Expanding Airdri: A Global Market Entry Analysis Report

This report examines Airdri, a UK-based SME manufacturing energy-efficient hand dryers, and its potential for international market expansion. It analyzes the global business environment, including internal and external factors, and assesses opportunities and threats faced by SMEs in an increasingly competitive landscape. The report explores the benefits of international trading blocs and agreements, as well as tariff and non-tariff barriers. Furthermore, it evaluates the pros and cons of importing and exporting, providing recommendations for securing deals. The report also delves into various methods for SMEs to enter international markets, comparing their advantages and disadvantages, and offers specific recommendations for Airdri's expansion. The report concludes with a comprehensive analysis of Airdri's strategic options for entering new markets, considering the complexities of global business operations and the importance of adapting to diverse market conditions.

Tapping into New and
International Markets

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
PART 1............................................................................................................................................4
Analyse the environment global business in which small and entrepreneurial companies are
operating.................................................................................................................................4
Determine various opportunities and threats which is face by SMEs in an increasing
competitive global environment.............................................................................................6
M1 Describe analysis of global business environment with example in which small businesses
operate....................................................................................................................................7
M2 Provide critical analysis of threats or opportunities which is faced by SMEs in
competitive global environment.............................................................................................7
TASK 2............................................................................................................................................8
Explain the benefits of international trading blocs and agreements.......................................8
Determine different tariff and non-tariff barriers which exist in the international trading
environment............................................................................................................................9
M3 Analyse pros of international trading blocs and agreements...........................................9
PART 2..........................................................................................................................................10
TASK 3..........................................................................................................................................10
Analyse pros and cons of importing and exporting and how company can to secure a deal.10
Evaluate distinguishes between merchandise imports and exports or service imports and
exports..................................................................................................................................10
M4 Provide application of import and export process to an organisation as well as give
recommendations for international context..........................................................................11
LO 4...............................................................................................................................................11
Determine different methods though which SMEs can enter into international markets.....11
Comparison between the different ways SMEs can tap into new or international markets.
Analyse advantage as well as disadvantage of each and every method. .............................12
M5 Assess several ways though which SMEs can tap into new market and provide specific
recommendation...................................................................................................................13

CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
It is very important for organisation to tap into new or international market in order to
expand business. It is essential for organisation as this will assist to enhance opportunities of
growth for an organisation (Alserhan, 2017). There are various methods that can be used by
organisation to expand operational activities into new marketplace. This will help in capturing
eyes of services users and increase profits of the firm. Barclays Plc. is one of the leading
multinational investment bank as well as financial services organisation. It is providing product
and services to various part of the world and headquarter of Barclays Plc company is located at
London, UK. This organisation was founded in 1690 by Nigel Higgins. This report is based on
Airdri which is a SME operating in the UK market that manufactures hand dryers that are energy
efficient. The dryers are safe for the environment as they don't emit harmful carbon emissions
and also are not heavy on the pocket. The company was founded by business partners Peter
Philipps and Peter Allen in the year 1974. The report includes study of global business
environment as well as influence of key global drivers. It includes advantages for Small Medium
Enterprises for international opportunities as well as overcome barriers for global growth. This
report includes benefits of trading agreement and trading blocs for significance over country.
Different tariff and non-tariff issues are evaluated as well as impact of international trading blocs
and agreements on global growth for SMEs. Apart from this advantages as well as disadvantage
of different types of exporting processes are determined. It includes difference between services
imports, merchandise as well as exports are analysed and along with this different documentation
are also determined. Various ways though which SME can tap into international market are
compare.
MAIN BODY
PART 1
Analyse the environment global business in which small and entrepreneurial companies are
operating.
The global business environment can be defined as the environment in various regions or
countries with external factors besides the home environment of the company that influence its
various decisions including how to make use of the available resources in various regions etc

