Airdri's Expansion: Analyzing Global Markets and Strategies

This report provides an analysis of Airdri's strategy for tapping into new and international markets, focusing on the global business environment in which small and entrepreneurial businesses operate. It examines the rationale for SMEs to expand internationally, analyzing the opportunities and obstacles for global expansion. The report evaluates the range of trading blocs and agreements, highlighting the advantages of specific trading agreements for the region and country. It also critically assesses how these stimulate and generate global growth. Furthermore, the report includes a brochure detailing the advantages and disadvantages of exporting processes for merchandising and services, providing a comprehensive overview of the considerations and strategies involved in international market expansion.

Tapping into New and International
Markets

Contents
PART A........................................................................................................................................................................................................................4
INTRODUCTION........................................................................................................................................................................................................4
The global business environment in which small and entrepreneurial businesses operate......................................................................................4
The rationale for SMEs to expand their business internationally............................................................................................................................5
Analyse the chances and obstacles for global expansion critically..........................................................................................................................6
Evaluate the range of trading blocs and agreements and examine the advantages of specific trading agreements that would have a direct
significance for region and country..........................................................................................................................................................................7
Critically evaluate how these stimulate and generate global growth.......................................................................................................................8
PART 2.........................................................................................................................................................................................................................9
Brochure...................................................................................................................................................................................................................9
CONCLUSION..........................................................................................................................................................................................................14
References..................................................................................................................................................................................................................15

PART A
INTRODUCTION
In today's global business world, companies are continuously looking for innovative methods to improve their international operations.
Furthermore, they must tap into new and worldwide markets in order to successfully and efficiently capture multiple chances and build their
businesses (Sin, and Kim, 2018). The company chosen for the project is Airdri, which is known for its hand dryers and it has wide range of
dryers which is locate in England, UK. The report outlines the impact of current global business environment, main international drivers,
opportunities and threats related to international business environment. Also, the report demonstrates the pros and disadvantages of exporting
and importing, as well as the differences between service and merchandise imports and exports. Furthermore, the report will present the various
ways and methods to obtain success within several international countries (Wong and et.al., 2018).
The global business environment in which small and entrepreneurial businesses operate
Pestle Analysis-
 Political factors: The United Kingdom is one of Europe's most powerful countries, with a large number of SME's operating in the nation.
Small and medium-sized firms account for major portions of all businesses in the UK. The government of the nation's regulations and
rules have an influence on the profitability and operation of enterprises operating in the country. Although the United Kingdom has a
high level of political stability, certain issues, such as Brexit, generate uncertainty for businesses (Levy and Huli, 2019).
 Economic factors: In terms of nominal GDP, the United Kingdom is the one of leading and largest economy globally. Though the UK's
general economic conditions are favourable, there have been certain instabilities, such as a pandemic and a lockdown, which have had a
negative influence on the country's economy. This has a harmful impact on enterprises since they are unable to function and earn income
from their activities and services.

 Social factors: There are a number of elements relating to society and the social environment that have an influence on business (Meikle,
2019). The United Kingdom is a large market with a diverse audience, allowing businesses to reach a wide range of people. A larger
population in a country means greater opportunities for a corporation to develop its operations and boost its profits (Branan, 2022).
 Technical factors: The United Kingdom is one of those markets where innovation is a key component since the country is exposed to
cutting-edge technology, and enterprises must adapt to these changes or risk failing to survive in the environment for an extended length
of time. SMEs in the UK and Europe are now adjusting to new technology since it helps them acquire a competitive advantage in the
market and improves the efficiency with which they operate.
 Legal factors: The United Kingdom has a well-defined legal framework for business and rules that help firms understand how they
should conduct their activities in the country. The government creates a legal environment to guarantee that no unethical commercial
practises are implemented. Legalities is one of those areas that has a direct influence on operations, and businesses who do not obey the
legal rules in their industry are more likely to suffer legal consequences (Nie. 2020).
 Environmental factors: These are the factors that are connected to the environment in which the company operates, such as nature and
other similar aspects. The United Kingdom has a number of environmental challenges, which businesses operating in the nation must
take into account since they have a direct influence on their operations. Environmentally friendly practises must be used by enterprises
developing in the United Kingdom, as this will aid in the long-term sustainability of both the environment and the business. Businesses
that employ environmentally friendly methods improve their market image in front of its customers.
The rationale for SMEs to expand their business internationally.
SMEs in the United Kingdom want to expand their businesses globally in order to optimise their sales through target market pricing. Another
important factor is cost reduction through the use of low-priced labour from Asian and African nations. There are a variety of reasons why
businesses extend their operations into other nations, a few of which are listed below-

