SME Strategies: Tapping into New and International Markets Report

This report analyzes strategies for small and medium-sized enterprises (SMEs) to tap into international markets, focusing on Airdri, a UK-based company expanding into the US market. It explains the global business environment using PESTEL analysis, identifying political, economic, social, technological, legal, and environmental factors. The report also includes a SWOT analysis to assess Airdri's strengths, weaknesses, opportunities, and threats in a competitive global landscape. It discusses the advantages of international trading blocs and agreements, such as NAFTA, and examines tariff and non-tariff barriers. Furthermore, the report explores the import and export processes, the differences between merchandise and service trade, and various methods SMEs can use to enter international markets, providing a comprehensive overview of the challenges and opportunities involved in global expansion.

Tapping into New and
International Markets

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
P1 Explanation of global business environment in which small and medium enterprise operate3
P2. Analysation of threat and opportunity faced by small medium enterprise in competitive global environment 4
M1. Evidence based analysis of global business environment in which small and entrepreneurial business operating using specific
examples......................................................................................................................................5
M2. Critical analysation of implication of threat and opportunity hay face SME in competitive global environment 6
P3. Determination and analysation of advantage of international trading blocs and agreement.6
P4. Explanation of various tariff and non-tariff barriers that exist in international trading environment 7
M3 Evaluation of advantage of international trading blocs an agreement in implication of SME 7
P5. Determination of advantage and disadvantage of importing and exporting of how to secure a deal 8
P6. Explanation of difference between merchandise and service import and export..................9
M4. Application of appropriate import and export process to an organisation along with recommendation about how they could be
applied in context of international...............................................................................................9
P7. Evaluation of values method in which SME can tap into international market..................10
P8. Compare and contrast different ways in SME can tap into international market assessing their pros and cons of each method
...................................................................................................................................................11
M5. Evaluation of different methods of SME that can be used by companies in market for purpose of application to small business
along with masking recommendation........................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
International market refers to a market that are present outside geographic borders of a country. It provides various opportunity to a
company to expand their business in international market as they can earn more profit there. It allows them to access of various
resources, technology and labours which market their business more efficient and improve quality of their service (Ardito, Peruffo and
Natalicchio, 2019). But at same time, it creates various challenges in market. This project report includes analysation of Airdri which
is a UK based organisation that is offering hand dryers and air purifiers to their customers. It is a business which is planning to expand
their business in international market in USA. This project report includes analysation of analysation of opportunity and threat faced
by companies in global environment. It illustrates advantage to trading blocs of firm along with determination of importing and
exporting of process and practicalities involved. It also evaluates different ways in which SME can tap to international market.
TASK
P1 Explanation of global business environment in which small and medium enterprise operate
Globalisation refers to increasing interdependence of economy. Population and culture of a company that brought about cross border
trade among technologies, service, products, and information. It provides various benefits to business and cause different changes in
business environment. It allows business to access to new culture by expanding their business operation. It provides them benefits to
spread of technology as well as innovation which provide benefits to a company as they can access to new technology in their
organisation (Belz, 2017). There are different components with which it can be affected like fiscal framework, political effects,
societal influence, technical development. There are different types of tools that can be used by companies like PESTEL analysis
which allow them to evaluate and analyse external environment and create impact over efficiency of an enterprise. In order to enter in
new market, it is essential for a company to use this tool which allow them to identify threat present in market. In order to evaluate
different factors, present in market, PESTEL analysis of market of USA is mentioned underneath:

Political Factors: Political factors are those factors which consist regulation of government on import and export stability of
government and other things. Airdri is an organisation which are intending to expand their operation in market of USA. In order to
carry out their operation in market efficiently, it is essential for the to conform different ethics in market, tax policies, regulation of
economy and other things (PESTLE Analysis for Small Businesses, 2022). It is essential for managers of this organisation to consider
all these aspects in their organisation. There are different types of regulation impose by political party of USA which is to be consider
by Airdri while operating in USA. Also changes in government policy by government can create impact over survival of company.
Economic Factors: Economical factors are those factors which create impact over point of view of group in market. It is taking
into consideration about different things like fiscal situation, working methods, rate of interest, expense maximisation rate, business
optimism, and other things (de Oliveira and Rottig, 2018). Economy of different country including USA is facing crisis due to covid-
19 pandemic and other things which create impact over business of AirDri.
Social Factors: Social factors are those factors that consist things related to culture, norms of a country. It is essential for AirDri
to consider these factors which operating in market of USA as people are more sensitive about their culture and social values. In order
to ensure operation in USA without any interruption, it is essential for Airdri to ensure their business will hurt sentiments of people.
Technological Factors: Technological factors are one of important factors for purpose of getting success in mares as it provides
benefit of differentiation to a company. Airdri is adopting technology in order to sell their products as it is providing their products at
online stores (PEST Analysis of USA, 2022). This organisation is also using technology for purpose of producing their products. It
increase cost of their products which make it difficult for company to compete in competitive global business environment.
Legal Factors: Legal factors are those that consist laws and regulation which create impact over operation of company. There
are different employment and other laws which is to be consider by Airdri in order to conduct their operation in market of USA.
Ignorance of these laws and regulation can create impact of survival for business of Airdri in USA. This country is very strict with
their rules and regulation that can create impact over business of company.

