Guildford Tyre: Global Business Environment and Market Entry Strategy

This report provides a comprehensive analysis of Guildford Tyre's international business venture. It begins by examining the global business environment, including political, economic, social, technological, legal, and environmental factors. It then explores the threats and opportunities faced by small and medium-sized enterprises (SMEs) in a competitive global market, with a focus on online working and market research. The report analyzes the advantages of international trading blocs and agreements, specifically highlighting the benefits of the UK and NAFTA trade agreement for Guildford Tyre. It also discusses various tariff and non-tariff barriers within the international trading environment. Furthermore, the report delves into the differences between merchandise and service import and export, and explores various methods for entering the global market, comparing and contrasting different entry strategies. The report concludes with a summary of key findings and recommendations for Guildford Tyre's successful international expansion, leveraging insights for strategic market entry.

TAPPING INTO NEW
AND
INTERNATIONAL
VENTURE

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Global business environment within which small and entrepreneurial business work...............3
Threats and opportunities faced by SME due to increasing competition....................................4
Analyse the advantages of international trading blocs and agreements......................................5
Various tariff and non-tariff barriers that exist in the international trading environment..........7
Consideration and Process of Sealing a deal...............................................................................7
Differences between merchandise and service import and export .............................................9
Differences between merchandise and service import and export..............................................9
Ways of entering into global market.........................................................................................10
Compare and Contrast variant way through which organization can enter new market...........11
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The current business world is very competitive and global and for business to be
successful the most essential thing is tapping of new opportunities. This is necessary because of
the reason that if the small business will not adapt to the latest trends and opportunities going on
at marketplace then they will not be successful in running and operating the business. The
current study is based over the company Guildford tyre which is a tyre manufacturer. The report
will outline the global business environment along with the threat and opportunities within the
highly competitive global business environment.
Also, it will further discuss about the advantage of variant international trading bloc
including the non- tariff and tariff barriers. Further the variant advantages and disadvantages of
importing and exporting will be demonstrated along with the difference between merchandising
and import and export. In the end variant methods of tapping the international market will be
discussed along with comparing the variant market along with its pros and cons .
MAIN BODY
Global business environment within which small and entrepreneurial business work
For the SME to operate in successful manner it is very essential for the company to first
analyse the global business environment. This is necessary because of the reason that when the
company operates in global market then they have to keep an eye over all the changes taking
place withat marketplace (Wadhwa, McCormick and Musteen, 2017). Thus, for analysing the
business environment for SME, PESTLE model is applied in following manner-
Political- this environment is favourable for the existence of SMEs as if a person is
starting the SME then the government of the company provides for many of the relaxations to the
company. This is majorly because of the reason that SME are good for the country and if people
with get relaxation while operating SME then the number of SME companies will increase.
Economic- this environment is also very positive for the SME companies because when
the SME operates then the national income of the country increases. This in turn will increase the
GDP and the growth of that particular country. Hence, because of this reason the economy of the
country increases the this also result in increase in the working of SME.
Social- the society and the people living in the society also like the concept of SME and
they are also promoting the SME in many variant ways like buying the products which the SME

is producing and not using the branded products. Also, the latest trend among the society and the
people is to use the local products only and this will increase the popularity of the SME withat
marketplace.
Technological- this environment is also favourable for the SME as there are many good
and innovative development within the technological field. Thus, this is beneficial for the SME
as if they will use the latest and innovative technology then this will increase the working
capacity and efficiency of the company. For example, using latest technology like digital
marketing, artificial intelligence and others.
Legal- this is the most important environment for the SME as this make sure that the
working of company is in accordance with all the laws and regulations. Thus, all these rules and
laws guide the SME that how they have to operate and run the business. Also, if all the laws and
regulation will be followed by the SME then the trust of the consumer will also increase for the
company.
Environmental- in this modern and global world the consumer and society has become
more conscious relating to the protection of the environment and the society. Thus, for the SME
to operate in good and effective manner it is essential for the SME to maintain the environment
and divert all the strategies in the protection of the environment. For example, not using plastic
in the operations of SME (Melén Hånell, Rovira Nordman and Tolstoy, 2017).
Threats and opportunities faced by SME due to increasing competition
Also for the success of the company or the SME it is very essential for the company to
analyse all the threats and opportunities within the external environment.
Threat- the major threat for the SME is the high competition because of the fact that
there is a trend of increasing the local business. Thus, because of this the company might face
high competition as all the SME are trying to gain more of the market share. This includes the
rise of the ‘born global’ which states that there is high competition within the global market.
Opportunity- the major opportunity for the SME for growing and developing is to for
online working. This is the major opportunity for the SME as the latest trend among the large
business and consumer is to go for online working whether be it purchasing of goods, payment,
marketing of product and many others options. The major examples of the online system and
technological advancement is like using online payment modes, digital and social media
marketing, artificial intelligence and many others.

