Unit 5: International Business.
Pearson BTEC Level 3 National Extended Diploma in Business.
External factors and cultural differences.
Criteria covered by this task:
Unit/Criteria
To achieve the criteria you must show that you are able to:
reference
Recommend one country a selected business could target for
5/C.D2 international trade, justifying your decision.
Carry out a situational analysis on two countries a selected business
5/C.M3 may consider trading in.
Explain how business support systems enable a selected business to
5/C.P6 trade internationally.
Explain the external factors that influence a selected business
5/C.P5 considering trading internationally
Assignment Introduction.
In this assignment, I will conduct a report of which I have already had research on. My
reports will explain the external factors of which can have an impact on international
businesses and cultural differences. For this assignment, my selected business will be
Tescos.
Task 1 - 5/C.P5 - Explain the external factors that influence a selected business
considering trading internationally.
Tescos is known to be one of the well known supermarkets to the British Society, in other
words, the top 4 supermarkets in the United Kingdom. Tesco’s supermarkets had a wide
range of products including foods, beverages, home appliances, clothing and services such
as banking, insurances and mobile services. Jack Cohen in London founded Tescos in 1919
as a market stall selling food which would be affordable for all, of course making a profit of
£1 for every £4 sales per day. A pound from 1919 would be in the region of £50 in today's
worth.
Countries which Tescos do not operate in, include Saudi Arabia and Russia.
Saudi Arabia is a country in the Middle East, with an estimated 35,000,000 people. The
ethinc makeup of Saudi Arabia includes: Saudi Arabs, Syrian, Indian, Combined African and
Asian Ancestry, Pakistani, Filipino, Bangladeshi, Egyptian, Yemini and others. Saudi Arabia
is a country with many of those who are clearly seen and defined as controlling meaning that
the management style of Saudi Arabia is Hierarchical. The hours of work per week is 48
hours meaning 8 hours per day, in the month of Ramadan, the hours of work is 36 hours a
week meaning that it will be required to work 6 hours per day. There are gender gaps in
Saudi Arabia including restrictions on Women working and driving. However, it is permissible
, Unit 5: International Business.
Pearson BTEC Level 3 National Extended Diploma in Business.
External factors and cultural differences.
for a woman to work if their partner is the owner of the business, this would represent a
sense of security. Women are thought to stay at home and be more of a family/house person
as the men are the “breadwinners”. When talking about social structures, there are Nomads
(travellers), Villagers and those who live in towns/cities. Bribery is not allowed in Saudi
Arabia, the repercussions when caught bribing can include a fine of 1,000,000 Saudi Riyal
which is equivalent to £200,000 and/or imprisonment from 5 years. Arabic is a common
language spoken in Saudi Arabia and English. There are aspects of Urdu, Hindi due to some
of the population being made up of Pakistani and Indian people. The level of technology is
more emerging rather than advanced. I believe that, as much as Saudi Arabia would like to
innovate, Saudi Arabia would like to retain their traditional atmosphere/vibe.
Russia is a country located in Northerneastern Europe and Northern Asia, with an estimated
146,000,000 people. Russia’s ethnic makeup includes: Russians, Turkic People, Peoples of
the Caucasus, Finnic Peoples, Ukranians, and others. Russia is a country which needs a
Boss in a place of work, Specific tasks with specific instructions given with little consultation
and more or less “bossed” around as employees must comply with tasks and instructions.
This would leave an impression of a Hierarchical society. The average hours of work in
Russia are approximately 38 hours per week. There is a gender pay gap of 25% between
men and women. The Constitution of Russia was adopted in 1993 which guarantees equal
rights between Men and Women. However, women are still fighting (voting/pressure groups
etc) for, as mentioned before, the pay gap of 25% between men and women. Also, there are
and have been cases of corruption. This can be very dangerous for those who would like to
expand or start operations in Russia. No doubt that there may be bribery which takes place.
Languages spoken in Russia include: Russian, English, Tatar, German, Chuvash, Bashkir,
Chechen, Ukrainian, and others. Russia is a country which can be classified as talent ready
due to the use of highly advanced technology.
The PESTLE analysis.
The PESTLE analysis is a detailed examination of elements of external influences which is
typically used for making business decisions, usually when thinking of operating
internationally or operating into a new industry. The elements of PESTLE include: Political,
Economical, Social, Technological, Legal and Environmental factors to suggest possible
alternatives to initial decisions or ideas. I will now conduct a PESTLE analysis for Tescos
wanting to operate internationally (no specific countries).
When discussing or thinking about Political factors when Tesco’s would like to operate
internationally, Tesco’s must conduct exceptional levels of research on the country that they
would like to expand their operations into, this includes:
● If the country is part of any trading blocs, if so what are the benefits, rules and
legislations.
