Introduction:
This report will be explaining about two businesses that operate in contrasting
sectors. The businesses that have been chosen are McDonald’s, which is a
multinational business, and Wilkin and Sons which is based in the UK but trades
internationally.
An international business is a business that exports their goods and services into two
or more countries. Businesses trade internationally for many reasons. One reason a
business trades internationally is to increase productivity. This is because
businesses that trade internationally are around 70% more productive than
businesses that do not trade internationally (ONS, 2018). As well as this, new
businesses that export become 34% more productive within the first year alone
(BusinessWest, 2016)
Businesses that trade internationally are more likely to survive and be successful.
This is because trading internationally gives businesses access to new markets and
more potential customers, which will increase the amount of products they sell and
profit the business makes. Furthermore, businesses that trade internationally spread
risk in multiple markets, as sales could be declining in some countries, but increasing
in other countries, which will help spread any loss that the business makes.
Therefore, if a business trades internationally, they will not be relying on only one
market, which will decrease risk for the business. This is also important if there are
tax increases in one country or the economy is declining in one country as being in
multiple markets will help protect the business against the market fluctuating. As a
result of this, businesses who trade internationally are 12% more likely to survive
and excel than businesses that choose not to export, according to UK Trade and
Investment (UKTI) (ttc, 2020)
Another reason a business could decide to trade internationally is to extend the life
of the products or services that they offer. This is because, while products or
services might reach maturity in one market, if the business offers the existing
products or services in other international markets the product or service is likely to
be at an earlier stage within the product life cycle (for example, introduction or
growth), therefore more customers will have the opportunity to buy them which is
likely to increase sales of existing products and services. As a result of this, the
,business can still make profit and increase sales without having to spend time or
money on developing new products or services.
Another reason that a business could decide to trade internationally is this could help
inspire the business as to what products and services they should develop. As 48%
of businesses reported that foreign trade has increased their return on investment
from new products and services, dealing with different markets internationally could
lead to the development of different products and services being offered, than those
that would commonly do well in the UK market. (BusinessWest, 2016)
A final reason that a business might want to trade internationally is because this can
help them offer innovative products and services. This is because trading
internationally gives the business a wider range of customers to export their products
to, which will help the business gain a wider range of feedback about their products.
According to UK Trade and Investment statistics, 53% of businesses that the UKTI
spoke to said that a new product or service has evolved because of the business
trading internationally (ttc, 2020).
Businesses that trade internationally benefit the UK. More than half of the UK
economy’s growth is because of businesses that trade internationally by exporting
goods and services to other countries. (BusinessWest, 2016) For that reason,
businesses that trade internationally have a big impact on the UK economy’s growth,
which is beneficial for the UK as economic growth will result in employees in the UK
having higher incomes. Also, economic growth will enable UK consumers to be able
to purchase more goods and services and enjoy a better standard of living. Another
benefit that businesses that trade internationally have on the UK economy is that
there will be a lower unemployment rate as more businesses will be able to afford to
employ more workers. As well as this, an increase in economic growth from
businesses trading internationally will enable the government to spend more on
public services, such as education and health care which will improve the living
standards in the UK and could result in increased life expectancy. Businesses that
trade internationally will also benefit other businesses in the UK, as economic growth
will encourage other businesses to invest in order to meet future demand.
McDonald’s
McDonald’s is an American fast food multinational company, with the first
McDonald’s franchise being opened in 1955. (Business Insider, 2020) McDonald’s
first opened in the UK in October 1974. (McDonald’s, 2021) McDonald’s are a public
limited company as their shares are open to the public, which anyone can buy.
McDonald’s is the world’s largest restaurant chain by revenue and serves over 69
million customers daily in 118 countries, in their over 37,000 restaurants worldwide.
