International Markets: SMEs, Trade Agreements, and Global Growth

This report assesses the international expansion of Small and Medium-sized Enterprises (SMEs), focusing on the United Kingdom as a chosen country. It examines the global business environment, highlighting key drivers such as technological advancement, start-up funding, social networks, and education levels. The rationale behind SMEs' international expansion, including increased customer base and profitability, is discussed. The report further identifies opportunities like declining trade barriers and access to technology, alongside challenges such as limited access to finance and lack of sales channels. It explores various trade agreements, including those between the UK and Australia, and the UK and New Zealand, evaluating their advantages and disadvantages. Finally, the report discusses tariff and non-tariff barriers and their impact on global growth, concluding that cross-border trades facilitate access to quality products and enhance living standards.

Tapping into New and
International Markets

Table of Contents
PART 1............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of chosen country...................................................................................................3
Global Business Environment and key global drivers...........................................................3
Rationale of SMEs in expansion of business.........................................................................4
Opportunities and challenges for global growth....................................................................5
Range of Trading blocs and agreements................................................................................6
Tariff and non-tariff barriers..................................................................................................8
Critically evaluate how these stimulate and generate global growth.....................................8
CONCLUSION................................................................................................................................8
PART-2..........................................................................................................................................10
Brochure...............................................................................................................................10
REFERENCES..............................................................................................................................15

PART 1
INTRODUCTION
International expansion of business could be determined as initiating cross-border trades in different economic nation in order
to serve a customer base residing in that foreign economic nation. For instance, it includes legalities to be maintained in order to trade
goods and services offered by a business organisation in that particular economic nation. United Kingdom has been taken into
consideration as the chosen country from the region of Europe in order to complete this particular report assessment. This report
assessment will be comprised of insightful knowledge of SMEs in chosen country and region. Furthermore, it will be further including
opportunities and challenges of growth for SMEs in chosen country (Ahmed, and Alam, 2021).
MAIN BODY
Overview of chosen country
The chosen country i.e., United Kingdom is among leading economic nations with upright business relationship with different
economic nation within as well as outside the region of Europe. For instance, the chosen country has been determined as one of the
most preferred as well as safest place for carrying out business activities and practices in order to accomplish desired goals and
objectives. UK is a considered as home to pro-innovation regulators, attained gold standard in the field of corporate governance,
robust market infrastructure, etc. which makes it suitable for business organisations to carry out their business operations and activities
in an efficient manner.
Global Business Environment and key global drivers
SMEs (Small and Medium Sized Enterprise) is referred to business organisations operating upon small and medium scale of
operations. For instance, there are immense number of SMEs operating in global business environment which are engaged in serving a
small amount of customer base from their small-scale operations. In addition to that, it facilitates in creating job opportunities in
business environment with establishment of additional business unit in order to serve customers which facilitates in economic

development. It includes small amount of investment in order to establish the desired business unit which provides a platform to carry
out business operations in order to serve customers with their products and services.
There are various different key global drivers which result in influencing SMEs in chosen country which are as follows;
 Technological advancement: With the increasing technological advancement, it has been resulting in influencing
development of SMEs in United Kingdom. For instance, with access to use advanced and latest technological elements, people
in society are coming up with innovative and creative approach of business in order to serve customers in society.
 Start-up Funding: With the increasing support to start-ups by providing them with financial support in order to fuel up their
business operations and activities. For instance, it facilitates people in society to transform their business ideas into reality.
 Social network: People in existing environment are majorly aimed at building their social network in order to increase their
reach as well as look out for most effective business opportunity. Therefore, this factor has been influencing development of
SMEs in United Kingdom.
 Education level: With the increasing level of education, people now have access to higher information and knowledge which
supports them in their journey towards establishment small scale business unit (Belyaeva, 2018).
Rationale of SMEs in expansion of business
There are various rationale or meaningful purpose behind international expansion of SMEs lies in various different aspects
which are as follows:
 Increased Customer base: International expansion of SMEs facilitate in serving a large amount of customer base residing in
other economic nation in order to ensure effective business expansion. For instance, it includes initiatives including
establishment of additional business unit in another economic nation as well as starting cross-border trades in order to serve
higher number of customer base.
 Profitability: The consideration of expansion of business further contributes additional values towards increasing profitability
of company with increasing overall sales. For instance, this aspect has been considered as one of the most essential rationale

