BTEC Business Level 3: Unit 5 International Business Assignment 1. Distinction criteria met. This Assignment is very well structured with easy to read subheadings and appropriate images. Using this Assignment as your template will ensure you attain Distinction. Please read the criteria carefully b...
A.P1 Explain why two businesses operate in contrasting international markets
Section One:
In this section, I will be introducing two businesses which operate in contrasting sectors and
are based in more than one country. The two different British businesses I have selected to
report on are BT and Tesco. In this section I will be talking about:
The operation of each businesses
The reasons each conducts businesses internationally
Types of finances available to each business
A full analysis of the support which has been given to each of the business
BT – Operation of the Business
BT Group PLC is a holding company which is a British multinational telecommunication
company. BT Headquarters are in United Kingdom, London. The founder of BT is William
Cooke and John Lewis Ricardo. It holds several operations from up to 180 countries and the
largest provider of fixed line with also mobile and broadband services within the UK. BT also
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,BTEC Level 3 Extended Diploma in Business
providers subscriptions for televisions and also IT services. General Post Office, which is a
government department did become the monopoly of the telecoms within the suppliers of
the United Kingdom. 1960 is where it led to becoming a public corporation and British
Telecommunication and then lately trading as British Telecommunications and was formed
fully in 1980.
British Telecommunications then was privatised in 2984 which became British
Telecommunications plc and gained 50 per cent of its shares sold fully to its investors. Later
then, the Government sold its other stakes of the shared in around 2992 and 1993.
BT does have a listing on London Stock Exchange which also means there is a secondary
listing on the New York Stock Exchange and also a part of the FTSE 100 Index. In 1912.
Therefore, BT does have in control of big subsidiaries. BT has around 18 million customers in
the UK alone. BT operated in more than 280 countries including Ireland, America, France,
Germany, Italy, Nordics, Spain, South Korea, China, Hong Kong, Africa, Singapore, Japan and
many more.
BT products include Mobile services, Broadband Internet, TV, IT and network services,
Supply Chain Management and Telecommunications equipment.
BT is in the secondary, tertiary and quaternary industry as with its manufacturing with BT
manufacturing company which is an ISO-9001 certified electronic contract manufacturer
being established and providing good performance from 25 years within the electronic
manufacturing services.
BT - Structure
BT is currently running a PLC which means that the shared are fully available to the stock
exchange. BT employs around 104,000 people worldwide and including 93,000 in the UK
alone. 2019 February is when BT did announce their new organisational structure will be
taking effect from April 2016. Brands like EE networks and other high street stores will be
fully retained and will soon develop a secondary consumer division which will operate with
BT consumer. Serving customers with mobile services, broadband and also TV is perfect for
BT.
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,BTEC Level 3 Extended Diploma in Business
The new structure has also allowed BT business and public sector to have around £5bn of
revenue and serve multiple small and large businesses within the United Kingdom. BT added
a new division where BT Wholesale and also ventures will be compromising the existence of
BT wholesale division within the EE’s MVNO organisation.
BT later in 2017 announced to change the organisational structure to “Simplify its operating
model, strengthen accountabilities and accelerate its transformation” and wanted to involve
bringing together its BT Consumer and EE divisions into a brand new BT consumer division
which will operate with three brands which are BT, EE and PlusNet.
Later on, 2018, BT did also announce further organisational changes which followed the
unification of the BT consumer and EE division which was aimed to unify BT Business and
Public Sector and the BT Wholesale and Ventures divisions into a brand new unifies division
together which is known as today BT Enterprise.
Tesco Operation of the Business
Tesco PLC is a British multinational grocery and its headquarters are located in Welwyn
Garden City, Hertfordshire, England, United Kingdom. Tesco is the third-largest retailers in
the world. Tesco contains shops around in seven countries across Asia and also Europe.
Tesco is the market leader of groceries in the UK with an outstanding market share of
28.4%, Ireland Hungary and also Thailand.
Tesco was founded in 1919 by Jack Cohen and other groups of market stalls in London.
Tesco’s name itself first appeared in 1924 when Cohen did manage to purchase by a
shipment of tea. Tesco managed to expand rapidly and by 1939, Cohen managed to grab
onto over 100 Tesco shops across the country.
Since 1960s Tesco did try to get into areas such as retailing of books, clothing, electronics,
toys, petrol, software’s, telecoms, financial services, internet services, etc. During the
1990sw, Tesco attracted various socials groups with its low-cost Tesco Value products which
range from that to Tesco Finest range. This resulted in huge attraction and was a fantastic
way of providing great value to all types of economic social groups.
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,BTEC Level 3 Extended Diploma in Business
Tesco is also on the London Stock Exchange and is also of the FTSE 100 Index. Its market
capitalisation was around £18.1bn and 28th largest company on the London Stock
Exchange.
