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Unit 5 Assignment 1International Business
Why trade internationally?
1
,In this report I will be writing about two businesses in which they operate in contrasting
international markets. Within this assignment I have chosen to write about Tesco and
Apple, where I will be exploring the types of finance and support available for
international businesses, and I will explain the main features of globalisation within an
evaluation on the impacts of globalisation on these two markets.
The operation of Tesco and Apple
Tesco is the most well-known, multinational grocery supermarket and retail brand in the
UK. According to this website (Tesco Plc - Powerbase) Tesco operates in 12 countries
multinational, including Thailand and Ireland, and is a PLC in a private sector, which
means it is a limited business where the shares can be traded on the stock market to
the general public. In addition to this, the business is headquartered in Welwyn Garden
City, Hertfordshire, England and United Kingdom, where according to Statista, the
company operates in nearly up-to 5,000 stores worldwide.
Furthermore, as Tesco is a multinational retailer that sells food and groceries, as well as
everyday essential household needs, they also provide other services which include,
clothing, internet services, electronic goods, online shopping, click and collect, fuel
stations, loyalty cards, and financial services like Tesco Mobile and Tesco bank,
available for customers to use. Moreover, as well as the Tesco supermarkets, the
company also have other stores which includes, Tesco Extra, Tesco Express, and
Tesco Superstore, located in locations where it best suits in accordance with how busy
the place is or if it would be beneficial as a one stop shop for customers.
Tesco’s aim of operating within Asian and European countries is to provide customers
with affordable goods at cheap prices while remaining the market leader in the grocery
market sector. This will help them make profit and expand in the success of their
business through operating their stores internationally.
Moreover, similar to Tesco Apple is a multinational technology company, which
operates within the consumer electronics industry. They produce many products like
phones, watches, Air pods, iPads, laptops, computers, etc and operates worldwide in 25
countries, with over 500 stores. In addition to this, according to Apple’s mission
statement, (website Apple Mission Statement 2022 | Apple Mission & Vision Analysis
(mission-statement.com), Apple’s aim of operating is to provide “the best user
experience to its customers through its innovative hardware, software and services” and
give support to those in working environments, to track an individual's personal health
styles as well as for entertainment purposes.
Tesco’s and Apple’s structure:
Tesco operates in an oligopoly market structure as there is imperfect competition within
the business. An oligopoly is a market that has a limited number of large firms including
the industry in which they compete in. Tesco is part of the UK supermarket industry,
hence why the business operates in an oligopoly market. As well as this, the company
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, operates in an oligopoly market as buyers face high entry barriers, there are few
suppliers, and every person is a customer within the supermarket industry. Furthermore,
within an oligopoly, the supermarket industry is dominated by Tesco and its competitors,
Asda, Morrison's, Sainsbury's, and Aldi. In addition to this, in imperfect competition, the
nature of competition is usually Tesco having competitive prices with their competitors
and also competing with the quality of the products.
As well as this, within the organisation, Tesco follows a hierarchical organisational
structure where the business has multiple layers of management due to the size of the
company being large. According to Statista, (website • Tesco group employees by
region 2021-2022 | Statista) there are over 326,000 Tesco employees working in the Uk
and currently 354,744 employees worldwide working within the business.
Like Tesco, Apple operates in an oligopoly market structure but with monopolistic
competition. This means that Apple has many competitors within their industry which
includes Samsung, dell, HP, Lenovo, Sony, Asus, Microsoft, Google and many more. In
addition to this, Apple also has a hierarchical organisational structure with over 137,000
employees across all their stores. Their products are focused on economies who are
willing to buy their goods on the pricier side of the technological items.
Which strategy does Tesco and Apple use to enter the international business?
Tesco entered the international market through joint ventures, mergers, and
acquisitions. According to this source, (websiteTesco Mergers and Acquisitions
Summary | Mergr), Tesco acquired 13 companies and in 2017, Tesco acquired a retail
company called Bookers group for $5.7billion, and mainly focused their acquisitions on
75% of the retail sector with the remaining 17% on internet services. As well as this,
Tesco entered the Asian and European markets through partnerships, working with
local firms to supply products and services to serve their needs in gaining profits and
making the company’s shareholders happy.
Furthermore, Apple entered the international market through acquisitions. According to
this website: Apple Acquisitions | AcquiredBy, Apple has acquired 114 companies with
their recent acquisition of an organisation called Xnor.ai. However, Apple’s biggest
acquisition was Beats Electronics in 2014, where the company was bought for $3 bn. In
addition to this, Apple entered the global market through the expansion in their business
which reached a wider audience in countries where it didn’t operate in. Apple’s growth
and success is through the increase in their sales and customers, as a result, Apple
entered the international market through having customers from different countries,
which influenced the company to expand their business.
International business activity
When businesses like Tesco and Apple operate multinational or internationally, they are
involved in one or more out of the four business activities which includes exporting,
importing, multinational and having associated businesses. Tesco and Apple will be
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