Report on Feasibility Study: Mont Blanc and Cross International Trade

This report presents a feasibility study analyzing the potential for Mont Blanc and Cross, a luxury writing instruments and watches brand, to expand its business internationally, specifically focusing on the Australian market. The study examines the impact of globalization on businesses, including the benefits of specialization, access to larger markets, and the use of cheaper raw materials, as well as potential disadvantages like barriers to entry and job losses. It evaluates different international business strategies such as multi-domestic, global, and transnational approaches. The report also considers the external business environment, including political, economic, and cultural factors that influence decision-making. It concludes by emphasizing the importance of adapting to the global environment and managing internal variables to leverage external opportunities. The report also highlights the necessity for businesses to consider international barriers and regulations when expanding globally.

Feasibility Study

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1...................................................................................................................................................3
2...................................................................................................................................................4
3...................................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
A feasibility study is an analysis of the viability of an idea. The concept can be used in
many ways but primarily focus on proposed business ventures. The present scenario is based on
the analysis which is carried out on Mont Blanc and Cross which is a leading brand in high
quality instruments and watches. The report will elaborate the drivers and consequences of
globalisation on the business entities and also the global business strategies are analysed
(Kulwin, 2016). Moreover the strategies are evaluated which support the operations of the
international organization.
TASK 1
1
As per the given scenario, Mont Blanc and Cross is operating its business in UK and
deals in luxury writing instruments and watches and has a plan to expand the trade in other
country that is Australia. Globalisation is the assimilation of the markets in the economy. Retail
where globalisation includes financial markets such as capital, commodity, insurance and for
motor vehicles and consumer electronics market (Leonard, 2011). Globalisation is increased by
increase in the capital mobility and the development of complex financial products, such as
derivatives has enabled global credit markets to grow rapidly. Trade has become increasingly
free which has opened up many former communist countries to inward investment and global
trade.
Globalisation brings a number of potential benefits to the international producers and
national economies. It includes provide the incentive for the countries to specialise and get a
benefit for comparative advantage. Access to the larger markets means that firms may experience
the higher demands for their products. Proliferation enables worldwide access to sources of
cheap raw materials and this enables enterprise to be cost competitive in their own markets

(Buckley, 2011). In the long term, trade can be increased is likely to lead to the creation of more
employment in all countries that are involved.
There are also several potential disadvantages of globalisation. It includes barriers to
entry to small, local, producers. Large multinational companies can also suffer from
diseconomies of scale. The increased power and influence of multinationals is also seen by many
as a considerable disadvantage of maturation. Jobs may be lost because of the structural changes
arising from globalisation. These changes may lead to structural unemployment and may also
increase the gap between rich and poor within a country. By increasing the trade proliferation has
increased pollution and help contribute to global warming (Butcher and Maunder, 2014).
The main issues which arise from globalisation for the UK includes growth, employment,
prices and trade. They are:
 Growth – Maturation is likely to increase UK growth in the long term because aggregate
demand is likely to increase through increased exports and aggregate supply is likely to
increase because of higher levels of investment both domestic and foreign direct
investment. In the short term may become more unstable as the global economy becomes
increasingly interconnected.
 Employment – In the manufacturing and the service sector creates structural
unemployment which widen the income gap within countries. The net effect of the
impact on the employment depends upon the speed of the labour market adjustment
which depends on mobility and flexibility (Harrison and Mears, 2013). Improvements in
the labour productivity may need to close the productivity gap.
 Prices – It increased the competition is likely to reduce the price level for trading
manufacturers because Mont Blanc and Cross can source around the world costs may
become down and may be passed in terms of reduced domestic and export prices.
 Trade – The volume of export and import is likely to increase with the trade. The effect
on the balance of payment is uncertain and depends on growth rate, inflation and the
exchange rates.
2
International business strategy refers to plans that guides commercial transactions taking place
between entities in different countries. Many companies deals with one international partner at
some point in their supply chain and in most well established fields competition is international