McDonald’s sells a selection of fast-food products, such as burgers, chicken
, nuggets, fries, salad as well as a breakfast menu in the mornings serving breakfast
rolls, pancakes and hashbrowns. (McDonald’s 2021)
McDonald’s purpose is to serve delicious food for their consumers, while offering
their products in convenient locations, with convenient opening hours and affordable
prices. As well as this, McDonald’s wants to offer food quickly, while giving
customers good choice and personalisation. (Corporate McDonald’s, 2019)
McDonald’s sells a selection of fast-food products, such as burgers, chicken
nuggets, fries, salad and a breakfast menu in the mornings. McDonald’s is in the
tertiary sector, as they provide a service to customers by advertising and selling
food. McDonald’s receives goods from over 1,500 farmers in the UK, such as getting
lettuce from lettuce farmers, and therefore McDonald’s do not manufacture their own
products. (McDonald’s, 2021) McDonald’s operates internationally, in around 118
countries with over 37,000 restaurants worldwide. McDonald’s has 1.7 million
employees worldwide and is the biggest fast-food chain in the world. (Business
Insider, 2020) The aims and objectives for McDonald’s is serving quality food that
McDonald’s customers love and trust. McDonald’s also wants to support franchisees
and employees by investing £43 million every year on training and development, and
offering clear career progression. Because of this, 9 out of 10 restaurant managers
and 1 in 5 franchisees started as restaurant crew members. McDonald’s also wants
to support the local community, by leading and supporting a range of community
activities, from litter picking to local football matches, as McDonald’s have supported
initiatives to encourage young people into football for over 10 years. (McDonald’s,
2021) McDonald’s has a divisional organisational structure. This is because the
business organisation is divided into departments that are given their own
responsibilities and objectives. For example, McDonald’s have their own legal
department, customer services department and franchising department (McDonald’s,
2021).
McDonald’s is an importer. This is because they import goods to make their
products, for example, a McDonald’s Big Mac in the UK could have travelled the
equivalent of 8,000 miles before reaching a customer’s plate in the UK (Daily Mail,
2018). While McDonald’s mainly use British ingredients, they have to import some
foods from other countries, such as the Big Mac’s onions from the US and dill pickles
from Turkey. McDonald’s imports their onions from the US as it claims there is no
European supplier that can meet McDonald’s demand for the particular type of onion
(McDonald’s, 2021). Furthermore, McDonald’s also sources some of their beef from
Ireland and sources lettuce from Spain when lettuce is not in season in the UK.
While all pork, eggs and milk come from UK farms, McDonald’s chicken is sourced
from all over Europe, with the UK being the second largest European chicken
supplier (McDonald’s 2021). When trading internationally McDonald’s needs to
consider the cultural difference between the country they are trading to, and any
legal and regulatory barriers that could prevent McDonald’s from being able to trade
with a country. McDonald’s needs to also make sure they have all the required
This report will be explaining about two businesses that operate in contrasting
sectors. The businesses that have been chosen are McDonald’s, which is a
multinational business, and Wilkin and Sons which is based in the UK but trades
internationally.
An international business is a business that exports their goods and services into two
or more countries. Businesses trade internationally for many reasons. One reason a
business trades internationally is to increase productivity. This is because
businesses that trade internationally are around 70% more productive than
businesses that do not trade internationally (ONS, 2018). As well as this, new
businesses that export become 34% more productive within the first year alone
(BusinessWest, 2016)
Businesses that trade internationally are more likely to survive and be successful.
This is because trading internationally gives businesses access to new markets and
more potential customers, which will increase the amount of products they sell and
profit the business makes. Furthermore, businesses that trade internationally spread
risk in multiple markets, as sales could be declining in some countries, but increasing
in other countries, which will help spread any loss that the business makes.
Therefore, if a business trades internationally, they will not be relying on only one
market, which will decrease risk for the business. This is also important if there are
tax increases in one country or the economy is declining in one country as being in
multiple markets will help protect the business against the market fluctuating. As a
result of this, businesses who trade internationally are 12% more likely to survive
and excel than businesses that choose not to export, according to UK Trade and
Investment (UKTI) (ttc, 2020)
Another reason a business could decide to trade internationally is to extend the life
of the products or services that they offer. This is because, while products or
services might reach maturity in one market, if the business offers the existing
products or services in other international markets the product or service is likely to
be at an earlier stage within the product life cycle (for example, introduction or
growth), therefore more customers will have the opportunity to buy them which is
likely to increase sales of existing products and services. As a result of this, the
,business can still make profit and increase sales without having to spend time or
money on developing new products or services.
Another reason that a business could decide to trade internationally is this could help
inspire the business as to what products and services they should develop. As 48%
of businesses reported that foreign trade has increased their return on investment
from new products and services, dealing with different markets internationally could
lead to the development of different products and services being offered, than those
that would commonly do well in the UK market. (BusinessWest, 2016)
A final reason that a business might want to trade internationally is because this can
help them offer innovative products and services. This is because trading
internationally gives the business a wider range of customers to export their products
to, which will help the business gain a wider range of feedback about their products.
