International Business Report: UK Expansion for Organic Cotton Wear

This report, prepared for an SME company "Rahat Continental Limited," investigates the expansion of its e-commerce business, specifically focusing on the UK market for organic cotton wear. The report begins with an introduction to international business, emphasizing the role of globalization and the need for thorough market research. Task 1 delves into the company's history, the importance of market research, and the structure of business activities, including international company structure, accounting, and currency rates. Task 2 examines key business drivers behind the company's expansion, such as strategies, people, cash flow, and risk minimization, alongside barriers to trade and protectionist policies. It also addresses ethical, social, and legal issues, along with cross-cultural considerations. Finally, Task 3 compares e-commerce to other expansion methods, explores international marketing aspects, and assesses the potential impacts of Brexit on the venture. The report concludes with a summary of findings and recommendations for the company's successful entry into the UK market.

International Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
History of the company..........................................................................................................1
Business activities structure: .................................................................................................2
TASK 2............................................................................................................................................3
Key business drivers behind company’s expansion in the UK..............................................3
Important barriers to trade and protectionist policies related to new venture.......................5
Ethical, social and legal issues that are required to be taken into account.............................7
Cross-culture issues that are relevant to the proposed venture...............................................8
TASK 3............................................................................................................................................9
E-commerce option versus other methods of expansion........................................................9
Aspect of international marketing relevant to the proposed venture......................................9
Potential impacts of Brexit on new venture.........................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
International business is a platform where most of the companies want to invest their
amount in order to expand their operations. The other aspects of doing this are to operate all
those commercial transactions that occur among two or more than two regions and country.
However, globalisation has made positive effect in every business those are operating in global
market. It is possible for companies to operate in various types of markets where opportunities
can be found more for performing better operations. As a global business consultant for an
upcoming SME company “Rahat Continental Limited” a well organise research is needed to be
conducted for the purpose of increasing scope of their business (Cadogan, 2012).
This project report covers various aspects such as different contemporary issues that
areassociated with the organisation. Identification of international business functions based on
21st Century trends. Some useful methods that would help companies to enter into international
markets will be needed to be implemnt. Examination of crucial facts about internationalise and
alternatives techniques of markets are discuss under this report . Further, this report determines
the cultural impacts on domestic as well as global markets.
TASK 1
History of the company
The term international business is associated with every business event that is taken into
account in order to expand in global market. It is crucial for the firms to serve a large number of
customers and lead to increase in overall satisfaction stage of customers. It consists of various
aspects such as export of products and services, providing license to develop products in the host
nation, opening a joint venture with other company and so on. In order to expand their e-
commerce business in the UK market, it is vital for ‘Rahat continental limited’ to consider
different factors that can directly affect its operations at international level. Their efficiency is
the primary aim which would be retained by making a proper analysis of customers’
requirements and their demands (Stahl and Tung, 2015).
Further, there are some other challenges that exist at the international level because of
which company cannot be able to act against all those hurdles that are coming in their ways. The
main objective of market research is to provide all relevant information to “Rahat continental
limited” to solve various marketing implications that a business will mostly face as internal level
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of their business planning. In fact, strategies like as market segmentation which is required to
determine particular group within a market that can easily be able to grab crucial opportunities
which is been delivery by new e-commerce venture. Another one is product differentiation which
is necessary to develop an identity for a specific product and service that is being offered by
company. Successful business is having an extensive information of their customers as well as
competitors. Market research is a procedure of collecting data which will assist the firm to
become aware about how company hope to sell their products. The primary motive is to identify
their reactions about their present as well as potential goods and services. In this part of research
work, it is vital to make use of correct research analysis that can provide more appropriate
information about the demand of customers (Bordo and Helbling, 2011).
As company wants to make expansion in the UK market by offering organic cotton wear
for infant, this would be an attractive idea that can help them to gain maximum attention of
people as well as local government. Before setting any new business as mentioned in the case, it
is crucial to make proper analysis of marketing opportunities and issues. With the help of well
organised marketing research which specifies that data is needed to address these problems and
designs the method for collecting vital information so that perfect products can be delivered to
them. The process and results of sales forecasting is creating more common interest between
business managers. By corporate planning and proper investment proposal, these problems can
easily be resolved.
