Unit 5 International Business
Business Report
Report Title - ‘Why Trade Internationally?’
Introduction
International business involves cross border transactions of goods and services between two or
more countries. Companies that export become 34% more productive within the rst year and
11% more likely to survive. Reasons to trade internationally are:-
Access to new markets
New sources of revenue
Economies of scale
Opportunities to specialise
Diversity in new markets
Risk limitation
Access to expert nancing
Types of international business include:-
Importing
Exporting
Foreign direct investment
Franchising
Licensing
Outsourcing
Contract Manufacturing
Importing is the process involving bringing products or services into a country for sale that might
have been made or sourced in a foreign market. These can include machinery, vehicles, fuels,
gems, plastics etc. It is important to the UK economy as the UK geographically replies on imports
due to its size and lack of natural resources. The UK is not self su cient in food production and it
imports 48% of the food consumed. The UK imports more than its exports. Import increases
consumer choice, can lower prices and also increase supplier choice.
Exports are goods and services produced in one country and sold to buyers in another.
Exporting can bring new markets and customers, new sources of revenue, lower costs in some
markets, diversify and spread risks. Exporting is often a rst choice when businesses decide to
expand abroad. It includes selling to new markets and customers abroad, new sources of
revenue, can look to lower costs in some overseas markets, can diversity and can spread the risk.
Conducting business internationally can o er lots of opportunities for growth and development
including access to new markets, additional revenue streams, brand exploitation, diversi cation,
increasing market share and market leadership, economies of scale and preferential tax rates.
International business is vital to the UK economy to ensure the UK maintains its economic
position. It allows access to recourse and innovation, maintains a strong global in uence, creates
employment opportunities, allows for diversi cation and risk reduction, grows trade and economic
growth.
Cadburys
Cadburys is the worlds most recognisable chocolate brand established in 1824 in Birmingham. It
is now a global icon and part of the Mondelez International Group. It operates in over 50
countries worldwide. Its international success is largely due to its ability to adapts its products
and marketing to meet the preference and needs of worldwide varying markets.
Countries where Cadburys has the strongest markets include UK, Australia, India, Africa, Middle
East and China. Chocolate consumption is a growing market globally and as economies with
increasing disposable income increases so does the global growth of Cadburys. Expanding
internationally allows Cadbury to access untapped markets and avoid stagnation in a mature
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, domestic market. Cadburys grows in markets where rising income levels lead to increased
consumer spending on premium goods including chocolate. Younger populations and lifestyle
changes in countries make them attractive for chocolate. Cadburys assesses its ability to
complete and align with local consumer presence, using market research to evaluate its entry.
Cadburys uses joint ventures where they collaborate with local partners to gain market insights
and regulatory environments and also acquisitions where they buy local brands to quickly
establish a foothold. Direct investment is also used and they have built production facilities in
key market to reduce costs and ensure quality and consistency.
Cadburys adapts their products for new markets and adjusts avours and packaging to cater to
local preferences in di erent countries. They also tailor their marketing campaigns to align with
cultural traditions and events.
Trading internationally ensure market expansion and increased sales, expanding helps to reduce
risk and allows Cadburys to produce on a much larger scale. It also builds brand strength and
global presence.
JD Sports
JD Sports is a UK based sports retailer that has expanded to an international market because its
in uenced by new opportunities, increased competition and business growth opportunities.
Within the UK sportswear and footwear is already highly competitive and mature. Growth is
limited and its pushed JD to expand internationally. Health conscious and tness trends is in
demand globally which has pushed JD to expand. JD sports partners with global brands such as
Nike, Adidas and Puma. This allowed JD to be a premium retailer of these brands internationally.
JD Sports operates over 4500 stores over 36 countries with a very strong present in UK, Europe’s
North America and Asia. Entering international markets allows larger production, distribution and
marketing. Larger operations spread xed costs over wider customer base and reduces overall
costs which increases pro ts. JD sports uses online platforms to reach global customers, which
reduces the need for physical stores and reduces expenses, thus more pro t. Target countries
are those that have high disposable income and a strong sports culture such as Australia, France
and Spain. Also ones with large populations and growing economies such as USA, China and
India. Countries with trade policies and stable political environments are also more attractive for
expansion.
JD often acquires existing business to provide an established customer base and operations
infrastructure. These include Finish Line in the USA and Chausport in France.
JD Sports export sports products to its stores and online in international markets. This allows
trade without signi cant initial investment in production facilities abroad. JD also operates with
Franchise agreements which allows the company to expand with lower risk. Franchises handle
the local operation whilst adhering to JD standards. JD manufactures products in Asia which has
a lower labour and manufacture cost which reduces the cost of production and increases pro t.
Trade Finance and Support available For international trade in the UK and Essex
Trade Finance
Finances must be in place to ensure that the international trade can be nanced. There are 4
ways to nance international business and depending on the business, product and market the
di erent methods can vary. Unlike trading in the UK when trading domestically transactions
include extended payment terms, currency uctuations and potential political or economic
instability - all of these can create a nancial strain on a business. Trade nance plays a strong
part in the UK expanding globally and helps to manage nancial risk and helps businesses stay
competitive against international successful businesses.
