Unit 43: Exploring International Markets for SMEs Report

This report, prepared for Clarasys, a consultancy, analyzes strategies for small and medium-sized enterprises (SMEs) to tap into international markets. It begins by explaining the global business environment, including the impact of Brexit and the importance of SMEs in the UK economy. The report assesses the threats and opportunities faced by SMEs in a competitive global environment, focusing on key drivers and the expansion of businesses internationally. It then explores the advantages of international trading blocs and agreements, such as the CARIFORUM-UK and SACUM-UK agreements, and examines tariff and non-tariff barriers. The report also determines the advantages and disadvantages of importing and exporting, and the methods to secure deals. Finally, it evaluates various methods SMEs can use to enter international markets, comparing and contrasting the pros and cons of each approach, providing a comprehensive overview of international market strategies for SMEs.

Unit 43- Tapping into new
and international markets

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Explain the global business environments in which small and entrepreneurial businesses
operate.........................................................................................................................................1
P2) Analyse the threat and opportunity that face SMEs in an increasingly competitive global
environment................................................................................................................................2
TASK 2............................................................................................................................................3
P3) Determine and analyse the advantage of international trading blocs and agreement...........3
P4) Explain the various tariff and non-tariff barriers that exist in the international trading
environment................................................................................................................................4
TASK 3............................................................................................................................................5
P5) Determine that advantage and disadvantage of importing and exporting and how to secure
a deal...........................................................................................................................................5
P6) Explain the differences between merchandiser and service import and exports..................6
TASK 4............................................................................................................................................7
P7) Evaluate the various methods in which SME can tap into international market..................7
P8) Compare and contrast the various ways SMEs can tap into international market, assessing
the pros and cons of each method...............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Tapping into an international market state overseas activities that is induced by the
business as in order to enhance its working capabilities and potential so that highest return on
investment is induced. It is developed to make more profit as while considering different
opportunities so that productive improvisation is induced with perfection and better suitability. In
this business might have performed importing or exporting so that effective understanding is
achieved with perfection (Adomako, 2019). The following report is dependent of Clarasys that is
a consultancy organisation and helps other businesses so as to shaping and imagining better
customer service. The report consist of opportunities and threat of firm that expose increase
globalised environment, advantages of trading blocs for firms, practicalities and process of
importing and exporting and different way that is used by SME in order to tap into international
market.
TASK 1
P1) Explain the global business environments in which small and entrepreneurial businesses
operate.
The global business environment defines different economical and political benefits so
that long term sustainability and balance is attained within stipulated time period. There is
different challenges that is faces by SMEs and in this UK has worked over to manage and
operate better working that govern sustained benefits and betterment of business. UK governance
also develop different policies by which fund flow is managed and in this suitable control on
GDP and economy development is addressed. It include offering of employment opportunities so
that market resistivity and its performance is getting enhanced on continuous basis. UK is
basically known as epicentre and provide sustain financial balance to the business and make a
contribution about 80%.
Small businesses worked over limited scaling and also covers bounded region and they
have processed their working with support of less than 50 employee's and generate a revenue of
about 10 million pounds (Brace, 2018). On other hand medium enterprise has generate revenue
about 50 million pound and processed its working with minimum of 250 employee's. In order to
enhance the working operation business must have analyse different working environment so
that import and export of goods become easy and flexible. SMEs provide huge support and
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balance to UK government and it is the largest business sector that covers 98% of market (UK’s
global business environment, 2011). SME generate higher benefits as in terms of export services
all across UK and while covering boundaries of Europe as covers France, Spain, Netherlands and
many others places as well. In this transportation cost decreases as it is due to the impact of
Breixt so that profit generation also increases. UK's SME has performed its trading as while
covering international market such as Asia, America, Africa etc. and it provide positive benefits
as in terms of better country advancement (Gunderson, Magnan and Baciu, 2018).
P2) Analyse the threat and opportunity that face SMEs in an increasingly competitive global
environment.
Global business and their impact of key drivers:
The form of global business are more engaged and having effective impact in overall
business enterprise as well as various type of external segment of United Kingdom business
environment. But the negative impact of Brexit market and different implication of changes
applies by the government in United kingdom. The Small medium enterprise business are play
major role in UK business economy in term of more growth, increase in Gross domestic product.