Extensive market research: It is known as well effective research strategies which are
often used in order to attain market penetration with making data regarding product base line. It
is also said to be opposite of selective distribution. Reliable and up-to-date information is
required to be gathered by the help of market research that can create high value to a business. It
is the only way to make product reach to the respective customers as well as gain maximum
advantages over other competitors. Likewise, there are various reasons in the present scenario to
collect potential benefits by selling attractive products over e-commerce (Meyer and Peng,
2016).
Business activities structure:
Expanding business overseas means that reaching to new customers and potentially boost
the benefits collected after selling of organic cotton wears. Before conducting business on
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international scale, it is vital to analyse various contemporary issues thoat are presented at the
place. Some of them are mentioned underneath:
 International company structure: The “Rahat continental limited” is having primary
aims that are to be use into global market. They must have a perfect and balanced team
in place that are use up for every challenge those are affecting overall business.. The
basic structure of company’s and there location of team is needs to be taken in order
considered.
 International accounting: One of the main legal aspects to be taken into accounts ,when
it comes to deal with international business. Tax obligation is the primary concern that is
important for the company. Accounting can be present at as a big challenge to
multinational firms in order to make use of corporate tax at international level. They
have different tax systems and compliances that must be followed accordingly.
 Currency rates: It is the most important part for every company that is going for
expansion of their business at international level. Price setting and payment techniques
are major consideration as well as currency rate fluctuation is another big issues to face.
Major deviations can make huge impacts on the balance of business expenditure and
profits of business.
TASK 2
Key business drivers behind company’s expansion in the UK
As per the mentioned case about Rahat Continental limited that, they want to make
expansion of their business in UK market. They are planning to produce organic cotton wears for
infants. The primary aspect of business growth drivers is strategy. With increasing idea of new
business they requires to be more attractive that can changes minds of customers and turns into
innovative business plan. Strategies revolve around the formulation of new product to market or
they are present on current goods or services requiref in delivering in a new manner. Enhancing
growth would be driven by building more new innovative products in new market place in the
UK. Although innovative strategies and operations would also determine as crucial growth
driver. It has been said that company which is growing at a faster rate often has a key individual
driving them for forecasting for better future. The operations side, a growing firms require to
formulate an appropriate infrastructure with grow to its business as the same time. This consists
of IT system, processes and even offices spaces too is an important part of for every business
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expansion. The cited company are taking more effective planning methods to raw material for
the prupose of expanding their portfolios as per the preferred options. The cotton market is
growing once more after three consecutive period of time. This has becomes an increasingly
significane part of their clothing and basic good planning. UK organic market is more strongly
growing with total of 7.1%. There are various key drivers that are related with business
expansion. It is known as:
Strategies: In the fast growing business, it is necessary to have perfect ideas that can
assist an organisation to make business more reliable and effective manner. Apart from this,
people and operations are another important key growth drivers that are helpful for an
organisation to increase their business into local and domestic market. On the operational side, a
growing business required to formulate an appropriate infrasturture and keep adjustment as per
the basic requirements.
Leaders have to make the direct link among the drivers into account as they make their
vital decisions or risk for running their business into the same ground. Employees need to make
understand every driver in respects to think strategically and communication more efficiently in
long period of time. It will help to enhance its own career opportunities. Some of them are
mentioned underneath:
 Cash: It is an utmost important drives as a business. Because of this, a business cannot
pay their bills, salary to employees and cannot able to buy raw material. It lays out for an
organisation to analyse the three key components of cash and liquidity position in detail
to use it wisely to make growth for their business (Michailova, 2011).
 Sales and Profit: It is more determine as total amount of gain they are getting from
selling products and services. Managers clarify the difference among profit and cash flow
a company is generating during the time.
 Assets: It is more important for companies to make use of their equipment to generate
revenue whether it is tangible or some others one. It is crucial to develop products with
maximum demand in the market without having any obligations.
 People: They are pointed at the centre of five main drivers. They are vital for making
useful decision about success of products in the nation. They make a crucial business
meeting with various outside stakeholders, employees and customers to make financial
decisions. These are necessary for the purpose of making further growth of company.
