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BTEC Business Level 3 - Unit 5 Assignment 1
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Unit 5: International Business - Assignment 1➢ P1
International businesses are businesses that operate worldwide. These businesses import
and export goods to and from different countries while having offices operating across the
world, making them multinational. Multinational businesses are involved in activities such as
marketing and logistics too. Businesses are usually involved with one or more activities at a
time meaning they need subcontractors to carry out other tasks they cannot prioritise.
When a business wishes to export, it could do so either within or outside of the European
Union (EU). Working within the EU means that goods moving into Europe are not due to
customs checks and that goods can be freely transported. This process is also known as
dispatching. If a business decides to dispatch outside of the EU, different rules may apply
and businesses may need export declarations, export licences, may need to pay custom
duties and to pay taxes in the country where goods are being exported.
When a business imports products from another country within the EU into the UK, it usually
doesn't require any licences or pay import charges, but it does have to pay VAT. In addition,
the import must have a commodity code attached to it so that the correct VAT level may be
paid. Importing products outside the EU will require an import declaration, an import licence,
commodity codes, custom duties and VAT to be paid for
Multinational businesses are those that do business in more than one country and in a range
of markets throughout the world. Multinational businesses must be cautious in adapting their
trading strategies to the many countries in which they operate. Importation, taxation, and
other duties will be regulated by the law of each nation. They also have diverse customs,
laws, and cultures, all of which will have an impact on how they do business.
Businesses will often offer assistance to other organisations by providing services or
cooperating. Businesses that work with others to assist international trade may provide
specialist services such as marketing and logistics.
Apple
Apple was started on April 1, 1976 by Steve Jobs and Steve Wozniak who decided to
change the way computer systems operated. The aim was to deliver computers that people
could use from home. Apple now sells a range of technology products such as smartphones,
computers, smart watches and tablets. Apple’s headquarters lie in Cupertino, California
within the USA along with 154,000 employees worldwide. Apple operates internationally,
with stores in countries such as the USA, the UK, Japan, Canada, Italy, Australia, China,
Switzerland and many more. Apple competes in the PC, laptop, and smart tablet markets, as
well as the smartphone industry, against a large list of competitors from a variety of
businesses. Driving factors towards these markets would be to become a largely successful
company in all different markets by diversifying the brand into all technology products. Apple
is world widely known with a huge brand awareness due to the popularity of the brand.
, Apple uses Chinese manufacturing companies to build most of its products which has shown
bad publicity however Apple has started taking manufacturing overseas in an effort to
improve efficiency and reduce costs. Since many of the parts and components are also
made in China and Southeast Asia, final assembly in the United States would pose a serious
logistical difficulties. China's factories are also much larger and more adaptable than those in
the United States. Companies along with Apple are looking for moderately skilled workers to
meet the labor demand of product launches. Even with China's populace, meeting labour
demands is challenging when there are so many businesses competing for workers.
Manufacturers employ or re-distribute roughly 250,000 workers to work on the final assembly
of the new iPhone during an iPhone launch contract. There are also all of the key suppliers
that require workers to work on their parts and components that make up the completed
product.
Apple operates internationally since there are international opportunities for its workers,
quickness to market for its customers to have the newest and greatest technology, and
supply chain efficiencies with sub-component suppliers are just a few of the advantages.
Apple trades and has stores that are operated worldwide which makes Apple an
international business. Along with this, many customers are able to access Apple’s website
around the world which produces orders of products around the world.
Three main markets Apple would enter are developed economies, less developed or
developing economies, and emerging markets. Examples of developed economies are the
UK and Europe.
With developed economies, these are already established and there is support available
from agencies to help trade. There are also higher employment levels and established
trading rules. Along with this however the market is already very competitive which can
make it difficult to trade and compete, and there are also higher tax rates than other
countries.
Less developed or developing economies include countries such as Brazil, China, India and
Russia. Some advantages of this is that there is potential for high sales due to the population
in these countries. There are also structures in place to continue expansion and existing
knowledge making it easier for Apple. However there are different tax and legal systems that
pose risks.
Emerging markets include countries such as Turkey, Iran and Mexico. There are
opportunities to be the first entrant into the market along with government incentives being
offered to create jobs or reduced taxes. As well as this however, ethical factors like child
labour and lower employment rates would need to be taken into consideration since it could
affect sales growth.
Apple's international organisational structure consists of a hierarchical structure. Apple has
spared billions of dollars in taxes by forming global subsidiaries. Apple has subsidiaries in
Ireland, where a special tax rate of 2% has been established. These subsidiaries work with
manufacturers to assemble Apple products, then sell those to other subsidiaries for
distribution, with profits being transferred to the main company in dividends. Unfortunately,
several of the subsidiaries have no declared tax residence and pay no taxes. Apple Inc is the
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