 Greater profitability- Expansion on a worldwide scale boosts profitability by exposing the company to a more diverse and big audience
(Gosovic, 2019). Many nations, particularly in the United Kingdom and Europe, are expanding their businesses in these regions in order
to increase income.
 Expanding level of expertise- As a company expands its operations internationally, it is able to sell its products and services on a global
scale. The expansion in the United Kingdom and Europe is beneficial because firms may offer their products in a vast market with a large
population and a strong market base. The company can show their area of knowledge on a worldwide scale, which will aid in the
company's image enhancement (D'yakonova, Nikitina and Gurvits, 2018).
 More opportunities- The global market is full with vision and businesses who extend their activities internationally are exposed to an
environment with a variety of characteristics, all of which may be used if the firm is able to adapt to the trend. In the case of United
Kingdom and Europe, if a company can analyse product demand at a specific time, it may make a lot of money from it.
 Exposure to innovative technology- The global business environment is open to latest technology, which benefits businesses by
allowing them to adopt innovation into their manufacturing and distribution processes. Innovative technology also aids in the creation of
a strong customer base and also gaining a competitive advantage in the market.
Analyse the chances and obstacles for global expansion critically.
There are various opportunities in the global environment which allows the business to grow, some of them are discussed below-
 New customer base- The company may identify their target market and then target audiences from other nations, which will aid the
company in achieving global reputation. They are able to market their products and services to individuals in the country who are
searching for an alternative (O'Rourke, 2019).
 Importing and exporting- There are various opportunities when working in a global environment, one of which is the exporting and
importing of products and services. Exporting goods to numerous European nations assists the company in expanding its consumer base
and promoting the company's activities on a worldwide scale.

 Strategic alliance and joint venture-Expansion on a global scale may help a firm make money, but it can also cost a lot of money.
Strategic alliances and partnerships can help a company make money. Expanding the firm as a joint venture allows the company to divide
the amount of capital necessary for the growth process. The business may collaborate and decide on the amount of partnership, and it can
easily operate in a new nation with little restrictions.
There are various challenges which are faced by the organisation are explained below-
 The major problem that businesses face while growing is the level of competition they must cope with in a global market. Because there
are so many organisations and so much competition in the global market, businesses must develop effective strategies in order to achieve
a competitive advantage. SME's considering growing their operations in the UK and other European nations face fierce competition, and
those considering doing so must develop strategies that are specific to the market's needs.
 Another key barrier that the firm must overcome is the high cost of growth, which forces the company to invest a significant amount of
cash in the expansion process because it requires many asset purchases. Furthermore, the company must overcome this challenge by
thinking ahead to lower the cost of expansion in order to boost profitability.
 Another issue that businesses face while growing is the rules, trade, and tariffs that each nation has. These are the most significant
obstacles, and many businesses are unable to extend their operations as a result of high import or start-up limitations.
Evaluate the range of trading blocs and agreements and examine the advantages of specific trading agreements that would have a direct
significance for region and country.
Trading blocs are defined as type of government relationship in which participant governments are free to trade across several areas. Trading
contracts and blocs are agreements between nations that allow whole participants in contracts to freely trade among themselves for economic
progress. This also made it possible for a country's corporation to trade with other countries without having to pay taxes. The United Kingdom
was an EU member, allowing them to trade with any European country. However, following the adoption of BREXIT, it has signed lots of new
trade agreements that will allow them to interact with the rest of the globe. The CARIFORUM-UK Economic Partnership Agreement is one of
the most important trading blocs. SMEs in the United Kingdom will be allowed to trade freely in nations such as Barbados and the Bahamas as

