Tapping into New and International Markets2 Assignment Sample

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Introduction Of Tapping into New and International Markets Assignment Sample

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Task 1

Introduction

It’s being identified since many years that SME’s have undermining impacts over the financial system of a definite country. It’s just not providing effect over the Gross Domestic Production of the financial system although its communal status upon the nation creates as well as advertises the development of the business is also very hugely impacted. It is pivotal to make a note in this case that the influence of SME’s is not same as the large-scale business when it comes to any kind of involvement to the country overall. The occupation of these undertakings is additionally partnered with assisting the economies of their country in addition to setting out work open doors for the adolescent those aides in controlling deficiency. SMEs in all actuality do have their difficulties and dangers. This report will dissect the parts of the snags that are looked by SMEs in the United Kingdom.

Key Global Factors Influencing SMEs in the UK

Both small and medium business accounts for around fifty per cent of the profit created by the nation UK. It is additionally responsible for forty four per cent of the workforce of the nation. This part of the study will takes into account the main aspects which have impacted SME’s in the past few years.

Global pandemic of Coronavirus: As per the various researches, the financial system of the UK doesn’t grasp an influential site. It has been proved by means of mathematical evaluation that openly tells half of the financial system if ether in inactivity more or going through downturn. The worldwide pandemic gas affected the SME’s hugely and as a result the nation includes a large number of ME’s that the financial system suffered overall. As per a market study it has been also identified that SME; s within the UK had suffered almost 80% deficit in the Covid times. One out of every four SME: s was concerned on their indemnity repay. Twenty four per cent were worried concerning retention of their workers and 28% were worried concerning maintaining their delivery chain. 28% of SMEs followed the way of cutbacks at the time of the coronavirus and 36 present deferred or dropped the possibility of new ventures (Esq 2008).

Integration of the global market: Globalization presently is a questionable subject, it has for sure assisted each part of the business with surroundings, and at times, it has likewise assisted SMEs with flourishing and developing naturally. There are different manners by which globalization has helped SMEs, for instance, it has extended the compass of these organizations and measurably expanded their range and clients. The span to new clients and an expansion in business sectors have fundamentally assisted SMEs with growing their organizations. Because of digitization, SMEs get the chance of simple along with planned advertising. Since these ventures don't produce a lot of income. This is an exceptionally encouraging field for SMEs. Digitization by means of integration of the global markets globalization limits and thus it offers open doors for ability procurement that is far in excess of physical and political boundaries (Nkwabi 2019).

Regimental Limitations: The regimental hindrances are one more significant factor of outer impact in the development cycle of an SME. States don't straightforwardly discourage development although their strategies along with impetuses have an effect. Organizations (SMEs) like to grow their fields in regions that are geologically and monetarily nearer to the base camp. The issue that stands here, for this situation, is that humanistically the distinction in culture assumes a significant part in development which again is upheld by the biases by implication or unknowingly laid by the public authority. For instance, the initiation of the makes espresso organization of Starbucks in underdeveloped nations was viewed as a terrible endeavour, as the conservative states of these nations could not have possibly allowed the business to the firm (Farrokh 2016).

The rationale for the expansion of SMEs

It is a demand of every trading to increase their operation in other nations. But considering the case in this scenario is not relevant. The instance of SME’s is no varied. However, various aspects motivate the development of SME’s.

