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Summary Unit 5 Assignment 3
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- Unit 5 Assignment 3
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- PEARSON (PEARSON)
Unit 5 International Business Assignment 3 Learning aim E Grade Distinction 14 Pages
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Unit 5: International BusinessLearning Aim E: Examine the strategic and operational approaches to developing
international trade
P8: Explain how products and processes have to be adapted for international markets by a selected
business.
E.M5 Analyse the effectiveness of the strategies and resources used by a selected international
business.
E. D4 Evaluate the success of the strategies and resources used by a selected business in one of its
markets.
, P8: Explain how products and processes have to be adapted for international markets by a selected
business.
Joint venture
One strategy that can be used when internationally is joint venture. Joint venture is when 2 or more
businesses team up together with a shared interest to develop a project with a goal of sharing profits
and risks during the process. An example of a joint venture is Vodafone and Telefonica with both
companies to agree that they would share the same mobile network. This is an attempt to attract more
consumers towards their brands to increase their sales revenue as both companies sharing a network
will mean it will allow an opportunity for both companies to strengthen their network that would enable
consumers to earn new benefits such as 5G which provides consumers a lesser latency, higher speeds
and better efficiency better than the previous generation (4G) when using their mobile devices on a day
to day basis. In this case, Samsung is does not have a joint venture with any business. In this case,
Samsung does have joint venture with companies like Volvo and General Motors which they have
invested in estimated of $8 billion to fund for these projects. Samsung is having a joint venture project
with Volvo with an intention of providing battery cells to meet Volvo’s electric truck demands. The
purpose of this joint venture was to strengthen and accelerate the development in electromobility with
an aim to benefit the consumers. This can illustrate Samsung’s attempt to become more reputable as a
business as shifting its vehicles to electrical will mean it will benefit the environment as it does not
produce CO2 emissions and as well as potentially increase its subsidiary when working with Volvo in
exchange for reducing their costs in trucks.
Subsidiary businesses
Secondly, another strategy used when operating internationally is subsidiary businesses. This is because
when a business has many of its subsidiary's businesses overseas, it will increase the brand recognition
that can ultimately lead to increase in sales revenue as more and more consumers and more aware of
the brand. For example, Samsung has many subsidiaries such as Samsung electronics, biologics,
engineering which are primarily there to increase sales and as well as to allow Samsung as a company to
use its own raw materials made by their own subsidiaries that produces the components used to make
its own products such as OLED displays used for mobile phones. Therefore, with subsidiary businesses
operating overseas, it will overall increase the business’s growth in terms of its profit and possibly create
new ventures from gaining knowledge when operating in several more foreign markets. Moreover, with
its consumers wanting more products at cheaper prices and at higher quality, Samsung can accomplish
through manufacturing its own raw materials to produce its own products which effectively reduces
costs. This will lead to a knock-on effect on the selling prices of the Samsung products which can make
themselves as a business more attractive than others such as Apple who is Samsung’s direct rival that
primarily tends to make their products expensive whenever new products releases.
Franchising
Thirdly, another strategy used when operating internationally is franchising. The purpose of franchising
is to increase its profits and recognition by seeking new qualified franchisees in which they will be
allowed to use their brand without getting copyrighted with a purpose of making sales by selling the
business’ products. By franchising globally, as a business you will be able to have multiple sources of
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