Pearson BTEC Level 3 National Diploma in Business Unit 5 Assignment 1
Why trade internationally?
P1:
Explain why two businesses operate in contrasting international markets.
In this essay, I will explain why two different organisations (Jaguar & JLB Shipping
International) operate in distinct markets in international business. International business
refers to any commercial activity or transaction between businesses, organisations,
individuals, or governments that crosses boundaries into other countries and areas. These
foreign transactions are not limited to any certain asset, interest rate, or currency.
International commerce refers to any exchange of value between the parties involved,
including products and services, technology, capital, people, and intellectual property.
International trading refers to the buying and sale of goods and services by businesses
located in other countries. Countries can gain access to products and services that might
otherwise be unavailable domestically, allowing them to grow their markets. Market
competition has intensified as a result of international trade. This eventually leads to more
competitive pricing, lowering the cost of the final product for the consumer.
Both Jaguar and JLB Shipping International were founded in the United Kingdom and have
since expanded into international trading. They are well-known companies that sell their
products and services globally.
JLB International Limited
JLB Shipping International, started in Jamaica and expanding globally, has established itself
as a premier International Freight Forwarding Company, with subsidiaries including JLB
Shipping & Logistics Ltd in the United Kingdom. The company specialises in intermodal ISO
tank container services and has formed strategic connections with companies such as
Isocon-JLB International Ltd. It serves industries such as Scotch Whisky/Global spirits and
Offshore Oil & Gas. With a strong global network of agents and offices, over 35 years of
experience, and a dedicated team of professionals, JLB Shipping International is well-known
for its dependable and efficient goods forwarding services, demonstrating a commitment to
excellence in the international shipping and logistics industry.
Jaguar
Jaguar, Jaguar Land Rover's luxury automobile brand, has a famed history that began in 1922
when William Lyons and William Walmsley created the Swallow Sidecar Company. The
company began by manufacturing motorcycle sidecars before moving on to passenger car
bodies. The first Jaguar car was created in 1935, kicking off a series of iconic and successful
sports cars that included the Jaguar XK120, XK140, XK150, and the famed Jaguar E-Type.
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Jaguar has long been linked with elegance, performance, and British history, with major
successes include winning the Le Mans 24 Hours event in 1951 and 1953. The company's
motto "Grace, Space, Pace" expresses its dedication to creating automobiles that exemplify
these characteristics.
Jaguar's international expansion was made possible by its success in motorsport, strategic
collaborations, and acquisitions. Ford acquired the brand in 1989, providing it with the
resources and distribution channels it needed to grow its position in important international
markets. Furthermore, Jaguar's acquisition by Tata Motors in 2008 improved its access to the
quickly rising Indian and other emerging markets, as well as allowing the brand to establish
manufacturing and assembly sites in other nations, including China, Brazil, and Slovakia.
Reasons to trade internationally:
Growth
Jaguars foreign business will help them grow since it will allow them to dramatically boost
their client base by raising awareness of their product offerings.
Additional revenue streams
An additional revenue stream is another means for Jaguar/JLB to generate revenue for the
business that is not the primary revenue source. It is a motive for them to trade worldwide
because it allows the company to obtain more clients, which leads to a variety of revenue
streams in many nations.
Brand exploitation
Brand exploitation is a method by which a brand research another firm in order to capitalise
on their business and reputation. Popular brands should be cautious of potential brand
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, Pearson BTEC Level 3 National Diploma in Business Unit 5 Assignment 1
exploitation. Businesses may face threats such as the establishment of fraudulent websites,
social network impersonation, and patent theft.
Increasing market share
Gaining market share can boost sales, make items easier to sell, and serve as a stronger
barrier against competitors. A larger market share also means that the leader will benefit the
most when the market expands.
Diversification
A business can grow from diversifying by developing and distributing new goods and/or
services, or by entering other markets and industries in addition to its current ones. This has
the ability to greatly improve a company's revenue. The advantages of diversity include
opportunities for economic expansion, access to foreign exchange, and the capacity to
import critical goods and amenities, all of which can help emerging economies thrive
economically.
Technological dominance
Businesses may make decisions based on technological dominance if they become reliant on
technical advancement to expand. According to the technology domination idea, an
experienced user should constantly be combined with a modern decision assistance for
technology to be used in informed decisions.
Comparative advantages
Comparative advantage refers to an economy's ability to generate specific products or
services at lower opportunity costs than other trade companies. This allows a company to
offer things at lower prices than competitors, which helps them attract more customers.
Preferential tax rates
This is one of the most expensive tax regimes and is considered a tax cost. Taxpayers in the
lowest income brackets pay no taxes on their gains, while those in the middle pay 15%.
Preferential tax rates can be a reason for Jaguar and JLB to trade internationally due to the
potential tax benefits offered by foreign countries. For instance, foreign ownership of UK
companies, such as Jaguar, can lead to tax advantages, contributing to their decision to trade
internationally. Additionally, the acquisition of Jaguar by the Indian company Tata Group also
exemplifies how preferential tax rates and other financial incentives can influence
international trade and ownership of companies. These tax benefits and incentives can make
international trade more financially appealing for companies like Jaguar, ultimately
influencing their decision to engage in global business activities
Jaguar and JLB have a few options of which markets to operate in; Developed economies,
less developed countries, and emerging markets.
High living standards and well-established infrastructure make industrialised countries more
attractive for trade because they come with reduced costs and quicker trading periods. A
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