an outcome of this. The SACUM-UK economic partnership agreement is another trade deal with the UK (EPA). As a result, businesses in the
United Kingdom will be able to trade with countries in Southern Africa. This also believes that Southern African regions are highly rich in
natural materials, and that by utilising appropriate contracts, a specific country may import these items without paying any taxes, resulting in
cost savings.
Range of trade blocs
 Free trade areas- These are established when members of a group of nations agree to eliminate tariffs and quotas among themselves. In
the case of non-members, they keep their own tariffs and quotas.
 Custom union- There are lower tariffs and quotas in the Custom Union, but they have their own trade obstacles with outsiders.
 Common market-The custom union in which members agree to remove limitations on the movement of elements of production such as
people and money is known as a common market.
 Economic Union-A shared market in which economic policies such as taxation, interest rates, and currency are agreed upon. For
example, the EU (European Union) is Europe's most significant trading bloc. Iceland, Liechtenstein, Switzerland, and Norway are the
four members of the European Free Trade Association (EFTA).
Critically evaluate how these stimulate and generate global growth.
It is critically assessed that trade blocs and trade agreements provide new prospects for exporters in Europe and the United Kingdom. This
also helps to boost global growth by allowing access to lower-cost goods from other nations. They boost global growth by boosting the
volume of products imported and exported. By focusing on what they do best, trade agreements promote prospects in the Europe area. As a
result, by reducing barriers and expanding FDI investment, other nations will be able to enter the market. This is beneficial to SMEs since
they are continuously looking for new chances, and when export prices are low, they may gain growth and promote economic development
(Bamel, Dhir and Sushil, 2019).

PART 2
Brochure

ADVANTAGES AND DISADVANTAGES OF EXPORTING PROCESSES
FOR EXPORTING MERCHANDISING AND SERVICES
The exporting process is defined as the combination of procedures used to
export a company's goods and services throughout the world.
In this context, it can be stated that there are essentially two types of exporting
methods, both of which are explained below-
 Indirect exporting – It is defined as the methods by which a company
may sell its goods and services in other nations or markets by using the
services of a third party. Within it, the middleman offers the products of
the particular firm to wholesalers or clients.
Advantage: When compared to direct exporting, the financial resources required
for indirect exporting are substantially lower. This may also make it easier for
HSBC to gain effective access to specific markets.
Disadvantage: There is no control over marketing, distribution, or any other
merchandising methods inside it. Furthermore, there is a significant risk
associated with distributor preferences, since any negative impact would have a
significant impact on the particular firm.
 Direct exporting- It can be defined as the process of a company's product
or service being sold into new market regions without the involvement of
a third party. Furthermore, it is determined that there are various exports
methods by considering the circumstances. Acquisition, collaboration, and
other modes are found to be this mode. The following are some of its
benefits and drawbacks:
Advantage: It makes it easier to protect patents, goodwill, trademarks, and other
intellectual property rights.
Disadvantages: Adoption of the appropriate approach might be costly for
organisations such as HSBC. It would also be dangerous for them on a bigger
scale.
THE DOCUMENTATION THAT IS REQUIRED
There is specific paperwork that a company must file in order to gain entry to a
new market in another country. The following are a few of the documents:
 Letter of acknowledgement: This document can be provided by one
bank to another in order to act as a guarantee for a payment that is made
for a specific individual in a specific scenario. Additionally, each
document may be used by each organisation in worldwide trade for the
purpose of providing an economic guarantee from a significant bank to a
goods exporter.

 Packing list: This is a document that contains detailed information on the
commodities that will be exported together, as well as the packaging
specifics. Furthermore, it is critical for each organisation to be prepared
when exporting their goods because this provides clients with information
about the products requested as well as quantity details.
 Commercial invoice: It is used as a legal document that is shared between
suppliers and clients, and it clearly represents the items that are sold as
well as the money owed to the customers.
DIFFERENT METHODS OF TAPPING INTO NEW INTERNATIONAL
MARKETS WITH ITS LIMITATIONS AND BENEFITS
Regardless of their size or nature, all businesses have access to a limited number
of tools that allow them to efficiently carry out their business tasks in the global
market, allowing them to expand their market share and profit. A few of these
ways for tapping into foreign and new market areas that are often used by groups
of administration.
SMEs are entering into new foreign markets in order to achieve growth and
development. International markets provide a diverse range of options and
chances for success, allowing SMEs to expand while also boosting the economy
of a given region. SMEs have a variety of options for entering the new worldwide
market, which are outlined.
 Franchising: For SMEs, franchising is one of the most common methods
of entering the foreign market. In this case, a company lends its property
rights to another individual in order for that person to launch a new
business or enter a new worldwide market.
Advantages
 Rapid expansion: this is the most common and fastest way to join a new
market. Franchising has the capacity to quickly capture fresh market share
while also establishing market dominance. In this case, the franchisor
supplies the brand and franchisee funds, allowing SMEs to expand swiftly
with available resources.
 Low operating costs: Because the capital required to enter a new market
is little and is also contributed by the franchisee, the operational costs are
so low. In addition, SMEs enjoy the opportunity of building their
company's brand in a new market.
Disadvantages
 Commitment or contract: The franchisee must agree to a certain period
of lock time with the franchisor during which the individual must operate
the business regardless of profit or loss.
 Negative publicity: There is a chance that the business will receive
negative publicity as a result of the franchisor's actions and activities, in
which case the entire brand will suffer.