The major impact of SME's in the global business economy where it helps tor reduces the
poverty and other negative economic barriers that which was preventing the more conflicts. As
They generating more business in terms of employment, development in society and new
opportunities optimise for that it develop the performance of economy. The SME's have got
more freedom in aspect of UK governance and through which they form their trading in their
other relative countries like Europe and Germany (Guo, Heinberg and Zou, 2019). They
developed after the Brexit and with the SMEs the entrepreneurial business firm which helps to
operates the function to form new interest and exchange rates. There some key drivers that have
made direct impact on the economic evolution of United Kingdom in terms of manpower,
investment criteria, as well as productive.
SME's expand their business in international level:
The business of SME's is having to help to expands their business in external regions
called the international level where they focuses towards idol market through which they get
more development ad growth which helps to enhanced the revenue. As SME's gain moderate
competitive advantages from the market through international level where they get economic
price from that they hire low range of labour or manpower.
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The role of SME to create more jobs creation.
SME's also plays a very critical role in the world economy where they tend to contribute
to generating more employment. As in United kingdom, more than 600 million small and large
scale of jobs would be required in next 10-20 years where the major role of SME's plays for
creating small job opportunities for developing the manpower growth as well as lack of assess in
capital investment (Hollinshead, 2020).
Threats and Opportunities in competitive global environment.
By measure the performance of SME's they tend to perform in their business along with
small number of manpower and staff and they worked in limited scale. In that scale they evaluate
different platform in terms of challenges and opportunities that they could reform for valuable
outcomes generation. The opportunities would generates in global business that they provides the
plenty of business platforms and small job which could provide the benefit to the economy as
well as companies will get generates sufficient profitability. Threats could be prevents for SME's
is the involvement of global business in competitive business environment where they can
overtake the market of SME's as well as more high level of jobs provide to people which reduces
the productivity of Small Medium business.
TASK 2
P3) Determine and analyse the advantage of international trading blocs and agreement.
The trading blocs and agreements provide long term advantages within international
marketplace and in this trading blocs generally state different limitation and restriction that is
implemented as while working within two international boundaries. In this government
intervention is induces and in this they have worked over to make better participation of
businesses by which complexity within working is reduced and in sustained mode (Ju, 2018). In
addition trading blocs and its agreements is based on the contract development that is basically
performed in between national boundaries and that is processed in order to make advancement
and improvisation within the economic stability and balance of a particular country.
Agreements and trade blocs is basically dependent on the various regions as through
which UK and European Union performs certain memorandum in which there is no need for
business to fill certain tax. It induces balanced perfection within the working standards and in
addition after Brexit confrontation UK develop other opportunities in the market so that better
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trading is performed. In this governance develops differ opportunities so that working conditions
has been increases and balanced profit is attained as while increasing profit share or revenue
generation. The CARIFORUM-UK economic partnership agreement is a trade bloc that is
developed by UK in order to provide effective platform to SME and also offer better easiness
and flexibility such as Barbados, Bahamas and with rest 11 countries respectively.
The another one agreement is performed by UK such as SACUM-UK economic
partnership agreement (EPA) and in this trading standard is developed in between UK and
southern region of Africa (Khan and Lew, 2018). These are the places that is more developed
and in this business has performed all its trading without paying any tac regulation by which cost
and profit ratio is increases in constrained manner (UK trade agreements, 2019). Due to the
replicative impact of Brexit, certain responsibilities and its regulation is affected and in this
World trade organisation (WTO) make an agreement so as to manage agreements and in this
favourable outcome is achieved as while managing certain fair practices of trading.
Input of global growth for SMEs
The international blocs and agreements induces higher profitability to business and in this
sustained growth and development is attained by which long term benefits is achieved in easiest
manner. The SME has manages its trading as while managing different expenses so that
expenditure rating and its growth is measured as while paying balanced taxation.
P4) Explain the various tariff and non-tariff barriers that exist in the international trading
environment
An international trading environment is usually a combination of national and
international trading that has been performed by the business in order to make higher benefits in
better way. In this tariff and non-tariff is controlled by the business so that different challenges
has been restricted with balanced manner (Lane and Parthasarathy, 2018). In this tariff include
custom duties, interest and taxation rates through which suitable revenue is developed in accurate
manner. On the other hand-non tariff is directed towards the objectives as from which import and
export services has been managed.
There is certain barrier that is developed as from tariff as it somehow restricts exporting
and importing of SMEs along with this its goods and services. It bounds the entry specification
of business so that while performing international trading SME has to pay higher interest and tax
rates. For instance, custom and taxation services brings higher barrier and it is required for SME
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to get followed these as while performing trading. On the other hand non-tariff trading also bring
certain restriction such as about taxation interest as per revenue generation. It basically based on
goods labelling, restriction on quantity, procurement regulation, administered process, subsidies
etc.
