Relove Technology: International Market Analysis and Strategy

This report examines Relove Technology's strategy for expanding into the Canadian market, analyzing the global business environment, including legal landscapes, cultural considerations, and technological factors. It identifies threats faced by SMEs, such as compliance and financial risks, while also highlighting opportunities like business expansion and increased profitability. The report explores the advantages of international trading blocs and agreements, including tariff and non-tariff barriers. It also delves into importing and exporting processes, differentiating between merchandise and service trade, and providing recommendations for SMEs. Furthermore, the report evaluates various methods for entering international markets, weighing the pros and cons of each approach, and offers justified recommendations for Relove Technology's market entry strategy.

Tapping Into New and
International Markets

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P2: Threats faced by SMEs..........................................................................................................2
M1: Evidence based analysis of global business environment....................................................3
M2: Analysis of implications of threats and opportunities..........................................................3
TASK 2............................................................................................................................................3
P3: Advantages of International trading blocs and agreements...................................................3
P4: Tariff and Non-tariff barriers.................................................................................................4
M3: Advantages of International trading blocs and agreements.................................................5
D1: Critical evaluation of SMEs..................................................................................................6
TASK 3............................................................................................................................................6
P5: Advantages and Disadvantages of Importing and Exporting and the way a deal is secured 6
P6: Difference between merchandise and service imports and exports.......................................7
D2: Recommendations for SMEs................................................................................................8
TASK 4............................................................................................................................................9
P7 & M5: Evaluation of various methods....................................................................................9
P8: Pros and Cons of methods to tap into international markets...............................................10
D3: Justification of recommendations.......................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
International markets are the markets which offer opportunities related to companies for
expanding globally in an effective manner (Alfaro and Chauvin, 2016). Due to the advent of
globalization the companies now have multiple opportunities which are present in the external
business environment. This has been made possible due to the integration between the various
economies in the world. By expanding into these markets the organizations can ensure that they
are able to enhance their overall profitability level. By tapping into opportunities provided by
them the firms can make sure that they are able to achieve the various types of goals and
objectives without problems and issues. In this report, focus will be made on Relove
Technology. It is a company which provides telecommunications equipments to the various
people. It is looking forward to expanding into Canada. In this assignment, specific analysis will
be made on analysis of opportunities and threats, illustration of advantages of trading blocs.
Additionally, determination of importing and exporting process and evaluation of ways in which
SMEs can tap into international markets will be discussed as a part of this project.
TASK 1
P1: Global business environment
Global Business Environment: It means societal and task environment that is influence
by the global forces in business. It includes factors related to economic, technological force,
global labour, global competition, political and legal forces etc. Small and entrepreneurial
business perform their business operation after facings all the challenges related to these above
factors. It involves internal and external environment. Decision making related to use of
resources and capabilities are also influenced under it (Bateman, 2019). Relove Technology is
UK based company that works as telecommunication equipment suppliers. As the organisation
want to expand their business in Canada. Adoption of technology and effective communication
are business environment that was like by the company in the place. Business environment of
Canada is rated free as the government reduce spending and reform labour laws to create flexible
labor market. Many factors that is to faced by this organisation in business environment are
explain in detail in below mentioned paragraphs.
Legal landscape: As the business of Relove Technology operate in different sovereign
countries so tax rules, laws and various regulations of different countries effects their business
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both positively and negatively. By keeping with numerous jurisdiction the company ensure that
they work as per law in that particular place. In Canada income tax rate is 33% and corporate tax
rate is 15% that makes negative impact on profit margin of the company because due to higher
rates of tax huge amount of revenue is paid to government as taxation. As it reduces the profit
and effects the growth of the business also.
Understanding other language and culture: At the global market place culture and
language are quiet similar in most of the countries but some has different also. It is necessary for
Relove technology to learn different languages and cultures to connect with their customers and
to succeed their business across border. If the organisation expand their business in Canada
knowledge of different languages like French, English are also increase. As due to business
expansion there is great interaction among people of different religion like Catholics, Romans,
protestant etc are exist. As language and religion help the company to grow. If the company
starts their business in Canada persons of different religions can easily available to work in less
pay that reduces the expenses and increase the profit that leads to growth in the market.