  1. Firstly, the main way of expanding a business is getting entry intro nay new business sector. By getting entry into a new business sector, the company usually looks to attain additional clients. Fresh as well as prospective client assist in the increase if profits for the company which in turn assist in expanding of market share which might be saved in future research and growth along with advertising. It is pivotal to comprehend that increase obviously need few monetary assistance for the sake of advertising, physical set up, duties, business expenses and etc. Thus, the attraction of prospective clients is pivotal (Gancarczyk 2014).
  2. The conquest of small along with medium undertakings into business markets permits business foundations to produce and form bigger amounts of inventory network material. This thus assists both small and medium organizations with acquiring limits and offers from merchants and providers as the general chain gets profited from the extension.
  3. The expansion and internationalization cycle of little and medium organizations impact their present status of items and administrations also. Many organizations could enhance their items or administrations and consolidate different necessities in their administration or product offerings to integrate themselves into a specific market. This expansion can emerge out of development and this thus assists the firm with growing its scope of income streams from where income can be created (Govori 2013).
  4. Marking prospective is expanded by means of effectual promotion. In the present times because of the expansion in digitization, virtual entertainment promotion or any type of computerized showcasing is extremely easy. Moreover, on account of SMEs, it likewise doesn't beg to be spent. This sort of promotion is viewed as very proficient, powerful, responsive, and above all financial plan cordial which is the main perspective for SMEs.

Opportunities and Challenges of SMEs in the Global Market

Opportunities

  1. Development of Business: Business growth is also considered the process of branding and is not restricted to market development or revenue and consumers. Brands with better brand profiles are more likely to be trusted by customers and consumers (Thrassou, Aand et.al., 2020). Customer reviews can be heterogeneous in nature in order to help create the brand profile. In other words, the criticisms must come from an assorted collection of folks, which will produce trust amongst shoppers. As a result of expansion outside of the EU or European Union, SMEs will benefit in a variety of ways. First, they will experience an increase in growth of more than 90 percent outside the EU in the next few years, secondly, over 60 percent of global value chains are expected to come from developing and emerging markets by 2030, and last but not least, SMEs will play an essential role in them. It is vital to take various opinions that do affect business in a negative aspect but it gives a variety of changes as per the requirement of business.
  2. Addition and Innovation: Profits will increase as a business grows, but there are many other factors that must be met to make it successful (Rugova, and Prenaj, 2016). At the initial stage, there is a requirement to perform huge research in terms of the target market which must be approachable. When the business has more new technologies, it will be helpful to perform appropriate research. By using new technologies, the firm will be able to move forward with better coordination and functionality in the future. Moreover, a growth procedure will encourage the firm to employ talent from a variety of backgrounds, promoting comprehensiveness within the organization as well as generating a broader standpoint and new thoughts that will prove hugely advantageous. Innovation plays an important role in developing the business and is considered one of the motive aspects for growing business.

Challenges

  1. Susceptibility- SMEs are still small and in the procedure of internationalization, they are exposed to a wide variety of international threats (Osano, 2019). Global markets are extremely inexpensive and cruel; deliberation has no place here, particularly since these markets cover hulks of the industry with much more involvement. The SMEs in the marketplace are considered to be exposed to the standard pricing regarding the international market which affects the level of profit in addition to also reduces it.
  2. Impactful Barriers- An expansion like this, because SMEs are small companies, needs an excellent amount of resources, including manpower, funds, networks, as well as the utmost significant thing, practice (Abe23, 2016). Due to the lack of all of them, SMEs are more likely to engage in threats that can prove deadly for them. SMEs should therefore create a strong position in their home-based market first before thinking about expanding internationally.

Another Strategies for SMEs

There is not a single confusion about the fact that over the past two years of Covid lockdown numerous organizations are battling. The private venture area, specifically, has been hit hard, enduring two times the contact as to employment misfortunes as large business, as indicated by information delivered by bookkeeping stage Xero. The Small Business Insights research, in light of collected and anonymised information from the stage's very nearly 1,000,000 Australian clients, looks at various pointers, including work and income. Below mentioned are some of the additional stratgeis for keeping up as well as maintaining the functioning of the SME’s.

