Unit 43: Exploring International Markets for Arden Construction - BTEC

This report delves into the strategies and challenges faced by small and medium-sized enterprises (SMEs) when expanding into international markets, using Arden Construction as a case study. It begins by explaining the global business environment, including political, economic, social, technological, legal, and environmental factors (PESTLE analysis), and analyzes the threats and opportunities SMEs encounter. The report then examines international trading blocs and agreements, evaluating their advantages and implications for SMEs. It explores the advantages and disadvantages of importing and exporting, including tariff and non-tariff barriers, and analyzes the import and export processes. Finally, the report evaluates various methods for SMEs to tap into international markets, comparing the pros and cons of each approach and offering recommendations. The report provides insights into the complexities of international market entry, offering valuable information for businesses seeking global expansion.

Tapping into New and
International Markets

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Explain the global business environment in which small and entrepreneurial businesses
operate.........................................................................................................................................4
P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment.................................................................................................................................5
M1 Provide evidence based analysis of the global business environment in which small and
entrepreneurial businesses operate using specific examples.......................................................6
M2 Critically analyse the implications of threats and opportunities that face SMEs in an
increasingly competitive global environment.............................................................................6
TASK 2............................................................................................................................................7
P3 Determine and analyse the advantages of international trading blocs and agreements.........7
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.................................................................................................................................7
M3 Evaluate the advantages of international trading blocs and agreements and their
implications for SMEs.................................................................................................................8
TASK 3............................................................................................................................................8
P5 Determine the advantages and disadvantages of importing and exporting and how to secure
a deal...........................................................................................................................................8
P6 Explain the differences between merchandise and service imports and exports...................9
M4 Apply the appropriate import and export process to an organisation and make
recommendations on how they could be applied in an international context...........................10
TASK 4..........................................................................................................................................10
P7 Evaluate the various methods in which SMEs can tap into international markets..............10
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method.............................................................................................11
M5 Evaluate different methods SMEs can use to tap into various markets with application to a
small business or entrepreneurial venture, making valid recommendations.............................11
CONCLUSION..............................................................................................................................12

REFRENCES.................................................................................................................................13
Books and Journal.....................................................................................................................13

INTRODUCTION
SME's are the small and medium sector enterprises that are small and their rate of growth
in market is low. Many a times, the founders only consists of managerial team. The rate at which
they cater market is very low and as compared to large companies their turnover is very low.
They lack behind in catering reach of high investors and large projects which can increase the
productivity of respective organisation. Such organisations are undoubtedly small but the
policies they frame for proceeding operations is very effective and can engage all the workers to
perform in a proper manner. The following report is proceeded in relation to Arden Construction.
It is a medium sector construction company and is recognised as an organisation providing best
quality services in constructing buildings, furnishing houses, maintenance of projects built and
renovation of the same. More than a decade it is providing services to clients and fulfilling their
requirements. The employees are highly competent and can meet the requirements of clients.
They have been also providing services like plumbing, heating, repairs and engineering. Their
are many challenges which the small and medium sector enterprises would face while expanding
their reach in global as well as in domestic markets can be monopoly of large competitors,
inadequate capital, hurdles in procuring raw materials. The whole report based on Arden
Construction is based on the hurdles and challenges which the small and medium sector
enterprises face in expanding their reach in both domestic as well as global markets.
TASK 1
P1 Explain the global business environment in which small and entrepreneurial businesses
operate.
Global business environment means the international environment in which the different
business organisations operates. There is requirement of various resources and effective deciosn
making to compete in the global market. When organisations wish to expand their reach,
managers have to perform several analysis which can help them in getting a wider knowledge of
market. The best analysis which can be performed to develop knowledge of market is PESTLE
analysis(Bembom and Schwens 2018). It will help in evaluating what factors would hamper the
growth when Arden Construction would expand in other markets. Such factors can be: Political: Government of UK is very supportive for SME to expand in global markets and
time to time motivate such organisation by reducing the taxes and maintaining stability.