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 Risk minimisation: It is necessary to evaluation of all risk those are present in
organisation during evaluation or business activities. This will assists in increase growth
in more effectively. Financial risk, political and social risk are needed to be taken into
consideration.
Sale expansion: This seems to be utmost important aspects that could be feeling impact
on growth of consumer market in FMCG businesses. Fashion trends are increase at faster rate
and people are more demanding. To deal with all these aspects they need to sale maximum
during the time (Marschan-Piekkari and Welch, 2011).
Risk management: Expanding into various market can be more effective ways to
leverage about core business for the purpose of growth. Searching best level of resources in
market analysis and entry modes would formulate to reduce risk that are associated with business
organisation.
Acquisition of resources: There is a regular change a company is facing in current
scenario. It can be determined by measuring their total revenue and gains collected during the
period of time. It is necessary for the purpose of making internal expansion and by margining
into a new segment of business operations.
Entering in new market: It is an effective driver that can assist in provide crucial
information about introducing new products into global market. The best option is to select that
entry mode which is more easily be able to increase the profitability of an organisation.
Important barriers to trade and protectionist policies related to new venture
Protectionism is known as an economic policy of imposing restrictions over imports from
other nations through various methods such as tariffs on imported products, quotas and other
government regulations. In the legal government, protectionism is advocated by other parties that
hold far-left economic positions. Trade protection is an important technique that helps companies
to make sure that their products should be transferred in an easy manner from one nation to
another (Vagts and et. al., 2015).
It makes limitations over imports or guide to promote exports by imposing up barriers to
trade. International trade has increased at a faster rate because of their wide range of products
and services. The number of products that a host country customers can select from decrease in
costs of there products through increase competitions. While every aspects related with them are
seems to be more beneficial as free trade is not wholly acceptable as completely too every
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nations. Before known crucial aspects, it is necessary to look after some useful facts which can
be more helpful for Rahat continental limited.
Tariff: It is known as the simplest term as tax. It included to the cost of good those are
imported and is one of different trade policies that a nations can enact. It is mostly developed in
order increase their overall growth for developing economic of scale and to create more
opportunities in near future (Forsgren and Johanson, 2014). The real rate of tariff applicable in
importing is about 10%. Most trade regulations works on the same common principles that are
imposition of some sort of cost on trade that increase the cost of traded products. Some crucial
trade barriers are: Specific tariffs: It is known as a fixed fee levied on single units of an imported product
which is referred to a specific tariff. Such kind of barriers can vary as per the types of
goods imported. It is mention in the case, the Rahat continental limited is collecting raw
material from India. Because they are having important suppliers which is delivering raw
material to the company in UK. Ad Valorem tariffs: It is mostly related with the value and such kind of tariff is levied on
products which are based on certain percentage of those products that are having
maximum advantages. It varies as per the types of products they are importing from
another country. Licenses: It is another important barrier that must be kept by company before making any
new planning for expanding their business. It is granted by the local government which
allows business to import certain kinds of goods in nation. This can create a restriction on
competition and enhances cost which will be faced by consumers. In the current time ILB
licences is needed to be use as guide to make import in UK. In case of department for
environment, food and rural affairs issues licenses that is needed to import products into
new market.
 Import Quota: It is a kind of restriction that is placed on the total amount of specific
products that are going to be imported. These kinds of barriers are often related with the
issue of license such as a country can place a quota on the volume of import over citrus
fruits that are allowed.
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Ethical, social and legal issues that are required to be taken into account
According to the mentioned case about Rahat continental limited, they are going for
international market for the purpose of making latest innovation in e-commerce facilities. There
are some social and ethical aspects those are company’s needs to be taken into consideration,
while making strategies for global business. It has been seen that a company operating in their
host country, most of their employees work from areas with the some culture. They share the
social and ethical standards of company staffs and administration to a wide scale (Dunning,
2013). The company must have to select the extent to which it will respect international market
practices which will be maintained as a core business operation.
 Employment: The first and foremost part of every new business is related with creating
employment opportunities. After that wage and the working environment in global areas
are often inferior to those in the UK. Even after making fulfilment of every legal
consideration, it is necessary to provide all basic requirements that are crucial for the
employees.
