Business Focus
This report will highlight the best practice within international businesses, analysing the
barriers to operating internationally for Morrisons (as an Importing Business) and Aston
Martin (as Multinational Enterprise) and the support available for these different
businesses. Additionally, the report will contain an evaluation of the impact of globalisation
on Aston Martin over the last 5-10 years.
M2. Barriers to operating internationally for Morrisons
and Aston Martin
There are a number of different barriers facing businesses that choose to operate
internationally including: Trading Blocs, Protectionism, Finance, Language barriers,
Communication, Recruiting labour, Changing exchange rates etc.
One of the main barriers that Morrisons and Aston Martin are facing is Trading Blocs,
because they protect their members from the imports of non-members. Although Trading
Blocs favours trade between countries that are members of the same trading bloc (no
tariffs, less costs, economies of scale, comparative advantage, efficiency etc.), they make it
difficult to trade with countries outside the trading bloc, being more expensive.
Brexit has been a real challenge for Morrisons and Aston Martin as well as other British
businesses operating internationally. The United Kingdom became a third party for the
countries from the EU (the 1st of January 2021) and no charges will be levied on the
movement of goods originating in the European Union or the United Kingdom, but the
additional authorization will be required and the goods will cross the border between the
European Union and the United Kingdom represented by France, the Netherlands, Belgium
and Spain. If an agreement had not been reached between the UK and European Union, the
trade would have severely affected with more costs, tariffs, customs duties etc.
Additionally, Protectionism methods (Import Tariff, Quota, Embargo, Import licence,
Subsidies) are intended to reduce the amount of imports, being considered a barrier to
international trade. Although these methods bring benefits to the domestic producers (the
foreign competition decreases that allow domestic businesses to extend, to have more
customers/sales/profit and contributing to the improvements for the domestic market and
national economy), they reduce the international trade, having effects such as: increasing
costs that may lead to decreasing the amount of profit for the Morrisons and Aston Martin;
affecting the productivity and profitability of the businesses; a lack of certain products of the
market; reducing the customers’ choices etc.
Changing exchange rates influences prices in international trade, especially when there is a
sharp rise of fall. Influencing the sales and the costs, the exchange rates affect the profit of
Morrison and Aston Martin. Morrisons is an importing business, a Pound appreciated
against the Euro brings several benefits to the company. A strong Pound Sterling will lead to
1
, less costs for company when importing products from Italy, for example. Instead, a weaker
Pound may affect their profits, because Morrisons will buy a small amount of products with
the same sum of money, being more expensive to import products. For Aston Martin, one
Sterling Pound stronger against the Dollar will make the Aston Martin cars less accessible for
customers from the US, decreasing demand. On the other hand, importing raw materials
from the US would be cheaper, buying more with the same amount of money. With the
depreciation of the pound, prices of the cars will be lower for customers in the US, but if
they import raw material, it will be more expensive. In this case, the business will have to
make decisions: they will maintain the price in the hope that demand will be higher and will
make profit or they will change the prices depending on the exchange rates.
Cultural and language barriers affect the international businesses. They are key factors in
the success of international agreements, causing great financial losses when not overcome
by the parties involved. For Morrisons and Aston Martin is important to consider what
languages are spoken in the countries with which they are trading, as well as their culture.
For example, Aston Martin needs to ensure that the messages of their products are
translated well in other languages and are suitable for the culture existing there.
Interpreters could be a real help for the businesses in order to facilitate communication and
to operate smoothly. It is important to understand the culture from a country with which
Morrisons and Aston Martin are trade partners, because there are different traditions,
habits, social norms that are very important for certain countries and their non-compliance
may lead to deterioration of trade relations. For example, an absolutely normal gesture in
the UK (shaking hands) before a business meeting can be considered offensive in an Asian
country where people tend not to touch each other.
All these barriers will affect both Morrisons and Aston Martin, but the impact can be quite
different, because the businesses operate in different sectors (retail and car manufacturing).
For example, a Quota introduced by the Government will make Morrisons to look for
domestic suppliers that could help them to meet the demand. It is not very difficult, but also
not easy to find local businesses from where you can buy the same products with those
imported from other countries, but most of the time it is not impossible. For example, if
Morrisons can no longer import wines from French, they will look for domestic producers
that can help them to meet the customers’ needs and wants. However, these domestic
products could be more expensive or they may not have the same quality and the
customers will not want to buy them, this fact will have a major impact on Morrisons,
decreasing their sales and profit. On the other hand, a Quota for raw materials imported by
Aston Martin from Germany would be a real issue for the business. Unlike Morrisons, for
Aston Martin will be much more difficult to find a new supplier, especially when Germany is
the only country that could provide different parts for the cars’ construction. Aston Martin
might be even forced to move its factories in another country, because the production
would be impossible without the German parts.
