Unit 5 International business
Assignment 2
Task 1 – P5, P6, M3, D2
John Price
Explain the external factors that influence Innocent Drinks considering trading internationally.…....2
Explain how business support systems enable Innocent Drinks to trade internationally ……..…….…..3
• Influence of the internet on Innocent Drinks
• International payment methods
Situational analysis on two countries Innocent Drinks may consider trading in.………………………...…..5
• PESTEL of China
• PESTEL of USA
• 5C Analyses of Innocent Drinks
Recommendation and justification of one country that Innocent Drinks can target for international
trade………..……………………………………………………..………………………………………………………………….….….…..7
Conclusion.………….……………………..………………………………………………………………………………………………….8
References.………….……………………..………………………………………………………………………………………………….9
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, Unit 5 International business
External Factors and
Cultural Difference
P5: Explain the external factors that influence a selected business
considering trading internationally.
Innocent Drinks is international company that makes juices and smoothies, which are sold in most
supermarkets, coffee shops and other outlets. Innocent sells more than 2 million products every week
in the UK and Europe. To keep up to date with changes in the global environment every company
needs to perform PESTEL analyses which examines the trends in different environmental factors.
Political factors include the trade. Trading in China can be more Innovation Network (FDIN). Also, the
guidelines and rulings from challenging for Innocent due to the level of taxation in different
government bodies; Department of strict business laws. countries can be determining factor
Health, Advertising Standards when deciding in which country to
Economic factors that influence
Authority, Office of Fair Trading and trade in. For now, the UK is part of
Innocent include the economic
Trading Standards. The Department The European Free Trade Area (EFTA)
situation in the countries where it
of Health recently changed the thus there are no trade taxations.
operates. Tax policies as well as
guidelines of the 5-a-day fruits and However, if Innocent was to trade
other market factors are influence
vegetables, qualifying 100% pure with China there would be taxes.
the way Innocent operates. For
smoothies and juices up to 150mil to
instance, reports marked smoothies Social/Cultural factors include the
count as one portion of the daily
as “too expensive for credit-crunched consumer buying patterns and
intake (Donnelly, 2016). This can
Brits” which resulted in smoothie attitudes in each specific target
positively affect Innocent because
sales falling by 33% (Levy, 2011). demographics. There is a growing
now they are able to use this in their
Another factor that affected the interest in healthy eating not only in
marketing and packaging,
industry was the recession, resulting the UK but across Europe also. This
encouraging health-oriented people
in fall by 29% in 2008 to 2009 presents considerable opportunities
to buy their product. Further
according to the Food and Drink for Innocent due to the fact that the
continues have different type of
governments – if Innocent considers
to trade in China the company has to
have in mind that China is a
communist state, which may mean
that there are more restrictions to
Figure 1
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, company is associated with healthy consumers vie digital marketing Environmental and Ethical – The
lifestyle and ethical values. campaigns. There are positive and whole brand image Innocent Drinks
(Gagliardi, 2015). In terms of cultural negatives related with instant is based on ethics. The company is
factors Innocent drinks makes sure information sharing. Innocent can one with a strong drive of being
that they translate their products to reach millions of consumers with sustainable. They take responsibility
native language in the countries they their digital channels – Facebook, for the impact of their business on
operate in. If they didn’t do that and Twitter and Instagram. This enables the environment, striving to change
sold all their products on English, the the company to share exciting news the negatives to neutrals or even
company is risking to not be about their products. However, better positives. Innocent focused on
successful due to people not being companies have to be careful what the 6 ethical factors - figure 1. They
able to understand the labels. they post, there are a lot of cases achieve their environmental goals by
Technological – we live the era of where well-known brands have made reducing their carbon emissions from
rapid information and technology massive mistakes which have gone the manufacturing of packaging and
development. Innocent uses viral and out of control, there by the use of recyclable materials. (our
technology to help the business harming the company’s reputation. approach to sustainability, 2013).
grow, reach new consumers and Technology also helps when it comes China started a new campaign to
reduce their environmental to communication internationally – it reduce the pollution in the country
footprint. There are a lot of new allows the different departments of with 20% by the end of 2025.
ways of communication used to the company to have reliable Companies that consider trading in
connect with shareholders, suppliers connection and pass on important this country will have to contribute
and most importantly with information. to this goal.
P6: Explain how business support systems enable a selected business to trade internationally
International business support systems refer to the tools that assist globalization and international trade. Now more than ever
before people and businesses are connected, they constantly exchange information with the help of the internet. The other
significant international support system are the international methods of payment. The combination of both of those systems
enables businesses, suppliers and consumers to buy and trade internationally.
Influence of the internet on Innocent Drinks – the creators of Innocent started using digital marketing and more specifically
social media marketing, soon after they found the company. It didn’t make much sales until Coca Cola took over all the
marketing, reaching more then 500 000 likes on their Facebook page in 2018 and almost 100 thousand on Innocent Instagram.
This digital communication channels enable the company to reach new consumers and markets, national and international. The
company keeps their consumer constantly engaged by posting regular and relevant content. Consumer from all around the
world are reminded 27/7 about the brand and its products. This builds customer loyalty and expands the business.
The internet is also a great way to collect instant feedback from
consumers by specialized services or even just buy how consumers
interact with the content. In Facebook we can react to a post in six
ways, Innocent analyses those reactions to determine what their
audiences love, like or dislike. Similarly, Instagram provides a wide range of analytical tools that can even help companies
determine their audiences geographic, sex and age.
Internet also makes international business activity – Innocent uses internet for international communications with suppliers and
retailers vie emails or social media platforms like Skype. This simplifies the day to day business activities because there is
constant international connection and reduces the chances of mistakes or misunderstandings.
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