BTEC International Level 3 Business Unit: 5 International Business Assignment Answers Sample

BTEC Level 3 Business Unit 5 Introduction

For any type of business organisation impact of globalisation is one of the biggest challenges they have to face if they want to stay competitive in the market. To overcome this challenge, one needs to develop creative strategies that enable businesses to capture the rewards of operating in the global economy while managing the risks that arise in international business. 
 
This unit will aim to make students learn how to evaluate how effective those strategies are when implemented by international businesses. This unit will also discuss how you can build these strategies after going through all the risks that are associated with international business. 
 
Note: Make sure that you are using this sample for learning purposes only; do not make the mistake of copying the exact information from this sample to your assignment. It will get caught in plagiarism, which will result in failure. You can use this for judging the writing style of our writers, and for learning how you need to write the answers in your BTEC assignment. If you want to look for another sample, you can visit our website, where you can get a free list of BTEC level 3 Business assignment examples. And no matter how short the deadline is or how stressed you are, never copy this information. You can get help from our BTEC assignment helpers, who can provide you with your assignment on time and at affordable prices. 

Learning Aim A – Examine the influences on the growth of globalisation.

• Give a presentation on the features and benefits of international trade. This could be followed with a class discussion. 
• Learners work in small groups to make an informational leaflet explaining the benefits of international trade to a given audience. 
• Give a presentation on the factors that influence globalisation and the influence of business organisations on the global economy. 
• Learners could then work in pairs to look at data related to the scope and scale of international trading activities. They could design a data sheet to identify the main exports and exports by volume, value and type, as well as identifying main trading partners by country and region. 
• Use the outcome of the previous data sheet activity to discuss with learners the degree to which the local economy mirrors the national picture. Discuss the associated trends in the local economy that have been influenced by international business. You could invite a local business leader with experience in international business to talk to learners about their business. Alternatively, a local elected official could give learners an insight into the wider business implications of international business for the local economy. 
• Learners could write a short case study on a specific international business, which investigates the range of international markets in which business organisations may operate. 
• Extend learning by asking learners to write a short informative article on how and why international business is concerned with small and medium-sized enterprises (SMEs) as well as very large and complex business organisations. 
• Using case study materials about a small or medium-sized enterprise, learners undertake a comparative study in which they compare the international activities of this business with those of a multinational company. 
• Lead a discussion on the opportunities afforded by globalisation to small and medium- sized enterprises.
• In small groups, learners research the role of technology in opening up opportunities for international business, then present their findings to the class. 
• Extend learning by asking learners to write a short report reviewing the influences that have led to the development of international businesses within the global economy. This should include the range of agencies which serve to support the interests of international businesses and government support.
• Ensure that all learners are prepared for assessment before handing out the assignment brief for learning aim A.

A1 Globalisation

Answer: 

The term globalisation refers to the process through which countries, companies, and individuals worldwide become more interconnected. This occurs as a result of international trade, communication, technology and transportation. Due to globalisation, companies are able to purchase and sell products and services across national borders with ease.

Globalisation enables organisations to conduct business in not just one nation, seek new consumers, and minimise expenditure, besides reaching new markets. It also enables individuals to have access to products, services, and ideas from other regions of the world. As an illustration, a UK company may produce goods in Asia and market them to customers in Europe or America.

Altogether, globalisation has led to the growth of economies, the strengthening of international relations, and the establishment of international business as a significant aspect of the present-day world.

A2 Factors influencing globalisation

Answer: 

Globalisation has grown over time due to several reasons. Technology is among the key factors. The internet, mobile communication, and digital platforms have also improved and made communication and trade between businesses and customers, as well as suppliers located all over the world, easier. Technology has also contributed towards making companies more efficient in handling international operations.

The other factor that is significant is the fact that transportation is better. The increased speed and reduced cost of transporting goods have facilitated the movement of goods across countries faster and at a lower cost, such as container shipping and air freight. This has minimised delivery time and cost, which has encouraged businesses to do international trade.