Another major opportunity for the SME is to continuously do the market research for the
changing trends and requirements of the consumer withat marketplace. This is majorly because
of the reason that when it comes to global business environment then there are many variety of
changes taking place at marketplace and the trends going on withat marketplace. This is majorly
because of the reason that if the SME will not analyse and adapt to these changes then the
company will not be able to build a good position withat marketplace (Abel-Koch and Rohloff,
2017).
The major implication of analysing these threat and opportunity is that this will assist the
SMEs in knowing the fact that where the company is lacking and which areas can help the
company in gaining more competitive position and increase the working efficiency of the
company. The threats will help SME in strategizing in such a manner that they are able to
manage the intense competition withat marketplace. Also, the opportunities analysis will assist
the company in making strategies and policies for adapting and grabbing the opportunities for the
growth of the business.
Analyse the advantages of international trading blocs and agreements.
Guildford tyre Company is the firm which is in the current scenario used to operate in the
Guildford town of the UK. They generally used to sell the top quality of the tyre in the nation
with the help of both direct as well as indirect way of distribution in the nation. They have seen
good amount of success in doing the same at marketplace. Now they are looking to enter into the
Canadian market, for the purpose of trading of companies product. There were many variety of
type of the advantage which will be seen by Guildford tyre Company due to trading agreement in
between the UK and NAFTA. Some of the advantage are as follows:
Able to get the more local employee, it is the first benefit which will be seen by the
Guildford tyre Company due to agreement between UK and NAFTA, as implication of NAFTA
has assured local employee that their nation is opening the variety of the job opportunity for
them at marketplace. This has helped the nation in maintaining the employee base, which will
help the Guildford tyre Company in getting the employee very easily at marketplace (Tolstoy,
2019).

Trade creation, it is another advantage which has been brought by the NAFTA, in the
Canadian nation. As it has been identified that after implication of NAFTA most of the company
are attracted as a free trade opportunity toward the Canada, these will eventually open up good
opportunity in context of trade creation in the nation.
Another advantage which will be seen by Guildford tyre Company is that availability of
finance if require by the business. As trading block between NAFTAA and UK union 2019 used
to specify that Canadian government will be promoting the global SMEs to grow with the help of
providing variety of funding whenever it is require by the organization.
Applying Poter's national competitive advantage it has been identified that Guildford tyre
will be getting the benefit of less amount of the SMEs are generally used to enter in these sector
of the retailer as a whole (Rosenbaum, Madsen and Johanning, 2019). These will eventually help
the company in getting competitive advantage, as there is no well known domestic retailer of
domestic tyres in the nation. Also, other MNC manufacturer who used to manufacture tyres in
the nation used to offer the product at higher rate as compare to Guildford tyre, this may help the
company in getting good competitive advantage. As there is less amount of the power in the
hand of the consumer. At the same time organization may get difficult to get the raw material as
supplier is having good sort of the power in their hand.
Type of Trade block and role played by variety of trade block in SMEs Preferential trade area: it is the type of trade block which used to exist at the time when
two countries in the geographical region used to agree on variety of tariff barriers which
are imposed on selected piece of the goods which are imported from other nation. Free trade Area: It is the block which is created at the time when two or more countries
in the nation used to agree to eliminate variety of barrier to trade on variety of good
coming from other nation
Role played by Trade Blocks in SMEs
Trade block generally used to play the role of trade creator, as it used to open up a wide
market for the company which used to create variety of the trade for the nation in the long run.
Trade block also generally used to play the role of employment creation for the company
in the long, as it used to help the SMEs in seeing good number of the employee easily in market.

Various tariff and non-tariff barriers that exist in the international trading environment
There are two differ type of trade barrier in real i.e. tariff and non tariff trade barrier in
the nation. Tariff barrier generally includes the custom levy or tariff on different goods which are
entering a country and are imposed by different government. At the same time Non tariff barrier
generally includes the red tape, onerous regulation and unfair rules or decisions. NAFTA was
generally formed to reduced the amount of the trade barrier which is generally seen by all the
SMEs at the time of entering into Canadian market (Hollender, Zapkau and Schwens, 2017).
Supplement Agreement, this is the agreement which was passed on by the NAFTA top
reduce the Labour handling as well as environmental issue in the nation, these has created variety
of the barrier for the SMEs in context of increases cost as amount of the fine in the nation was
increased subsequently.
Looking at the barrier in context of the subsidies, it has been find out that under NAFTA
there is an end to taxpayer funded subsidies in the nation. Reason behind brining this sort of the
barrier in the nation is to naturally extend the original purpose of NAFTA at marketplace. As
billion of the taxpayer dollar would be saved in the nation.
These are two barrier which is applied by NAFTA, in real there are many less amount of
barrier which are being applied by the NAFTA in the long run.
Advantage of Trading Block
Trade block generally used to help the company in overcoming the variety of the
competition very easily at marketplace, as it used to help the company in competing with
different organization very easily at marketplace (Palmié and et.al, 2016). For example Trade
block generally used to provide the guidance to SMEs which generally help them in facing
variety of competition very easily.
Trade block generally used to help the company in improving the level of market
efficiency at marketplace as it has been identified that it used to remove the variety of the barrier
for differ SMEs who is looking to operate in Canada.

