Exam (elaborations)
Unit 5 - International business Assignment 2 C&D Distinction
- Institution
- PEARSON (PEARSON)
Unit 5 - International business Assignment 2 C&D Distinction graded. BTEC level 3 business
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Fatima Turay (70230602)Unit 5 International business
Introduction
I'll recommend a nation in this post that a business might take into account for
international trade. by investigating two countries that the company could be able to
do business in and a suitable business. Tesco is the business I've selected because
it's a well-known grocery chain in the UK and a prosperous enterprise there. I've
chosen on China and Belgium as my two nations.
Task 1
P5: Explain the external factors that influence a selected business considering
trading internationally.
Tesco Plc (Tesco) is a worldwide general merchandise store. The company operates
through multi-format locations as well as online. It has a variety of store styles,
including large, small, dotcom only, and one-stop, that are characterised by size and
product range.
International expansion might be hindered by a variety of factors and risks that could
lead to different options being taken. A business could do well in one nation but
poorly in another. International trade can be challenging since it requires due
diligence on the part of states and accurate information gathering. A high degree of
trust between trading partners is necessary for successful international trade,
therefore if this is not done effectively, bad things could happen. PESTLE is an
excellent tool for conducting in-depth studies on the effects of environmental factors
on businesses, enabling people to understand the short- and long-term effects on
their company. Because they are aware of this, businesses are less vulnerable.
PESTLE
Political Factors
Given that Tesco is a worldwide retailer, its operations are greatly impacted by
political developments on a global scale. These variables include the nation's
stability, legislative actions, and tax rates. Because of the unpredictability of the
global financial system, many countries pressure retailers to provide jobs for their
citizens. By fostering the establishment of new job opportunities, Tesco diversifies its
workforce and generates demand for its products.
Economic Factors
Given that these are the variables that will impact the company's earnings, sales,
distribution, and profit, the company needs to closely monitor any changes in the
economies of the countries in which it conducts business. In order to utilise the
numerous tax laws to its advantage, the company needs to be aware of them. The
majority of income is still derived from the United Kingdom, even if international
markets are growing. Any modifications to UK policy may cause the corporation to
rethink its delivery plan and incur large additional expenditures for reconstructing the
organisation. Tesco needs to remember that product prices affect sales as well.
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When the economy is struggling or there is inflation, basic needs have to be priced
appropriately.
Social Factors
Because life moves so quickly, people prefer to buy everything at once, and Tesco
has built its stores to meet these needs. The business now offers both food and non-
food products instead of only food. Their societal or social influence dictates the
products that its diverse clientele seek. The many cultural factors that he has grown
up surrounded by may also have an impact on the person's choice of products.
Future generations are changing culture and society in ways that Tesco needs to
look into, and customers need to be able to choose from a wide range of products.
Tesco has been able to grow its customer base by changing the way it promotes
organic products in order to appease consumers' views on organic products have
shifted.
Technological Factors
Trends shift swiftly, and in order for a company to be relevant in the modern world, it
must stay up to date with developing technologies. Tesco has been experimenting in
a number of retailing-related areas and has had some success. Customer influence
is influenced by social media advertisements, online buying, and other technological
advantages. As a result of the company's success in shifting consumer behaviour,
43% of its clients now shop online and have their items delivered right to their
homes. Tesco's latest announcement on its partnership with Amazon The
development of new technologies for cashierless billing is revolutionising consumer
purchasing. Customers will save time by not having to wait in line and can avoid
large queues.
Legal Factors
The operations of the corporation are directly impacted by changes in government
policy. It must abide by national and international market regulations in order to
maintain operations. For instance, all retail members are required to follow the rules
and regulations set forth by the Food Retailing Commission. Certain reports from
2016 claim that Tesco was accused of age and gender discrimination in the
workplace. Tesco has also been in the news because of a fraud lawsuit that was
settled for $12 million. The company is being sued for paying male and female
employees differently, according to the most recent development. Its reputation
depends on its understanding of these regulatory requirements and careful
adherence to them. Regaining a company's reputation after it has been damaged is
highly costly.
Environmental Factors
Tesco has implemented several initiatives aimed at promoting environmental
enhancement and the advancement of a more sustainable community. The second
phase of Tesco's Remove, Reduce, Reuse, and Recycle initiative was just unveiled.
The company has made a lot of efforts to get rid of and minimise any non-recyclable
plastic and to find creative uses for the plastic that is still in use. As a result, a closed
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loop system will be established, lowering the amount of waste that is dumped in
landfills. The company has changed 800 goods in the last three years, helping to
reduce 4000 tonnes of plastic waste that is difficult to recycle.
Being a part of a retail chain means having a big responsibility when it comes to
sustainable procurement. Tesco makes sure that all of its marine products are
certified and sourced responsibly. The company is also working on creating a way to
identify the boat that caught the fish in order to uphold a zero-tolerance policy for
illegal sourcing. By adopting these changes, the company hopes to contribute to a
more sustainable environment.
P6 - Explain how business support systems enable a selected business to
trade internationally.
Assistance is necessary for businesses that want to expand and become global in
order to succeed abroad. The use of technology, such as the Internet, has helped
many businesses because it has increased customer awareness of companies both
domestically and abroad. advertisements that help companies attract more clients,
along with a website where people may browse and buy the products they desire.
Tesco's could trade globally and boost sales if people have access to both the
website and the physical store. Even if other companies in the nation are not as
successful as Tesco, if consumers know what's coming to their town centre before it
opens overseas, they will be more curious to find out more and their curiosity will be
piqued. Businesses headquartered in the United Kingdom or looking to expand
worldwide can receive assistance from the Department for International Trade. An
organisation that is willing to help suggests that the company will be able to launch
sooner and with less difficulties. This is effective since it saves time. Another
effective and long-standing entity that enables businesses to trade and build ties with
organisations worldwide is the Chamber of Commerce. If your business wishes to
grow globally, you can receive guidance and assistance with market research.
Businesses like Tesco's are able to trade internationally because to business support
systems and the effect of the internet and foreign payment methods. One of the
three factors that could affect the company is online buying. Tesco might save
overhead costs if it launched an online service in place of its numerous physical
locations. Using the internet to report daily updates of Tesco's products within
several warehouses worldwide will improve logistics efficiency. This information can
be accessed from anywhere in the world, 24 hours a day, 7 days a week, thanks to
its internet availability. Tesco's recent promotional marketing has cost the corporation
less money, but customers have seen it more widely as they may promote
themselves on social networking sites.
Companies must take into account international payments since they need to
provide financial and payment support for the different countries in which they wish
to conduct business. The money received by a business when it initially opens for
business in a foreign nation will always affect its performance. If the funds are in
order, expanding the business overseas will be less difficult. Researching can help
you save a tonne of time. Paying in advance is the simplest method; bank transfers
can be arranged to guarantee prompt delivery of the funds. If the funds are obtained
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