According to UK Trade and Investment statistics, 53% of businesses that the UKTI
spoke to said that a new product or service has evolved because of the business
trading internationally (ttc, 2020).
Businesses that trade internationally benefit the UK. More than half of the UK
economy’s growth is because of businesses that trade internationally by exporting
goods and services to other countries. (BusinessWest, 2016) For that reason,
businesses that trade internationally have a big impact on the UK economy’s growth,
which is beneficial for the UK as economic growth will result in employees in the UK
having higher incomes. Also, economic growth will enable UK consumers to be able
to purchase more goods and services and enjoy a better standard of living. Another
benefit that businesses that trade internationally have on the UK economy is that
there will be a lower unemployment rate as more businesses will be able to afford to
employ more workers. As well as this, an increase in economic growth from
businesses trading internationally will enable the government to spend more on
public services, such as education and health care which will improve the living
standards in the UK and could result in increased life expectancy. Businesses that
trade internationally will also benefit other businesses in the UK, as economic growth
will encourage other businesses to invest in order to meet future demand.
McDonald’s
McDonald’s is an American fast food multinational company, with the first
McDonald’s franchise being opened in 1955. (Business Insider, 2020) McDonald’s
first opened in the UK in October 1974. (McDonald’s, 2021) McDonald’s are a public
limited company as their shares are open to the public, which anyone can buy.
McDonald’s is the world’s largest restaurant chain by revenue and serves over 69
million customers daily in 118 countries, in their over 37,000 restaurants worldwide.
McDonald’s sells a selection of fast-food products, such as burgers, chicken
, nuggets, fries, salad as well as a breakfast menu in the mornings serving breakfast
rolls, pancakes and hashbrowns. (McDonald’s 2021)
McDonald’s purpose is to serve delicious food for their consumers, while offering
their products in convenient locations, with convenient opening hours and affordable
prices. As well as this, McDonald’s wants to offer food quickly, while giving
customers good choice and personalisation. (Corporate McDonald’s, 2019)
McDonald’s sells a selection of fast-food products, such as burgers, chicken
nuggets, fries, salad and a breakfast menu in the mornings. McDonald’s is in the
tertiary sector, as they provide a service to customers by advertising and selling
food. McDonald’s receives goods from over 1,500 farmers in the UK, such as getting
lettuce from lettuce farmers, and therefore McDonald’s do not manufacture their own
products. (McDonald’s, 2021) McDonald’s operates internationally, in around 118
countries with over 37,000 restaurants worldwide. McDonald’s has 1.7 million
employees worldwide and is the biggest fast-food chain in the world. (Business
Insider, 2020) The aims and objectives for McDonald’s is serving quality food that
McDonald’s customers love and trust. McDonald’s also wants to support franchisees
and employees by investing £43 million every year on training and development, and
offering clear career progression. Because of this, 9 out of 10 restaurant managers
and 1 in 5 franchisees started as restaurant crew members. McDonald’s also wants
to support the local community, by leading and supporting a range of community
activities, from litter picking to local football matches, as McDonald’s have supported
initiatives to encourage young people into football for over 10 years. (McDonald’s,
2021) McDonald’s has a divisional organisational structure. This is because the
business organisation is divided into departments that are given their own
responsibilities and objectives. For example, McDonald’s have their own legal
department, customer services department and franchising department (McDonald’s,
2021).
McDonald’s is an importer. This is because they import goods to make their
products, for example, a McDonald’s Big Mac in the UK could have travelled the
equivalent of 8,000 miles before reaching a customer’s plate in the UK (Daily Mail,
2018). While McDonald’s mainly use British ingredients, they have to import some
foods from other countries, such as the Big Mac’s onions from the US and dill pickles
from Turkey. McDonald’s imports their onions from the US as it claims there is no
European supplier that can meet McDonald’s demand for the particular type of onion
(McDonald’s, 2021). Furthermore, McDonald’s also sources some of their beef from
Ireland and sources lettuce from Spain when lettuce is not in season in the UK.
While all pork, eggs and milk come from UK farms, McDonald’s chicken is sourced
from all over Europe, with the UK being the second largest European chicken
supplier (McDonald’s 2021). When trading internationally McDonald’s needs to
consider the cultural difference between the country they are trading to, and any
legal and regulatory barriers that could prevent McDonald’s from being able to trade
with a country. McDonald’s needs to also make sure they have all the required