 Operations: As the company entering into a foreign market mainly develop some local
operation in their particular area. Few practices in the international market must consist
of activities that can be immoral or illegal at home. A company needs to formulate safe
working conditions and adhere to contractual situations with following the basic
standards.
 Marketing: As companies needed to have certain amount of powers to make influence
societies by making proper advertising and they have ethical and social responsibilities. It
has been seen that small firms are helping large companies to determine their suppliers
advertising that does not meet their ethical standards.
 Taxes: It is a crucial activity in international market that provides a business a platform
to a low tax jurisdiction that lets companies to avoid paying heaving taxes by the way of
transfer pricing.
 Environmental issues: There are certain kind of issues that are related with population
and waste material. The production of product that are imported and exported are need to
be analyse in more effective manner.
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 Bribery issues: This seems to be more well recognise form of corruption that would
affect productivity and growth of an organisation. It is necessary to make backup plan to
deal with them.
 Child labour: This is known as one of the major issues which are seen in nowadays.
This is illegal in any nation because their overall growth can get affected.
Cross-culture issues that are relevant to the proposed venture
Managing cross-culture issues in the global business management is an important part for
every business concern. In order to gain positive results, it is vital to determine cultural diversity
of the nation that can or cannot bring success, but not doing so will maximise the chances of
stagnation or downfall. The global era is becoming smaller every day and therefore, the Indian
entrepreneurs and managers get associated in the international business as it was seen in the
mentioned case of Rahat continental. There are various issues that are mainly related with the
cross culture of that particular nation where the new business is going to be started. Some of
them are mentioned underneath:
Languages: It is necessary for every company to understand all sorts of language that are
being spoken in that particular nation. This will assist in making business deal in more effective
manner. By having specific ideas about various languages, one can easily communicate with
each other.
High context culture with low: These are said to be more effective ways to
communicate with all implicit that are rely heavily on context. Whereas low context culture are
mostly depend on explicit verbal communication that are needed in business planning (Doz,
2011).
Idealism vs pragmatism: According to this particular aspects which is being practical
and having moral principles which are opposition. This belief is a derivative of practical
classification. While idealism is said to be belief which will be adopt with certain moral
principles that are exist in negative effects on people lives.
Individualism vs collectivism: This seems to be cultural values which is being
characterize through giving maximum focus on connection between individual and prioritization
of a group over an individualism. Every people need to act according to the their own
perceptions.
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TASK 3
E-commerce option versus other methods of expansion
E-commerce allow customers to electronically exchange products and services without
any other barriers of time and distance. Nowadays, it is increases at a faster rate at domestic as
well as international market (Wild, Wild and Han, 2014). Plenty of products are sold over
internet by using various applications that are showing multiple varieties of products with
economical costs. The planning done by Rahat continental limited for offering organic cotton
wear by using e-commerce would be a more reliable decision. By increasing the requirement of
e-commerce, every business concern is looking to have an online store where they can sell their
products and services easily. By doing this, they can get maximum advantages in a
comprehensive manner. It is beneficial as compared to other modes because of below mentioned
reasons that make e-commerce different:
 Convenience and easiness: For plenty of people, it is a preferred way of shopping. The
best thing about this buying options is that, they are quick and user friendly with the
capability to transfer funds online.
 Attract new customers: Through provide attractive advertisement to their products and
economical prices to them. By making valuable differentiation with other companies
those are also in the same line (Killing, 2012).
 Decreasing cost of inventory management: One of the best benefits a company can get
over e-commerce is by making separation of their own products with another one. By
making comparison among their quality and prices, inventory costs can be controlled.
Aspect of international marketing relevant to the proposed venture
Marketing is the procedure of developing perfect understanding and cooperation among
suppliers and clients. Sales would take this process up to a next level further, it can be
characterised as fulfilling the requirement of customers. To commence business in the foreign
market, there are various entry modes. Some of them are discussed underneath:
 E-commerce VS Joint venture: It is the most attractive strategy which is used by firms
to enter in a foreign market by sharing ownership and operations with another company.
There are some common purposes of doing so such as technology sharing, risk and
reward exchanging, etc. A business will be require to get associated with another as joint
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venture. This will assist in increasing more chances of profitability and growth for the
company.
 E-commerce Vs Exporting: It is a well organised process of selling products and
services manufactured in one nation to another. It can be either direct or indirect in which
exporter has no any control over their products in international market. According to this
particular aspects which would help an organisation to increase their business through
using online delivery of orders and booking.
 E-Commerce Vs Outsourcing: It is said to be a cost effective planning which can be
more useful for Rahat continental limited to operate their business in the UK. It consists
of both domestic as well as foreign contracting. The primary objective is to concentrate
on its core process in-spite of supporting other ones (Modes of entry into foreign market,
2018). By doing so, business can increase there profitability through increase business by
expanding their operations in more than one units.
 E-Commerce Vs Franchising: Under which semi-independent business owner would
pay fees and royalty to a parent company. They get royalty in return for the right to
examine by its trademarks to sell its goods and services. It helps to expand business
through using online mode in new country.
Differences in marketing mix elements:
There are various ingredients in the marketing mix which are related with product, place,
price and promotion. This seems to be the combination of all elements that are being used to
make products available in the marketplace.
Local responsiveness: It is said to be one of the main aspects which is willingness of
firms to make proper adjustment in their present products and services in case of conducting
business at domestic level.
Potential impacts of Brexit on new venture
The market and odd makers have been capture off safeguard by the UK Brexit vote.
There is always present uncertainty for both British and multinational businesses regulating in
UK. The new venture would be acceptable by UK people in case every demand and regulations
are made as per their requirements (Dunning, 2012). It is vital of the new business operation to
create maximum job opportunities so that chances of growth can be enhanced.
 There is chance of global impact which would be faced by the new venture.
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 Changes of culture can also be the affecting the business operations.
EU is having plenty of rules and regulation those are related with Brexit vote. They all
are have legal forces in UK until the Brexit negotiation are complete. Immigration is having
biggest individual reason that are present in nation. This will assist in proper use of regulation to
conduct business operations in more effective manner.
CONCLUSION
From the above project report, it has been concluded that setting up a new business at
international level is a difficult task. They need to deal with various aspects that are affecting
their business operations either directly or indirectly. It is necessary to make use of various
culture issues and methods in more effective manner so that maximum growth and opportunities
can be generated in more quick time. It is necessary to make evaluation of all the impacts those
are present in the business prior making any critical decisions.
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REFERENCES
Books and Journals:
Dunning, J. H., 2012. International Production and the Multinational Enterprise (RLE
International Business). Routledge.
Killing, P., 2012. Strategies for joint venture success (RLE international business) (Vol. 22).
Routledge.
Wild, J. J., Wild, K. L. and Han, J. C., 2014. International business. Pearson Education Limited.
Doz, Y., 2011. Qualitative research for international business. Journal of International Business
Studies. 42(5). pp.582-590.
Dunning, J. H., 2013. Multinationals, Technology & Competitiveness (RLE International
Business) (Vol. 13). Routledge.
Forsgren, M. and Johanson, J., 2014. Managing networks in international business. Routledge.
Vagts, D. F. and et.al., 2015. Transnational business problems. West Academic.
Marschan-Piekkari, R. and Welch, C. eds., 2011. Rethinking the case study in international
business and management research. Edward Elgar Publishing.
Michailova, S., 2011. Contextualizing in international business research: why do we need more
of it and how can we be better at it?. Scandinavian Journal of Management. 27(1).
pp.129-139.
Cadogan, J. W., 2012. International marketing, strategic orientations and business success:
Reflections on the path ahead. International Marketing Review. 29(4). pp.340-348.
Stahl, G. K. and Tung, R. L., 2015. Towards a more balanced treatment of culture in
international business studies: The need for positive cross-cultural scholarship. Journal of
International Business Studies. 46(4). pp.391-414.
Bordo, M. D. and Helbling, T. F., 2011. International business cycle synchronization in historical
perspective. The Manchester School. 79(2). pp.208-238.
Meyer, K. and Peng, M. W., 2016. International business. Cengage Learning.
Online
Modes of entry into foreign market. 2018. [Online]. Available through:
<http://www.bbamantra.com/modes-of-entry-in-foreign-market/>.
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