The cultural and language barriers is other type of barriers that could affect Morrisons and
Aston Martin in different ways. Although the language will be a very important aspect for
2
This report will highlight the best practice within international businesses, analysing the
barriers to operating internationally for Morrisons (as an Importing Business) and Aston
Martin (as Multinational Enterprise) and the support available for these different
businesses. Additionally, the report will contain an evaluation of the impact of globalisation
on Aston Martin over the last 5-10 years.
M2. Barriers to operating internationally for Morrisons
and Aston Martin
There are a number of different barriers facing businesses that choose to operate
internationally including: Trading Blocs, Protectionism, Finance, Language barriers,
Communication, Recruiting labour, Changing exchange rates etc.
One of the main barriers that Morrisons and Aston Martin are facing is Trading Blocs,
because they protect their members from the imports of non-members. Although Trading
Blocs favours trade between countries that are members of the same trading bloc (no
tariffs, less costs, economies of scale, comparative advantage, efficiency etc.), they make it
difficult to trade with countries outside the trading bloc, being more expensive.
Brexit has been a real challenge for Morrisons and Aston Martin as well as other British
businesses operating internationally. The United Kingdom became a third party for the
countries from the EU (the 1st of January 2021) and no charges will be levied on the
movement of goods originating in the European Union or the United Kingdom, but the
additional authorization will be required and the goods will cross the border between the
European Union and the United Kingdom represented by France, the Netherlands, Belgium
and Spain. If an agreement had not been reached between the UK and European Union, the
trade would have severely affected with more costs, tariffs, customs duties etc.
Additionally, Protectionism methods (Import Tariff, Quota, Embargo, Import licence,
Subsidies) are intended to reduce the amount of imports, being considered a barrier to
international trade. Although these methods bring benefits to the domestic producers (the
foreign competition decreases that allow domestic businesses to extend, to have more
customers/sales/profit and contributing to the improvements for the domestic market and
national economy), they reduce the international trade, having effects such as: increasing
costs that may lead to decreasing the amount of profit for the Morrisons and Aston Martin;
affecting the productivity and profitability of the businesses; a lack of certain products of the
market; reducing the customers’ choices etc.
Changing exchange rates influences prices in international trade, especially when there is a
sharp rise of fall. Influencing the sales and the costs, the exchange rates affect the profit of
Morrison and Aston Martin. Morrisons is an importing business, a Pound appreciated
against the Euro brings several benefits to the company. A strong Pound Sterling will lead to
1
, less costs for company when importing products from Italy, for example. Instead, a weaker
Pound may affect their profits, because Morrisons will buy a small amount of products with
the same sum of money, being more expensive to import products. For Aston Martin, one
Sterling Pound stronger against the Dollar will make the Aston Martin cars less accessible for
customers from the US, decreasing demand. On the other hand, importing raw materials
from the US would be cheaper, buying more with the same amount of money. With the
depreciation of the pound, prices of the cars will be lower for customers in the US, but if
they import raw material, it will be more expensive. In this case, the business will have to
make decisions: they will maintain the price in the hope that demand will be higher and will
make profit or they will change the prices depending on the exchange rates.
Cultural and language barriers affect the international businesses. They are key factors in
the success of international agreements, causing great financial losses when not overcome
by the parties involved. For Morrisons and Aston Martin is important to consider what
languages are spoken in the countries with which they are trading, as well as their culture.
For example, Aston Martin needs to ensure that the messages of their products are
translated well in other languages and are suitable for the culture existing there.
Interpreters could be a real help for the businesses in order to facilitate communication and
to operate smoothly. It is important to understand the culture from a country with which
Morrisons and Aston Martin are trade partners, because there are different traditions,
habits, social norms that are very important for certain countries and their non-compliance
may lead to deterioration of trade relations. For example, an absolutely normal gesture in
the UK (shaking hands) before a business meeting can be considered offensive in an Asian
country where people tend not to touch each other.
All these barriers will affect both Morrisons and Aston Martin, but the impact can be quite
different, because the businesses operate in different sectors (retail and car manufacturing).
For example, a Quota introduced by the Government will make Morrisons to look for
domestic suppliers that could help them to meet the demand. It is not very difficult, but also
not easy to find local businesses from where you can buy the same products with those
imported from other countries, but most of the time it is not impossible. For example, if
Morrisons can no longer import wines from French, they will look for domestic producers
that can help them to meet the customers’ needs and wants. However, these domestic
products could be more expensive or they may not have the same quality and the
customers will not want to buy them, this fact will have a major impact on Morrisons,
decreasing their sales and profit. On the other hand, a Quota for raw materials imported by
Aston Martin from Germany would be a real issue for the business. Unlike Morrisons, for
Aston Martin will be much more difficult to find a new supplier, especially when Germany is
the only country that could provide different parts for the cars’ construction. Aston Martin
might be even forced to move its factories in another country, because the production
would be impossible without the German parts.
The cultural and language barriers is other type of barriers that could affect Morrisons and
Aston Martin in different ways. Although the language will be a very important aspect for
2