(Katsouris and Sayne, 2013). Small and entrepreneurial businesses operate in distinct business
environments which influence their functioning. The environments can be classified into
different categories that are explained below -
Internal Business Environment – The internal business environment comprises of
humans, technological, internal capabilities, rules and regulation, policies and many other
factors. This environment of organisation will lead to increase the performance as well as growth
of company. It includes all those elements that could be controlled as well as managed by
organisation.
External Business Environment – The external environment consists of various forces that
are external to the business and influence the way in which a company works and are
beyond the control of the organisation (Livermore and Soon, 2015). The external
environment can further be classified into external micro as well as external macro
business environment.
 External micro environment: Various forces of the micro businesses majorly impact the
operations of a business. It comprises of the suppliers of the company as they influence
the pricing of the products. There can also be cases wherein a competitive organisation
can start a price war but this depends on the size of the firm. Here, the respective
company, which is Airdri will have to conduct an analysis of the external environment to
get an understanding of how can these forces impact its business operations.
 External macro environment: These are environmental forces that an organisation faces
and determines various opportunities that are available in order to promote its business.
The external macro environment cannot be controlled by the organisation and thus has to
adjust itself to adapt to these forces. It can further be divided into various kinds of factors
like political, technological, environmental, demographic environment etc. Airdri should
have a complete understanding of all these forces as well as the ways in which they can
be avoided which will help it strengthen its brand image in the market.
It is very important to understand as well as analyse the global business environment in
which SME as well as enterprise are operating. This will help in taking appropriate business
decision and achievement of preferred goals of the firm. Chosen region for this report is Europe
and it is essential of SME and enterprise to evaluate different factors that will aid in the
enlargement of organisation (Brown, 2017). It has been analysed that government of UK market

area is performing taking various decision for the growth and development of organisation. So
stability of UK political and government party will help in conducting different activities in
appropriate way. UK has one of the growing economy is the world which will have adverse
influence over SMEs.
Determine various opportunities and threats which is face by SMEs in an increasing competitive
global environment.
There are various opportunities as well as threat that could be faced by SMEs with the
increase in competitive global environment. Competitive global environment refers to the overall
competition in the global business environment. It impacts positively and negatively over
organisation (Wirtz, Tuzovic and Ehret, 2015). When more companies are operating in same
business environment this will lead to increase the completion in the business environment.
Global business environment refer to the surrounding in which different companies are
performing its business operations. Increasing competition in the global environment will bring
various opportunities as well as threat for organisation.
Threats – This includes all those factors as well as elements that influence decision
making of firm directly. It is important to analyse threats in order to overcome it as well as
enhance business functions.
 Increase in competition – Increase in globe competition will lead to improve the rival
companies. Organisation with better strategies or product will be consider as threat for
SMEs as these business is performing at small and medium level. Competition can
impact the overall operations of the business of Airdri and thus the company should stay
aware of the same.
 Business cost – When completion in global environment is increasing this will impact
negatively over firm. To gain competitive advantage over other competitive firm, SMEs
have to develop its products and services. This will lead to increase the cost of business.
Opportunities – There are several advantages for SMEs organisation that could be
achieved by organisation in order to increase business opportunities.
 Increasing employees capabilities – This will help SMEs to increase the skills as well as
capabilities of organisation. Increasing global competition will help organisation to
enhance their the capabilities of employees. There are various training methods that could
be used by organisation for increasing capabilities of employees (Rubera and Droge,

2013). This opportunity will assist to perform several organisational activities in
appropriate manner. Airdri should provide various training and development
opportunities to its employees to enhance their existing skills and develop new ones
which will be beneficial in their future endeavours.
 Reach to new customers – It is opportunities for SMEs to reach and attract more and
more service users towards firm. It is important for organisation to reach and attract large
number of customers in order to increase its sales as well as profits. Global market area
will bring various opportunities for SMEs for reaching to new customers. Effective
strategies must be formulated by the management of company in order to increase its
reach among people and enter markets that have not previously been introduced to
Airdri's products.
M1 Describe analysis of global business environment with example in which small businesses
operate
It is essential for SMEs organisation to operate its function in different part of the global
environment. This will help in enhancing as well as improving business performance. For
example Airdri company. This is a small scale company that is operating its business function in
UK market area. Aridri is providing different types of air dryer products to satisfy the
requirements of customers. This company should expand its services to different market area in
order to enhance market share as well as earn more profits.
M2 Provide critical analysis of threats or opportunities which is faced by SMEs in competitive
global environment.
SMEs companies can take advantage of the opportunities that occur due to increase in
competitive environment. There are several threat that is faced by SMEs while performing its
function in competitive global environment. SMEs has major threat from strong rival company
that is providing high quality products and services to customers (McCollum and Findlay, 2018).
With the increase in competition in global environment SMEs have opportunities to reach to new
customers. This will help in enhancing sales as well as developing strong relationship with
customers.