● If the country or segments of the country support political parties.
● If the country of interest is in competition with other countries.
When discussing or thinking about Economical factors when Tesco’s would like to operate
internationally, Tesco’s must conduct exceptional levels of research on the financial factors
which can include:
, Unit 5: International Business.
Pearson BTEC Level 3 National Extended Diploma in Business.
External factors and cultural differences.
● Levels of taxation.
● Levels of interest rates on revenues/sources of incomes.
● The levels and the causes of inflation within the economy.
● The Economic Cycle, in layman's terms, the growth or decline of the market.
● The levels of employment and unemployment.
When discussing or thinking about Social factors when Tesco’s would like to operate
internationally, Tesco’s must consider points such as:
● The level and attitudes towards education.
● The spending powers of citizens and tourists of the country.
● The lifestyle habits of citizens and tourists of the country.
● Religion and beliefs (rules and morals).
● The attitude towards the environment.
● If the population is growing or declining.
● The approach towards immigration (individuals coming reside in the country) and
emigration (citizens of the country moving out to reside elsewhere).
● The typical/common sizes of families and estimations of disposable income.
When discussing or thinking about Technological factors when Tesco’s would like to
operate internationally, Tesco’s must consider points such as:
● The acceptance or dislikeness to the technology within the country.
● The levels of advancements of technology within the country (talent ready).
● Finally, the frequency of advancements in technology within the country.
When discussing or thinking about Legal factors when Tesco’s would like to operate
internationally, Tesco’s must consider points such as:
● The laws of employment.
● The licences required for the business to operate. An example being, Licence to sell
alcohol & premises licences.
● The legal structures when operating business, such as Sole Trader, Partnership etc.
● Tescos must know the laws on paying taxes.
● And laws for criminal activity.
When discussing or thinking about Environmental factors when Tesco’s would like to
operate internationally, Tesco’s must consider points such as:
● Transport links (tram stops, trains, buses etc).
● The provision for energies such as Electricity, water, fuel etc.
● The levels of waste.
● The weather cycle/conditions.
Then ethical factors in relation to environmental factors which include where the products
are sourced, sustained, manufactured and where the product is distributed from. Also
Tescos must bear in mind the condition and features of the product/first commodities (if the
product is used and if the product is recyclable).
Pearson BTEC Level 3 National Extended Diploma in Business.
External factors and cultural differences.
Criteria covered by this task:
Unit/Criteria
To achieve the criteria you must show that you are able to:
reference
Recommend one country a selected business could target for
5/C.D2 international trade, justifying your decision.
Carry out a situational analysis on two countries a selected business
5/C.M3 may consider trading in.
Explain how business support systems enable a selected business to
5/C.P6 trade internationally.
Explain the external factors that influence a selected business
5/C.P5 considering trading internationally
Assignment Introduction.
In this assignment, I will conduct a report of which I have already had research on. My
reports will explain the external factors of which can have an impact on international
businesses and cultural differences. For this assignment, my selected business will be
Tescos.
Task 1 - 5/C.P5 - Explain the external factors that influence a selected business
considering trading internationally.
Tescos is known to be one of the well known supermarkets to the British Society, in other
words, the top 4 supermarkets in the United Kingdom. Tesco’s supermarkets had a wide
range of products including foods, beverages, home appliances, clothing and services such
as banking, insurances and mobile services. Jack Cohen in London founded Tescos in 1919
as a market stall selling food which would be affordable for all, of course making a profit of
£1 for every £4 sales per day. A pound from 1919 would be in the region of £50 in today's
worth.
Countries which Tescos do not operate in, include Saudi Arabia and Russia.
Saudi Arabia is a country in the Middle East, with an estimated 35,000,000 people. The
ethinc makeup of Saudi Arabia includes: Saudi Arabs, Syrian, Indian, Combined African and
Asian Ancestry, Pakistani, Filipino, Bangladeshi, Egyptian, Yemini and others. Saudi Arabia
is a country with many of those who are clearly seen and defined as controlling meaning that
the management style of Saudi Arabia is Hierarchical. The hours of work per week is 48
hours meaning 8 hours per day, in the month of Ramadan, the hours of work is 36 hours a
week meaning that it will be required to work 6 hours per day. There are gender gaps in
Saudi Arabia including restrictions on Women working and driving. However, it is permissible
, Unit 5: International Business.
Pearson BTEC Level 3 National Extended Diploma in Business.