They provide assistance so that more and more job opportunities are created. As there is
political stability in United Kingdom so it is beneficial for Arden Construction to operate
effectively. Economical: There are various economic factors that have impact on the working of an
organisation. The factors such as GDP, interest rate, inflation rate etc. The employment
and wage rate of UK is very low and as inflation is rising in markets, it generates better
opportunities for Arden Construction to expand. When services are provided by
professionals at cheaper rates it will surely help organisation to sustain. In respect to
Arden Construction they are providing employment opportunity to various employees in
UK. Social: Organisation is working for a longer time which makes it capable of knowing all
the trends and socially encrypted factors like education, tastes, preferences and others.
When organisation cater work according to trends it can deliver good quality services and
expand (Burkart and McCourt 2017). Arden Construction takes care of the trends and
needs of customers and provide them services accordingly that satisfies the customers. Technological: The technology is updating at rapid rate so it is imporatnt to use latest
technology. As the success and failure of business depends on the level of technology
used. In times of advancements, enterprises follow technology in their operations which
makes expansion speeded up. Arden Construction is providing quality services with latest
technology which is satisfying consumers, this makes expansion high. Legal: Rules and regulations which are made by government that affects the working
and when these are not followed it can lead organisation into legal actions. For this
reason Arden Construction is following all the legal frameworks accurately and
eliminating the chances which can trouble operations.
 Environmental: While operating in market, external surroundings are to be taken care of.
The resources which are required should be used in precise manner, thus looking
towards sustainability of economy. Arden Construction takes care of environment and
uses the resources optimally and focus on reducing wastage.

P2 Analyse the threats and opportunities that face SMEs in an increasingly competitive global
environment.
While proceeding reach in global markets, there will be many hurdles which come in
way. Although several opportunities also come in mid way and can help in working effectively.
SME's are very imaginative and can process operations in a way so that expansion is speeded up.
Threats
As place is new and trends are not familiar, it will create hurdles in proper execution.
Several laws and compliances are required by organisation to follow(Curtis 2016). At times they
are unable to follow them and it would bring trouble to enterprises and make them engage in
legal compliances. Lack of experience will also result in non catering the needs of consumers
which can slow down progress and might face barriers in entry. The major rivals existing in
market also creates hurdle as they are well established and have a major impact over local
individuals. Small enterprises face problems in building goodwill as they are not having full
support of individuals. Small enterprises faces problems in acquiring capital from outside
sources, founders being devoid of good financial background are also not able to invest good
capital.
Opportunities
As individuals are attracted towards innovation and organisations bringing such products
and operations will be easily adopted by consumers. When consumers are provided good quality
services at low price, it will cater numerous consumers (Dabic and Kiessling 2019). As workers
are less and load of operations are also less, it will give rise to cost cutting and increase
productivity by earning high gains. When turnover is low, several rebates provided can be
exploited to fullest and deductions in taxes can also be gained. Usage of rebates and subsidies
provided by government acts as in hassle free operations of new enterprises. When such
opportunities are grabbed enterprise can easily climb ladder of success.
M1 Provide evidence based analysis of the global business environment in which small and
entrepreneurial businesses operate using specific examples.
With context to Arden Construction it can be seen while expanding in global markets,
organisations need to cater all the factors which will affect the progress. Such external factors
can be analysed by PESTLE analysis. When managerial team focuses on these factors it will help
business to grow without any hassle(Van de Graaf 2018). There are many organisations like

