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BTEC Business Level 3, International Business Assignment 2
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A.SInternational Business
Unit 39 Assignment 2
08/03/2021
International expansion proposal
In the following assignment I will be explaining the international business environment in
which a selection organisation operates, describing how the monetary environment affects
business that operates internationally, explaining the business strategies used by a business
operating internationally, explaining the challenges of globalisation facing a selected
business when using the internet as a marketing tool and lastly evaluating the potential
problems faced by businesses that trade internationally when entering new markets. The
country I will be choosing is China and the business I will be choosing is Tesco.
Proposal for expansion
China is one of the oldest continuous civilizations in the world, with organised society
existing for more than 10,000 years. China has reduced the number of their citizens living in
poverty by over 200 million people and managed to achieve a sevenfold increase in per
capita income from 1979 to 2006. China’s GDP accounted for 6% of the global total, making
it the 3rd largest economy in the world in the year of 2008. China’s goal was to create 100
million new jobs by 2013 and to quadruple its GDP by 2020 to achieve and sustain a
reasonable standard living for their population. China has opened the foreign investment,
trade and the market oriented ideas that would help the domestic productivity and build
the global competitiveness. Even though China has had many competitors in this aspect, it
was still better than most developing and many developed nations.
China’s , monthly minimum wage standard maintained at CNY 2,480 = £275.81, whereas
UK’s monthly minimum average wage is £1,376. Tesco’s prices reflect on the countries
minimum wage, and because Tesco is not the cheapest on the market as their products are
high quality, they’ll need to consider their pricing for China to make sure they fit their
minimum wage and make sure Tesco are still making a profit even if they’re trading in the
country with less inco
Business Environment
PESTLE analysis China vs UK
Political –
China is the 4th largest country in the world by land area and is known to be one of the most
powerful countries in the world. China has a stable political environment with their cheap
labour and improved infrastructure, China also positions itself as a great destination for
foreign direct investment (FDI). China has attracted a $135 billion worth of FDI in 2018. The
main two political factors that affect China are government regulations and legal issues,
both of them are formal and informal issues, which all the first must abide by, as this will
impact China. Many people in China say that the political force if the most unsettled force,
so over the past couple of years the Chinese government focused on the development of
, A.S
International Business
Unit 39 Assignment 2
08/03/2021
the e-commerce. China has little experience in making e-commerce and therefore this is
taking them a few years and is still in its early stage.
United Kingdom is one of the most powerful countries in the world, as it is a country of
modern parliamentary democracy and a constitutional monarchy with the monarch (Queen
Elizabeth II) being the head. The political stability is a great strength of the country,
however, Brexit has made some uncertainties and political debates, as some people believe
that Brexit is for the worst and some think it’s a better decision. The UK has good relations
with the US and a lot of other countries in the world. This is because the UK is a member of
the UN which has a permanent position and has a lot of power to influence the global
economic, cultural, military, scientific and political affairs.
Economic –
China has experienced a growth in the GDP rate over the past 5 years. If China will
implement sigh rate of savings, abundant and skilled labour, more export business and
potential urban growth, this is suggested by reports as this way China will be able to
continue to excel at this rate as well as supress the US GDP. Looking at China’s GDP date, it
shows that citizens are adding more and more values to the society, and therefore this helps
to turn the increasing consumer’s purchasing power. Because of the costing of China’s
labour which is very low, the large and leading companies like Apple are inclined to hire
workers from the country. The only worrying trends in China are high inflation rates and
high property prices.
The UK is the 5th largest economy in the world by GDP and the research states the recession
in 2008 has made the economy go in trouble, however, thanks to the government there are
no longer issues with this. In 2017, the Britain’s faced a challenge when the prices on
products went up as a result of increased cost to import good to the UK, but, the wages did
not go up even though prices did. The inflation rate of the UK in 2019 was 1.7%, and this has
rose 3.1% in November 2017, as well as the inflation rate rose 0.9% in the 12 months to
January 2021, up from 0.8% to December 2020.
Social –
The social aspect of China plays an important role as the demographics always change. For
example, the population and the age distribution constantly fluctuates. Family sizes and
social behaviours often impact how certain decisions are made. The literacy rate in china is
over 90%, as China emphasizes on education and majority of the nation are literate. In
China, Chinese people tend to shop online and there are 420 million internet users in China.
Their largest e-commerce website is called Taobao and a lot of people spend a lot of money
on the website.
The population of the UK is currently standing at 68.20 million, as births continue to rise in
the UK and overtake the death rate, research suggest the population will increase to 74
million by 2039. As well as this, the population living rate has changed too, in 2016, 18% of
people were ages 65 and over, while 2.4% were 85 or older, this has affected both labour
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