(Healey and et. al., 2010). Methods of doing business vary in different countries understanding
of cultural barrier, political and legal systems and many complexities of international trade is
essential to commercial success. There are different types of international strategies that is multi
domestic, global and transnational strategy.
 Multi domestic sacrifice the efficiency in favour of emphasizing responsiveness to local
requirements within each of its markets. Mont Blanc and Cross adapts its products to
match local preferences because some persons like high quality with high range products
and some people want high quality with low range products.
 Mont Blanc and Cross using a global strategy sacrifices responsiveness to local
requirements within each of its markets in favour of emphasizing efficiency. It is
complete opposite of multi domestic strategy. Products and services may be made in
various markets but a global strategy stresses the need to gain economies of scale by
offering essentially the same products and services in each market (Jenkins and Healey,
2010).
 Mont Blanc and Cross using a transnational strategy seeks a middle ground between a
multi domestic and global strategy. The firm tries to balance the desire for efficiency with
the need to adjust to local preferences within various countries.
These strategies brings a benefits of international business. It includes earning valuable
foreign currency, division of labour, optimum utilization of available resources, standard of
living should be increased, encouragement should be given to industrialization. By these
overseas trade consumers are also benefited. Price of the product should be stable. In the
economy large scale of production should be done (Kain and et. al., 2014). Increase in the
government revenue and employment opportunities should be created.
There are several disadvantages of international business. It includes adverse effect on
economy, competition with developed countries, rivalry among nations, exploitation, legal
problems, publicity of undesirable fashions, shortage of goods in the exporting country and
complicated technical procedure.
3
Mont Blanc and Cross do not have any control over the external business environment.
The success of the international company depends upon its ability to adapt to the overall
environment and managing the enterprise internal variables to leverage on the opportunities of

the external environment. There are numerous types of trade environment but the political,
cultural and economic environments are prime ones (MacDougall and Riley, 2010). These
factors influence the decision making process of the international business enterprise.
Political Factors – It affects the legal aspects and the government rules which a foreign firm has
to experience and follow while doing business in that nation. There are definite legal rules and
governance terms in every country in the world. There are four major effects of political
environment on Mont Blanc and Cross (Thomas, Herbert and Teras, 2014). It includes impact on
economy, changes in regulation, political stability and mitigation of risk.
Economic Factors – They exert a huge impact on international business firms. Trade enterprise
seek predictable, risk-free and stable mechanisms. Monetary system that acknowledge the
relative dependence of countries and their economies are good for a corporate. High rate of
inflation increases the cost of borrowing and makes the revenue in domestic currency.
Cultural Factors – It includes educational, religious, family and social systems within the
marketing system. Knowledge of foreign culture is important for international firms. Marketers
who ignore cultural differences risk failure (Manathunga and et. al., 2012). Language, colours,
customs, values, time and religious belief is the part of the cultural factors.
There is quite a degree of optimism from Mont Blanc and Cross about their own
commercial future based on a combination of factors such as assessing overseas market, better
customer relations, improve the way to do things, product innovation etc. Trade recognise the
importance of having a business strategy to guide them through a recessionary period.
Corporates have identified several managerial areas where they felt to the robustness and quality
of the approaches being applied had been allowed to decline (Smith and Rust, 2011). The
challenge of the recession, urgent improvements have had to be or need to be made.
CONCLUSION
In the above report nature and effect of global business has been described. International
trade is becoming a way of life for increasing number of business. As there are many business
risks and uncertainties associated with trading outside domestic markets, organisations require
secure partnership. Thus to expand the business is the need of the time and for this a whole focus
on the international barriers and regulations is obvious. Mont Blanc and Cross is dealing in high
quality instruments and watches therefore it is very important for the entity to take care of all

kinds of rules and regulations which are liable for global trade. Thus the report has concluded the
role and impact of international business in carrying the business worldwide.
REFERENCES
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Online
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