 Joint venture: A joint venture is a business arrangement in which two or
more parties agree to share their resources in order to complete a certain job.
A joint venture is a corporate company formed by two or more partners that is
defined by shared ownership, profits and risks, as well as management and
governance (World Bank, 2019).
Advantages
 Firms benefit from the skill mix and efficient resources available here.
Furthermore, the risk involved with each strategy is shared by both parties.
Disadvantages
 This strategy requires both partners to share profits equally, which may
lead to problems. Furthermore, if a company adopts a certain technique, it
will have to deal with the challenges that come with rigidity.
A SME like Airdri can expand its market by selling commodities and services in
another country, improving sales and profitability, reducing the risks of only
operating in one market, and extending the life cycle of its products. Before
entering the European region's worldwide market, the organisation should have a
variety of international market approaches and instruments.
 Financial support- This is an important factor that determines the
organization's ability to enter a worldwide commercial environment. The
firm uses this instrument to analyse monetary assistance in the worldwide
marketplace in the form of financial sources that will provide money to the
institution in the form of loans and other forms of financing. It is critical to
determine since no commerce can run effectively in the worldwide market
without efficient financial help.
 Assessing Market- Assessing markets is one of the most significant
factors that the Airdri management should consider when it comes to the
European region's goods and facilities. So that they may assess the
efficiency and profits of their target specific market in the European area,
as well as provide a range of target audiences based on their products and

 Distribution and transportation channels- It is necessary because it
allows the management of the relevant enterprise to analyse the manner
and techniques of providing and selling goods and services. In addition,
the organisation examines transportation options so that raw materials may
be imported and produced items can be sold in a market that is easily
accessible to consumers (Bagchi and et.al., 2020).
 International regulations- It is a significant feature to analyse facts
regarding legislation and rules that are deemed and followed by a firm
throughout worldwide expansion. It allows Airdri's management to access
information on many international regulations pertaining to commerce,
production, the environment, and customer-related rules, among other
things. It is critical since it aids in the effective operation of the company's
operations on a global scale.
VARIOUS RECOMMENDATIONS ON APPROPRIATE METHODS AND
COUNTRIES TO MEET SPECIFIC BUSINESS REQUIREMENTS
According to the above report, several suitable techniques and places for
addressing the specific business requirements have been identified. As a result,
the following suggestions are made to the relevant firm:
 It must choose the direct exporting approach, as it can be said from the
analysis that exporting items directly to consumers has various
advantages. Furthermore, it has been said that the firm in question will be
able to sell its goods directly to exporters all over the world. Furthermore,
in compared to other methods, one of the major advantages of using this
strategy is that it delivers effective market information. Furthermore, this
is not as dangerous for the chosen firm. On the other hand, the key
disadvantages of the relevant strategy are that it requires more cash,
energy, and potential.
 It has also been recommended that franchising would be a good alternative
for the relevant organisation because it has established significant
advantages for them. Franchising, for example, may quickly gain
additional market share while also establishing market domination. Also,
because the capital required to enter a new market is modest and is also
contributed by the franchisee, the operational costs are very low. On the
other hand, this system has several disadvantages, such as the fact that the
franchisee must commit to the franchisor for a specified length of lock
time during which the individual must continue the firm regardless of loss

CONCLUSION
Based on the above analysis, it can be said that international business environment consists of several elements of legislation and conventions
that restrict free trade between nations. SMEs are businesses that benefit from trade blocs in a variety of ways. Furthermore, it has been observed
that the United Kingdom is included in a number of commercial agreements that allow their businesses to deal with other nations without paying
taxes. Furthermore, there are two types of trade obstacles that must be overcome in order to conduct business in the global market: tariffs and
non-tariff barriers.

References
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