  1. To ensure strong position in the home country- When a company establishes a solid foothold in its country of origin, it opens the door to a wide range of incomes (Tuan, 2020). In the first place, a firm with a tough position within a specific country is mechanically positioned to sell a significant amount of its products abroad. Having grown and generated steady cash movement and income, the firm now has a lot more capital to invest in market research, manpower, and marketing in general. Moreover, the firm is now well versed in all aspects of project organization and processes, so threat establishment here will be much well-organized.
  2. Starting little- The SME can expand in Scotland, Wales, and Northern Ireland if its headquarters is in London. These areas are mainly within the UK but they have different types of customers. However, they are not connected closely and it helps the business to get a chance to explore various opportunities as well as challenges of internationalization (Juergensen, Guimón, and Narula, 2020). Thus, it allows a business to get a clear idea regarding the management of risk as well as project.

Interchange contract of SMEs in the UK

  1. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): This is a trade agreement among 11 countries, including Vietnam, Japan, Canada, Australia, Brunei, Malaysia, Peru, Singapore, Darussalam, Mexico, and Chile. • There is an initiative by all countries to join the contract in the year 2021, so that it will be completed by that time (Del Vecchio, and et.al., 2018).
  2. A trade negotiation with the United States, which began in May 2020, is about to arrive to an end.
  3. There is currently no trade agreement among India and the United Kingdom, but agreements will begin in January 2022.
  4. The same rules apply in the UK-Canada trade agreement as they do in the UK-EU trade agreement. This began in March 2022.
  5. Mexico and Canada have trade agreements that are similar to UN agreements with these countries. However, the talks began in May 2022.
  6. The Gulf Cooperation Council (GCC) represents countries in the Middle East. Agreements between the UK and the EU are currently on going.
  7. Mexico and Canada are in a similar circumstance as Israel.
  8. Ukraine and the United Kingdom have indeed finalised virtual trade treaties.

Use of international opportunities

Statistics about UK trade show a dramatic change from 1999 when 53.8 per cent of their trade went to the EU. Within a few years, this number had turned around, with the UK exporting goods to non-EU countries accounting for 57.4 percent of its trade (Hamisi, 2021). Small and medium-sized companies (SMEs) make up the majority of the UK's business profile, so there are many advantages for them to internationalize in the UK since internationalization is sanctioned by the government.

As the government wishes to seek the assistance and intervention of firms in emerging markets like BRIC, BRICET, MINT, and CIVETS, firms have enormous opportunities for internalization, and thus it becomes easier for firms to do so since the government sometimes provides financial assistance to these firms to increase their international trading share. It provides a basic aspect for dealing with the change in the marketplace. 

Conclusion

From the above done study it can be concluded that the study has taken a proper look in the factors of the internationalisation of the SME’s the risks as well as occasions connected to it, In addition to this the study has also successfully evaluated the active business associations with the SME’s within United Kingdom along with in what manner SME’s might promote their notion of internationalisation by means of intellect of the active business association of the UK has also been discussed in detail.

Task 2

Speaker notes

Slide 1: Cover Slide

Slide 2:

Introduction:

This segment of the study will concentrate on the traditional ideas of exporting and importing and will also concentrate on specific benefits and drawbacks of the same. Next, it will comprehend the conditions that must be met for these procedures to be completed, and eventually, it will comprehend the contrast between the exports and imports of the related services and goods. In the final section of this presentation, suggestions for the importing and exporting procedures of a chosen SME from the United Kingdom entitled CafePod will be made. This overall sum up all the important things about the project and this report touches and covers all the sections.

Slides 3:

Benefits of importing: launching of the latest products in the desired sectors: the launch of all the latest bringing into a market enlarges the availability of the market and helps in making it more inclusive.

Cost savings: Imports encourage a boom in the number of products available on the market, which boosts supply and lowers prices.

Choosing a leadership position in the market: As more new products enter the market, competition for leadership positions increases. This increased competition is sometimes healthy and sometimes not. However, the leading positions matters when it comes to bringing new and innovative ideas in the market.

High-Quality Products: To take the lead in the market, a product must outperform many others of its kind, so quality is crucial.

Benefits of importing: introduction of the newest items in the targeted industries: the introduction of all the newest products into a market expands the market segment, thereby contributing to the market's inclusivity.

Savings: Imports promote an increase in the number of goods on the market, which raises supply and drives down prices.