TESCO, TESLA, Marks and Spencers which have acquired several factors of market and made it
to their best. This is the reason that theses organisations are having dominance ion the domestic
market and also making good profits in international markets. When respective market is studied
properly, it would prove beneficial in catering the market.
M2 Critically analyse the implications of threats and opportunities that face SMEs in an
increasingly competitive global environment.
Analysing the threats and opportunities which can prevalent in market will enable the
organisation in proper functioning. This will lead in overcoming the weak market facilities and
will provide proper facts and figures which are required by the managers to procure. When
accurate data is available, organisation can develop its strategies accordingly and it will reduce
the wastages and loss of energy and power. When threats and opportunities are analysed and
acted upon, the vulnerable factors can be overcome(Gabor 2018). This can reduce costs and
increase profitability. Before entering new markets language and trends are required to be known
and when this is achieved, it will help in better framing of related policies.
TASK 2
P3 Determine and analyse the advantages of international trading blocs and agreements.
In different countries, government have imposed various regulations on entrance of new
organisations so that interest of domestic companies is maintained. When Arden Construction
went for globalisation, it also faced the same as government has imposed several international
trading blocs in those regions. It can attain economic leverage over other firms and can facilitate
technological implications with an ease. Trading bloc are imposed by the respective governing
bodies so that interest of domestic organisations are reserved and they can trade easily in inter
country and intra country boundaries. It acted as a support for Arden Constructions in expanding
its reach in different markets and procuring competitive advantages. This has also resulted in
production with low cost and high productivity(Rogers 2017). This even help organisations in
procuring good quality resources and raw materials which are an essential element in operating
the operations. All these measures can be achieved by any and every organisation but
international trading blocs have facilitated this process and traders can gain a competitive
outlook here over the competitive firms in same industry. The trading blocs also consists of
reducing tariffs and providing subsidies to new industries which can result in their efficiency.

This has reduced impositions over import and export of goods and raw materials which can
enhance quality of production and operations.
P4 Explain the various tariff and non-tariff barriers that exist in the international trading
environment.
In every country, government has imposed several tariffs and non tariffs barriers for
international entries so that a proper check is kept on goods and services which are exported and
imported for trade(Goncalves and Cornelius 2018). Tariff barriers are the customs and duties
which are levied on goods entering the market so that prices are maintained and equilibrium is
achieved. It is a charge for moving international goods and services in and out the country. This
can sometimes increase the price of goods as heavy duties are imposed. Non Tariff Barriers are
such impositions which are unfair, excessive and hampers the execution of operations. These are
also imposed by government so that to achieve any strategy in favour of development of country
and its economy. Several policies are made in country so that economy is heightened and for this
non tariff barriers are required to be imposed. Several tariff and non tariff barriers which Arden
Construction is required to lookout are:
Export and Imports duties
These are the tariff barriers which are imposed by ruling bodies on export and import of
goods. There are several countries where less impositions are on some products like agricultural
ones and minerals as these are the necessities. Else wise luxury goods have high tax duties which
might increase overall prices(Pollari 2016). To safeguard trade of respective country it is
required to impose import duties so that people import less and use domestic products at a higher
rate. There are some countries where import duties are high, so to trade in such countries
company has to work with relevant policies.
Licensing
Several products and services require licensing to work and import them. There are many
criteria which organisations has to fulfil in order to gain licenses. Any of the criteria is not
achieved can be a risk in catering licenses. When a product or service which requires license but
it is not procured and operations are performed without permission, there are chances of legal
actions.

M3 Evaluate the advantages of international trading blocs and agreements and their implications
for SMEs.
When international trading blocs are implemented, it will help organisation to easily cater
the foreign market and trade there. It will eliminate heavy and illegal taxation at time of
entrance, reduction in cost of procuring raw materials and human resource. This can be enabled
when government bodies provide opportunities to new entrances so that job opportunities are
enhanced and standard of living is enhanced. This can connect the whole world and people can
get products and services from any part of the world anywhere.
TASK 3
P5 Determine the advantages and disadvantages of importing and exporting and how to secure a
deal.
Every thing has its own merits and demerits which can affect its worth.
Advantages of export
When export is enhanced Arden Construction is able to diverse itself in outer markets and
interdependence of single market is reduced. Individuals of every country can access products
and services from any market. When large scale of operation is exported it will increase the
production and organisations can multifold its productivity and gains. When services are
extended at low rates that too quality ones, it will attract more and more consumers. It will result
in high sales and better results to Arden Construction.
Disadvantages of exports
When large scales of produce is exported, domestic market is least focused. It will give
rise to management issues, trust issues of employees and domestic consumers. A question on
sustainability is raised. Arden Construction has to focus on both markets and imply with laws
and policies of all markets which can create hassle and at times non implication of several laws.
This can create problems and arise legal actions(Gueldry and Liang 2016).
Advantages of import
Companies import products and services which can make their work process easy and
enable the organisation in catering more and more profits. The materials which are imported by
organisations may be cheap and more effective which can fasten the work process.
Disadvantages of import

