Root Coffee House: Strategies for Global Market Expansion

This report examines the international market expansion strategies for Root Coffee House, a small coffee shop business based in Liverpool, England. The report begins by exploring the global business environment, including opportunities and threats like increased competition, tariff barriers, and political instability, while also discussing the benefits of globalization and the impact of MNCs. It then analyzes international trading blocs and agreements, highlighting advantages such as promoting foreign direct investment, maintaining business laws, increasing market efficiency, and facilitating coordination between importers and exporters. The report also delves into tariff and non-tariff barriers, including import duties, export tariffs, quotas, and subsidies. Finally, it explores methods for SMEs to tap into global markets, comparing and contrasting different approaches to provide a comprehensive overview of international market expansion strategies for small businesses, with a focus on the specific context of Root Coffee House's potential growth.

TAPPING INTO NEW AND
INTERNATIONAL
MARKETS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1: Global business environment in which entrepreneurial and small business operate............3
P2: Opportunities and threats in an increasingly competitive international environment...........4
LO2..................................................................................................................................................6
P3: Advantages of international trading blocs and agreements...................................................6
P4: Tariff and non-tariff barriers of international trading environment......................................7
LO3..................................................................................................................................................8
P5: Advantages and disadvantages of exporting and importing and ways to secure a deal........8
P6: Differences between merchandise and service exports and imports...................................10
LO4................................................................................................................................................10
P7: Methods for SMEs to tap into global markets.....................................................................10
P8: Compare and contrast the different ways SMEs can tap into global markets.....................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Tapping into new and international markets is not an easy task for a small business or
company. Currently only large-sized businesses are only able to do this. Basically, a business
requires a lot of funds for effectively running its business operations in different international
market (Kisanga and Mohammad, 2019). However, currently top-level management within most
companies or businesses puts their huge efforts for systematically tapping into new and different
international markets. When any business operates business operations internationally, then it
gains high growth opportunities. That’s why tapping into new and global markets step is
beneficial to a business. This report discusses different aspects and factors of new and global
markets in the context of Root Coffee house. This business which has chosen for this report is
basically a small coffee café business in Liverpool, England which offers different quality range
of coffee flavours. This report discusses how the management of this small coffee business can
take different productive actions towards expanding its business at the wide scale in international
markets.
LO1
P1: Global business environment in which entrepreneurial and small business operate
Global business environment also known as the international business environment,
where many companies from different countries come together for conducting venture activities,
and this is the main concept of global business environment. The main advantage of global
business environment is to enable different countries to get access for running venture operations
in another country. Currently each venture wants to run its daily operations in the international
market. With the support of global market place, any company simply adopt and use new and
latest technology within its workplace (Camilleri, 2018). In this situation, top-level management
at root coffee café have to take steps towards entering in the international market for achieving
better opportunities of growth. When this small venture will enter in this market place, then it
can adopt various new technologies within is daily operations. However, competition within each
sector is continuously increasing just because of globalisation, but this factor provides different
growth opportunities also to different companies and venture in market place (Vasileva and

et.al., 2020). An entrepreneurial and small venture require to put its huge efforts for entering in
the global market. Reason is, currently only highly reputed and well-developed companies are
able to simply expand their venture operations in global market place.
The global business environment impacts to top-level management at Root coffee need to
make some proper strategies for properly entering in the international markets. This global
market affects to company in both ways, positively and negatively. Globalisation is a big aspect
of global market, in which due to this factor there are many MNCs that has entered in the United
Kingdom’s entrepreneurial environment. For example; American giant coffee house company
called Starbucks has successfully expanded its daily operations in the UK, so that this company
currently gives tough competition to Root coffee in market. In this situation, this is negative
impact of the international market place (Sartor and Beamish, 2018). So that, this is very positive
impact of this market. Existing market competition will expand in the future, but root coffee café
business has to be ready for highly competitive market by making different creative and
productive business strategies. This is the main way to business for overcoming barriers There
are governance and technology are two of globalisation in the current time, in which the
management of small venture need to take advantages through these trends.
P2: Opportunities and threats in an increasingly competitive international environment
Currently competitive international market place has different threats and opportunities as
well, in which top management at Root coffee always needs to systematically deal with them.
There are some key opportunities and threats of competitive environment has been discussed
below;
THREATS
High competition: This is one of key threats to this small venture for which it will be faced
while entering in other countries. Currently due to globalisation, many new entrants enter in the
international market, in which this factor can badly affect to business operations of Root coffee,
because many existing global coffee café companies currently gives tough competition to this
small business (Klier and et.al., 2017). This small venture is not able to invest large fund in its
marketing operations, just because of its small size. That’s why other MNCs gives tough
competition to this company in market place.

Tariff barriers: This is another key threat of global competitive business environment. Basically,
when any company expand its business operations in other countries, then existing government
of any country charges high fund to that company in the form of tariff charges (Moorkens and
et.al., 2017). In this situation, this is a big threat to small business like; Root coffee, because this
business not has source of income as other MNCs, so that it can’t pay higher fund to the
government of any country in the form of tariff charges.
Political instability: Political instability is also a key threat which always affects to a business or
company in very negative way (Hennart, Sheng and Carrera Jr, 2017). In this situation, this
factor of global competitive business environment will definitely affect Root coffee café business
in very bad or negative manner.
OPPORTUNITIES
Increase market size: A competitive market environment always gives opportunity to a business
to increase its market size as well, so that root coffee café house has to take huge advantages this
factor of the global business environment. Basically, when competition increases in market, then
businesses also influence to more expand their business in new markets to gain huge competitive
advantage (Veselovsky and et.al., 2017). When this small business increases its marker size, then
its customer base will be automatically improved, and that’s why this factor is considered here as
an opportunity to this small business.
Enables to gain huge foreign exchange: This is one of key opportunities of competitive
international environment to a business. Basically, when root coffee café business will expand its
business operation in international market, then it can simply gain huge foreign exchange.
According to different business experts, when any company gains huge foreign exchange, then it
can simply increase its productivity within the international market (Li, Yi and Cui, 2017). So
that, currently Root coffee business has great opportunity to generate huge foreign exchange by
tapping into other countries’ business environment.
Currently has great chance to take lots of advantages through its competitive international
business environment. Basically, by considering different opportunities, top-level management at
Root coffee café will simply develop their business in market place. On the other side, while
expanding own business operations in international business environment, this small business

can different threats as well, so that existing management at this business have to develop some
productive strategies of business to properly overcome barriers and threat of this business
environment.
LO2
P3: Advantages of international trading blocs and agreements
International trading blocs and agreements are basically known as intergovernmental
agreements which has signed between two or more than two countries to give some relaxation to
each other while conducting trade activities in international market. International trading blocs
mostly affects a company or venture in positive manner, in which some key advantages of
international trading blocs and agreements has been discussed below;
Promotes FDI (foreign direct investment): There are international trading blocs and agreements
beneficial in promoting foreign direct investment. With the support of this advantage, Root
coffee café will enable to find appropriate foreign investors which can provide huge fund to this
small business. After getting this fund, the coffee café will simply expand is business operations
in international trading market.
Maintains business laws at international level: Currently each local business within the UK has
required to follow the business laws which has formulated by the UK’s government. But when
any business runs its operations of business at international level, then it has required to follow
global business laws and ethics. In this situation, there are global trading blocs and agreements
that has influenced to businesses which runs their operations at global level to always follow the
business ethics. Otherwise, no country can allow to do business activities in its authorisation
zone.
Increases market efficiency: Global trading blocs and agreements are very beneficial increasing
market efficiency as well. Basically, high market efficiency always gives great growth
opportunities to different existing business and companies. In this situation, top-level
management at Root coffee need to take lots of advantages through this attribute of international
trading blocs and agreements. When market efficiency increases with the support of international

trading blocs and agreements, then this small business also can increase its sales ratio in market
place.
Maintains effective coordination between importers and exporters: Blocs and agreements are
very beneficial in the terms of maintaining an effective coordination between different exporters
and importers (Del Bo, Ferraris and Florio, 2017). Basically, when any company expands its
various products and services to any international market place, then it has required to sign
contract or agreement with the importer party. These agreements and blocs has involved some
trade terms and conditions which has negotiated by both parties. In this situation, both parties
will enable to remove different conflicts between them by maintaining effective coordination.
Evaluation
These all are key advantages of international blocs and agreements which can very
positively affect to Root coffee, in which upper management at Root coffee has always required
to consider these blocs and agreements.
P4: Tariff and non-tariff barriers of international trading environment
There are lots of tariff and non-tariff barriers exists within the international trading
environment, in which top management at Root coffee have to consider these all barriers while
expanding its business operations at the international market (Whyntie, 2016). Some key tariff
and non-tariff barriers have been discussed below;
Tariff Barriers
Import duty or import tariff: This is one key tariff barriers which will be faced by Root coffee
while tapping into the international markets. This import duty mainly imposed by the importing
nation or country for protecting domestic companies or businesses. In this situation, this small
coffee café business has to fulfil this obligation of import duty to enter in any other country’s
market place.
Export tariff: Export tariff is another key barrier which can will negatively affect to root coffee
café while tapping into the international market segment. Basically, a busines has always
required to pay a certain percentage of fund to exporting country while sending its goods and
services to another country (TOLOIE and et.al., 2016). So that, this factor will be barrier to the

management of root coffee café to pay huge fund in the form on export tariff of duty while
entering into new international market segments.
Non-Tariff Barriers
Quotas: Quotas are basically numerical limit which considers on goods’ quantity that can be
exported and imported in a specified period of time (Smith, 2016). Basically, this barrier has
faced by a company in that situation when importers more than decided amount. In this situation,
existing management of that company will be responsible to pay the fine or penalty to the
department of export and import of any country.
Subsidies: Subsidies is just a payment method which has made by the government for the
domestic companies for enabling them to simply compete different foreign companies. It can be
subsidized prices of input, cash grant, equality participation of government, tax holiday etc.
( Dehghani, Abubakar and Pashna, 2020). This non-tariff barrier will impact to Root coffee café
for reducing costs and earn control in across the market place.
These all are key tariff barriers and non-tariff barriers which will impact to root coffee
café business in both manners positively and negatively, and that’s why existing management at
this small coffee business have to make some appropriate decisions for systematically dealing
with these all barriers.
LO3
P5: Advantages and disadvantages of exporting and importing and ways to secure a deal
Some major advantages and disadvantages of exporting and importing has been discussed
below which existing management at root coffee café business has to consider. This is very
necessary to this small business for gaining appropriate outcomes in international market.
Advantages and disadvantages of exporting
Advantages: The first advantage of exporting is that, , this small business will enable to gain
very small or limitless market. Currently this company serves its various exclusive range of
products only in England, but after tapping into international markets it will enable to access

market places of different countries, and that’s why this is beneficial to this root coffee café
business. On other size, with the support of exporting, the business will enable to gain huge
competitive advantage in market place, because people or customers within market always gives
priority for buying products and services from MNCs than local businesses (Apte and Kapshe,
2020). That’s why these all factors of exporting will positively affect to this company.
Disadvantages: Exporting has different disadvantages as well, suppose, when any company
exports its various goods and services to another country, then importing country charges very
higher fund from the exporter in the form of tariff or duty. On the other side, factor of currency
differentiation factor of international market also highly affects to a company, because changing
own currency into another country’s currency is tough task to the business. That’s why top
management of root coffee café business has to systematically deal with these all disadvantages
of exporting to get very appropriate outcomes while tapping into the international market
through exporting.
Advantages and disadvantages of importing
Advantages: Importing is very beneficial to different customers in the market, because most
countries always import those goods and services from other countries which provides products
and services with very effective quality (Gordon and et.al., 2019). This is basically an American
Multinational company. On the other side, with the support of importing, Root coffee cafe can
simply get latest technological gadgets
Disadvantages: Increase market competition is one key disadvantages of importing. Basically,
when many foreign companies have started to export their different goods and services in the
United Kingdom, then local or domestic business will face high competition in the market place.
This factor can badly affect to this root coffee as well. On the other side, when a country very
much imports, then its foreign exchange will be automatically decreased.
Ways to secure a deal
Top-level management at root coffee café need to choose different ways for securing its
deals with different parties while tapping into international markets (Rekola, 2020). for example,
business can sign contracts and agreements with different foreign parties, follow all guidelines of

importing and exporting countries etc. These all are really very effective ways to root coffee for
securing its deals.
Recommendations
The management at root coffee business have to properly understand and know the actual
advantages and disadvantages of exporting and importing. Currently exporting own goods and
services in other countries is sustainable to this small business. The advantages will affect to this
business in very positive manner. On the other side, the business has to find some productive
ways to deal different disadvantages of export and import.
P6: Differences between merchandise and service exports and imports
The merchandise and service exports and imports are completely different from each
other. Basically, merchandise is a way to provide different goods and services to various retail
customers on time. On the other side, service exports and imports aspects used by a business for
taking or providing different products and services at the international level. This is the basic
difference between merchandise and service export and import. Currently any small business
also can simply adopt this merchandise method of business to generate excellent revenue in the
selected market place.
On the other hand, currently only MNCs can simply conduct activities of imports and
exports in market place, because there are lots of fund required for a business to fulfil different
obligations of imports and exports (Göthberg and Persson, 2017). The merchandise method of
business is much simpler than service imports and exports. That’s why top management at root
coffee café business have choose only those ways of selling its coffee products which are
completely favourable to it.
LO4
P7: Methods for SMEs to tap into global markets
Currently there are lots of appropriate ways or methods simply available in the market
which can be adopted the management of Root coffee café for successfully tapping into

international markets and also align international market, in which some key method or ways has
been discussed below;
Use local affiliate networks
This is very favourable way to this company for properly tapping into the international
market (How To Tap Into International Markets With Your New Product, 2016). Basically, the
management of Root coffee have to use local affiliate networks of that country which it has
chosen to tap its business operations.
Use local social media
In this modern world, this is another key productive method to this small business to
properly tap into international market. Basically, while entering in the selected international
market segment, this business has to use local social media platform of that segment to
effectively interact with different local people of that market segment. This is another key
method which enable o Root coffee for properly aligning international market.
Use the internet for finding local freelance expertise
The management at Root coffee should use internet also for finding appropriate local
freelance expertise of that country which it has selected to tap. This is really very essential way
for tapping into other countries. So that, this will positively affect to this business.
P8: Compare and contrast the different ways SMEs can tap into global markets
Currently joint venture and exporting are two key ways to the management of root coffee
café business to properly tap into any international market place (Cunningham-Williams and
et.al., 2018). These both methods are very favourable to this business, both has their own pros
and cons, in which existing management at business have consider these pros and cons of joint
venture and exporting ways.
Basically, the joint venture method gives opportunity to a business for meeting with other
venture of any selected country to run own business operations in that country through existing
local venture. On the other side, exporting is a way to send own products and services to other
countries on client’s demand.
Pros and cons of joint venture and exporting

The joint venture way is not required much complicated legal formalities as exporting, so
that this is its advantage. Then, finding the appropriate venture of another selected country will
very tough task to this small business, so this is disadvantage of joint venture method (Cortina-
Lorente, Didier and Schmukler, 2016). There are exporting contributes in providing large
market share to a business, so this is advantage of this method, and the root coffee café business
will be required to fulfil very complicated paper work formalities while using this exporting way,
so that this one disadvantage.
Recommendations
Root coffee café business have to choose the exporting way, because this much
favourable than joint venture way. By exporting different goods and services in another country,
this small business will enable to increase its customer base as well (Prashantham and Yip,
2016). While entering in international market, this small business need to systematically deal
with the impact of different tariff and non-tariff barriers.
CONCLUSION
On the basis of above findings, it can be concluded that upper management at root coffee
business has highly required to tap into the international market. It also can be concluded that,
this report has involved different method and ways above which existing management of root
coffee have to adopt for gaining very appropriate results in international market place. Some key
methods also have discussed above in this report which can help to root coffee café properly tap
into new international market segment. It also can be concluded that. this small business have
systematically different pros and cons of these tapping ways.