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Summary Unit 5 Assignment 2
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Unit 5 Assignmentt 2, Learning aim C and D Grade: Distinction 24 Pages
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Unit 5: International BusinessLearning Aim C: Investigate the external factors that influence international businesses
C.P5: Explain the external factors that influence a selected business considering trading internationally
C.P6: Explain how business support systems enable a selected business to trade internationally.
C.M3: Carry out a situational analysis on two countries a selected business may consider trading in.
C.D2 Recommend one country that a selected business could target for international trade, justifying
your decision.
Learning Aim D: Investigate the cultural factors that influence international businesses
D.P7: Explore the cultural differences affecting international businesses
D.M4 Analyse how cultural differences affect international businesses
D.D3- Evaluate the impact of cultural differences on international business
,C.P5: Explain the external factors that influence a selected business considering trading internationally
PESTLE
Political:
One political factor that can affect Samsung would be trade policy. For example, trade policy would
include the following: tariffs, quotas. Countries would have trade policy in attempt to have
protectionism within their own economy to help support infant industries that have yet been
established or lacks economies of scale that other companies are capable of or to challenge against
dumping that can affect the country’s environment. Therefore, Samsung operating in countries that
imposes tariffs and anti-dumping measures must be wary of their policies because failure to comply with
their legislation and regulation, Amazon may potentially face fines or in worst case imprisonment.
Moreover, another political factor would be imposed tariffs meaning Samsung will have a lower income
from increased costs of having to pay tax so that the importing country will make a revenue out of it.
This may lead to Samsung to be forced to increase its selling price per each unit sold to compensate the
increased costs of sourcing raw materials from an importing country. Therefore, Samsung should
consider sourcing raw materials from countries that do not impose tariffs such as Singapore and
Switzerland in exchange for potential economic growth within their own respective countries from being
able to experience increase exports that allows wider selection of choices for consumers to purchase.
Economic:
Economic are factors that have a direct impact on a business which may influence how they manage the
quality and price of their goods and services which will have a knock-on effect on supply and demand in
the long term. For example, a factor that can have an impact on Samsung would be inflation. This is
because when there's a general rise in prices of goods and services, consumers will be discouraged to
spend and would rather to save to maintain a substantial purchasing power that they can rely on, to
compensate against inflation, leading Samsung to lose revenue as they will receive less sale of goods.
However, it could be argued that economic factor can be a benefit for Samsung such as low
unemployment rate. This is because when there’s a low unemployment rate, Samsung will be more
likely to generate revenue as consumers will be more likely to spend without having to worry about
their own financial circumstances knowing the fact that they have job security that provides them a
considerable income that they can rely on. Therefore, Samsung operating in countries that have high
employment rate such as UK with 75.6% will mean they are likely to produce sale revenue knowing that
majority of the citizens in UK are willing to spend money as they have job security to depend on.
Social:
Social factors refer to factors that have an impact on consumers’ attitudes towards spending which
include demographics, trends, ethical reasons, etc. One social factor that can influence on Samsung can
be trends. For example, augmented reality also known as face filters which is a feature that takes
something real and modifies it. This mobile trend has been significantly popular especially with
, teenagers and young adults and it is statistically said there has be over 800 million downloads of AR and
more than 5 million active users with a total revenue of $1.2 billion. Therefore, Samsung has developed
an AR which enables users that have Samsung phones to introduce AR features to their photos and
videos to have higher user engagement with the brand and in hopes of retaining its existing consumers
by introducing features that satisfies them. Moreover, demographics is also a factor that needs to be
considered because involves household income and the employment rate of a certain area. This means
that by taking into account of these factors for Samsung, they can maintain a good level of demand for
their goods in a way that can be met and maintained when there's consideration with consumers
circumstances. For example, if a certain area has a low level of income, Samsung will have their products
to be sold at a lower price so that consumers will still be able to have a chance to purchase their
products without having to worry as much about possibility of ‘’living beyond their means.’’
Consequently, before internalising they should consider social status of a country that fits best for
Samsung’s goals and targets to increase the likelihood of attaining goals.
Technology
Technology refers to machinery or tools that can have a direct or indirect effect on the economy or
industry. An example of a technology factor that can impact on Samsung is automation. This is because
the amount of machinery and automation will reflect how well the business performs in terms of the
time taken for goods to be produced, how innovative the products are, etc. Automation has a significant
impact on a business-like Samsung as it determines the performance in profitability rate because better
of quality in goods from able to create new features that can increase demand from consumers.
Therefore, before Samsung internalise they need the consider the competitiveness of each country in
terms of the amount of technology and innovation it has within the market so that Samsung will be able
to comfortably enter the market with ease without having to worry about falling behind its rivals.
Legal
Legal refers to legislation or regulation that can affect both internally and externally on businesses. An
example of a legal factor that can have an impact on Samsung's consideration in internalising is
employment laws. Employment law can vary in different countries so for Samsung to internalise their
business in a particular country, they must be compliant with the country’s rules if they wish to operate.
For instance, UK has strict employment laws with National Minimum Wage Act 1998 whereby all
employees must be paid a minimum amount required that they are entitled to on an hourly basis based
on their age. Moreover, Equality Act 2010 is another act for businesses to comply with to protect
workers from discriminations such as age, gender, disability, religious, ethnicity, etc. This act is to ensure
everyone is provided with the same opportunities and treatment. Failure to comply with these acts,
Samsung can face fines, imprisonments and disqualifications for certain individuals within the
workplace. Consequently, will have Samsung to experience negative brand image which can lead to loss
of existing consumers leading to decrease demand for their brands for their misdemeanours.
Environmental
Environment refers to all factors that relates to physical environment and general environmental
protection requirements. This is can be a significant impact on how Samsung would perform as a
business because it will demonstrate how eco-friendly the business strives to be which can then
influence the consumers willingness to purchase a particular product from a business purely based on
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