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Business Report
Report Title - ‘Why Trade Internationally?’
Introduction
International business involves cross border transactions of goods and services between two or
more countries. Companies that export become 34% more productive within the rst year and
11% more likely to survive. Reasons to trade internationally are:-
Access to new markets
New sources of revenue
Economies of scale
Opportunities to specialise
Diversity in new markets
Risk limitation
Access to expert nancing
Types of international business include:-
Importing
Exporting
Foreign direct investment
Franchising
Licensing
Outsourcing
Contract Manufacturing
Importing is the process involving bringing products or services into a country for sale that might
have been made or sourced in a foreign market. These can include machinery, vehicles, fuels,
gems, plastics etc. It is important to the UK economy as the UK geographically replies on imports
due to its size and lack of natural resources. The UK is not self su cient in food production and it
imports 48% of the food consumed. The UK imports more than its exports. Import increases
consumer choice, can lower prices and also increase supplier choice.
Exports are goods and services produced in one country and sold to buyers in another.
Exporting can bring new markets and customers, new sources of revenue, lower costs in some
markets, diversify and spread risks. Exporting is often a rst choice when businesses decide to
expand abroad. It includes selling to new markets and customers abroad, new sources of
revenue, can look to lower costs in some overseas markets, can diversity and can spread the risk.
Conducting business internationally can o er lots of opportunities for growth and development
including access to new markets, additional revenue streams, brand exploitation, diversi cation,
increasing market share and market leadership, economies of scale and preferential tax rates.
International business is vital to the UK economy to ensure the UK maintains its economic
position. It allows access to recourse and innovation, maintains a strong global in uence, creates
employment opportunities, allows for diversi cation and risk reduction, grows trade and economic
growth.
Cadburys
Cadburys is the worlds most recognisable chocolate brand established in 1824 in Birmingham. It
is now a global icon and part of the Mondelez International Group. It operates in over 50
countries worldwide. Its international success is largely due to its ability to adapts its products
and marketing to meet the preference and needs of worldwide varying markets.
Countries where Cadburys has the strongest markets include UK, Australia, India, Africa, Middle
East and China. Chocolate consumption is a growing market globally and as economies with
increasing disposable income increases so does the global growth of Cadburys. Expanding
internationally allows Cadbury to access untapped markets and avoid stagnation in a mature
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, domestic market. Cadburys grows in markets where rising income levels lead to increased
consumer spending on premium goods including chocolate. Younger populations and lifestyle
changes in countries make them attractive for chocolate. Cadburys assesses its ability to
complete and align with local consumer presence, using market research to evaluate its entry.
Cadburys uses joint ventures where they collaborate with local partners to gain market insights
and regulatory environments and also acquisitions where they buy local brands to quickly
establish a foothold. Direct investment is also used and they have built production facilities in
key market to reduce costs and ensure quality and consistency.
Cadburys adapts their products for new markets and adjusts avours and packaging to cater to
local preferences in di erent countries. They also tailor their marketing campaigns to align with
cultural traditions and events.
Trading internationally ensure market expansion and increased sales, expanding helps to reduce
risk and allows Cadburys to produce on a much larger scale. It also builds brand strength and
global presence.
JD Sports
JD Sports is a UK based sports retailer that has expanded to an international market because its
in uenced by new opportunities, increased competition and business growth opportunities.
Within the UK sportswear and footwear is already highly competitive and mature. Growth is
limited and its pushed JD to expand internationally. Health conscious and tness trends is in
demand globally which has pushed JD to expand. JD sports partners with global brands such as
Nike, Adidas and Puma. This allowed JD to be a premium retailer of these brands internationally.
JD Sports operates over 4500 stores over 36 countries with a very strong present in UK, Europe’s
North America and Asia. Entering international markets allows larger production, distribution and
marketing. Larger operations spread xed costs over wider customer base and reduces overall
costs which increases pro ts. JD sports uses online platforms to reach global customers, which
reduces the need for physical stores and reduces expenses, thus more pro t. Target countries
are those that have high disposable income and a strong sports culture such as Australia, France
and Spain. Also ones with large populations and growing economies such as USA, China and
India. Countries with trade policies and stable political environments are also more attractive for
expansion.
JD often acquires existing business to provide an established customer base and operations
infrastructure. These include Finish Line in the USA and Chausport in France.
JD Sports export sports products to its stores and online in international markets. This allows
trade without signi cant initial investment in production facilities abroad. JD also operates with
Franchise agreements which allows the company to expand with lower risk. Franchises handle
the local operation whilst adhering to JD standards. JD manufactures products in Asia which has
a lower labour and manufacture cost which reduces the cost of production and increases pro t.
Trade Finance and Support available For international trade in the UK and Essex
Trade Finance
Finances must be in place to ensure that the international trade can be nanced. There are 4
ways to nance international business and depending on the business, product and market the
di erent methods can vary. Unlike trading in the UK when trading domestically transactions
include extended payment terms, currency uctuations and potential political or economic
instability - all of these can create a nancial strain on a business. Trade nance plays a strong
part in the UK expanding globally and helps to manage nancial risk and helps businesses stay
competitive against international successful businesses.
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