External factors and cultural differences.
for a woman to work if their partner is the owner of the business, this would represent a
sense of security. Women are thought to stay at home and be more of a family/house person
as the men are the “breadwinners”. When talking about social structures, there are Nomads
(travellers), Villagers and those who live in towns/cities. Bribery is not allowed in Saudi
Arabia, the repercussions when caught bribing can include a fine of 1,000,000 Saudi Riyal
which is equivalent to £200,000 and/or imprisonment from 5 years. Arabic is a common
language spoken in Saudi Arabia and English. There are aspects of Urdu, Hindi due to some
of the population being made up of Pakistani and Indian people. The level of technology is
more emerging rather than advanced. I believe that, as much as Saudi Arabia would like to
innovate, Saudi Arabia would like to retain their traditional atmosphere/vibe.
Russia is a country located in Northerneastern Europe and Northern Asia, with an estimated
146,000,000 people. Russia’s ethnic makeup includes: Russians, Turkic People, Peoples of
the Caucasus, Finnic Peoples, Ukranians, and others. Russia is a country which needs a
Boss in a place of work, Specific tasks with specific instructions given with little consultation
and more or less “bossed” around as employees must comply with tasks and instructions.
This would leave an impression of a Hierarchical society. The average hours of work in
Russia are approximately 38 hours per week. There is a gender pay gap of 25% between
men and women. The Constitution of Russia was adopted in 1993 which guarantees equal
rights between Men and Women. However, women are still fighting (voting/pressure groups
etc) for, as mentioned before, the pay gap of 25% between men and women. Also, there are
and have been cases of corruption. This can be very dangerous for those who would like to
expand or start operations in Russia. No doubt that there may be bribery which takes place.
Languages spoken in Russia include: Russian, English, Tatar, German, Chuvash, Bashkir,
Chechen, Ukrainian, and others. Russia is a country which can be classified as talent ready
due to the use of highly advanced technology.
The PESTLE analysis.
The PESTLE analysis is a detailed examination of elements of external influences which is
typically used for making business decisions, usually when thinking of operating
internationally or operating into a new industry. The elements of PESTLE include: Political,
Economical, Social, Technological, Legal and Environmental factors to suggest possible
alternatives to initial decisions or ideas. I will now conduct a PESTLE analysis for Tescos
wanting to operate internationally (no specific countries).
When discussing or thinking about Political factors when Tesco’s would like to operate
internationally, Tesco’s must conduct exceptional levels of research on the country that they
would like to expand their operations into, this includes:
● If the country is part of any trading blocs, if so what are the benefits, rules and
legislations.
● If the country or segments of the country support political parties.
● If the country of interest is in competition with other countries.
When discussing or thinking about Economical factors when Tesco’s would like to operate
internationally, Tesco’s must conduct exceptional levels of research on the financial factors
which can include:
, Unit 5: International Business.
Pearson BTEC Level 3 National Extended Diploma in Business.
External factors and cultural differences.
● Levels of taxation.
● Levels of interest rates on revenues/sources of incomes.
● The levels and the causes of inflation within the economy.
● The Economic Cycle, in layman's terms, the growth or decline of the market.
● The levels of employment and unemployment.
When discussing or thinking about Social factors when Tesco’s would like to operate
internationally, Tesco’s must consider points such as:
● The level and attitudes towards education.
● The spending powers of citizens and tourists of the country.
● The lifestyle habits of citizens and tourists of the country.
● Religion and beliefs (rules and morals).
● The attitude towards the environment.
● If the population is growing or declining.
● The approach towards immigration (individuals coming reside in the country) and
emigration (citizens of the country moving out to reside elsewhere).
● The typical/common sizes of families and estimations of disposable income.
When discussing or thinking about Technological factors when Tesco’s would like to
operate internationally, Tesco’s must consider points such as:
● The acceptance or dislikeness to the technology within the country.
● The levels of advancements of technology within the country (talent ready).
● Finally, the frequency of advancements in technology within the country.
When discussing or thinking about Legal factors when Tesco’s would like to operate
internationally, Tesco’s must consider points such as:
● The laws of employment.
● The licences required for the business to operate. An example being, Licence to sell
alcohol & premises licences.
● The legal structures when operating business, such as Sole Trader, Partnership etc.
● Tescos must know the laws on paying taxes.
● And laws for criminal activity.
When discussing or thinking about Environmental factors when Tesco’s would like to
operate internationally, Tesco’s must consider points such as:
● Transport links (tram stops, trains, buses etc).
● The provision for energies such as Electricity, water, fuel etc.
● The levels of waste.
● The weather cycle/conditions.
Then ethical factors in relation to environmental factors which include where the products
are sourced, sustained, manufactured and where the product is distributed from. Also
Tescos must bear in mind the condition and features of the product/first commodities (if the
product is used and if the product is recyclable).
