BTEC Business- International Business Assignment 1. Includes P1, P2, P3, P4, M1, M2, D1 criteria's. This assignment explores the international context of business operations and investigates the worldwide economic environment in which businesses operate within. The two businesses analysed in this e...
Assignment 1: Learning Aims A and B
Title: Why Businesses Trade Internationally
Aim A- Explore the international context for business operation.
Aim B- Investigate the international economic environment in which businesses operate.
Abstract
In this article, I will explore the international context
of business operations and will investigate the
international economic environment in which
businesses operate within. I will look at 2 British
based businesses that operate nationally in the UK
and have other locations internationally in various
countries abroad. The business I have chosen for this
article is Tesco and BP, two large private sector
businesses.
This article will cover the following:
● The operation of each business and the reasons they operate multinationally.
● The finance and support available to both businesses.
● The role of trading blocs and the features of globalisation.
● The barriers these businesses face.
● Impact of globalisation on selected businesses.
Introduction
An international business is a business which partakes in the activity of trading and
exchanging goods and services on a global scale. The companies I will look into are two
popular businesses that are based in the UK whilst also operating in international markets.
These businesses are also known as multinational companies (MNC’s) as they are expanding
their operations by entering multiple foreign markets and are trying to compete within
these markets.
Tesco is a popular retail brand amongst British
shoppers with many stores in the UK and Republic of
Ireland (around 4,000). It is part of the ‘Big Four’
supermarket chains of Britain in which it has the
largest market share with 27.9%. Tesco has been
operating internationally since 1994 and currently has
nearly 7,000 outlets across 13 countries worldwide;
these stores sell their own brand and global brand
products.
1
, INTERNATIONAL BUSINESS
ASSIGNMENT 1
BP (formerly known as British Petroleum) stands for Beyond Petroleum and it is a British-
based gas and oil company which is one of the
largest oil majors in the world. The company has
also been recently ranked in 7th place for most
valuable companies in the world. BP sells its own
branded products and operates internationally
with more than 18,500 gas service stations across
the world where they provide services and sell
their own products.
Brief History of Both Businesses
Tesco
Tesco was founded in 1919, by Jack Cohen who first started the business as a market stall in
the East End of London. Cohen initially sold Tesco Tea which helped form the name Tesco,
this came from the initials of TE Stockwell (tea suppliers) with CO coming from Cohen. 5
years later during 1929, the first store opened up in Edgware, North London resulting in a
heavy expansion in the 50’s in which more than 500 new stores opened, during this time
their first supermarket opened in Maldon, Essex. During 1995, Tesco started expanding into
foreign markets in which stores opened in Central Europe, Ireland, East Asia within a
decade. Also, in 1995 the Clubcard was introduced alongside online shopping to help Tesco
overtake Sainsbury's market share; this loyalty scheme has now become a marketing
scheme, tracking trends and buying habits. Now the business has become the 15th most
valuable retailing brand globally and is part of the ‘Big Four’ supermarkets in the UK with the
most market share at 27.9%.
BP
BP was formed as Anglo-Persian Oil Company in 1919 by William D’Arcy. This company was
formed from a crude oil well which was drilled in the city of Majed Soleyman, Iran (known as
Persia in the early 1900’s). The British government became the principal stakeholder in
1914 with British Petroleum becoming the holding company on January 1st 1955. However,
shares were sold in the late 70’s with the government turning the company into a private
business by the late 80’s. After this, BP has built oil fields and refineries in Alaska and the
North Sea, UK. During 1998, it merged with Amoco re-branding their name to BP Amoco
later changing to another name BP PLC after buying ARCO (US gasoline brand) and Castrol (a
leading British oil and gas company. BP, still carries out the activities of exploration,
production, refining, transporting and distributing oil and natural gases. It operates through
the brand names of BP, Aral, ARCO and AM PM within different regions of the world; also, it
is currently the 7th largest oil company worldwide.
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