Unit 5 Assignment 1 – Why Trade
Internationally?
This report will begin by explaining why two businesses operate in contrasting
markets, and what types of finance are available for these international businesses.
It will then discuss the main features of globalisation affecting these businesses and
explore the role trading blocs play in international trade. Finally, this report will
analyse both the support that international businesses can receive, and the barriers
they must face, and end with an evaluation of the impact globalisation has on a
business. This report will then end with a conclusion that will explain my research.
Section One
P1 – explain why two businesses operate in contrasting
international markets.
An example of two businesses that operate in contrasting international markets
would be Vodafone and Marks and Spencer (M&S).
Vodafone Group PLC is the world’s largest mobile service provider, initially coming
to the market as the Racal Electronics Group in 1982
(https://www.vodafone.co.uk/newscentre/about-us/history/). It quickly became the
market leader for new mobile phone technology in the UK, launching the first digital
mobile phone service in the UK in 1991
(https://www.vodafone.co.uk/newscentre/about-us/history/). Since then, it has grown
through acquisitions and partnerships, with its most recent milestone being the
introduction of 5G in 2019 through towns and cities in the UK and Europe.
(https://www.vodafone.co.uk/newscentre/about-us/history/). Now, the company has
become truly global with a presence in more than 30 countries including Japan and
the US, where it undertook a joint venture with Bell Atlantic to form Verizon Wireless
(https://www.referenceforbusiness.com/history2/98/Vodafone-Group-Plc.html).
Vodafone has grown into a global company through mergers and acquisitions, such
as the takeover of the German company Mannesmann on the 3 rd of February 2000,
which at the time was the largest corporate merger ever
,(https://www.companieshistory.com/vodafone/), and the joint venture with Bell
Atlantic mentioned above.
Vodafone conducts business internationally because they are providing a service to
people who have an international presence and therefore require the services of a
business who are global to link operations between countries. As internet technology
and 5G becomes more advanced, more and more businesses and individuals are
requiring a faster and higher quality internet connection. Being a global business
provides Vodafone with opportunities to not only enter emerging markets but also
work within its established markets to upgrade its offerings. Vodafone becoming a
global company is therefore vital for its growth due to the market it operates in.
M&S began in 1884, when Michael Marks, an immigrant from Slonim, came over to
England and set up a stall in Kirkgate Market in Leeds.
(https://corporate.marksandspencer.com/about-us/our-history). In this stall, he
originally sold items at individual prices, but once he realised that the ‘penny section’
of his stall was doing much better, he changed his entire stall to sell everything for
only a penny(https://corporate.marksandspencer.com/about-us/our-history). Through
this method, he gained a lot of popularity and money and this allowed him to partner
up with Tom Spencer
(https://marksintime.marksandspencer.com/ms-history/timeline) and together Marks
and Spencer were made. M&S saw its first especially large growth from 1920-1940,
when their clothing, which was ‘well-made but affordable’
(https://marksintime.marksandspencer.com/ms-history/timeline/art1269#:~:text=We
%20made%20ourselves%20unique%20by,lower%20prices%20proved%20very
%20successful) became extremely popular, as quality products for an affordable
price seemed to be the best way to entice customers to purchase M&S’s products.
Nowadays, M&S has grown to accommodate over 30 million customers each year,
with a total of 1,487 stores, 98 websites, and with the help of its 65,000 staff
members (https://corporate.marksandspencer.com/investors/our-performance-
updates/2022-annual-report#:~:text=We%20do%20this%20through
%20a,30%20million%20customers%20each%20year) M&S saw £10.9 billion in
revenue in 2021. (https://corporate.marksandspencer.com/investors/our-
performance-updates/2022-annual-report#:~:text=We%20do%20this%20through
%20a,30%20million%20customers%20each%20year). M&S officially began
expanding from the UK in 1975, when it opened its first stores in continental Europe
and then in Ireland in 1975. Since then, it expanded across the globe and can now
be found in 29 different countries as well as Hong Kong. It aims to expand this
number further to 150 different countries.
(https://www.theguardian.com/business/2006/jun/21/marksspencer.supermarkets#:~:
text=M%26S%20operates%20in%2029%20countries,Hong%20Kong%2C
%20Gibraltar%20and%20Ireland).
M&S have gone global to boost its sales and expand into new markets. In the early
1940s (when they first began expanding), they began to consider the international
, market because of the company’s perception that the British market had reached
saturation and further growth was required. They opened stores in Canada in 1973
and two years later began an expansion into Europe. Therefore, M&S saw the
globalisation of their business grow and increase profits.