The tariff and non tariff barriers has better influence over the success and growth of
SMEs and in addition to entrepreneurial ventures as well. In order to manage the working
discipline it is required that certain control on restriction is attained so that sustained increment
in profit generation is achieved (Majid, 2019). International trading performed on the basis of
importing and exporting by which business has differentiate its working in support of
unreasonable, labelling by which better control among legislation is achieved.
TASK 3
P5) Determine that advantage and disadvantage of importing and exporting and how to secure a
deal.
The importing and exporting is being performed as in terms of overseas trading and in
this exchange of goods and services is processed. It includes both advantages and disadvantage
and it is as explained below as:
Importing: In this business has transferred its products and services within foreign
marketplace. It provide balanced support as in order to increase economic stability of business.
The trading is being performed while making effective balance in manufacturing of creative
goods and services. Following is few advantage of importing and it is as explained below as:
 The SME must have managed the development of good and services with minimum
pricing so that profit margin is increases (Ryan, 2019).
 The manufacturing and production cost such as cost to material, machinery, labour all is
maintain accurately so that long term effectiveness is achieved.
 SME must have work to attain higher quality so that taxation policies is being controlled
along with this better facilities is achieved in successful manner.
 The governance also pay more support for the development of SME so that its collective
development is processed with effectiveness.
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On the other hand there is few disadvantages of importing that is as illustrate below as:
 SME must have required to follow GST regulations as well as tax too thus it reduce profit
share of business.
 In order to make importing employment opportunities is increases but local offers of job
is reduces on repetitive basis.
Exporting: It is a procedure as from which SME sold its goods and services in international
marketplace and it is developed in order to gain more profit as by providing balance in terms of
economy generation. There is few advantages that is as explained below as:
 It produces more advancement for SME in international marketplace as business image
and working both get expanded.
 SME must have ensure to gain higher profit as in term of revenue generation and it is due
to enhanced value of currency (Sheth, 2020).
In addition there is few disadvantage as well of exporting and it is as described below as:
 The financial condition of different countries has been varied and it has direct impact
over profit generation so that SME face fluctuation within profit generation.
 The businesses must have take license and perform other documentation as well so that
market entering is getting restricted.
 It takes higher cost and time under which complex situation is developed for SME in
order to manage its survival.
P6) Explain the differences between merchandiser and service import and exports.
The merchandiser and service import as well as export is a specialised prospect of the
business and in this the ability of an organisation to get make their presence in new marketplace
is increases on continuous basis. It basically include sustained difference in between
merchandiser and service as it is as explained below as:
BASIS Merchandiser import and export Service import and export
Meaning It is basically refer to exports of
tangible good and services that would
be sold out from a country (Steffen,
2018). On the other hand merchandiser
import has been bought within the
nation. For instance, Clarasys as
The service import and export is based
on to generate earning which is
dependent on non product
internationalisation. It consider
intangible trading for example, in
Clarasys make acquisition with other
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offered consultancy experience to
others along with innovation and
improvements. They also get connect
with the customers as with streamlined,
personalised, digital experience so that
better connect with customers in and
out of UK.
businesses so that professionalism
within business is addressed and they
have provide better solution as per
analysing overall situation.
Scope Merchandiser has less scope within
marketplace as tangible goods doesn't
processed with suitable effectiveness.
It has wider scope as compared to
merchandiser as in this Clarasys must
have provide training, infrastructure
enhancement as in return of payment.
Cost The merchandiser cost is related to
manufacturing and trading as in this
sufficient need and demand of business
is fulfilled and it is processed as by
investing in adequate development.
It is stratified procedure in which
operating and functioning cost of
business is reduces as it doesn't consist
of any development (Tidd and
Bessant, 2018).
TASK 4
P7) Evaluate the various methods in which SME can tap into international market
The small and medium enterprise has worked over to gain accurate earning as in return of
its investment. In this there is very few business that has worked in international market as by
enhancing its production or its operations. In addition there is few methods that is selected by
SME in order to tap in international market and it is as explained below as:
Franchising: It is a form through which certain agreement is developed as in between
two individual parties as one is franchisee that takes permission from franchiser so as to make
use of its brand name and logo. In this it is essential that business must have provide quality
services so that brand perception in market is maintained.
Joint venture: In this business makes collaboration or partnership with other business so
as to worked on specified project by which favourable outcome is generated with perfection and
on timely basis as well.
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Licensing: In this one business make agreement with other parties and permit them to
make effective usage of its patent by which adequate trading is processed so that better values
and images is managed.