Globalisation has also been affected by trade liberalisation. Most states have lowered trade barriers, including tariffs and quotas, and international trade agreements have been signed. This has facilitated the importation and exportation of goods and services by the businesses at a cheaper cost.

Another important factor is the expansion of multinational companies (MNCs). Big organisations will be involved in business in two or more countries to extend to new markets, lower the cost of production and maximise profits. These firms contribute significantly to the growth of trade and investment across the world.

Lastly, globalisation has been affected by consumer demand. Customers have shifted and demand a greater variety of products at attractive prices, including those from other countries. In order to respond to this need, corporations spread to foreign countries.

All in all, these have contributed in unison to the rise in global interactions and the expansion of globalisation.

Learning aim B – Explore the structure of the global economy.

• This learning aim requires learners to review, analyse and evaluate data and information drawn from a variety of sources to identify those factors that promote the development of globalisation and those that serve to restrict the growth of international business. 
• Give a presentation that illustrates the different types of international trading associations and trading arrangements that exist in different regions of the global economy, paying attention to their similarities and unique features. Lead a discussion that focuses on the role and influence of those trading blocs and associations that directly impact directly on businesses in their own country. 
• Organise a class debate on the advantages and disadvantages of a business operating in a country that belongs to an international trading association.
• Give a presentation on the methods of financing international trade, the agencies involved in supporting businesses that are engaged in, or who wish to commence, international business operations, and the government support available. 
• Ask learners to research how the business organisations have been supported by various agencies and the government, and the payment methods that are available to them. Learners then discuss their findings with the class. Case study materials may be used. 
• Give a presentation on the barriers to international business. Lead a discussion on the factors that have an impact on the growth of international business, giving appropriate examples.
• Ask learners to work in pairs to research how countries construct barriers to international trade and prepare an article for a business magazine on the economic and business case for erecting such barriers. 
• Extend learning by asking learners to write a short comparative study of these barriers to international trade, exploring their own national economy and the existing barriers to imports, then comparing this with another country.
• Give a presentation on the impact of exchange rates and foreign currency fluctuations. 
• Ask learners to track international currency movements over a given period. They should record the changes in price of specific exported goods and imported supplies and the impact of these changes on identified businesses. 
• Extend learning by asking learners to track the share price of individual international businesses based in the national economy. They could then write a short report that analyses currency movements against the share price and draws appropriate conclusions regarding the relationship between these two economic variables.

B1 International trading associations

Answer: 

The international trading associations are the organisations or agreements between country groups that are created to promote and facilitate trade between them. These associations are designed to ease trade barriers, enhance cooperation and ease with which businesses trade across borders. The co-operation will help the member countries to enjoy the benefits of more trade, economic growth, and political relations.
 
A trade bloc is one of the popular forms of international trading associations. Trade blocs enable the member nations to trade without as many restrictions like reduced tariffs or even zero tariffs. The international trading associations may be the European Union (EU), the United States-Mexico-Canada Agreement (USMCA), ASEAN, and the SAFTA. These associations have various regions, and their rules vary, though all are meant to promote international trade.
 
Both international trade associations are useful in assisting businesses as they establish a stable trading rule, enhance market access, and lessen uncertainty. This eases the planning, investment, and expansion of businesses into international markets. But the associations can also be a problem for non-member countries, since they might have more problems in terms of trade barriers.
 
In general, the international trading associations are significant in the development of the global economy and the way businesses are conducted internationally.

B2 The finance of international trade

Answer: 

Finance of international trade can be defined as the various methods used by businesses in paying for goods and services when they engage in international trade. International trade is risky, involving long distances and the use of other currencies; hence, businesses require secure and trustworthy payment and financing systems.

Letters of credit are also one of the common ways of financing international trade. The bank issues a letter of credit, which assures the payment of the seller on the fulfilment of the terms agreed upon. This eliminates the risk to the buyers and sellers. The other method is the bank transfers, where the amount is transmitted by the bank of the buyer to the bank of the seller. They also use open account trading, whereby goods are delivered even before payment has been done but this is riskier to the seller.