TASK 2
Explain the benefits of international trading blocs and agreements.
Trading blocs can be defining as a formal agreement that is developed to remove trade
barriers between two or more regional and countries. There are different types of trade blocs as
well as agreements that will aid organisation to accomplish business activities effectively.
Trading blocs can be describing as a group of countries that is developed in specific regions that
is responsible for managing as well as promoting various trade activities. Different types of trade
blocs and agreement includes free trade area, customs union, common market and economic
union (Hills, Voronov and Hinings, 2013). There are various advantages of international trading
blocs and agreements that will help organisation to enhance business activities. Several
advantages of trading blocs or agreements are mention below in detail. Increase economic growth – Due to trade blocs or agreements organisation will be able
to improve the economic growth. This will help organisation to conduct organisational
activities appropriately. Free trade between various countries will help in enhancing
economic growth as well as in expanding business across different countries . Technology transfer – Trading blocs and agreements will provide new and innovative
technology to organisation. It is essential for organisation to take advantage of creative
and modified technology to organisation to perform business task in appropriate way.
Because of free trade updated technology will be able to move from one nation to other
nation very fast. Improve trade – Reduction of trade restriction and policies will lead to improve in
trading function of organisation (Giuliani and et.al., 2014). Trade bloc will help company
to conduct business activities in various parts of the world. This will lead to increase in
sales as well as profitability of organisation.
 Free transfer of resources – Trade bloc and agreements are very important for company
as this will help in transferring of raw material as well as other resources between
different countries. This will help organisation in performing business activities in
effective and appropriate manner. The company will also be able to cut down
unnecessary costs and use that money more effectively.

Determine different tariff and non-tariff barriers which exist in the international trading
environment
There are various issues that is faced by company which is performing its trading at
global level. It is essential for an organisation to identify and analyse various tariff and non-tariff
issues that has impact over organisation. Perform business activities at international level. Tariff
refers to the tax or duty that is to paid in order to import or export products. Non-tariff refers to
the various restriction which is implemented on trade process which does not include tax or duty
(Payne, 2016). It is very important for organisation to overcome different tariff as well as non
tariff barriers of trade in order to perform business activities in effective manner. Otherwise, it
will have to pay heavy amounts of tarriffs which can affect the overall operations of the
company's business.
Tariff barriers :
 Transit duties – This refers to the tax that is charged by government and other parties on
product of commodity that is transferring from one place to other. This is considered as
huge barrier for organisation that impacts negatively over firm.
 Specific duty – This is a barriers which will affect the sales as well as profits of
organisation. Specific duty is the tax that is imposed on the commodity that is passing
though a country. This can be describe as the amount that is charged by government and
it will to increase the cost of business.
Non tariff barriers :
 Import policy barriers – This can be defining as non-tariff barriers that has an impact
upon the performance of the firm. It is important for organisation to overcome these
barriers so that business can easily import products.
 Service barriers – This includes the different barriers or restriction access by
government for distributing product and services across boarders (Fang, 2016). Service
barriers include all rules and regulation on offering services to other country.
M3 Analyse pros of international trading blocs and agreements
International trading blocs are considered to be very important for SMEs as this will help
in offering free trade to these companies. Due to international trading blocs and agreements as
well as its implication on organisation will help in increase sales of product and services offered
by organisation. The main advantage that can be used by trading blocs and agreements is that it

