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Assignment 1 International Business (Full document) Distinction
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Unit 5 International BusinessP1
Tesco
Tesco is a British international retailer with its main store in Hertfordshire, England. Tesco
has the biggest UK retailer share and is the largest retailer globally measured by their
profits. Tesco functions in developed, emerging and developing markets. According to their
website Tesco has over 6800 stores with around 450000 workers in 10 different countries.
With its diversification, Tesco now has banking service, insurance and other different
facilities.
Structure:
Tesco follows a hierarchical organisational structure. This means that positions and
responsibilities are shared into many functions which provides the business the
effectiveness to get the job done efficiently. This structure is useful for Tesco as it is a big
company with many lawyers within the business. Tesco board of managers have the final
authority and responsibility. The chief executive officer reports to the Board of Directors.
This structure is simple to comprehend and to follow because it gives clarity to everybody
positions and roles. Also, this organisational arrangement presents a development route for
directors. However, a disadvantage is that this type of structure can make communication
harder and unfair treatment.
Activity:
Tesco is a multinational business that works across Europe, Canada and Asia. The company
is concerned with importing and exporting. The company operates in the tertiary sector,
initially concentrating in food and drinks, but with its diversification, the business has
enlarged and started operations globally.
Chosen markets:
Tesco operates in all types of markets, developed, less developed and emerging markets.
Tesco has numerous stores across Europe, Canada and Asia. The company has operations in
Europe in Czech Republic which has a developed market. There are lots of advantages and
disadvantages when functioning in developed markets. The advantages are established
trading laws and great employment rates. The disadvantages are higher competition and
high tax rates. Moreover, Tesco operates in Turkey under another brand name, which has
an emerging market. With emerging markets comes many chances as Tesco can deliver its
goods and services to increase market share. While in emerging markets there are nearly no
ethical matter, as an example, child labour. Tesco also operates in developing markets such
as China and India. The advantages of operating on this type market is that stipulate a good
trade of low costs and possible for high sales as the population is very big. A disadvantage
for this market includes different tax and legal systems that presents risks.
, Edgecumbes
Edgcumbes coffee is a small local coffee shop based in the Arundel, United Kingdom. The
business serving customers in the shop and also they have a website where they sell coffee
beans imported from Colombia, Brazil and Indonesia.
Structure:
Edgecumbes follow a flat organisational structure. This means that there is only a director
and their assistants, and there is frequently a short chain of command. The advantage of
follow a flat structure is that is less expensive as the fewer lawyers between the manager
and his staff means that there is also less wages to pay and fringe benefits to provide.
Moreover, it allows for a quick decision-making process because only a few individuals have
to be checked about the choice, the management team can deliver fast reply to any concern
or problem. So, there is a straight communication line between the director of the nosiness
and the workers on the front line.
Activity:
Edgecumbes is a small business based in town of Arundel which imports their coffee beans
from coffee farms around the world such as Indonesia, Colombia and Brazil. The business
operates in secondary and tertiary sector as the company hand roasted daily the coffee as
their belief is that fresh products are better and also they operate in tertiary sector as they
offer the service of selling their products to customers.
Chosen markets:
Edgecumbes operates in markets with developed economies as it only operates in UK in a
small town. However the advantages are that there is support available to help from
agencies and in UK are high employment rates, but the disadvantage is that the market is
very competitive. Furthermore the advantage of importing from markets that are less
developed is that is cheaper and it also has different currency.
Reason for conducting businesses internationally
1. Cheaper Labour
One of the advantages of international companies is the chance to operate in countries
where labour is less expensive. This is one of the bonuses that smaller business does not
like. Multinationals can set up their businesses in numerous countries where request for
their facilities and products are high while less expensive labour is accessible.
2. Broader Market Base
By opening organisations or offices in some countries, international companies enlarge their
opportunities of reaching out to consumers on a global scale, a benefit which other business
limited to local organisations and establishments do not have. The access to extra
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