UNIT 5-INTERNATIONAL BUSINESS, ASSIGNMENT 1

UNIT 5-INTERNATIONAL BUSINESS, ASSIGNMENT 1 Unit 5 International business Assignment 1 Why trade internationally? 1 lOMoAR cPSD| Content Introduction ..........................................................................................................................................3 Methods used to finance international trade......................................................................................4 • Prepayment by the importer • Letters of credit • Export credits • Bank loans • UK Export Finance • Department for International • Trade Chambers of Commerce Globalization .........................................................................................................................................7 Trading blocs… ......................................................................................................................................9 • World Trade Organisation • Customs unions and common markets - European Union • Mercosur • NAFTA • APEC assessment, health and safety Protectionalism....................................................................................................................................12 • Tariffs Customs • Duties • Currency restrictions • Quotas Subsidies • Legal restrictions Barriers to trade................................................................................................................................... 14 • Trade restrictions • Exchange rate volatility • Legal and regulatory systems • Financial requirements • Operating risks • Economic sanctions Effects of Globalization on Vodafone...................................................................................................17 Conclusion.............................................................................................................................................18 References….........................................................................................................................................19 2 lOMoAR cPSD| Task 1 - P1, P2, M1 Introduction This report will carry out independent research on two contrasting international businesses - Vodafone Group Plc and Innocent Drinks. Using the information from this research to explain in detail how and why the two business operate in the international market. Then it will proceed with explaining and analysing the types of finance made available for international businesses, applying this information to both Vodafone Group Plc and Innocent Drinks. P1: Explain why two businesses operate in contrasting international markets. Vodafone Group Plc currently is world leading international telecommunicationsservices provider, which has major presence in the Middle East, Asia, Europe and the United States. The company launched in 1985 in the UK as the first national network. In 1993 Vodafone Group International was found to supervise overseas interests and acquire licences. Since then the company have grown tremendously, now Vodafone is operation across 5 continents including 27 different countries. “Vodafone’s ambition is to contribute to sustainable living by delivering connectivity and innovative services to our customers, while maintaining the trust of our stakeholders by behaving ethically and responsibly wherever we operate.”[ CITATION Vod l 2057 ] Exanimating Vodafone’s vision statement, for the full version of which refer to the bibliography, we can safely conclude that the number one reason for the company to become international was to grow by increasing its market share and introducing the company services to new geographical regions. We can see that Vodafone have reached not only this goal but they have become the global market leadership. Another reason to go international was gain competitive advantage over their competitors. Because the company is international it is able to provide no roaming fees in 48 countries, meaning that people can travel freely around those countries without worrying about high roam fees. It also provides the some of the lowest international call’s fees, which is really attractive to people who have friends and family abroad. To reach the aims described above Vodafone decided to focus on the emerging markets, like the fastgrowing Indian mobile market. What influenced them to choose this market is the fact that there is less competition and more business opportunities due to the huge potentialsize of the market. Using this strategy, the company have rapidly grown eventually becoming the global market leader. Innocent Drinks is international company which was found by Richard Reed, Jonathan Wright and Adam Balon in 1998. The company has great ethical rating of 12.3/20, which is due to the fact that all of their drinks are produced with fresh fruits and that the company donates at least 10% of their profits to charities. The great philosophy behind this company is the reason why lot of people want to buy into it, as well as the amazing taste. The company went international when Coca Cola took ever by buying more than 90% of the company. In the first year Coca Cola focused on introducing the company into the Europe market and by the end of the financial year the company had tremendous