will lead to reduce trading services. This will help in proving product and services of different
part of organisation.
PART 2
TASK 3
Analyse pros and cons of importing and exporting and how company can to secure a deal.
There are various advantages as well as disadvantage of both important and exporting
(Brown, 2017). Benefits and drawbacks of importing as well as exporting are mention below.
Advantages – Importing and exporting of organisational goods to new and different
marketplace. This will include less cost to organisation as well as help in reaching to new
customers. By importing organisation will be able to get better raw material and other
commodity for organisational benefits. By importing raw material for its products, Airdri will be
able to purchase material by spending less money, produce products of high quality and then sell
the at high prices.
Disadvantage – This will lead to have some drawbacks for organisation as importing and
exporting of products will lead to increase GST prices. There is high chance of damaging of
products while transferring from one place to other. Different countries will have their own
import rates due to which currency can act as a barrier for Airdri. Importing can also impact the
environment as the company will exploit various natural resources for its personal benefit.
Evaluate distinguishes between merchandise imports and exports or service imports and exports
There is huge difference between merchandise imports and exports or service import and
export. Merchandise can be describe as the efforts of an individual as well as organisation to
promote and sell the products to the ultimate consumers (Sanfelici and Halbert, 2016). This
includes import and export of tangible products. While products are available for sale typically
in the retail marketplace. Export merchandise is a tool or process of offering the retail goods and
services in the foreign consumer market. The various large scale organisations across the various
countries maintain the whole departments keen to evaluate the one of best way to enter into
foreign retail markets. This will includes physical space while transferring from one place to
other.
There are some companies while are important and exporting services into new and
different market area. An import are foreign services brought by the residents of a country. On

other export are the backbone of the international trade. Service are referring as non-tangible
offering of organisation. There are different types of services such as consultancy, counselling
and so. These services are aid to provide desired services to customers as per their requirement
and need.
M4 Provide application of import and export process to an organisation as well as give
recommendations for international context.
Import and export is considered as very complex process as this includes various steps. It
is essential for organisation to follow each and every step very carefully to perform
organisational activities effectively (Sundström and Radon, 2015). Import process includes trade
enquiry, licence and quota, placing order, letter of credit as well as full filling of different
documents, clearing goods and customs formalities, making the payments, closing the
transaction. Export process start from export order, confirmation, development of products,
clearance from central excise and shipment of products. In order to apply this process in
international market organisation needs to full fill all steps very clearly and effectively. This will
help in conducting import and export process in fast way as well as successful achievement of
targets.
LO 4
Determine different methods though which SMEs can enter into international markets.
Globalisation have made expanding the business significantly not easy for large market
but also for the small businesses and start up. Hence there are some roadblocks with the different
laws and paperwork which make it difficult for SME to expand its roots at the international level.
But technology have made it easy for the firm to expand at the global level. Here are some of the
steps through which SME can move at global level:
 Create joint venture: Once the entity uncovers the establishment of international
organisation this is become ease to form a new company. Joint venture help in making
healthy relationship with the other firm for offering new product and services to the
consumer. This venture aid to share new ideas as well as technology to mutual growth
and expansion for longer time period. Further the entity does not require to build new
infrastructure and other new technology. This kind of strategies help in capturing new
market share and improving the brand image in efficiently manner.

 Connect with large companies: This is very crucial to connect with large firms as this
open the door for the SME to expand there business in a well define manner. The entity
must use local resources in order to find out the best possible outcomes to expand the
business at the international level. The other way for Barclay is to set meeting and tie up
deals with those organisation who deals at global level. Hence this will provide
opportunity for the SME companies to explore new markets . Along with this, it help in
capturing the untapped market to make more profit for the longer duration.
Comparison between the different ways SMEs can tap into new or international markets.
Analyse advantage as well as disadvantage of each and every method.
For expanding the business it is essential to identify the pros and cons as this help in
reducing the risk and uncertainty present in the market (Lee, Mudambi and Cano-Kollmann,
2016). Being a SME, Airdri holds the record for manufacturing the most energy efficient hand
dryers that consume as low as 10W of energy and are safe for the environment as well. Small
business often reach points where the top management have to decide to expand and grow as
stable business . Here are some advantages and disadvantages for SME:
Advantages:
 Attract new customers: The main advantages is that it help in capturing new customers
in the limited time frame. Further this aid the organisation to add new product to its
portfolio which provide competitive advancement at the international level.
 Economic of scale: When SME expand the business it often it spread the risk of doing
business and improve the product capability. Operating in the multiple market or in the
product allow the company to spread the cost of doing business and also minimize the
risk present in the market.
Disadvantages :
 Capital requirement: The major drawback is the investment and the resources for the
company to expand the business for the company (Sundström and Radon, 2015).
Expansion often leads towards debt and unexpected downturn in the market condition can
put the firm in the financial trouble for the longer duration.
 Challenges of foreign culture: Although a global plan of action will support respective
organisation to influence more customers and increase its customer base. The major
drawback of this strategy is that there is huge deviation in cultural of different countries