Business Environment - Assignment



Business Environment - Assignment

Significance of International Trade to UK business

International trade is referred to as the exchange of goods, services and capital across the globe. International trade has opened gates to adequate utilization of resources, access to excessive resources, promotes imports of products that could not be produced in local country, and increases the variety of products to choose from for consumers. However, there are some disadvantages of international trade as well such as increase in unemployment in local country, and higher reliability on international market. The significance of international trade to the organizations operating in UK like that of Marks and Sponsors comes from the concept of competitive advantage. As per the core concept of trade, the trade between two countries takes place as a result of existence of mutual benefits. Every country must have competitive advantage in trading goods with another country (Afonso, 2001, pp. 2-44).

Marks and Spenser's can benefit from lower cost of production in developing companies as a result of competitive advantage. It has been a normal practice for MNC to carry forward manufacturing operations in developed nations, where cost of factors of production is lower than that of UK or European countries. The labor is very cheap in countries like china, Indonesia, India and Korea etc. The European countries and UK have also restricted the imports from developing countries because it has a higher tendency of attracting consumers to purchase similar products at lower cost.

International trade has crucial benefits for UK business sector due to which UK may increase the growth of trade by 60% in the next 15 years from now. The international trade has provided free access to the organization to expand its operations across the globe. WTO also promotes international trade and has implemented a set of standards and policies that restrict all the possible activities of an organization that affects the competitiveness in the market. Therefore, international trade is helpful in combating fierce competition in local market and makes market a more competitive place.

Impact of global factors on UK business

There are some global factors that affect the international business of M&S. These factors include social, technological, political and economic.

Technological Factors

Technology is one of the critical and crucial factors that significantly affect the company's international retailing strategy. The technical alterations in a country provide the MNC to adapt to new technology and innovation. Any positive change ...