Consideration and Process of Sealing a deal
There are some consideration which need to be consider by all the organization at the
time of importing and exporting. Some of them are as follows: Letter of credit: All the organization need to consider going through Letter of Credit and
understanding the same and after that used to carry out further activity of import and
export in an organization. Reason behind the same is that there are many differ type of
document are linked with Letter of credit are commercial invoice, Bill of landing and
proof of insurance.
 Freight forwarder:Freight forwarder is the one in the nation who used to provide the
services of necessary delivery of companies good in the nation. There are many
companies who used to overlook freight forwarder to save cost of the company but it has
been recommend to the company that they should consider the same as it will help the
company in safeguarding from variety of compliance issue (Ahi and et.al, 2017).
To seal the Deal from Working in the UK, a process in relation to the export has to be followed
in an organization. The process is as follows:
Register for EORI number: It is the first step, in which organization has to make sure
that they used to apply for EORI number as with the help of the same only organization will be
allowed to export goods from European nations. These number is obtain by felling form on
authorised site. Number is receive within three working days.
License need: It is next step in the process in which organization look for the license
which used to allow them to export variety of the good outside nation.
Commodity code: After that organization has to make sure that they used to find out the
commodity code of the good.
Custom Procedure Code (CPC): It is next step in which organization has to take Custom
Procedure Code, which will help the company in identifying the custom and excise regime which
goods are entered into trading purpose.
NES: It is the next step in the exporting process in which organization used to register
upon National Exporting system, which allow the export declaration to be made electronically at
marketplace.
Commercial invoice: It is next step in which organization has to make sure that
commercial invoice is attached with the goods which has to be exported.

Goods presenting: It is the next step in the process in which all the organization in the
nation are asked to present the different goods in the custom, also need to possess the arrival
message. As CHIEF will require a arrival message (Goyat and Nain, 2016).
Finalizing: It is the step till which the deal is settle for the organization as goods are
exported, now organization has to make sure that the detail are provided to the chief at
marketplace (Rathinamoorthy and Surjit, 2017).
Record keeping: It is the last step in which organization has to make sure that they used
to keep records of different things which are being exported.
Differences between merchandise and service import and export
Merchandise
Merchandise is generally define as a good which can be brought or sold at marketplace.
There are many differ type of merchandise such as retail merchandise, Impulse goods
merchandise, Convenience goods and Special Goods and Merchandise.
Service Import and Export
Service import is generally define as a process in which the services which are produced
in another countries are generally brought to own countries. At the same time Service export is
define as any service provided by a person in one nation to people or companies from another
(Tynchenko, and et.al, 2019).
Differences between merchandise and service import and export
Merchandising Service import and export
Merchandising is referred to as the selling of
goods and services within the global market
that is from one country to another for some
consideration in exchange.
On the other side the service imports and
export is referred to as the selling of service
from one country to another in exchange of
money or other consideration.
Under this system both the goods and the
services are included for the selling between
two or more countries.
In this system only the services are being
either sold or purchased from any another
different country.
The merchandising includes the physical
goods and these can be damaged when the
But this is not possible in case of service
import or export. This is majorly because of

goods are sent to some other countries. the reason that the service is intangible and no
damage can be given to service as they are
given in the same manner as it needs to be.
In case of merchandising it is essential for the
company to calculate the cost of goods sold
and also keep the record of both opening and
closing inventory.
But in case of service import and export this is
not possible as the services are intangible and
the opening and closing stock cannot be
measured.
Ways of entering into global market
There are many different ways through which organization can enter into the
international market some of the best way through which organization can enter into
international market is as follows:
Licensing and Franchising: It is the way in which franchisor in the nation used to
provide a licensed privilege to franchisee in the nation to carry out different operation of the
business and also franchisor used to provide the different help in setting up of a business at
marketplace. In return of the same franchisee in the nation used to provide fees to the franchisor.
Creating joint venture: It is another important way through which organization can
enter into the international market (Kisanga and Mohammad, 2019). This can be done when two
companies in the nation used to joined hand together with the objective of carrying out the
different operation of the business together in the coming future. In this way both the
organization used to contribute capital and also has some sort of profit margin shared.
Partnership: It is another way through which organization can enter into the new market,
it is the way in which the organization used to make the different connection with the larger firm
in the nation and can work as a partners to widen up the product base and market base of the
company at marketplace.
After going through the variety of the different type of the ways through which
organization can enter into the new market, it has been analysed that Franchising will be the best
way through which Guildford tyre can enter into the new market, reason behind the same is
identified that it is the best way through which organization will be saving the cost benefit at the
time of entering into the global market (Hossain, 2018). As entering into global market generally

asked the organization to invest good amount of the resources, it get very difficult for SMEs, so
franchising is one of the best way through which organization can save the amount of the cost
easily.
Compare and Contrast different way through which organization can enter new market
There are many different type of pros and cons which are brought by the different ways
of entering into a global market. As franchising will help the company in saving variety of the
cost at the time of entering into the market, at the same time in this method organization may
have to sacrifice the profit, as franchisee used to pay fix rate of only minimum amount of the
money to the franchisor (Nova, 2018).
At the same partnership form of the business may help the company in maximizing their
profit till a extent in an organization, as percentage of the contribution done by the organization
will decide the profit margin of the party, this eventually help the company in maximising the
profit at marketplace. At the same time in the partnership form of the business organization has
to see the unlimited liability of all the activity which is performed in the organization but this is
not the case in the franchising form of the business.
Joint venture generally help the company in seeing increasing market base of the
company in the new market, reason behind the same is identified that organization used to get
the benefit of goodwill of another company at marketplace. At the same time it has been also
identified that joint venture sometime not used to give the same amount of the respect to the
decision of one individual as compare to that in the franchising form.
CONCLUSION
After going through the above report it has been concluded that there is favourable
business environment for the business to operate in the new market. This was explain with the
help of SWOT and PESTLE in the organization. After that the report concludes the trade block
between EU and NAFTA and barrier which is presented by the NAFTA. After that the report

concludes consideration when importing and exporting and difference between merchandise and
service import and export. In the end the report concludes the evaluation of different way of
tapping new market and also comparison between all of them at marketplace.

REFERENCES
Books and Journals
Abel-Koch, J. and Rohloff, M., 2017. The happy few: German SMEs investing abroad. KfW
Research.
Ahi, A., and et.al, 2017. International market entry: how do small and Medium-Sized enterprises
make decisions?. Journal of International Marketing. 25(1). pp.1-21.
Goyat, S. and Nain, A., 2016. STRATEGIES OF ENTERING IN FOREIGN
MARKET. International Journal of Management Research and Reviews. 6(10). p.1382.
Hollender, L., Zapkau, F.B. and Schwens, C., 2017. SME foreign market entry mode choice and
foreign venture performance: The moderating effect of international experience and
product adaptation. International Business Review. 26(2). pp.250-263.
Hossain, D.M.S., 2018. Management of Merchandising Activities in Fakir Fashion LTD.
Kisanga, N. and Mohammad, S., 2019. Entry mode and institutional conditions to consider when
entering a new market: The case of fashion apparel franchising in Germany.
Melén Hånell, S., Rovira Nordman, E. and Tolstoy, D., 2017. New product development in
foreign customer relationships: a study of international SMEs. Entrepreneurship &
Regional Development, 29(7-8), pp.715-734.
Nova, F.T.J., 2018. MERCHANDISING ACTIVITIESOF TEXTILE HORIZON (Doctoral
dissertation, Daffodil International University).
Palmié, M., and et.al, 2016. Coordination mechanisms for international innovation in SMEs:
Effects on time-to-market and R&D task complexity as a moderator. Small Business
Economics. 46(2). pp.273-294.
Platonov, A., Larionova, V. and Davy, Y., 2019, February. Challenges of Entering International
Markets for Russian Construction Companies. In IOP Conference Series: Materials
Science and Engineering (Vol. 481, No. 1, p. 012060). IOP Publishing.
Rathinamoorthy, R. and Surjit, R., 2017. Apparel Merchandising. CRC Press.
Rosenbaum, S.M., Madsen, T.K. and Johanning, H., 2019. Managing the challenges of
piggybacking into international markets. International Marketing Review.
Tasavori, M., Ghauri, P.N. and Zaefarian, R., 2016. Entering the base of the pyramid market in
India. International Marketing Review. 33(4). pp.555-579.
Tolstoy, D., 2019. The Proactive Initiation of SMEs’ Foreign Business Relationships. European
Management Review. 16(4). pp.1159-1173.
Tynchenko, V.S., and et.al, 2019, August. The use of main methods of entering the agro-
industrial enterprise to the foreign market. In IOP Conference Series: Earth and
Environmental Science (Vol. 315, No. 2, p. 022101). IOP Publishing.
Wadhwa, P., McCormick, M. and Musteen, M., 2017. Technological innovation among
internationality active SMEs in the Czech economy. European Business Review.