Technology and communication:To compete globally, internet and networking helps
the small companies and entrepreneurship business most. Efficiency, sale and profitability of
Relove Technology is effected if they adopts unique technology in different countries and
centralized communication system is greatest challenge faced by this company. Canada has
developed into a hotbed of tech entrepreneurship. As it help the organisation to do business at
large scale with less wastage of time and resources in this way profit margin also increase so it is
beneficial to expand business in Canada.
environmental conservation: Reversing the effects of global warming and to conserve
environment are major objectives of all the countries. Rules related to recycling, energy
consumption and green packaging is to be followed by Relove Technology to save environment
(Cusumano, 2020). Due to different suitable weather and climatic change it helps the company to
establish business in Canada. As it help to expand business by increasing revenues that help the
company to survive in the competitive market.
P2: Threats faced by SMEs
Threat face by SMEs in increasing global environment:
Compliance Threat: It is based on corporative governance, law, regulations, politics etc.
On the new market structure there is always a threat related to lack of regulatory certainty
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challenged by Relove Technology. As the penal provisions are high so there is a threat of new
changes in law and regulations that are always face by organisation because these laws are
complicated and difficult to understand & follow so there is a great chance of mistakes involved.
Strategic Threat: It is related to competitor, investor, customer etc. For innovation there
is always a threat of failure of adopting new routes, difficulty faced to understand value of
customer are some threats faced by Relove Technology because it is difficult to observe
consumer behaviour accurately.
Financial Threat: Value from network assets are not be able to extract, inorganic growth
agenda are poorly defined are some threats faced by Relove technology because rate of economy
are always change that makes impact on assets value.
Operational Threat: Process impacting, peoples, system and the value whole business
chain are some factors that creates operational Threat. There is always a threat of failure to
adopt new roles are faced by Relove Technology. Threat of lack of data integrity and
measurement of performance are always faced by this company. Fails to improve agility of
organisation is also faced by the company (Gabor, 2018). Fails to improve agility of organisation
is also faced by the company (Gabor, 2018) because it is difficult to adopt changes by the
company so it effects negatively in the organisation as it reduces profit margin also.
Opportunities that has attracted by SMEs in global market are explain as under.
Business expansion: Relove Technology can expand their business operation by trading
globally to attract large number of customers for buying product from their supermarket which
increase their sales and profit. As with the help of this large it capture huge market market area.
Growth of business in global environment: As due to increase in the business activity
in different countries it involves large number of customers so, it helps SMEs to grow. Relove
Technology makes growth of their business by attracting huge customers of different location as
it also increase believe of customer in the brand. It makes positive impact on company because it
creates trust in consumers minds towards particular items which indirectly affect sales positively.
Increasing sales and profitability: By selling various product across border Relove
technology can easily increase their sales that directly effect their profitability also. It impact
positively because due to increase in sales, survival of brand in the competitive world become
easy.
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Brand Image: Good image of company is also be created in the minds of public as they
thought that company supply their services and goods globally have popular brand among
people. By doing business across overseas Relove technology creates best image as brand for
their items and services. It affects sales positively because persons believe that it supplies best
quality in affordable prices so it attract huge customers.
M1: Evidence based analysis of global business environment
Natural Disaster, rapid pace of technologies, effect of government rules, social and
environmental issue, national and international policies are some global factors that makes both
positive as well as negative impact on the operations of business. There are various SMEs
working in the market to expand their business. Relove Technology is one of them as by
supplying telecommunication equipments across the nation it captures large portion of market to
earn maximum. All the tax policies and laws are to be followed by such company to avoid penal
provision at the time of export to other countries (Weng, Ahmed and Megahed, 2017).
M2: Analysis of implications of threats and opportunities
It slowdowns the economy and increase the market rates of Relove Technology. In
domestic market it involves less growth in demand. Decrease in environmental clearance hurdle
it reduces import duty. Less advance technology is adopted by it that effects negatively on the
profitability of the business of such company. No social impact is involved under it and threat of
entry of multinationals and Chinese substitution are always impacts negatively in this way
implications of threat and opportunities are faced by SMEs in increasing competitive
environment.
TASK 2
P3: Advantages of International trading blocs and agreements
International Trading Blocs: To reduce trade barriers for different group of countries
there is need to do intergovernmental agreement. It leads to increase trade liberalization across
the border. It also improve sales because it reduce restriction in the global market. It have various
advantages in trade between close countries but some of these are describe in the following
points (Kotabe and Kothari, 2016). As due to decline in the sales in current state, Relove
technology try to grow their business in Canada by offering their services at low and affordable
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cost. It attract huge number of customers, that indirectly effects sales and rise profit margin. By
taking Canadian currency company can expand their business in positive manner.
Advantages of International Trading Blocs:
 It is beneficial for customers because foreign goods at reasonable cost are easily
available in the market.