Trade finance that can assist businesses in supporting cash flow would be in the form of export credit, loans, and overdrafts. These financial solutions assist companies in managing expenses associated with production, shipping and insurance prior to getting payment. Insurance, in other cases, is a means of insuring businesses against non-payment or political risks.

International trade is also supported by governments and financial institutions. Export credit agencies, banks, and trade support organisations are agencies that fund, give advice and offer guarantees to businesses that are engaged in international trade.

All in all, international trade requires proper financing because it assists companies in dealing with risk, cash flow, and trading in foreign markets without fear.

B3 Barriers to international business

Answer: 

International business barriers are the factors that make international trade hard or costly for businesses. These obstacles may retard or inhibit the development of global trade and globalisation.

Trade restrictions, including tariffs and quotas, can be regarded as one of the primary obstacles. T tariffs refer to levies imposed on imported products, and this raises the prices of businesses and consumers. Quotas restrict imports of goods, which decreases the accessibility of foreign businesses to markets.

Another obstacle is legal and regulatory differences. There are laws, regulations and standards of products, employment and safety in each country. The requirements may require the businesses to change, thereby adding more costs and time

Barriers may also be cultural and language differences. The language, business and consumer preferences may create a gap in understanding and influence marketing and communication. Companies should make their products and strategies adaptable to the local cultures.

International business could be thwarted by political instability and government policies. Government change, conflict, or stringent regulations may make business activities within the international sphere more risky.

Lastly, it is economic barriers like exchange rate fluctuations that may affect international trade. The fluctuation in the value of currency may increase the cost of imports or decrease the export earnings.

All in all, the existence of these barriers poses difficulties to businesses that engage in international trade, and international business could be restricted.

B4 Exchange rates

Answer: 

Exchange rates can be defined as the worth of the currency of a country in relation to that of another country. The exchange rates are significant in any international business since it influences the prices of imports and exports and may affect the profitability of the business.

Imports are cheaper when the currency of a nation is strong, since the businesses can purchase imported goods at a lower price. Nonetheless, foreign consumers are faced with the increased cost of imports that can decrease demand. Conversely, the weak currency makes exports cheaper and more appealing to foreign buyers, but expensive imports.

Fluctuations in exchange rates may bring uncertainties to international trade businesses. Unexpected fluctuations in the value of currency may raise the costs, lower the profit margins, or cause losses. As an illustration, when a business contracts to sell goods at a specific price and the exchange rate fluctuates, the business will get lower amounts of money after swapping the foreign currency.

The business can also hedge by employing forward contracts to secure exchange rates in order to manage such risks. The banks and financial institutions also assist businesses in dealing with currency risks.

On the whole, the exchange rates are important in international business in that they determine pricing, competitiveness, and profitability in international markets.

Learning aim C – Examine strategic and operational approaches to developing international business.

• This learning aim allows learners to apply their knowledge and understanding of business drawn from other units to analyse the external international business environment using a variety of business models. 
• Give a presentation on the strategic aims and objectives, including factors that can determine business, strategic aims, strategic direction and strategies for operating internationally. Give examples of strategies with reference to business organisations that are familiar to learners. 
• Learners could use this knowledge to investigate the benefits and drawbacks of the variety of strategies you have identified. Extend learning by asking learners to undertake an in-depth study evaluating one type of strategy for operating internationally. This could focus on franchising, since a number of international businesses with which learners are familiar are likely to be based on franchising. 
• Lead a discussion on the external business environment and the factors that influence different types of businesses engaged in international business. Discuss the reasons for analysing the external business environment. 
• Extend learning by asking learners to write a short report on why some features in the external environment will be more important to some businesses than others. This will help learners to understand the approach to analysing business data and information drawn from an external analysis of the business environment. 
• Recap the methods used by businesses to analyse their external business environment (previously covered in Unit 1: Exploring Business).
• Ask learners to conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) and a STEEPLE analysis (Social and cultural, Technological, Economic, Environmental, Political, Legal and regulatory, Ethical) on a specific international business. Provide case study materials on chosen businesses to ensure that the importance of different elements within the analysis is covered. 
• Give a presentation on the operational implications of trading internationally, introducing some of the strategies that well-known businesses have implemented to address challenges from the external business environment. 
• Lead a discussion on the factors to take into account when implementing an international business strategy. Discuss the reasons why businesses have re-engineered their products and services to meet the demands and preferences of international markets.
• Extend learning by asking learners to write a case study on a local business, analysing how and why they have re-engineered their products and services to meet the demands and preferences of international markets. 
• Ensure that all learners are prepared for assessment before handing out the assignment brief for learning aims B and C.

