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Unit 5 - International business Assignment 1 A&B Distinction
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Unit 5 - International business Assignment 1 A&B Distinction graded Btec Level 3 Business
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Fatima Turay (70230602)Unit 5
Assignment 1: Why trade internationally?
Learning Aim A: Explore the international context for business operations.
Introduction:
My task is to write a report with the heading "Why Trade Internationally?" I have
compiled extensive study data on companies that engage in foreign trade in order to
accomplish this. This study covers companies that are based in one nation but
conduct business internationally as well as those that have trading locations all over
the world. I have selected two companies to use as the foundation for my report
based on my research. These two companies work in different foreign markets. I
shall thus concentrate on Samsung and Brompton Bicycles in this post.
SECTION 1
P1 - Explain why two businesses operate in contrasting international markets
Samsung, a global conglomerate, leads the business world with a $204.09 billion
revenue in 2023. Operating in 79 nations, they dominate sectors like TVs,
smartphones, refrigerators, and memory.
In the global tech arena, Samsung competes with giants like Apple and HTC. To stay
ahead, they strategically enter new international markets, boosting brand recognition
and exploring untapped revenue opportunities.
Foreign competition drives Samsung to enhance product quality, gaining a
competitive edge, as seen in their Galaxy smartphones that rival Apple's. Samsung's
global presence makes them a tech force to be reckoned with.
Samsung's international endeavours also offer access to fresh markets, permitting
the company to diversify its customer base across different countries. This quest for
new customers abroad translates into increased revenue sources and lays the
foundation for a global advertising strategy that maintains consistency while catering
to local preferences.
The advantage of cost-effective labour in developing nations further cements
Samsung's international operations. Merging with Chinese companies, for instance,
grants access to affordable labour and production, along with cost-efficient resources
and raw materials. China's advantageous landscape, featuring economical lands and
low rental costs for factory construction, presents a compelling case for Samsung to
optimize its financial efficiency.
Moreover, international trade unleashes the power of free trade opportunities,
facilitating the exchange of goods and resources between countries. This practice
enables nations to specialise in producing items where they hold a comparative
advantage, fostering economic growth and collaboration on a global scale.
In summary, Samsung's international foray is not merely a business strategy, but a
multifaceted journey marked by innovation, adaptability, and the pursuit of
, Fatima Turay (70230602)
excellence. This dynamic approach allows them to seize new opportunities, cultivate
a global brand, and leverage the advantages offered by emerging markets and the
global economy.
A nation that specialises in trade would benefit from it in a number of ways, including:
• Cheaper consumer pricing
• A wider selection of goods
• More export markets for home producers
• Economies of scale due to the ability to specialise in particular items
• Increased competition
In the world of international business, there are as many different reasons why
businesses should grow internationally as there are global markets. Many firms are
motivated by the desire to minimise their tax payments, and it makes sense.
Developed countries often have higher tax rates, according to KPMG's tax rate data.
Consider the US, which will have a 27% tax rate in 2020 whereas Vietnam will only
have a 20% tax rate. Companies like Samsung are strongly encouraged to locate in
nations like Vietnam where they may take advantage of significant tax savings due to
this tax disparity.
The multinational giant Samsung has not only set up trading companies in Vietnam
but has also made calculated investments in local businesses. The Samsung
Vietnam centre employs up to 1,500 technicians, providing the corporation with a
cost-effective work force. Operating in Vietnam enables Samsung to pay employees
less than in wealthy nations like the UK and USA, where legislative minimum wages
protect workers. The end effect is a huge financial benefit.
Going global is more than just a tax strategy; it's a way to access a bright and
diversified workforce. Employees who are fluent in other languages and cultures are
essential for building relationships and growing the clientele. Furthermore, access to
resources and raw commodities that can be limited domestically is provided by
global marketplaces.
Due to its widespread presence, Samsung has seen an incredible increase in
revenue, with estimates for 2022 of nearly 302.23 trillion South Korean won (or
234.08 billion US dollars). Even against industry titans like Apple, the company's
growing client base and loyalty-boosting products solidify its standing as a fierce rival
in the IT sector.
Through its foreign relationships, Samsung facilitates the transfer of technology and
knowledge. Acquiring knowledge from many nations improves the calibre of their
workforce, setting them up for sustained expansion. The capacity to manufacture
goods and services at a cheaper cost than rivals, guaranteeing a competitive edge in
global marketplaces, further strengthens this strategic advantage.
In contrast, Brompton Bicycles, a British firm that specialises in folding bikes, does
not have any foreign investors and instead operates internationally through imports
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