The support to contrasting businesses that operate internationally Essay
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M1 Analyse the support that is available to contrasting businesses that operate internationally. In this section of the report, I am going to be identifying and analyzing the support available for two contrasting businesses that operate internationally, after this I am going to be identifying the similarities and differences between these two. To start off with this assignment I am going to analyze the agencies that support international businesses, these include; UK Export Finance, UK Trade and Investment, Chamber of Commerce and finally Regional advisory organizations.
UK Export Finance
UK Export Finance is a community interest company that is run as a not-for-profit organization. It is supported by many different agencies including the Federation of small businesses, the Institute of export and the HSBC bank. The organization supports businesses going into export by providing training, practical information, webinars and different forums so that ideas can be shared.
UK Trade and Investment
UK Trade and Investment was formed in May 1999 as ‘British Trade International, comprising of two parts, trade partners in the UK for exports and Invest UK for forwarding investments. In October 2003 they merged together to become the UK Trade & Investment to simplify the outward recognition of the organization, and possibly to reduce confusion with the two departments. Its aim is to \”enhance the competitiveness of companies in Britain through overseas trade and investments, and attract a continuing high level of quality foreign direct investment\”.
Regional advisory organizations
Regional advisory organizations are very similar to the Local Chambers of Commerce that represent the UK as a whole, there are also local Chambers of Commerce that offer specific training and opportunities for the areas which they serve. Local enterprise partnerships are also available in each of the regional areas. Networking and support are on offer to help businesses from the regions to gain access to support and help fund through partnerships that are working to help increase the number of exports from the UK for those particular areas.
Chamber of commerce
The chamber of commerce has been operating has been offering support for businesses to trade internationally for over 150 years and they promote partnerships between organizations in different countries. The support offered aims to give practical and on the ground advice about how to work in different markets in the world. Businesses wishing to operate overseas can get access to specific support to operate in a particular country including; market information, various practical tips about how to trade in a country, building the share of a market in a particular country and regions.
Now I will compare how Jaguar Land Rover and Innocent Drinks may use any of these organizations. “Jaguar Land Rover became a Strategic Partner of COBCOE in 2013. COBCOE is the only pan-European British business network, and as Jaguar Land Rover is such a highly regarded and quintessentially British brand, this partnership has been mutually beneficial at both the regional and local level. In the course of researching the extent of involvement across the region, we found that the relationship between Jaguar Land Rover and each local British chamber is unique.” http://www.cobcoe.eu/files/jlr-showcase-v4-XC4hHq.pdf this report also told us that Jaguar Land Rover is 1 of 8000 members of the Council of British Chambers of Commerce in Europe. Whereas Innocent Drinks are not involved in this council and so do not reap the benefits of the council like Jaguar Land Rover do.
Jaguar Land Rover use UK export finance in order to expand their business when trading, “the company is planning a new factory in eastern Europe in order to challenge high-end competitors in Germany. In February, thousands of Jaguar Land Rover vehicles were recalled in the US over problems with brakes and lights. Expansion at the company has been attributed to the popularity of the Range Rover vehicles. It was reported last week that Poland, Slovakia, the Czech Republic and Hungary had been shortlisted as possible sites for a new production facility.” This news came after they recorded a 5% increase in pre-tax profits to £2.6bn meaning that they are one of the largest exporters in the UK. This export finance as proven very beneficial as it is now allowing them to expand their market and are now looking to open more plants within the EU in order to grow as a company.
Now in the second section of this report, I am going to be analyzing the types of support provided for various businesses when trading whether it be nationally or internationally. The first of the support providers that I am going to analyze is the UK Export Advisors, they are advisers who are allocated to help businesses with any things to do with exporting from the UK to various international countries.
Now I am going to look into Trade Fairs and how they provide support. Trade fairs vary from single focused fairs, such as Discover Columbia: Business opportunities for British Companies, to the international festival of business 2016 held in Liverpool. Trade fairs are also organized by trade associations and there are many different trade associations that can support the development of international trade. As an example, Associated Independent Stores is an association that works to help smaller retailers by combining expertise, knowledge and purchasing power.
Next, I am going to look into identifying international partners. Visiting various international countries is a way of becoming aware of the different opportunities that there are for businesses and allows them to identify the different international partners for businesses. There are various British embassies based in most international countries that are there to help support international trade with Britain, they are able to offer support and information to businesses about countries they may want to trade or work with.
Grants for international promotions
The final support that is provided that I am going to look at grants for international promotions. Grants are available for UK businesses to help them to start operating overseas. Examples of this are having a small business that may be wishing to grow via exporting overseas through the Growth Programme which aims to support new or existing businesses in rural areas.
Now I will compare how Jaguar Land Rover and Innocent Drinks may use any of these organizations. Grants for International Promotions is the support that Innocent Drinks use. This is best for them as since they have started to operate in Europe they have really struggled to make a profit, however with using this type of financial support it has allowed them to grow as a business whilst not having to worry as much about their finances when trading internationally as the grants that they get allow them to expand in their market, and it gives them more time to repay these grants. Jaguar Land Rover don’t use this as they benefit from help off of the Chamber of Commerce and so aren’t required to make grants as they are already a powerhouse in the business market anyway.
Innocent Drinks use international partners very well in order to help expand their business, recently Coca-Cola has taken a minority stake in the business. In an interview, they said, “They\’ve invested £30M for a stake of between 10% and 20%. We spoke to plenty of potential investors before we made a decision (over fifteen), and you\’d be surprised how many wanted to tell us what to do and to run innocent themselves, rather than allowing us to carry on doing what we do. And that\’s why we chose Coke – because of all the people we spoke to, they were the ones who guaranteed a hands-off approach; an approach that means that we continue to run innocent our way.” This shows that Coca-Cola is showing great faith in the business and will continue to work with them in order to help them grow as a business
Unit 5 Workbook – International Business