Tran
Nation Corporation is a business that operates in many countries, they are a
lot wealthier than less developed countries. These business can generate jobs
to improve a countries economy but it is a risk that they may exploit people by
low wages and wreck the environment. Some TNCs you may know is
Cadbury-Schweppes. (bbc, 2019)
UK
SMEs are able to take advantage of international opportunities through
identifying how internationally expanding can help the business in the long
term scale, technology business can easily make a presence in foreign markets
because of the product and service they have to offer and it may be a more cost
effective process. They must understand the market they are wishing to enter,
and whether or not they need to consider a new market strategy. SMEs can seek
advice on what opportunities are available to them and how they can do this. Another
international opportunity SMEs can take advantage of is partnerships with
international business, this allows the business to reach their target market
and make consumers aware of the service or product they are offering. (international
directors, 2019)
Trading
agreements improve productivity and growth as they create jobs and give
businesses the opportunity to enter new markets and new revenues. Regional Trade
Agreements have rose from 70 to 300 since 1990, this strengthens a change to
better intra-regional trade, with majority of the fast growth emerging market
economies globally. The WTO allows trade blocs, only if the outcome is reduced
protection against foreign countries that were about before trade blocs were
created. Some of these include the North American Free Trade Agreement with
U.S., Canada and Mexico, the Trans-Pacific Partnership which is the contract
exchanged amid with Australia, Canada, Singapore, U.S, New Zealand and many
more countries. (tutor2u, 2019)
The
advantages of trading blocs is that it increases specialisation and trade in
the bloc, there are more potential markets and revenues for business, bigger
markets lead to larger businesses and economies of scale that reduce prices for
consumers, and gives the consumers more choice through increased trade. (McEvoy,
j, 2019)
Trading
blocs support globalisation by making worldwide discussions easier. For
example, in the case of trade negotiations. The EU will discuss as a
single trading bloc so it is less hassle to push through practices which rise free
trade. Trading blocs generate growth through removing tariffs which reduces
prices for the customers and gives better opportunities to the exporters and
they also increase trade which gives them the advantages of economies of scale
which is another important factor in generating growth, they also give SMEs a
better position in global trade agreements and increases competition. (economicshelp,
2019)
There
are a wide range of barriers SMEs can face when expanding internationally such
as language barriers, regulatory issues, costs and local competition. SMEs can overcome language barriers through
researching into the countries language and cultural differences, and ensure
they have staff who can adapt well to the changes, they may employee new staff
from that country or get current staff trained so that they have the knowledge
they need to operate in an international country. SMEs can overcome regulatory
and legal issues through doing excessive research into what permits, licences
and documentation they need to operate in a foreign country. They may learn the
new tax codes, packaging standards and regulations. They can overcome the local
competition barrier by finding their unique selling point and identifying what
makes them stand out against other products and services in the same field, SMEs
have to work harder than bigger companies to convince new markets that they are
a brand that can be relied on and can bring something better to the consumer. (businessnewsdaily,
2019)
SMEs
can overcome the barrier of supply chain risks through developing a business
plan and an appropriate budget, as if they don’t conduct the necessary research
it could result in them overstocking or understocking on their products which
could result in them losing out on profit and spending more expenses. Another barrier is the risks of hiring staff,
this can be overcome this by ensuring the product is ready and stands out
amongst competitors so they therefore need a good team to ensure this, they can
gather a good time by hiring internally in the business with staff members they
know and trust or hiring new staff that specialise in certain fields and have a
lot to offer. (tradegecko,2019)
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