TASK 4 (P4.1, P4.2, P4.3)
(P4.1) For Ecolab to open a branch in UK there are some assessments that are needed to know before they launch their business there.
International trade is very crucial for every business around the world as it is not possible to produce all goods and services within a country. There are some goods that are not available locally, so it needs to exchange the goods and services which are possible to execute with international trading. International trading is beneficial to businesses and it is very economical. Some of the benefits of international trading to UK business organizations are:
Broad Markets – If Ecolab is to be based in UK produce products only for domestic use, they can fully limit their potential. They
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Similarly, there are countries that need high and luxurious materials that imports from UK. Self-dependent in business can be tough in all sectors. Trading internationally gives opportunities to exchange products otherwise scarcity will apprehend for each nation.
Production cost – Trading in other countries, Ecolab can also open itself up to lower production cost. For example, if Ecolab imports many products from other countries for economical price and availability they can gain exports from other countries especially Ecolab has different branches in other countries.
(P4.2) There are global factors that impacts the UK business organizations:
Global growth – For UK economy, global factor is beneficial since it gives the opportunity to expand the business all over the world.
Market opportunity – UK has a good reputation across the globe for their advancement in technology and it gives the opportunity to UK business organizations to conduct business globally.
International trade and the UK economy – Global factors gives opportunities to make international trade which is a boost for UK economy. Many UK businesses are operating in different countries where they get economic labor and raw
Trade, of course, is only part of a larger network of relationships between our two countries. This network evolves in response to many complex influences, and exporters need to consider how our two countries' ever-expanding, ever-changing relationships will affect their activities. To take just a few examples:
One of the main costs is to manufacture their products. A major reason the companies are moving manufacturing plants to Asia and South America is to lower manufacturing cost. This will lower the cost for the customer and keep each company competitive and allow them to keep a high margin. Another cost is the inventory cost for each company. Each company needs major capital to store their broad catalog of products. This is especially true for Fastenal because one of their niches is time of delivery. Since Fastenal has more distribution plants we as a company are able to get a customer an order in a shorter period of time. The problem for both companies is since the catalog is so broad many products end up staying in inventory for too long raising inventory costs. Also another cost is product development and management. Each company has many products that need to be developed and the customer seems to always want something else. Both companies spend capital to satisfy their customer’s product needs and each company needs to manage product
Being part of the EU ensures that each member has free trade between all its member states. This is a great advantage for the UK and its businesses because it leaves them with no worry about import taxes or quotas. One of the main benefits of the European union is that it’s our main trading partner ,and membership of the EU has helped reduced both tariff and non- tariff barriers. According to sources, Half of the UK’s exports go to the EU (Shattock, 2013). As their main trading partner .If the UK was to leave the EU , it would be faced with the iron tariff wall that non-members face. This would destroy Britain’s Aggregate demand tremendously. Leaving the EU, could put the UK in jeopardy as it is an important aspect of the economy. Euro sceptics and the UKIP believe that even if we leave the EU, the UK’s free trade agreements can still be maintained due to the fact that countries such as Switzerland and Norway haven’t been excluded from EU agreements (Pettinger, 2013). However, it could be argued that France, Germany among with the rest of the main EU leading nations would never allow Britain a "pick and mix" approach to the bloc's rules (Peter, 2013) They also argued that Britain should rely on the membership of the World Trade Organisation to give access to markets. But, although the World trade organisation has indeed made a lot of progress with trade, it hasn’t secured free trade in manufacturing or services which do account for mostly all of the UK’s GDP. Also, if the UK left the EU, Britain would be opening up their markets to some of the world’s biggest economies such as China or Japan, more than they would open up theirs to Britain. This means, that Britain would be a minor under all these large economies a...
These factors encourage the SME to seek a non EU market and a central location where it can gain advantage from a lot of
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
Why would a company go international? There are many reasons why companies would go international, but generally a company goes international so they can seek opportunities in domestic markets, or they seek solutions to problems that cannot be solved through domestic operations. There are many profitable possibilities by going internationally and these include greater profit potential, offers new locations to sell products, it may provide better access to needed raw materials, it may access to financial resources from many nations, and lastly it may allow labour-intensive activities to locate in countries with lower labour costs. For a small business to become an international business they must use five guidelines the first is global sourcing, exporting and importing, licensing and franchising, joint ventures, and wholly owned subsidiaries. The first two are market entry strategies and the remaining are direct investment strategies.