As the global leader in mobile technology, Vodafone provides its customers (over
625 million) with innovative and developing technologies to provide the best
experience and to remain at the forefront of a very competitive market. Its market
requires it to be able to constantly be innovating its current services to provide new
services to its customers, and it must make sure that it beat its competitors to the
latest technologies.
As well as selling a large variety of quality clothes for a fair price, Marks and Spencer
also mainly operate in the supermarket food industry, as they are well known for their
quality food made with fresh ingredients. As such, they have to compete with huge
competitors such as Tesco, the UK’s biggest supermarket
(https://www.expatica.com/uk/living/household/supermarkets-in-the-uk-465489/
#:~:text=Tesco%3A%20The%20UK's%20largest%20supermarket,competitor
%20has%20over%202%2C000%20stores), and rapidly growing supermarket chains
such as Aldi, Sainsbury’s, and Lidl. Within the past decade, Marks and Spencer have
struggled with lower profits and ever-tougher competition, mainly due to the change
in the UK supermarket structure
(https://www.businessoffashion.com/news/retail/marks-spencer-to-sell-rival-fashion-
brands-online-in-revamp/#:~:text=M%26S%20sells%20food%20and
%20clothing,structural%20change%20within%20UK%20retail). Despite not being the
biggest UK supermarket chain, M&S did become the most popular supermarket in
2022 (https://www.statista.com/statistics/1135764/most-popular-supermarkets-in-the-
uk/), and this was because of the excellent quality of products they offer to their
customers. Similarly, their clothing offering has struggled due to the rise in popularity
of low-cost, high-turnover stores such as Primark, however, they continue to
innovate their offerings and compete based on quality rather than price.
This shows that M&S and Vodafone are two contrasting companies because M&S is
a retailer which sells physical products to its customers from clothes to food, and
Vodafone is a service provider. They operate in different markets, and they contrast
because M&S has grown its business over the years through its own business and
emphasis on quality for a fair price, as well as its wide range of available products for
customers. Vodafone has grown over the years mainly through mergers and
acquisitions and gradually becoming the biggest mobile phone service provider
across the world. Where M&S struggle on a product front, such as finding it hard to
compete against companies such as Primark, Vodafone won’t have to worry about
this as they compete on a technological level, which, given their size, gives them an
advantage because they can invest heavily in this area.
Internationally?
This report will begin by explaining why two businesses operate in contrasting
markets, and what types of finance are available for these international businesses.
It will then discuss the main features of globalisation affecting these businesses and
explore the role trading blocs play in international trade. Finally, this report will
analyse both the support that international businesses can receive, and the barriers
they must face, and end with an evaluation of the impact globalisation has on a
business. This report will then end with a conclusion that will explain my research.
Section One
P1 – explain why two businesses operate in contrasting
international markets.
An example of two businesses that operate in contrasting international markets
would be Vodafone and Marks and Spencer (M&S).
Vodafone Group PLC is the world’s largest mobile service provider, initially coming
to the market as the Racal Electronics Group in 1982
(https://www.vodafone.co.uk/newscentre/about-us/history/). It quickly became the
market leader for new mobile phone technology in the UK, launching the first digital
mobile phone service in the UK in 1991
(https://www.vodafone.co.uk/newscentre/about-us/history/). Since then, it has grown
through acquisitions and partnerships, with its most recent milestone being the
introduction of 5G in 2019 through towns and cities in the UK and Europe.
(https://www.vodafone.co.uk/newscentre/about-us/history/). Now, the company has
become truly global with a presence in more than 30 countries including Japan and
the US, where it undertook a joint venture with Bell Atlantic to form Verizon Wireless
(https://www.referenceforbusiness.com/history2/98/Vodafone-Group-Plc.html).
Vodafone has grown into a global company through mergers and acquisitions, such
as the takeover of the German company Mannesmann on the 3 rd of February 2000,
which at the time was the largest corporate merger ever
,(https://www.companieshistory.com/vodafone/), and the joint venture with Bell
Atlantic mentioned above.
Vodafone conducts business internationally because they are providing a service to
people who have an international presence and therefore require the services of a
business who are global to link operations between countries. As internet technology
and 5G becomes more advanced, more and more businesses and individuals are
requiring a faster and higher quality internet connection. Being a global business
provides Vodafone with opportunities to not only enter emerging markets but also
work within its established markets to upgrade its offerings. Vodafone becoming a
global company is therefore vital for its growth due to the market it operates in.
M&S began in 1884, when Michael Marks, an immigrant from Slonim, came over to
England and set up a stall in Kirkgate Market in Leeds.