C1 Strategic aims and objectives

Answer: 

Long-term goals desired by a business are the strategic aims and objectives. In the case of a business that is internationally based, its strategic goals and objectives aim at expansion, competitiveness and achieving success in foreign markets.

Market expansion is one of the strategic goals of global companies. Companies venture into international markets in order to access a greater number of customers and make more sales. The other objective is profit expansion, since the presence in several countries may enable businesses to gain revenue and reduce reliance on a single market.

Business firms also seek to save on expenses by acquiring raw materials or producing a product in a country where labour or the cost of production is cheaper. Increasing brand and international awareness is also another key objective, where global operations will enable businesses to establish a strong international brand.

These aims are supported by strategic objectives, which are more specific and measurable. As an illustration, a company can make a goal to sell in a particular number of countries within a period of time or to sell in a particular percentage internationally.

All in all, strategic goals and objectives assist international business plan their course as well as make better decisions and stay competitive in the international economy.

C2 External influences

Answer: 

External influences refer to those things that are beyond the control of a business and which may influence the way a business is run, particularly in the international market. The influences may present opportunities or challenges to businesses that trade internationally.

Political factors are one of the significant external factors. The international business operations may be influenced by government policies, trade regulations and political stability. As an illustration, alteration of trade regulations or tariffs may reduce costs or restrict access to the markets.

There are also economic forces that affect international businesses. Demand, pricing, and profits may be influenced by exchange rates, inflation, and economic growth. A poor economy can decrease consumer expenditure, whereas a good economy can create more business.

In international business, social and cultural factors are significant. The language, customs, values, and consumer preferences may be different, and this makes a difference to the marketing strategies and the product design. Companies usually have to differentiate their products to fit local culture.

Technological reasons determine the business communication, production, and sale of products across the world. The technological innovation has enabled global trade to be quicker and more efficient.

International businesses are also affected by legal and environmental factors. Various nations have varying legislations with regard to employment, safety and environmental conservation, which should be observed by businesses.

Generally, being aware of external factors assists a business in mitigating the risks, changing its approach and performing excellently in the foreign market.

C3 Operational implications

Answer: 

The changes and the challenges that a business encounters when it operates abroad are known as operational implications. When an organisation enters the international markets, it has to adjust its daily operations to cope with the new countries, systems and the needs of the customers.

Supply chain management is one of the implications of its operations. Global companies usually obtain inputs in other countries, and this may create delays in transportation time and expenses. The company has to deal with logistics, delivery, and warehouses in order to prevent delays.

The other implication is human resources management. Companies might be forced to employ locals or to work with a multinational team. This necessitates the knowledge of local labour laws, working practices, and cultural differences.

Another implication is operational, which is product adaptation. Depending on the local regulations and consumer preferences in each country, businesses might have to alter the product features, packaging, or branding to comply with the local market regulations.

The operations are influenced by legal and regulatory compliance. Local legislation regarding taxation, employment, health and safety and environmental regulations may complicate the business operations.

Lastly, time zone differences and language barriers may be a challenge to communication and coordination. International business frequently involves the use of technology by businesses to help them cope with operations in foreign countries.

Generally, global operations add complexity to the operations, but through proper planning and dealing, business entities can manage to surmount all these challenges.

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