Since the emergence of the global economy, the success of firms today and in the future depends on their ability to operate globally. The American economy depends on imports and exports. Foreign trade, both imports and exports accounts for a little over 25 percent of goods and services produced in the United States, and even more in countries like Japan and Germany. This percentage is currently and will continue to grow in the future (5).
Every economy can count on two things; there will always be supply and there will always be demand. For some countries, supply cannot keep up with the demands for the economy and when that happens, international trade is sometimes an only option. As with anything in life, there are advantages and disadvantages to international trade. One of the major advantages to international trade is that it allows countries with a surplus of supply to trade with another country that may have a shortage of that same supply. Another advantage is that if a country is in short supply of a particular product or service that country can import from other countries. One of the major disadvantages to international trade is the amount of surplus countries are exporting to other countries. For some countries, this dumping of surplus causes a loss in the market.
- E.C. rules state that, unless 60% of any product is made in E.C. by
Businesses are able to cut costs through global outsourcing which results in cheaper products and providing a better value. Customers are able to get more for the money they spend, and the company gets more business because they are providing good quality products. Global outsourcing is also good because it still gives jobs to people who need them. Although companies are not hiring domestic workers they are still providing a job to someone in another country. Global outsourcing also helps companies expand and gain access to new market areas.
UK exports outside the EU is growing, which means that when the UK leaves, they will still be trading with other countries. Also, many need to realize that just because the UK is leaving the EU, it doesn’t mean that they are to stop trading with each other. It is in the best interest of both the EU and the UK to continue trade amongst each other as the UK bought more of their products than the UK sold them. (EU/UK #2) Most importantly, if trade continues to do well, the country's total GDP could actually rise 1.6% (EU/UK #3). Similarly, by leaving the EU, the UK are committing to an investment then can positively change their country for the good.
Businesses are now able to approach overseas markets, they are no longer confined to their areas of establishment. Business today is inextricably intertwined with technology, from the smallest home office, to a multinational corporation with multiple monolithic legacy applications. It is impossible to be in business today without confronting the issues of technology. The way we do business today is different than 30 years ago. Technology has evolved around the areas of telecommunications, travel, stock markets, shipping and even around our daily lives.
...on, more than the combined shares of France, Germany, Italy and the Netherlands. ?All that we expect as a major company is here in the UK.?- Michael Morgan, President and CEO, Starpak inc. When analyzing the various aspects of the United Kingdom, it becomes evident that the UK has many significant advantages over other countries and holds the traits necessary for future expansion. A politically stable and extremely well organized system of government, great relationships and trading arrangements with other nations, tax breaks awarded to new companies and an abundance of skilled workers, are all among the UK?s benefits. The UK is also self-sufficient energy-wise and has a remarkable transportation system. Investing in the UK may be one of the smartest things you have ever done. It is one of the most sound and secure investments available. The best combination of benefits that offer pro-business conditions, work-force cost efficiency and flexibility, minimum risk, and maximum bottom line return are readily available in the UK. ?Britain draws more foreign investment in new factories, research centers and other business operations than any other country in Europe.? The New York Times
Globalisation has made people aware of conditions and opportunities abroad, and companies would need to effectively manage these
International trade is an activity that deals with the exchange of services and goods between countries. This has been the reason why we have the concept of a world economy where prices, or supply and demand are affected by global activities (What is International Trade? 2012). International trade allows one country to enjoy the services and products of other countries especially those that are not readily available for that particular country. This is also the reason why we have so many products to choose in the domestic market that bear the labels of names of other countries. Most of the products like food, clothes, spare parts, oil, jewelry, stocks and many more are the result of international trading. On the part of services, they are traded too like in area of tourism, banking, consultation and transportation. International trade involves two activities: export and import. Export is a product that is sold in the global market and import is the product that is bought from the local market.