behind further expansion of SMEs in another economic nation. Furthermore, it provides monetary strength to businesses as
well as enhances financial stability to company which contributes additional values towards growth and development of that
particular business (Bhagra, and Sharma, 2018).
Opportunities and challenges for global growth
In the journey towards global expansion of business, an SME faces various different situations which are classified under the
category of opportunities and challenges in the same. In order to be precise, these opportunities and challenges are as follows;
Opportunities
 Declining or reducing trade barriers: With the increasing cross-border trades among different economic nations,
government authorities have been initiating additional efforts towards reducing trade barriers in order to facilitate smooth
cross-border trades. For instance, this influencing factor results in being a major opportunity for an SME to step into global
market in order to serve their products and services.
 Access to technological advancement: With the increasing technological advancement as well as access to the same, it has
been resulted in creating a huge opportunity for businesses for further expansion of business upon global platforms. In addition
to that, it facilitates in acquiring required information, integrated supply chain, quality products, etc. which contributes
additional values towards society as well as business environment with international expansion of that particular business
organisation. Furthermore, it allows an SME owner in reducing costs of operations and activities in order to serve customers
with quality products and services at lower prices.
 Increasing customer demands: As the income level of consumers is increasing, it has been observed with increasing
consumer demands for products and services in order to meet their needs and requirements. In addition to that, it creates a
opportunity for SMEs to expand globally in order to meet customer demands in the global business environment. Though, it
has also created high level of competition among businesses in meeting customer demands in the market based upon quality
and price of products and services (Damarwulan, and Farida, 2018).

Challenges
 Limited Access to finance: This is one of the most common challenges faced by SMEs in further expansion as it involves
huge investment and costs. For instance, access to limited could result in being a major barrier in global expansion for business
operating upon small scale operations in order to serve a limited number of customer base.
 Lack of sales channels: As the SMEs have not yet stepped into global markets, it lacks suitable channels of sales in order to
initiate cross-border trades of products and services in other economic nations for further expansion of business. For instance,
it has been considered as another major in initiating effective cross-border trades of products and services in order to serve
customers of other economic nations.
 Lack of sufficient amount of information: With the lack of reach to customers of different economic nations, these small
sized enterprises lack sufficient amount of information and knowledge in order to ensure effective decision-making. In order to
be precise, it includes consumer demands as well as market trends in that particular geographical location.
Therefore, all these factors and aspects result in being a barrier in further expansion of business into another economic nation.
Furthermore, it could be prevented with consideration of corrective measures as well as suitable strategies which further contribute
additional values towards accomplishment of organisational goals and objectives (Hacioglu, 2019).
Range of Trading blocs and agreements
There are various different trade agreements signed by UK which allows the respective nation to regulate cross-border trades in
order to expand their businesses in those economic nations. For instance, these trade agreements are as follows;
 UK-Australia free trade agreement: This particular trade deal has been signed by two large economic nations i.e., United
Kingdom and Australia. For instance, it includes the major role of both the nations in negotiating and agreeing on suitable
terms and conditions of free trade agreement. In addition to that, it was singed with presence of representatives from both the
economic nations on December 2021. Moreover, it includes terms and conditions of cross-border trades of required products
and services between these nations in order to promote economic growth and development. Furthermore, it determines ethical

terms of cross-border trades as well as recognition of unethical practices associated with cross-border trades of products and
services (Hamilton, and Webster, 2018).
o Advantages: The primary and major advantage associated with this particular trade agreement lies in enhancement of
relationship among these large economic nations as well as better investment opportunities. Moreover, it allows
individuals and business organisations to invest more in better investment opportunities as well as development of
economic markets.
o Disadvantage: The initiation cross-border trades among these economic nations further result in increasing market
competition for businesses in meeting consumer demands in these economic nations. Access to high quality products
and services with cross-border trades will impact upon local and small-scale businesses in these economic nations.
 UK-New Zealand trade deal: This trade agreement includes a negotiation among these economic nations to initiate cross
border trades from each other. For instance, it allows access to customers in society of these nations to high quality products
and services form the other economic nation in order to contribute additional values towards economic growth and
development. In addition to that, this agreement between New Zealand and UK has been singed in June’ 22 in order to regulate
effective cross-border trades of products and services in order to meet consumer demands of customers residing in these
particular nations (Hampden-Turner, Trompenaars, and Hampden-Turner, 2020).
o Advantages: The major advantage associated with this particular trade agreement lies in access to international
markets to business organisation as well as access to international products and services to customers in society. In
addition to that, it contributes various additional values towards economic growth and development for both these
economic nations.
o Disadvantages: It impact upon local business as well as SMEs in these nations with access to large scale business
organisation stepping into these economic nations. For instance, people are often observed as tended towards
consumption of products and services offered by these large-scale businesses in consumer markets.

