Business Environment Business Environment a) Discuss the importance of International trade to two or more UK business organisations. Trading internationally has significance importance for all the companies that indulge themselves in international trading…
(HOLDEN, MATTHEWS & THOMPSON. 1995) In UK there are many businesses which export and import product internationally. There are big names in UK like Unilever, Barclays, HSBC, Tesco, Marks and Spencer etc who are involved in trading internationally. To emphasize on Marks and Spencer it is been one of the oldest British retailer selling clothes and luxury food products. It operates in 40 countries of the world and is a well known brand world wide. Due to its vast operations world wide M&S is a global competitor for many international clothing brands. This global coverage through international trade has led to expansion in manufacturing activities of M&S worldwide which have made it profitable by outsourcing its manufacturing activities easily in cheaper countries which have made it possible for the company to compete in international market on low cost and maintain its margins. Due to its international trade, M&S has also altered their products in accordance with the demand of international market which have make the company deal with many types of commodities serving many markets worldwide. (COADE. 1997; BRUCE, MOORE & BIRTWISTLE. 2004) On the other hand Tesco is one of the largest retail chains in Britain which has grown steadily over time and has internationalized its operations throughout the world. The international trade pursued by Tesco has also benefited it in the similar ways; Tesco being a very strong player in the local market is able to use its brand successfully around the world and has gained next level recognition throughout the world. Due to internationalization its operations has expanded in many countries of the world like Malaysia, Czech Republic, Poland, USA etc. where it has achieved economies of scales resulting in lower operating costs and a better ability to compete internationally with lower prices. On the other hand international trading is extremely beneficial to Tesco’s financials that has become very significant in the group results of Tesco. Overseas trading accounts for 60% of Tesco’s total results and its makes up 20% of current trading profits, while most of the operations worldwide are either profitable or on breakeven and in many countries it is a market leader. Another advantage the international retailing of Tesco is that due to its operations in many markets, it overcomes or reduces its risks of failure. For e.g. Tesco has recently started operating in US and its still a loss making region. However this loss is compensated by the profits generated by the others regions which make Tesco a profitable group. International trade not only can result in cost saving but it also leads to international recognition, higher revenues and profits, dispersed risk which are all beneficial for the business as well as the UK economy. (FERNIE. 2005; SETH, & RANDALL. 2000) b) Analyse the impact of two global factors on two or more UK business organisations. Organisation operating worldwide and trading internationally faces much more difficulties as locally operated businesses. Due to the globalization Barclays faces different environmental conditions in geographic regions. Banking sector works closely with the laws and regulations. Like political factors legal factors mostly depend on local legislation and regulation. Risk management policies of Barclays will be in accordance to legislation. Legislative compliance should be incorporated in the over all strategy, ...
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