal economies of sales.
• Trading blocs will also help in spreading technology rapidly which
increase opportunity for Airdri.

Tariff barriers
• Transit duties – This can be referred to as the taxation which is charged by
governmental authorities on products transmitted from one location to another.
• Specific duty – This can be referred to as a barrier that affects the sale and
profitability of company.

Non tariff barriers
•Import policy
barriers – These

Explain tariff and non tariff Barriers
Tariff Barriers
Tariff barriers will include a customs levy or tariff of products while
entering into a nation and it is imposed by government. It can be seek to
reduced by conducting free trade agreements. There are several examples of
tariff barriers such as licensing requirement, data storage requirement, price
controls and many more.

Cont.…
Non Tariff Barriers
Non tariff barriers are regulation, rules and laws a nation enacts in
order to protect domestic sector against the foreign competition. This may
reduce market opportunities for the United State exports as well as it provide
unfair competitive advantages for the products and services from other
nations.

International trading blocs and its impact
• Trading blocs reduce unnecessary restriction on trade affairs by making uniform
policies for the nation.
• Owing to Brexit, UK has signed agreement with various countries in relation to
trade practices. CARIFORUM-UK economic partnership agreement is a trading
bloc that helps SMEs to trade in Barbados and Bahamas and execute the option
to trade freely.

Introduction of Airdri
The Airdri Group is introduced in year 1974 by two business partners i.e.
Peter Philipps and Peter Allen in Oxfordshire, United Kingdom. These two
partners are experienced as well as entrepreneurial engineers who want to
start their own business.

References
• Steiner, A. and Fan, S., 2019. Rural revitalization: Tapping into new
opportunities. IFPRI book chapters, pp.16-25.
• Fernhaber, S., Li, D. and Wu, A., 2019. Internationalization of emerging-
economy new ventures: The role of within-country differences. Business
Horizons.