Environmental Factors: Environmental factors are those which ar related to protection of environment, weather condition and
others (Devadason, Govindaraju and Mubarik, 2018). Airdri is producing their products in environmental friendly ways that does not
create impact over environment and also reusing material which are usable. This organisation is adopting sustainable practices in
market that create positive impact over image of company. It improve image of company in minds of their consumers and also allow
them for purpose of building positive reputation of company in minds of their government that provide them subsidies and other
benefits.
P2. Analysation of threat and opportunity faced by small medium enterprise in competitive global environment
SWOT analysis refers to an internal and external analysis which helps company to identify strength and opportunity in market
that helps them to overcome of weakness and threat present in market. SWOT analysis tool can be used by managers of Airdri in
market of UK which is important in order to analyse competitive market. Description of SWOT analysis in context of Airdri is
mentioned below:
Strength Weakness
 Airdri has various resource which
provide them success in global business
environment as it has financial
resources, material resources (Dwyer
and Vongvisouk, 2019).
 Airdri it has lack of experience has it is
small organisation which is planning to
expand its operation in global business
environment.
 Airdri has low financial leverage which
create impact over business activities of
company largely.
 It has lack of skilled worker which
create impact over quality of products
and performance of company.
Opportunity Threat

 Expanding operation in market of USA
provide them opportunity to hire new
and diverse skills employees. It
improves employee capability of
company which allow them to hire
employees from other country (How to
Perform a SWOT Analysis for Your
Small Business, 2021).
 Airdri is also getting opportunity to
reach to new customers as expanding
operation for a SME like Airdri allow
them to expand their operation in
global environment.
 There is increasing competition in
global environment for a SME like
Airdri which create impact over their
profitability level and marketing share.
 Expanding business to global business
will increase operating cost of company
which can impact over company and
does not allow them to capture more
marketing share.
M1. Evidence based analysis of global business environment in which small and entrepreneurial business operating using specific
examples
Small medium enterprise is one that operation in global business environment that enhance their productivities (Farrell and
Newman, 2020). It provides them opportunity to access to different resources that improve their performance. For instance, Airdri is
operating in market of UK and planning to expand its operation in USA. Expansion of their business in competitive business
environment helps them for enhancing marketing share and provide more opportunity for them to earn more profit.
M2. Critical analysation of implication of threat and opportunity hay face SME in competitive global environment
SME companies can expand their business operation in global business environment which provide them various opportunities and
threat in market. There are various opportunity can be get by Airdri as it provide employ capability to business as they can access to

more diversified employees. It also increases customer base of company which allow provide them products and customers to
customers present in different countries. This organisation will also get threat in global business environment as it increases
competition in market and also increase business cost of company.
P3. Determination and analysation of advantage of international trading blocs and agreement
Trading blocs can be described as formal agreement among different countries which is developed for purpose of removing
barriers of trade. Different types of agreement and trading blocs are developed among countries which assist for conducting business
activities in effective and efficient manner (Ferraris, Santoro and Bresciani, 2017). It consists group of countries that are in specific
region and manage to promote trading activities. It helps in trade liberalisation and also for trade creation among different members.
Types of trading blocs
North America free trade agreement- This agreement was signed by Canada, Mexico and US and established trilateral trade bloc in
North America. This come in force on 1st ofJanuary 1994, Canada and US gives highly mechanical surrounding for manufacturing
and resources growth and Mexico introduce affordable materials. It helps in reduces the trade barriers for its people and country to
generate more investment opportunists.
European union- It is a government and economic union of 27 states of Europe, it is the most unsegregated trade bloc around the
world established in 1951. the main objective of this is to construct single Europe-wide market and single currency for all the regional
trading.
Association of South East Asian Notions- It is introduce in 8th August 1967 in Bangkok 10 countries comes under this bric. The
main objective of this is to grow economic growth, community progress and increase regional space and stability. The main focus is to
modify ASEAN in single entity whereas Singapore is one of its largest trading market.
South Asian Associate for Regional Cooperation- It was started in 8th December 1985and it gives platform for all people who are
from South Asian to work with faith and understanding. They start exporting and importing merchandise to the world.
Airdiri is using NAFTA trade blocs that provides different benefits to a company which are mentioned below:

Increase economic growth: Trade blocs and agreement are contributing to economic growth of a country as it allows free flow
of trades which assist company to expand their operation in another country which create employment opportunity in host country and
also allow them to earn more profit.
Improve trade: There is reduction in trade due to trading blocs or agreement which results in improving trading function of a
company. It provides opportunity to an organisation like Airdri to expand its business operation in different countries where they can
expand their marketing share and also earn more profit.
Technology transfer: Trading blocs and agreement are important as it allow them free flow of technology in an organisation
(Götz and Jankowska, 2018). It provides opportunity to Airdri to adopt new technology in their organisation and get advantage in
market.
Free transfer of trade: These trading blocs and agreement allow company to transfer their material as well as resources to other
countries which is important in order to perform business activities in effective manner.
There are different types of international business to be adopted by managers of Airdri while expanding their business operation.
Explanation of these theories in context of company is mentioned below:
Porters five forces model: This framework uses to analyse the companies competitive environment, and uses to guide organization
strategy to generate competitive advantage.
 Competitive rivalry- It refers to the number of competition in the market and their capacity to undercut the organization.
Competitive rivalry is low in airdri company because it has greater power to charge the high price.
 Bargaining Power of suppliers- It is depends upon how many suppliers are in the market for providing goods and services to
the company. It is low because around the market there are so many suppliers so company can easily switch too other supplier.
 Bargaining power of buyer- when in market there are so many substitutes are available then customers can easily go to other
product. It has high impact in the company.
 New entrants- The impact of new entrants in market is high because of entry of new market consume less time and money.

 Threat of substitute – substitutes which can be used by the customer in place of firms product. The threat of substitute is high.
Global strategic rivalry:
This theory founded in 1980s and main objective of this is on MNCs and achieve a competitive superiority against the other global
industries. It is the service or goods which is provided by leading firms that serves to international customers. A firm gain the
competitive advantage by gaining the brand name, trademarks along with patents. This focusses on planned decisions that company
embrace as they compete internationally. This consequence both international trade and international investment. There are various
competitors present in market of airdri which create impact over profitability of company.
P4. Explanation of various tariff and non-tariff barriers that exist in international trading environment
Different types of issues and barrier are faced by a company in international market which is important to identify in order to
overcome of its impact. These barriers can be traffic and non-traffic barrier that create impact over performance of company.
Traffic barrier are those barriers which are related to duty, tax paid by company in order import and export their products (Guo
and Jiang, 2020). Non traffic barrier on the other hand can be described as restriction that can be implemented in different process of
trade that does not includes duties and taxes. Some of these barriers faced by Airdri in global business environment are mentioned
below:
Traffic barriers:
 Transit Duties: Transit duties can be described as tax that government and other parties charge on different products as well
as commodities that can be import and export. It creates negative impact on cost of company which can be huge barrier for
small company like Airdri.

 Specific duties: It is another barrier that create impact over sales and profit of company as it charged on products an service
that pass through a country.
Non traffic barrier:
 Important policy barrier: These are another barrier that can affect performance of business and it is important or managers of
a company to develop strategies to overcome of these barriers that allow business to import their products (Kupp, Marval and
Borchers, 2017).
 Service barriers: These are barrier which is faced by a company due to restriction of government for distribution of products
and service across borders. These barriers consist rules on offering of service by a company in a country.
All these barrier are creating impact over operation of company of Airdri. In order to overcome of impact of these barrier, NAFTA is
proving support to business. These support is in form of subsidies and grants which are mentioned below:
Grants: In order to provide support to small business like Airdri, NAFTA is providing support to business. For this, they are
providing grants to business that can be momentary or non monetary.
Subsidies: In order to provide support to business like Airdri, it is also essential for business to provide support to business. For this,
they are providing discounts that leads to reduction in cost of company and provide them opportunity to capture more profit in market.
special agreements: NAFTA is also providing support to business by offering them that provide them various benefits while
operating in USA. For instance, they are providing tax benefits and other things to small companies like Airdri.
M3 Evaluation of advantage of international trading blocs an agreement in implication of SME
International trading blocs as well as agreement are important for a small enterprise as it provide them opportunity to expand their
business in different companies with free flow of trade among these countries. It provides opportunity to business of Airdri to increase
sales of products and also allow them to reduce barrier present in international market. It provides them opportunity to adopt new
technologies and other resources that provide company with competitive advantage in market.

P5. Determination of advantage and disadvantage of importing and exporting of how to secure a deal
Importing and exporting activities play important role in economy of a country as it provides support to local business and
provide opportunities to company for expanding their business in international market (Li and Fleury, 2020). Explanation of these
importing and exporting activities in context of company is mentioned below:
Importing: Importing refers to an activity to purchase products and service to a country that was developed in another country.
It consists action that organisation takes for purpose of selling of products that are manufactured in abroad and bring to sell in a
country in which they are conducting business. Airdri will securing benefits of importing activities in their business by importing
cheap resources from foreign countries that allow them to reduce cost of company. It also allow them to import advance technology
that increase productivity of company and also allow them to increase efficiency of company.
Advantage of importing:
Importing of products and service provide advantage to a company as they can reduce their cost of manufacturing as
sometimes manufacturing of products and service many results in increasing cost of company.
It is providing different advantage to a company as it allows them to helps them in emergency situation. There are various
emergencies occur in a country due to drought, natural calamity which does not allow a country to produce enough products and
service and in that situation, they can import products and service.
Disadvantage of importing:
There is a risk of currency as due to fluctuation in inflation rate, business is facing difficulties in international market (Lo and
Campos, 2018). If importuning of a company is more in compare to their export, then it can result in issues in currency which create
problem for a company like Airdri.
Exporting: Exporting can be described as action that are taken by organisation for purpose of selling its products and service
in different countries.
Advantage of exporting: