Essay
Unit 39: International Business - P5, P6
- Institution
- Pearson (PEARSON)
identify why businesses operate internationally explain the business strategies used by a business operating internationally.
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Content preview
In this assignment I will be identifying why businesses operate internationally. Iwill also be explaining the business strategies used by a business which operates
internationally. The business that I will be doing is Pizza Hut.
International businesses such as Pizza Hut will decide to expand internationally if
they have the capital or investment to do so. If it’s an opportunity or a chance to
expand internationally, Majority of the international business will expand further
into different market. If Pizza Hut does expand and emerge into a new market
they will have access to a different and a new market area where they will trade
their products and services of the people in the markets. There are different
markets ranging from different locations. What makes the market different
between each other are the people buying power, culture, the amount of
purchase, population, wealth, location and the GDP. All these factors will make up
a market and this is what businesses like Pizza Hut look for before entering the
market and trading.
Another reason why international businesses like Pizza Hut decide to go
international is because of cheaper manufacturing location. Cheaper
manufacturing location means an area with labour that is charged less to
perform a job and produce maximum outputs of production and manufacturing.
There are different countries who offer cheaper manufacturing such as Brazil,
China, Taiwan, India, Pakistan, Nepal and many other countries. These types of
countries are good for manufacturing and this will be beneficial for Pizza Hut as
they can locate their manufacturing assets in those countries and produce
maximum products at lower costs.
Another factor which influences international businesses to expand
internationally and into different market is due to economies of scale. This factor
is beneficial for Pizza Hut because they’re expanding into a different market and
this will increase the product rate and decrease the prices per unit which will
make it affordable and efficient for Pizza Hut to produce more and sell more at a
decent price which in result will be profit. This is where the economies of scale
come in.
Lastly, another reason why Businesses like Pizza Hut will like to expand
internationally into different markets is because there are different countries
where it doesn’t charges taxes; Ireland, Switzerland, Bermuda, Singapore and
Luxembourg. These sorts of countries are business friendly and doesn’t charge
any sort of taxes posing on the business, this is beneficial for Pizza Hut as they
can make as much profit as they can without the government stripping away
20% in their pockets. Furthermore the countries who offer businesses to operate
in their tax-free zone have good economic structure with a population of skilled
people in English, Maths and IT.
Pizza Hut promotes and markets its products and services and various different
ways. One of the ways Pizza Hut market their products and services by using the
power of technology which billions of people use on the daily basis; Facebook,
Instagram and Twitter. Pizza Hut operates in every corner of the world, with 27.2
million followers on Facebook, 618k followers on Instagram and Twitter. The use
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