(https://corporate.marksandspencer.com/about-us/our-history). In this stall, he
originally sold items at individual prices, but once he realised that the ‘penny section’
of his stall was doing much better, he changed his entire stall to sell everything for
only a penny(https://corporate.marksandspencer.com/about-us/our-history). Through
this method, he gained a lot of popularity and money and this allowed him to partner
up with Tom Spencer
(https://marksintime.marksandspencer.com/ms-history/timeline) and together Marks
and Spencer were made. M&S saw its first especially large growth from 1920-1940,
when their clothing, which was ‘well-made but affordable’
(https://marksintime.marksandspencer.com/ms-history/timeline/art1269#:~:text=We
%20made%20ourselves%20unique%20by,lower%20prices%20proved%20very
%20successful) became extremely popular, as quality products for an affordable
price seemed to be the best way to entice customers to purchase M&S’s products.
Nowadays, M&S has grown to accommodate over 30 million customers each year,
with a total of 1,487 stores, 98 websites, and with the help of its 65,000 staff
members (https://corporate.marksandspencer.com/investors/our-performance-
updates/2022-annual-report#:~:text=We%20do%20this%20through
%20a,30%20million%20customers%20each%20year) M&S saw £10.9 billion in
revenue in 2021. (https://corporate.marksandspencer.com/investors/our-
performance-updates/2022-annual-report#:~:text=We%20do%20this%20through
%20a,30%20million%20customers%20each%20year). M&S officially began
expanding from the UK in 1975, when it opened its first stores in continental Europe
and then in Ireland in 1975. Since then, it expanded across the globe and can now
be found in 29 different countries as well as Hong Kong. It aims to expand this
number further to 150 different countries.
(https://www.theguardian.com/business/2006/jun/21/marksspencer.supermarkets#:~:
text=M%26S%20operates%20in%2029%20countries,Hong%20Kong%2C
%20Gibraltar%20and%20Ireland).
M&S have gone global to boost its sales and expand into new markets. In the early
1940s (when they first began expanding), they began to consider the international
, market because of the company’s perception that the British market had reached
saturation and further growth was required. They opened stores in Canada in 1973
and two years later began an expansion into Europe. Therefore, M&S saw the
globalisation of their business grow and increase profits.
As the global leader in mobile technology, Vodafone provides its customers (over
625 million) with innovative and developing technologies to provide the best
experience and to remain at the forefront of a very competitive market. Its market
requires it to be able to constantly be innovating its current services to provide new
services to its customers, and it must make sure that it beat its competitors to the
latest technologies.
As well as selling a large variety of quality clothes for a fair price, Marks and Spencer
also mainly operate in the supermarket food industry, as they are well known for their
quality food made with fresh ingredients. As such, they have to compete with huge
competitors such as Tesco, the UK’s biggest supermarket
(https://www.expatica.com/uk/living/household/supermarkets-in-the-uk-465489/
#:~:text=Tesco%3A%20The%20UK's%20largest%20supermarket,competitor
%20has%20over%202%2C000%20stores), and rapidly growing supermarket chains
such as Aldi, Sainsbury’s, and Lidl. Within the past decade, Marks and Spencer have
struggled with lower profits and ever-tougher competition, mainly due to the change
in the UK supermarket structure
(https://www.businessoffashion.com/news/retail/marks-spencer-to-sell-rival-fashion-
brands-online-in-revamp/#:~:text=M%26S%20sells%20food%20and
%20clothing,structural%20change%20within%20UK%20retail). Despite not being the
biggest UK supermarket chain, M&S did become the most popular supermarket in
2022 (https://www.statista.com/statistics/1135764/most-popular-supermarkets-in-the-
uk/), and this was because of the excellent quality of products they offer to their
customers. Similarly, their clothing offering has struggled due to the rise in popularity
of low-cost, high-turnover stores such as Primark, however, they continue to
innovate their offerings and compete based on quality rather than price.
This shows that M&S and Vodafone are two contrasting companies because M&S is
a retailer which sells physical products to its customers from clothes to food, and
Vodafone is a service provider. They operate in different markets, and they contrast
because M&S has grown its business over the years through its own business and
emphasis on quality for a fair price, as well as its wide range of available products for
customers. Vodafone has grown over the years mainly through mergers and
acquisitions and gradually becoming the biggest mobile phone service provider
across the world. Where M&S struggle on a product front, such as finding it hard to
compete against companies such as Primark, Vodafone won’t have to worry about
this as they compete on a technological level, which, given their size, gives them an
advantage because they can invest heavily in this area.