Tariff and non-tariff barriers
Tariff Barriers
 Export Tariff Barriers: It includes taxes that are imposed upon products and services that are exported from one economic
nation towards another which result in increasing cost for company in serving their target customers.
 Import Tariff Barriers: As the name suggests, it deals with import of products and services from another economic nation
which is further imposed by additional taxes.
 Transit Tariff Barriers: It includes taxes and charges over commodities and services that are exported from other country,
passes another, and further consumed in any other country (Ronit, 2018).
Non-Tariff Barriers
 Quotas: It includes a limit of number of goods and services that are exported from one economic nation to another.
 Subsidies: It includes government payments to a manufacturer that is local to domestic country which results in being a barrier
in effective cross-border trades (Wei, Thurasamy, and Popa, 2018).
Critically evaluate how these stimulate and generate global growth
All these initiatives towards initiating cross-border trades among different economic nations facilitates in consuming quality
products and services in order to meet consumer needs and demand in that particular region. In order to be precise, an economic nation
could provide other economic nations with some or the other products as well as resources that could be used in further consumption
by customers in society. With the access to quality products and services from business organisation from different economic nations,
it supports customers in enhancing their standards of living (Zámborský, 2020).
CONCLUSION
From the above report assessment, it could be concluded that international expansion of business is generally taken into
consideration by businesses in order to serve a large number of customers residing in another economic nation. In order to be precise,
technological advancement, start-up funding, social network, etc. are some of the influencing factors associated with international

expansion of businesses. Moreover, limited access to funds, lack of information, and inefficient channel of sales are some factors
affecting the same for a small-scale business organisation.

PART-2
Brochure

INTRODUCTION
An exporting business could be determined as business entity engaged in exporting
products and services to another economic nation in order to serve customers residing in
foreign economic nations. For instance, these businesses use integrated supply chain in
order to supply their offering towards foreign economic nation for further growth and
expansion of business. This report assessment will be comprised of essential knowledge
regarding establishing an exporting business in order effective understanding of the same.
Furthermore, it will be provided with recommendation in order to ensure further
improvisation and enhancement (Utama, and et. al., 2018).
Different types of Exporting Processes
In order to export products and services into foreign economic nations, there are basically
two determined processes which are as follows;
Direct Exporting: The mentioned process of exporting includes efforts initiated by
companies of the host country with consideration of suitable supply chain in order to
export their products into other economic nations. For instance, the manufacturer or
producer of that particular product or service is engaged in making necessary
arrangements for supplying their product to customers in other economic nation. In
addition to that, it includes the involvement of only buyers and sellers in order to provide
customers with products and services.
Advantages: Eliminating the role of mediators and intermediary’s increases profitability
of respective business organisation in exporting their products and services to another
economic nation. In addition to that, involvement of only buyers and customers promotes
flexibility in moulding the procedure according to their needs and requirements.
Disadvantages: The primary and major disadvantage associated with direct exporting lies in
inability in maintaining stock and inventory in an effective manner. For instance, it incurs
large number of risks in being in-charge and controller of the entire process of exporting.
Indirect Exporting: This process of exporting of goods and services includes the
involvement of intermediaries as well as mediators in carrying out the determined process.
For instance, it includes exporting agencies that represents respective company in exporting
their products and services in an efficient manner. In addition to that, businesses often hires
these exporting agencies or third party representatives in order to carry out the process of
exporting of goods and services for that particular business organisation (Siamagka, and
Brouthers, 2020).
Advantages: Effective coverage of consumer market, less or no requirement of workforce of
company, lesser financial risks, etc. are some of the primary advantages associated with
indirect exporting of goods and services.
Disadvantages: Lower profit margins, huge dependence over these exporting agencies, lack
of customer contact, etc. which could impact upon a business organisation in a negative
manner.