Clarasys must have uses joint venture as it is an consultancy firm and maintain focus on
to provide and deliver better experiences (Wang, Helms and Li, 2020). They also help to reduce
diverse complexity by which working is operated in better format. Thus it is the most suitable
mode through which they have collaborate with other business so that working effectiveness is
increases on continuous basis.
P8) Compare and contrast the various ways SMEs can tap into international market, assessing
the pros and cons of each method.
SME must have tapped into international market as with support of different methods
such as licensing, joint venture and franchising and below it is defines with its pros and cons and
it is as illustrate below as:
Pros
Franchising Licensing Joint venture
It is most suitable model
that is selected by business
so that supportive changes
is addressed with
affordability.
SME must have gain larger
market share as risk
involvement is less so that
profit ratio is increases.
It enhances the share control
along with the increment of
stature by which long term
accessibility is achieved
with perfection.
Cons
Franchising Licensing Joint venture
It requires more outlay of
capital and there is no
freedom to make
creativeness along with this
having limited options of
selling.
The time period of license is
limited and also provide less
access of knowledge so that
licensor failed while
maintaining product update
(Yip and Prashantham, 2019).
It brings joint responsibility
so that each business must
have manage its
performance but sometime
rigidity is increases due to
unequal involvement.
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CONCLUSION
As from the above report it has been summarised that tapping into an international market
bring better success and development for the business as in addition more advancement in terms
of profit and productivity is increases. In this it is required that business must have
acknowledged market opportunities so that higher revenue is collected in timely frame. In
addition various challenges also faced by small business and it is required to manage so that
balanced stability is attained. In addition SME must have worked on with trade agreements as
while developing rules and regulation along with an analysis of various methods that is used to
tap in international market.
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REFERENCES
Books and Journals
Adomako, S. and et. al., 2019. R&D intensity, knowledge creation process and new product
performance: The mediating role of international R&D teams. Journal of Business
Research.
Brace, I., 2018. Questionnaire design: How to plan, structure and write survey material for
effective market research. Kogan Page Publishers.
Gunderson, G., Magnan, S. and Baciu, A., 2018. Faith-based assets and multi-sector community
teams: tapping into deeply woven roots. North Carolina medical journal. 79(4). pp.236-
237.
Guo, X., Heinberg, M. and Zou, S., 2019. Enhancing consumer attitude toward culturally mixed
symbolic products from foreign global brands in an emerging-market setting: The role
of cultural respect. Journal of International Marketing. 27(3). pp.79-97.
Hollinshead, G., 2020. Global value chains in international knowledge work: networks,
stratifications and labour markets. Global Networks. 20(3). pp.472-488.
Ju, M. and et. al., 2018. How can international ventures utilize marketing capability in emerging
markets? Its contingent effect on new product development. Journal of International
Marketing. 26(4). pp.1-17.
Khan, Z. and Lew, Y.K., 2018. Post-entry survival of developing economy international new
ventures: A dynamic capability perspective. International Business Review. 27(1).
pp.149-160.
Lane, V. and Parthasarathy, M., 2018. A Comparison of Excess Stock Market Return to Standard
Marketing Metrics. In Research, Practices, and Innovations in Global Risk and
Contingency Management (pp. 20-37). IGI Global.
Majid, M.A., 2019. Combating Malaysia's Involvement in Worldwide Organ Trafficking by
Tapping into the Potential of Bioprinting. Global J. Bus. Soc. Sci. Review. 7(1). pp.61-
74.
Ryan, P. and et. al., 2019. Local horizontal network membership for accelerated global market
reach. International Marketing Review.
Sheth, J.N., 2020. Borderless Media: Rethinking International Marketing. Journal of
International Marketing. 28(1). pp.3-12.
Steffen, B. and et. al, 2018. Opening new markets for clean energy: The role of project
developers in the global diffusion of renewable energy technologies. Business and
Politics. 20(4). pp.553-587.
Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Wang, L., Helms, W.S. and Li, W., 2020. Tapping into agglomeration benefits by engaging in a
community of practice. Strategic Organization. 18(4). pp.617-644.
Yip, G.S. and Prashantham, S., 2019. Innovation in Emerging Markets. The Oxford Handbook of
Management in Emerging Markets, p.351.
ONLINE
UK trade agreements. 2019. [Online]. Available through: <https://www.gov.uk/guidance/uk-
trade-agreements-with-non-eu-countries-in-a-no-deal-brexit>
UK’s global business environment. 2011. [Online]. Available through:
<https://ccbjournal.com/articles/uk-business-environment-positive-and-forward-looking>
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