Choosing a dominant position in the market: The fight for leadership positions gets tougher as more new products come onto the scene.

High-quality Products: A product must perform better than many similar products to gain market dominance. Hence quality is essential.

Slides 4 and 5:

Small firms encounter difficulties while importing and exporting goods because of obstacles to exporting.

Cultural differences: Since diverse cultures in various countries may not always mesh, if the market analysis is not performed well, there may be resistance to using particular items.

Insufficient experience Exporters are challenging professions and risks may increase for someone with less experience.

Hefty price: Particularly from the perspective of an SME, rising export costs will lead to losses, especially if the market isn't ready or hasn't yet been penetrated.

Risk level rises: Serious dangers will be the result of more losses.

The decline and loss of domestic markets brought on by excessive and uneven imports, which compel firms to sharply cut their prices to compete, are examples of import problems.

Trade imbalances are what cause trade deficits to emerge.

Cultural differences: Because diverse cultures in different countries do not always mesh, some products may not be well received if the study is not done effectively.

Important documents required for exporting.

Slide 6: understanding what are the differences when it comes to the export and import merchandise or services. Importing

Goods/Merchandise

Services

The export of tangible commodities like vehicles, technology, mobiles, and other products is referred to as merchandise.

When someone is hired to execute an act for someone from another country, that person is said to be providing services.

 A mandatory permission from government is required.

This can be a private task

A lot of documentation is required.

A conversation over a telephone is enough.

Slide 7: evaluating the Differences between export and import merchandise and services: Exporting

Goods/Merchandise

Services

The term "merchandise" refers to the importation of tangible goods like automobiles, electronics, mobile phones, and so forth.

When someone is hired to execute an act for someone from another country, that person is said to be providing services..

Government permission needed.

You can do it privately.

Documentation required.

A telephonic conversation is enough.

Slides 9: Recommendation for CaféPod

A well-known SME in the UK by the name of CafePod makes coffee. In order for the company to export and expand, it needs to have a solid presence in the target audience it wants to reach. Discounts, coupons, and other marketing tactics will need to be used intelligently in order to set themselves apart from competitors.

The corporation won't have any trouble importing high-quality coffee beans because the UK already has reliable business ties in Vietnam, Brazil, and Indonesia.

Slide 9: Conclusion

The specifics of the phenomenon of importing and exporting were covered in this lecture. It focused on both the advantages and disadvantages of the same. Additionally, it focused on the SME CafePod and offered special import and export tactics for the same.

Task 3

Introduction

Internationalization is recognised as a very credible and successful corporate practise. Any company that is positioned to grow abroad or upscale its operations is considered to be ready for international competition. However, internationalisation is not as easy as it would seem. This study tries to pinpoint the advantages, disadvantages, opportunities, and dangers associated with a SME's internationalisation process. There are many aspects to the same thing, and if the varied components are not managed carefully, the results could be terrible.

The various globalization strategies are evaluated and compared

Mode of internationalisation

Description

Benefits

Limitations

Exporting

It is regarded as one of the simplest methods of breaking into a foreign market. Selling goods that were produced in the home country or another nation is referred to as exporting.

It is a fast technique is fast with low amounts and risks.

Export is a complicated industry, thus without enough market understanding and study, it has a high risk of failure. It also carries significant risks like poor control, potential environmental harm, high costs, and damage to the firm's reputation (Etemad and Write 2003).

Franchising and Licensing

There are countless instances of this phenomena where a large corporation sells or licences its franchise rights to a business owner in a nation. This is done in an effort to reduce both their obligations and liabilities. Now, that specific local business would be in charge of the company's day-to-day operations in the nation where it had undergone internationalisation.

A fast process with the liabilities of the firm which helps in reducing the cost and risks are also low.

There are numerous examples of this phenomenon where a big company distributes or sells its distribution rights to a company owner in a country. In an effort to lessen both their commitments and liabilities, this is done. The company's daily activities in the country where it underwent internationalisation would now be managed by that particular local entity.

Partnership and Strategic Alliance

A contract between two businesses on a subject that concerns both parties on a whole can fall under this category. At this point, it's critical to evaluate what each company can contribute. In order to complete a project or overcome the restrictions of a specific company, strategic collaborations typically take place. The length of the collaboration should therefore be evaluated.

Decrease in investments shared expenses and risks, as well as more ideas and opinions.

In cases where partnerships or alliances span nationalities or cultures, there have been severe integration problems. Additionally, it is more expensive than exporting.

Acquisition

This is a situation where one firm buys another by either selling its own stock or buying the other company's stock. In the current corporate environment, about 60% of transactions are cross-border at any particular time (Caiazza 2016).

Fast entry, effective and efficient operation, and efficient and comprehensive results.

The cost of an acquisition is exorbitantly high, furthermore, the entire corporate culture suffers due to this as the management completely changes. 

Contrasting the benefits and drawbacks of various strategies for entering new overseas markets

Mode of Internationalisation

Advantages

Disadvantages

Market research, selection of countries in which to expand,

global payments, foreign exchange rates, and target marketing.

Exporting

This method is quick and carries a great deal with fewer risk rate.

Export is a complicated industry, thus without enough market understanding and study, it has a high chance of failing. It also carries significant risks like poor control, severe ecological damage, high costs, and damage to the firm's reputation (Daszkiewicz, N. and Wach, 2012).

Market research for exports aids the business in comprehending many facets of the behaviour of the international market, such as which markets are now beneficial, the best entry points, the positioning of the items in the market, facts about competitors, and barriers to entry. (if any). The study of global commerce as a whole, which will shed light on the suitability of various nations for expansion, currency exchange, and target marketing, will also be a part of market research.

Franchising and Licensing

The procedure moves quickly, and as the company's responsibilities are decreasing, there are also less costs and threats.

In certain cases, the licensee turned become a rival of the parent business. The licensee is under far less mother company control. As the licensee business's regulatory environment deteriorates over time, the mother company may also suffer.

obtaining a licence and franchising Understanding the precise workings of a given company is necessary for the franchising and licencing procedure. Both the licensee and the licensor will need to be extremely knowledgeable about the regulatory frameworks in their respective countries. In addition, the licensor will need to conduct market research to determine the extent of the licensee's market penetration and the potential financial rewards of the arrangement. After that, the exchange rate determination will be the last component in finalising the contract. Consequently, the licensee now has to analyse the target market.

Partnership and Strategic Alliance

decrease in investments shared expenses and risks, as well as more ideas and opinions.

There have been cases of serious integration problems, particularly when partnerships or alliances span cultures or nationalities. Additionally, it costs more than exporting.

A franchise's market research is quite similar to that of a strategic partnership. Contrary to the earlier situation, when the licensor's liability was greater, in the situation of a partnership, both companies' responsibility grows. Research concerning expansion, worldwide exchange rates, and contribution are essential in strategic partnerships and should be conducted separately by both companies prior to the partnership agreement. Later on, the target demographic can be assured through cooperation. Both businesses must determine whether or not such a cooperation will be advantageous to them (Gardo et al., 2015).

Acquisition

Fast entry, effective and efficient operation, and appropriate and productive results.

The price of an acquisition is astronomically high, and as a result of the management's comprehensive transformation, the entire business culture suffers.

In an acquisition, what happens is the company buying the target company must exercise greater caution than the target company. The key focus of this company's market research should be the acquisition's requirements, potential rewards, and risks. The exchange rates around the world and the intended market for the acquired company's products and services are also included (Che et al., 2011).

Recommendation for the internationalization process of Cafepod 

As was already mentioned, the UK-based SME CafePod sells coffee. This company is very new to the marketplace and confines its operations to the UK's national borders. Exporting is the most advised strategy at the current stage of the company if CafePod wants to expand its market and become global. The company must keep in mind that it is a small to medium-sized enterprise (SME), making measured and strategic moves crucial. Export is the chosen method of internationalization for this company.