When supplies are procured from external environment, domestic suppliers face hard
times and to reverse this government impose high duties which becomes more costly for the
organisations. So Arden Construction has to keep in view that interests of domestic suppliers are
not hampered.
Secure the deal
To secure a deal Arden Construction has to select a well established brand with enhanced
goodwill as a supplier of raw materials. When cost of procurement of raw materials and capital
is reduced it will result in good gains and will provide a good name to organisation in overall
market. This will increase sales and thus expand the operations.
P6 Explain the differences between merchandise and service imports and exports.
Both merchandises and services play an integral part in executing operations in Arden
Construction.
Merchandise
Merchandises are tangible products which can be seen and touched. In Arden
Construction, it can be pipes, cement. They can import and export the raw materials which they
feel necessary and can expand their operations.
Services
Services are intangible and can only be felt. In case of Arden Construction it can be
expertise in operations. They can import or export and can lead in getting better gains to
organisation as new techniques are known which were deprived till now(Khalifa and Ali 2017).
M4 Apply the appropriate import and export process to an organisation and make
recommendations on how they could be applied in an international context.
When imports and exports are proceeded in any organisation it will change the outlook of
organisation. This will help in catering better market details. It will easily assist in differentiating
as to which market can lead in giving better returns and which market should not be reached.
Although it is hard to manage the complications which come in mid way. During the phase time
standards are required to be checked as different countries have different time standards and this

can create hassle at times of receiving or delivering the products. There is difficulty in managing
currencies as every organisation has different currency and at time of payments, rate of exchange
is troubled.
TASK 4
P7 Evaluate the various methods in which SMEs can tap into international markets.
There are numerous ways which can help in expansion of Arden construction in
international markets. These can be:
Team Management
When employees in a team work with coordination, productivity of employees are raised.
This leads to execution of work easily, thus conflicts are resolved. When employees work as a
team they work to their full potential which give rise to efficiency and effectiveness in
operations.
Innovation
While going in a new market, it is highly required to give innovative products which that
market is not having. As when same product is launched in new market, without any newness,
consumers in that market will not be having any interest in the product or service and the project
would be a fail(Lewis 2016). To succeed in market, innovation is highly required.
Pilot Marketing
When launching in a new market, pilot marketing is required. It can be termed as
launching product with low segment in markets so that every level of individuals can reach. It
refers to introducing products with low price and easy approach towards it. After establishing,
enterprises can reach to high segments. When this procedure is not followed by the managerial
team it will create chances of failures.
The various ways that are available to enter in international market are discussed below:
 Export: It is the easiest way to enter in international market is export. The company can
sell the goods and services that are manufactured by the company in the international
market.
 Licensing: A license is granted in the foreign country and the business organisation can
produce the same goods and services in the international market by using the brand name.

 Joint Venture: It is another way of entering the foreign market. The company share the
risk and two organisations come together and use their knowledge and expertise. The
share risk as well as profits mutually.
These are some of the ways that can be used by business organisation to enter the international
markets.
P8 Compare and contrast the various ways SMEs can tap into international markets, assessing
the pros and cons of each method.
The methods like team management, pilot marketing, innovation when included in a
production it will help in better assessment of foreign market as these all are interrelated. These
assist Arden Construction to grow and cater the needs of market as needs can be analysed easily
when a systematic process is followed (Lin 2018). The subsidies and rebates provided will
reduce the cost and make productions cheap which can attract high consumers. With planning
pros are increased and cons are reduced. At times there are situation when following a systematic
plan will increase job pressure and cost which will affect the production. To make a team work
with coordination, it is required by them to make plans and follow a long process, thus delaying
the execution of operations. Sometimes pilot marketing can also go wrong as launching low
segment products and then switching to high segment can not work and plan can fail.
Advantages and disadvantages associated with the ways to enter international market are
mentioned below:
Export
Advantage
The company can expand its operations and
enter into international market in a easy way. It
is less risky.
Disadvantage
The needs and wants of customers are not
analysed in case of export.
Licensing
Advantage
The party gets the benefit of already
established brand position.
Disadvantage
The licensor has to depend over the abilities,
skills etc. of the licensee to earn revenue.