 It helps to improve economy by reducing the prices of product as due to this large public
attracted and buy more. Relove technology offer their items at reasonable price in this
way it increase their sales.
 Growth in trade helps to create employment also. To expanding their business across the
borders Relove technology require huge employees to work.
 Specialization help to develop economies of scale that makes the company more
efficient. Relove Technology specialize in the sector they do best as they know it needs to
say their output to other countries.
 Different competitors of different countries compete each other that helps Relove
Technology to increase their efficiency to survive in the market by increasing their
market share.
International trading agreement cover all the export and import related to single and
certain categories of goods. It is a wide ranging of taxes, trade treaty which include guarantee of
investment and tariff. It is a contract between two or more countries as they agree to trade with
each other.
Advantages of International Trading Agreement:
Trade and Tarrifs: It involves import duties, export duties etc. It also serves primary
purposes. First one is to raise revenue by collecting a tax and the other one is to protect the
domestic industries of nation as cost of product become expensive due to charging of tax so it
consumers interested to buy domestic item to save money (Parthasarathy, Momaya and Jha,
2017).
Modern trading Blocs: On various goods tarrif is to be eliminated and trade areas are also
be reduced. Free trade are also be combine by custom union. Economic policies, industrial
policies and regulations are harmonies by members of common market.
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Hanseatic League Economic power is to be combine to secure favourable trading
previlage.
P4: Tariff and Non-tariff barriers
Tariff Barriers: To protect the interest of companies and local industries, tax is imposed
upon imports It is the common method of controlling imports and exports. It includes custom,
tax and duty. The main role of tarrif is to protect domestic industries and provide remedy if
required as it serves as a source of revenue. It also plays various role such as to improve trade
deficit, protection from dumping, to protect domestic jobs. It makes positive impact as it give
suggestions and guideline to correct mistakes. As it also help to increase GDP of the country
because huge amount was collected from public in the form tax that tends to increase growth and
development in the country.
 Import duty: It is type of tax that is imposed at the time of import. To protect domestic
industries it is to be imposed as Relove Technology attracts import duty that decrease
their revenue. Due to hike in the import duty it makes the thing and services expensive so
it make negative impact on business expansion. Because less customers are attracted due
to high prices of product and services that reduces the profit of company.
 export tariff: It is the duty that is levied at the time of exporting the goods to other
countries. Relove technology paid such type of tax at the time of selling their product
over the borders. As it increase the cost of doing business for exporting industries so it
decline product quality also.
 transit duties: It is imposed on commodities relates to one country, cross another and are
consigned to another. As it increase the expenses of Relove texchnology that reduce the
profit margin of the company in this way it makes negative impact igf the business
expand in Canada.
 Specific duty: It is fixed amount that is leived as tax after considering the weight and
volume. Relove Technology deal in large number of gadgets so large amount of reveue is
paid as tax due to their weights. It reduces the profit and makes negative impact.
 compound duty: It is to be imposed after combing ad valorem duty and specific duty
(Vasishth and Guleria, 2017). Due to high value of gadgets it increase the amount of duty
that increase the expenses and that affects profit of Relove technology negatively.
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Non tariff Barrier: It includes non trade restrictions such as government procedure,
government regulation and policies.
 Subsidies: To compete against foreign goods, the payment is to be made by government
to domestic producer. It affects the GDP and growth of the country negatively. It tends to
increase inflation rate due to this purchasing power of person decreases so people avoid
to purchase gadgets and telecommunication services. It reduce the sale of Relove
Technology that makes negative impact on sale.
 voluntary export restraint: The quota for export are to be fixed by exporting countries.
Relove technology fixes a quota regarding maximum quantity they can export overseas.
 Quotas: During a particular period of time how much quantity is to be export and and
import is to be numerically expressed. If the value is greater than specified amount, it
attracts penalty. Relove Technology to avoid penal provisions make import and export as
per standard fix by government (Vilaça, 2017).
M3: Advantages of International trading blocs and agreements
Various advantages of international trading blocs and agreement are improvement in
trade creation by removing tariff, Specialization is to be increased due to increase in trade and
Competition level is also be increased. Impact of international trading blocs and agreement
includes various factors such as it provides great opportunity to Relove technology to capture
large market area across nation that helps to increase their profit margin also. There is always a
threat of failure to survive in the market is faced by company because there are large number of
MNCs are working in the market. Large tax policies are require to follow if it needs to expand
their business.