Tesco Structure
Tesco is a big supermarket retailer and Is currently operating as a PLC which is basically
when the business has shares which are to be sold on the stock exchange. Tesco contains
almost 7,000 stores worldwide. Therefore, it has over 450,000 colleagues and services
millions of customers each week on their online stores and retail. 300,000 employees are
currently working for Tesco and 460,000 internationally. The countries that Tesco provide
their service to are Ireland, Poland, Hungary, Czech Republic, Thailand, Malaysia, South
Korea, Taiwan, Japan, Slovakia, Turkey and soon China.
Tesco is in a very highly competitive field and does hold a lot of power. The three big
companies that Tesco is against is Sainsbury, Asda and Morrison’s. These three retails are
the biggest in the market and does influence the food market as we know of today. Tesco
holds over a third of the UK market share and doubles the Asda’s market share in the UK.
Due to the recent pandemic crisis, Tesco was put in under pressure as the customers were
seeking reduction within expenses, so they switched to cheaper alternatives such as
supermarkets like Lidl, Asda and Aldi. Tesco lost its UK share as other supermarkets rose
their sales share. Tesco to resolve this issue has to tackle the problem by introducing 400
low-cost new ranges of groceries and products on their shelves.
Today, Tesco profits are easily exceedingly more than £2bn including the domestic market
shared and global sales too. It holds as the top 10 largest retailers in the world.
International Business Activity
Various companies identify themselves as Exporting businesses, Importing Businesses,
Multinational Enterprises like Logistics and Associated Businesses on Marketing etc.
Exporting Businesses are businesses who focus on solely importing their products and
services to other countries hence the name exporting. Importing Businesses are businesses
which focus more on only importing their products and services to other countries globally.
Multinational Enterprises are businesses which like to operate and trade the products
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,BTEC Level 3 Extended Diploma in Business
between several countries except for their own country. Associated Businesses are
businesses that like to offer support to different several organisational along with their
services.
BT
BT is a multinational telecommunication enterprise, which offers multiple services and
products from TV, mobile and fibre in the UK and across 180 countries globally. BT
manufacturing company is an ISO-9001 which is highly certified and authorised electronic
contract manufacturer which has been established got over 25 years in the process. BT
largest consumer broadband and fixed voice telephone are in the UK. BT owns 35% of the
mobile consumer market and the broadband market too. More than 500 communication
providers rely on BT as their network source. The market does consist of around 5.5 million
businesses in the UK.
The biggest advantage of BT being a multinational enterprise is because they acquire various
revenue streams across each business globally and does have the strong potential of
elevating their revenues for the, and to open more businesses in more countries further on.
However, the problem being a multinational enterprise is that importing and exporting with
different customs, laws and the cultures will need to be strongly considered before thinking
of supplying their services and products to the countries. BT by now have achieved this
easily as they have supplied over 180 countries, but this is one of the main factors they have
to consider each time considering supplying to a new country. Another big disadvantage is
that the language barrier is a major problem as BT will not be able to provide their services
if they do not speak the languages especially at homes where broadband needs to be
connected. One of the biggest threats for BT is the strong pressure of government
legislations and their regulations with licenses that can affect the revenue for BT. BT is
regarded as one of the strongest market leaders in this market and also on supply chains as
due to BT’s speed on which they can scale their operations to suit their customer demands.
BT has a very strong relationship with their suppliers, and this benefits them for being
flexible in terms of creating new products or new ideas of services.
Tesco
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, BTEC Level 3 Extended Diploma in Business
Tesco is a multinational groceries and general merchandise retailer. Tesco does contain
around 7,000 stores worldwide. Therefore, millions of customers are services each week
due to Tesco’s online stores and retail too. Countries such as Ireland, Poland, South Korea,
Taiwan, Japan, Turkey and more hold Tesco as one of their top retailers. The UK alone
contains around 1700 stores. It is the largest retailer in the UK. Tesco is highly influenced by
the political and the other conditions of the UK and the European Union which does play a
huge part in Tesco’s performance.
A huge advantage for Tesco being a multinational enterprise is that Tesco has built up
various revenue income streams across each franchise throughout the world. Therefore, it
can also lead to a disadvantage as being a multinational enterprise means that it will need to
adapt to the rules and legislations of importing, customs, laws, cultures and exporting. All
these factors must be researched well and planned. Language barriers are another
disadvantage as some customers can be scared due to discrimination if they do not
understand something, but this can be resolved through translators or electronic checkouts
which consists of multiple languages.
Tesco can be regarded as an import and export company due to importing their products
from the suppliers to exporting and sell to customers. Tesco suppliers contain Booker,
Premier Foods, Kerry Foods, Yeo Valley Farms, Cargill Meats, Europe/Avara Foods and Allied
Bakeries. Tesco does get involved with various business activities for them to achieve profits
and have a great chance of keeping that lead position within the market.
Reasons for Trading Internationally
Several reasons do contribute to why BT and Tesco may want to conduct their business
operations internationally and these include:
• Growth
• Additional Revenue Streams
• Brand Exploitation
• Access to new markets
• Diversification
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