unit 5: international business Assignment 1
Introduction
In this report I will write about why and how businesses trade internationally and i
will analyse how Tesco and Coca cola operate globally, the different types of
business activities they engage in, the causes behind their global trade, the support
these businesses receive and i will also include the methods by which they fund the
way they operate internationally.
similarities and differences in their international business operations
between Coca-Cola Company and Tesco over a 5-10year period
Coca cola
Coca cola is a business made by john Pemberton and it was made as a medicine but
became popular as a drink. Coca cola was then developed by a pharmacist named
asa griggs candler who then bought the company in 1888 who made it even more
popular
The products coca cola provide are coca cola zero sugar, diet coke, classic coca
cola, sodas like sprite and Fanta and have a variety of other products such as sports
drink sand tea. They sell vending machines and also provide services such as
marketing and advertising services to promote products.
Coca cola operate with countries such as Mexico, Canada, US, Japan, China, India,
Australia and Brazil.
Over the past 5 – 10 years coca cola has introduced new flavors of new drinks such
as coca cola zero sugar, smart water, honest tea and fuze. They also have started to
offer healthier options by reducing sugar in their products for customers who would
want low calorie drinks. They also have adapted to new trends such as online
shopping and have started to use e-commerce and home delivery services such as
uber eats to make it easily accessible to their customers.
For coca cola to have access to raw materials globally, they communicate with
different suppliers around the world and have teams in place in different countries
that help them connect with local suppliers and farmers. They use different raw
materials to make their drinks such as sugar for example which the drinks get its
flavor from and have to source sugar from from different locations around the
world, where it is produced into the form needed for their drinks. They also maintain
relationships with suppliers in different countries and help farmers use methods that
are good for the environment in the long run.
,Tesco
Tesco is a UK based retail company and was founded in 1919 by Jack Cohen as a
market stall in London. The company then grew and had its first shop in 1929 and
opened more shops which led to them entering new markets so they began to sell
products such as electronics, clothing, food etc.
The products Tesco sell are electronics, food, household items, clothing and offer
services such as online shopping and delivery services.
Tesco operate in countries such as Uk,, Hungary, Poland, Slovakia, thailand,
malaysia and czech republic.
Like coca cola, in the last 5-10 years Tesco has also started to have an active
presence on their online platform and have invested in their e-commerce and have
created an app for customers to purchase their products online and offer loyalty
points and discounts for customers that shop online. They also have invested in
home delivery services so customers can now schedule their delivery slots and have
their orders delivered directly to their home if they can’t have access to Tesco
stores.
To have access to raw materials, Tesco has different suppliers in different regions
who are local and international so that they have a reliable source of raw materials,
for example Tesco source their fruits and vegetables only from European countries
such as Spain, Italy and France because they are closer to the UK and reduces
transportation time so that the products can stay fresh when it reaches the stores
whereas Tesco’s clothing would be sourced from countries like China as they offer
lowers costs.
Section 2: International Business Activities
How coca cola exports:
Coca cola partners with local bottlers around the world and then distribute their
drinks to local markets. They first must fill out documentation such as customs
declaration and export permits so that all they products that are shipped are legally
transported. They then produce their drinks in different countries, then package
them in bottles or cans and then store them in distribution centres where they are
organized and stored before being shipped and then they transport the products
using trucks, airplanes or ships for distribution.
How they import:
Coca cola imports by bringing products into a country from somewhere else. They
import products such as ingredients, packaging materials, and other things they
,may not have from different countries to make their drinks and fill out
documentation such as customs declaration for the process to be legally done.
Logistics:
Coca cola first plan the transportation of their products and then place their
products into distribution centres to make sure the products are stored properly and
when the products are ready to be shipped, they work with logistics providers who
track shipments and make sure that the products are delivered on time.
Marketing
Coca cola use marketing by advertising their products through TV advertisements,
social media such as Instagram ads, YouTube ads and twitter and also sponsor
events and through sports team to increase their visibility. They also run campaigns
and use email marketing to reach a wider audience.
How Tesco exports:
Tesco's products are exported to 20 partners in countries such as Australia,
countries in Europe and Saudi Arabia by Tesco’s international export business. They
make sure their products meet the quality standard and regulations of the country
they’re sending their products to, for example if they want to export fruits they
would need to make sure it meets the food safety requirements of the destination
country. Then they label their products with important information such as product
details, ingredients and also translations so that the customers from a different
country can understand what they are buying.
They use export declarations which is a form that holds information about the
products that are being exported such as what they are and its destination country,
an export license which is a permission slip that allows them to export certain
products as Tesco could have products that are restricted in some countries and
they also pay extra fees (customs duties) that are charged by the country receiving
the products.
How they import :
Tesco globally import from countries such as France, Italy, Australia, Africa and
Spain and work with suppliers from different countries to negotiate prices and make
sure they are getting the best deals and best products for their customers. They
take advantage of lower production costs in other countries as it is cheaper for
Tesco to import certain products rather than to produce them locally which helps
them to keep prices competitive and give affordable options to their customers. To
import, Tesco use an import declaration which allows them to receive the products
, and then use commodity codes that classify products in order to make it easier to
fill in paperwork and pay customs duties and VAT.
Logistics :
Logistics refers to the process of managing how products are acquired, stored and
transported to its final destination. It involves working with suppliers and managing
inventory level and is important because it makes it possible for businesses to
import and export products internationally and keeps everything organized.
When Tesco places an order with a supplier, the supplier prepares the products for
shipping and send it off to Tesco’s distribution centers. Tesco’s logistics then
receive the product, organize them. They then decide how they are going to
transport the products to the stores and plan the routes and deliveries to make sure
there are no mistakes or delays.
Marketing :
Tesco uses marketing through TV advertising to promote products, they have a
website that shows information about product availability and offers and use social
media such as Facebook and twitter to also let customers know about deals. The
company hugely relies on promotional offers as their marketing strategy to attract
and retain customers and have ‘buy one get one free’ offers and discounts online
and in store for their customers.
Multinational business
A multinational business is a business that operates in more than one country at a
time. The business has its headquarters in one country and operate in other
countries too.
Associated businesses of Tesco and coca cola
Tesco
One associated business of Tesco is the Booker group who have a big impact in the
food market and sell food products to different shops and restaurants and have
their own brands such as Budgens and Londis. Tesco bought Booker group for 3.7
billion so that they could be part of Tesco and have more opportunities for Tesco to
offer a wider range of products.
Tesco bank is also associated to Tesco and was created through a partnership
between Tesco and the royal bank of Scotland and the bank offers services such as