Different methods of tapping into new market
There are various different methods of tapping into a new international market which are as
follows;
Exporting: This determined process of tapping into a new market includes efforts raised by
business organisation towards exporting their goods and services towards foreign economic
nation in order to expand their business. For instance, it includes effective supply chain
which allows export of business from one nation to another.
Advantages: Primary and major advantage of exporting lies in increasing overall sales of
products and services offered a expiring business organisation by stepping into foreign
economic market. Higher profitability, reduced vulnerability, low costs, etc. are other
advantages associated with the same.
Disadvantages: Increasing competition, additional costs, modification, financial risks, etc.
are some major disadvantages associated with exporting.
Licensing: It includes giving permission to a foreign business entity right to produce or
manufacture products to be served in the market. For instance, it includes trademarks,
copyrights, patents, and other intangible assets that allows a business organisation to
manufacture products of another business organisation.
Advantages: No requirement of incurring cost of production, promotion, packaging, etc. due
to presence of another business organisation in carrying out business operations and
activities.
Disadvantages: Lack of complete control over business operations and activities in order to
accomplish desired goals and objectives through international expansion of business.
Required documentation for international expansion of business
In order to establish an exporting business, there is a necessity of going through legalities
including various required documentation which are as follows;
Letter of Credit: The determined documentation could be determined as a collateral
required in business organisation which ensures and guarantees payment from buyer to
manufacturer in a given period of time specified in the same. For instance, it is kept as a
proof of outstanding amount that is required to be paid by the buyer for the purchase as
well as consumption of products and services (İpek, 2019).
Packing List: It includes determined information that is required to be presented on the
packaging of desired products and services in order to provide customers with required
information and knowledge regarding the product or service. In addition to that, it
includes Date, Contact information, Origin address, detailed description of package, etc.
Commercial Invoice: This particular document is a legal document that confirm a
transaction of sale for that particular product or service. Moreover, these invoice bills are
generated by government authorities in order to promote systematic approach of business
in business environment.
Terms of Payment: It includes methods or ways the manufacturer accepts the payment
for consumption of determined products and services in order to earn a profit out of the
same. For instance, primary of terms of payment include Cash in advance, documentary
credit or letter of credit, documentary collection, etc.
Customs Document: This determined document contains information of goods that are
being imported and exported from one economic nation to another. In addition to that, it
comes under legal guidelines to have a authentic custom document in order to maintain
systematic procedure or manner of exporting businesses (Forrest, and et. al., 2021).

Joint Venture: This particular way of tapping into international market includes
involvement of two or more business organisations together in order to create and deliver
additional values towards business environment (Volodin, and Podkovyrov, 2018).
Advantages: Access to new international marketplace and network of distribution is
primary advantage of joint venture as a process of tapping into international market. For
instance, it provides a business organisation with access to additional knowledge as well
as technology and sources of finance.
Disadvantages: unclear objectives, different expectancies of partners, lack of leadership
and support in initial stages, etc. are some major disadvantages associated with the same.
Foreign Direct Investment: It includes flow of investment from one economic nation
towards another in order to support business organisations operating in that particular
geographical location. For instance, it does not include movement of individual investor
from one place to another but includes movement of funds from one nation to another.
Advantages: Promoting economic growth, technological development, increasing
exports, improved flow of cash, etc. are some primary and major advantages associated
with FDI as a way of tapping into international market.
Disadvantages: Hindrance of domestic investment, higher costs, Expropriation,
economic non-viability, etc. are determined as disadvantages associated with FDI. For
instance, it hinders growth of domestic economy whereas promotes economy of foreign
nation.
Justified Recommendations
There are various different recommendations regarding international expansion of business
with consideration of suitable methods determined above. These recommendations are as
follows;
Exporting: In order to establish a exporting business organisation, business in host country
must consider establishment of additional business unit in foreign economic nation in order
to serve customers residing in that particular geographical location (Kalasin, Cuervo‐
Cazurra, and Ramamurti, 2020).
Licensing: There must be clarity in management and ownership in licensing which
facilitates in smooth functioning of business in order to expand into international markets.
For instance, it will further facilitate in conquering over most suitable business opportunity
available to that particular business organisation.
Joint Venture: It must include clarity of expectations of partners from each other in
carrying out business operations and activities with effective coordination and collaboration.
Foreign Direct Investment: Though, it promotes global economic growth and development,
but still investors must also look out for investing in their domestic businesses in order to
contribute additional values towards economic growth in their host country (Esfidani, and et.
al., 2018).

CONCLUSION
From the above report assessment, it could be concluded that businesses look after tapping into international markets with
consideration of most suitable and appropriate processes for the same. For instance, Direct and indirect are methods of exporting
which facilitates a business organisation in exporting products and services to another economic nation. On the other hand, Exporting,
Licensing, Joint venture, and Foreign Direct Investment are some of the major ways of tapping into international markets available to
small scale business organisations.

REFERENCES
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