Arif Mohammad
Unit 5 – International Business
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
UNIT 5 –
INTERNATIONAL
BUSINESS
Unit 5 – Assignment 2
,Arif Mohammad
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
Contents
Explain the external factors that influence a selected business considering trading internationally.....2
Political..............................................................................................................................................2
Economical........................................................................................................................................4
Social..................................................................................................................................................7
Technological...................................................................................................................................11
Legal.................................................................................................................................................13
Environmental.................................................................................................................................15
Ethics...............................................................................................................................................18
Carry out a situational analysis on two countries a selected business may consider trading in..........20
Introduction.....................................................................................................................................20
5cs analysis for Greggs to operate in USA........................................................................................26
5cs analysis for Greggs to operate in China.....................................................................................29
Porters 5 forces for USA...................................................................................................................31
Porters 5 forces for China................................................................................................................33
Explain how business support enable a selected business to trade internationally............................34
Recommend one country a selected business could target for international trade, justifying your
decision................................................................................................................................................39
Explore the cultural differences affecting international businesses....................................................40
Analyse how cultural differences affect international business...........................................................48
Evaluate the impact of cultural differences on international business................................................55
Bibliography.........................................................................................................................................63
1
,Arif Mohammad
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
Explain the external factors that influence a selected
business considering trading internationally
Introduction
In this section I will be choosing the business of Greggs where I will conduct a PESTLE analysis and
how this influences this business to trade internationally. The PESTLE factors include political,
economic, social, technological, legal and environmental.
Political
A democratic country is where people can vote and have freedom to do anything in the country
whilst a communist country is authoritarian and the leader in the specific country will make all the
decisions where people will have to follow and do what they say. An example of a democratic
country includes the UK and the USA. Protectionist measures is defined as when a country puts in
restrictions that prevent other countries/businesses that want to trade with them. These include
tariffs, quotas and more.
https://www.investopedia.com/ask/answers/040115/which-countries-have-highest-tariffs.asp
This screenshot portrays some of the countries with the highest protectionist measures which tells
you that these countries want to protect their own domestic markets. This is important because
Palau has the highest tariff put in place which is about 118.2%.
Political means how much power the government has on your business. Tariffs are an important
factor for Greggs when they are trading internationally because countries place tariffs on goods
coming into a specific country which can be costly for a business-like Greggs to purchase goods from.
If Greggs wanted to trade internationally with other businesses and countries, they need to consider
the tariffs which are put in place and therefore this can cause the price of their goods to rise. This is
2
, Arif Mohammad
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
a drawback for Greggs because if their own products have increased then customers wouldn’t
purchase its products as they have increased in price, so demand is going to be low.
Furthermore, a tariff can benefit a country because they want to protect their own domestic
businesses as well as money will be generated towards the government. The EU and APEC can have
a political influence on Gregg’s trading with them because the EU has a movement of goods, labour
and services as well as a growth in GDP because there is a lot of access towards consumers. It’s
important to know the political viewpoint of each country you are trading with because for example
China and Cuba are known to be a communist country which tells you that they probably won’t
accept trade from a non-communist country because of their different viewpoint. For example, the
UK is known as a constitutional monarchy and the government helps Greggs by providing them with
grants if they are struggling.
However, because of the current situation we are in, the UK was part of a recession because of
Coronavirus so therefore unemployment was low, and the economy dropped. Therefore, the
government will encourage Greggs as a business to provide unemployment because many people
have lost their jobs, and this will help improve the economy and boost the economic cycle of where
the UK is in. Overall, it’s important to know the viewpoint of the government because it may spend
money on the public-sector or increase their spending on other types of investments.
3
Unit 5 – International Business
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
UNIT 5 –
INTERNATIONAL
BUSINESS
Unit 5 – Assignment 2
,Arif Mohammad
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
Contents
Explain the external factors that influence a selected business considering trading internationally.....2
Political..............................................................................................................................................2
Economical........................................................................................................................................4
Social..................................................................................................................................................7
Technological...................................................................................................................................11
Legal.................................................................................................................................................13
Environmental.................................................................................................................................15
Ethics...............................................................................................................................................18
Carry out a situational analysis on two countries a selected business may consider trading in..........20
Introduction.....................................................................................................................................20
5cs analysis for Greggs to operate in USA........................................................................................26
5cs analysis for Greggs to operate in China.....................................................................................29
Porters 5 forces for USA...................................................................................................................31
Porters 5 forces for China................................................................................................................33
Explain how business support enable a selected business to trade internationally............................34
Recommend one country a selected business could target for international trade, justifying your
decision................................................................................................................................................39
Explore the cultural differences affecting international businesses....................................................40
Analyse how cultural differences affect international business...........................................................48
Evaluate the impact of cultural differences on international business................................................55
Bibliography.........................................................................................................................................63
1
,Arif Mohammad
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
Explain the external factors that influence a selected
business considering trading internationally
Introduction
In this section I will be choosing the business of Greggs where I will conduct a PESTLE analysis and
how this influences this business to trade internationally. The PESTLE factors include political,
economic, social, technological, legal and environmental.
Political
A democratic country is where people can vote and have freedom to do anything in the country
whilst a communist country is authoritarian and the leader in the specific country will make all the
decisions where people will have to follow and do what they say. An example of a democratic
country includes the UK and the USA. Protectionist measures is defined as when a country puts in
restrictions that prevent other countries/businesses that want to trade with them. These include
tariffs, quotas and more.
https://www.investopedia.com/ask/answers/040115/which-countries-have-highest-tariffs.asp
This screenshot portrays some of the countries with the highest protectionist measures which tells
you that these countries want to protect their own domestic markets. This is important because
Palau has the highest tariff put in place which is about 118.2%.
Political means how much power the government has on your business. Tariffs are an important
factor for Greggs when they are trading internationally because countries place tariffs on goods
coming into a specific country which can be costly for a business-like Greggs to purchase goods from.
If Greggs wanted to trade internationally with other businesses and countries, they need to consider
the tariffs which are put in place and therefore this can cause the price of their goods to rise. This is
2
, Arif Mohammad
Unit 5 – External Factors and Cultural Differences
Learning Aim C: Investigate the external factors that influence international businesses
Learning Aim D: Investigate the cultural factors that influence international business
a drawback for Greggs because if their own products have increased then customers wouldn’t
purchase its products as they have increased in price, so demand is going to be low.
Furthermore, a tariff can benefit a country because they want to protect their own domestic
businesses as well as money will be generated towards the government. The EU and APEC can have
a political influence on Gregg’s trading with them because the EU has a movement of goods, labour
and services as well as a growth in GDP because there is a lot of access towards consumers. It’s
important to know the political viewpoint of each country you are trading with because for example
China and Cuba are known to be a communist country which tells you that they probably won’t
accept trade from a non-communist country because of their different viewpoint. For example, the
UK is known as a constitutional monarchy and the government helps Greggs by providing them with
grants if they are struggling.
However, because of the current situation we are in, the UK was part of a recession because of
Coronavirus so therefore unemployment was low, and the economy dropped. Therefore, the
government will encourage Greggs as a business to provide unemployment because many people
have lost their jobs, and this will help improve the economy and boost the economic cycle of where
the UK is in. Overall, it’s important to know the viewpoint of the government because it may spend
money on the public-sector or increase their spending on other types of investments.
3