D1: Critical evaluation of SMEs
SMEs are growing businesses which are able to make sure that they take the right
advantage of the opportunities provided to them in an appropriate manner so that the
achievement of the goals and objectives can be facilitated by them. They can identify
opportunities and overcome the barriers in doing so. Relove Technology can use the available
opportunities in Canada and must also identify the barriers there so that a suitable approach can
be used to overcome them and ensuring the achievement of higher-level of profits in the future
time period.
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TASK 3
P5: Advantages and Disadvantages of Importing and Exporting and the way a deal is secured
Importing-
Importing refers to a process in which the goods and services are transferred from one
country to another (Andersson and et.al., 2016). By making use of it the companies can make
sure that they are able to handle their international business in a better manner. Relove
Technology needs to make sure that it can handle its imports effectively. This can help its
business in Canada.
Advantages-
 Quality inputs- Through importing an organization is able to get quality inputs which
can be quite beneficial for the production of various goods. Relove Technology needs to
make sure that it can get quality inputs through importing which will benefit its business
a lot.
 Low tax rates- By importing a firm can make sure that the benefit of low tax rates can be
taken effectively. In the context of Relove Technology this can be useful to ensure that
more profits can be earned by it.
Disadvantages-
 Can be costly- Importing of goods can be quite a costly process and thus in this way can
create difficulties for the company. Therefore it can create problems for Relove
Technology and can create a disadvantage.
 Trade restrictions- Importing of goods can face different types of trade restrictions in
some countries. For Relove Technology it can lead towards a disadvantage.
Exporting-
Exporting is a process through which the firms are able to transfer their goods and services to the
other countries (Dwyer and Vongvisouk, 2019). Relove Technology can make the use of this
process so that it is able to ensure that it can earn more profits in its business in Canada.
Advantages-
 Increase in competitiveness- This process is quite useful for the firms to ensure that they
are able to compete in a better manner. Thus in this way Relove Technology can become
more competitive.
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 Increase in sales- With the use of this process the organizations can ensure that they can
enhance their level of sales. For Relove Technology, this can create an advantage.
Disadvantages-
 Competition- Higher-level of competition is a major disadvantage which is associated
with exporting. Thus in the context of Relove Technology it can lead towards a
disadvantage.
 Costs involved- Exporting involves higher-level of costs on the part of the companies.
For Relove Technology, this can create a disadvantage.
Securing a deal- For the purpose of securing a deal the companies are required to make
sure that they analyse the pros and cons of the deal and then take the appropriate steps to secure
the deal in an effective manner. There are different methods through which a deal can be secured
effectively. These methods are explained as follows-
Licencing- It is an arrangement in which a business organization provides specific rights
to another company to manufacture its products in return of a specific fee. Thus the use of this
method is highly recommendable so that a deal can be secured between two companies in an
effective manner. Relove Technology can make the use of this method in Canada so that a deal
can be made whenever required.
Agreement between buyer and seller- It is an agreement under which the buyer and
seller enter into a contract and there is a sale and purchase of goods involved. The use of this
method is very useful for the purpose of securing a deal. Relove Technology can make the use of
this method in Canada so that it is able to ensure a regular flow of revenues through sales.
Imports and Exports- Under Imports the goods are purchased from outside the country.
Under Exports the goods are sold outside the country. Both of these methods are very useful for
the organizations so that they are able to secure a deal in a much effective manner. Relove
Technology can make use of this method in Canada so that a significant boost is provided to its
business.
P6: Difference between merchandise and service imports and exports
It is explained as follows-
Basis Merchandise imports and Service imports and exports
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exports
Process There is a lengthier process
which is involved under it.
This is so because there is a
requirement for the companies
to obtain specific permissions
for them so that they are able
to deal in them in an effective
manner.
In it the process involved is
comparatively less lengthier.
This is so because the
organizations are able to obtain
the permissions which are
related to them easily and it is
quite an easy process for them.
Rules and regulations In it, the rules and regulations
which are followed are
comparatively stricter and the
companies have to make sure
that they can follow them.
There are various legal
formalities which are involved
and the rules and regulations
of the countries are different
from each other.
Here, the rules and regulations
followed are comparatively
less stricter and thus this
makes it easier for the
companies to indulge in it. The
rules and regulations regarding
it are quite relaxed and thus
this makes it easier for the
management of the firms to
engage in it.
Cost The cost which is involved
under it is more as compared
to services. This is so because
the companies are required to
do more expenses on it.
The cost involved under it is
less as compared to the
merchandise. This is so
because there are
comparatively less legal
formalities which are involved
under it.
Thus from the above differentiation it can be stated that the managers of Relove
Technology should consider the different types of factors in order to ensure that they are able to
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