The company currently only uses a website for marketing. The majority of its orders come in person or via its websites. Along with selling coffee, it also offers guides about how to make great coffee, which can be considered a distinctive marketing feature of the company. The website has the potential to enter a new market if it is promoted properly via social media advertising and some minimal physical presence through the delivery of freebies or alluring incentives. The company must also comprehend its internal workings, including its social and economic processes. In this manner, the company will be able to comprehend market trends more effectively and break through them more successfully. In order to successfully build a global foundation for the company, research on the competitors is just one crucial component of market penetration. The firm must also study the market positions, strong points, and weaknesses of the competitors. Exporting products without a valid order or market analysis will result in losses for the company and product waste. Additionally, before establishing a presence or supply chain abroad, the company should wait until it has a firm grasp on the global market (Taylor 2013).

Conclusion

In order to come to a conclusion, this paper looked at traditional theories, their benefits, and their drawbacks related to the process of internationalization. The paper also looked closely at the drawbacks and advantages of several approaches to the process of internationalization and how each one differed from the others in terms of things like market analysis, target marketing, and international exchange rates. The final goal of this report was to advise the chosen SME, CafePod, on an effective internationalization strategy (Govori 2013)

References

Abe23, M., 2016. SME Participation in global value chains: Challenges and opportunities. Integrating SMEs into Global Value Chains, p.27.

Del Vecchio, P., Di Minin, A., Petruzzelli, A.M., Panniello, U. and Pirri, S., 2018. Big data for open innovation in SMEs and large corporations: Trends, opportunities, and challenges. Creativity and Innovation Management, 27(1), pp.6-22.

Hamisi, S., 2021. Challenges and opportunities of Tanzanian SMEs in adapting supply chain management.

Esq, ATL 2008, 'Factors influencing small and medium enterprises (SMEs): An exploratory study of owner/manager and firm characteristics', Banks and Bank Systems, vol 3, no. 3, pp. 5-13.

Farrokh, S 2016, 'ACTORS AFFECTING THE GROWTH OF SMALL AND MEDIUM-SIZED ENTERPRISES ', I J A B E R, vol 14, no. 10, pp. 6199-6216.

Gancarczyk, M 2014, 'The Process of the Growth of Small and Medium-Sized Enterprises (SMEs)', Journal of Entrepreneurship, Management and Innovation, vol 11, no. 4, pp. 3-24.

Govori, A 2013, 'Factors Affecting the Growth and Development of SMEs: Experiences from Kosovo', Mediterranean Journal of Social Sciences , vol 4, no. 9.

Juergensen, J., Guimón, J. and Narula, R., 2020. European SMEs amidst the COVID-19 crisis: assessing impact and policy responses. Journal of Industrial and Business Economics, 47(3), pp.499-510.

Osano, H.M., 2019. Global expansion of SMEs: role of global market strategy for Kenyan SMEs. Journal of Innovation and Entrepreneurship, 8(1), pp.1-31.

Rugova, B. and Prenaj, B., 2016. Social media as marketing tool for SMEs: opportunities and challenges. Academic Journal of Business, 2(3), pp.85-97.

Thrassou, A., Uzunboylu, N., Vrontis, D. and Christofi, M., 2020. Digitalization of SMEs: A review of opportunities and challenges. The changing role of SMEs in global business, pp.179-200.

Tuan, V.K., 2020. Analysis of challenges and opportunities for Vietnamese SMEs in the globalization. Journal of Business Management and Economic Research (JOBMER), 4(2), pp.169-185.

Taylor, P., 2013. The effect of entrepreneurial orientation on the internationalization of SMEs in developing countries. African Journal of Business Management, 17, pp.19-21. 

Nkwabi, JM 2019, 'A Review of Factors Affecting the Growth of Small and Medium Enterprises (SMEs) in Tanzania', European Journal of Business and Management, vol 11, no. 33.

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