Code (Rab Deepak friend 25oct) (1)

docx

School

Ohio State University *

*We aren’t endorsed by this school

Course

ETWGSD

Subject

Business

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by EarlLightning5452

BMS0076 The Context of International Business Individual Coursework 1

Table of Contents Q1 ................................................................................................................................................................ 3 I NTRODUCTION ..................................................................................................................................................... 3 B ENEFITS ............................................................................................................................................................. 3 D RAWBACKS ......................................................................................................................................................... 4 C ONCLUSION ........................................................................................................................................................ 5 Q2 ................................................................................................................................................................ 5 I NTRODUCTION ..................................................................................................................................................... 5 OLI F RAMEWORK .................................................................................................................................................. 6 O WNERSHIP A DVANTAGE ........................................................................................................................................ 6 L OCATION A DVANTAGE ........................................................................................................................................... 7 I NTERNALIZATION A DVANTAGE ................................................................................................................................. 7 C ONCLUSION ........................................................................................................................................................ 8 REFERENCES ................................................................................................................................................. 9 2

Q1 Introduction Trade agreements are contracts about operations and economic ties that are made between two nations (Mattoo, Rocha, & Ruta, 2020). Trade agreements may be international or bilateral. A nation will confer with its citizens to determine any market gaps and trade agreements that currently exist but could use some modification before signing a new one. Since leaving the European Union, the UK has negotiated several trade deals with various nations. Among them are the following: the Comprehensive Economic Partnership Agreement with Japan (GOV. UK, 2022) and the Agreement with Australia of December 16, 2021; the UK-Australia Free Trade Agreement; the UK-New Zealand Free Trade Agreement; and the ESA – UK Economic Partnership Agreement. The UK government is now negotiating potential trade agreements with the Gulf Cooperation Council, India, Mexico, and Canada (GOV. UK, 2022). The purpose of the essay is to examine the value of global trade by establishing trade agreements with the UK. Furthermore, it will draw attention to any possible drawbacks that can result from trade deals with foreign nations. Benefits The rules and regulations governing the purchase and sale of products and services between the UK and other nations will be established with the assistance of trade agreements with other nations. Trade agreements will facilitate the easing of export limitations for the UK, resulting in easier and more affordable trade (Garcia, 2023). The advantages that the UK government and companies stand to gain by signing new trade agreements with various nations are outlined in the section that follows: Businesses in the UK, whether big or small, can increase their trading prospects in overseas markets by exporting their unique goods and services. The theory of free trade agreements takes this into account. This idea states that the reduction of tariffs from a free trade deal with New Zealand would benefit the United Kingdom. According to (Business West, 2022), the agreement will increase red tape for approximately 6,000 small and medium-sized enterprises (SMEs) in the UK that export goods to New Zealand. This will boost their export volume and increase their earnings. The deal will also facilitate British nationals' ability to travel to New Zealand in search of employment. Aside from the massive export opportunities of labour, goods, and services, the trade agreement will also act as a bridge for the UK to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), providing access to developing economies (Business West, 2022). 3

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Further benefits to the UK come from increased domestic job prospects brought about by new trade agreements for foreign companies. A connection between this and the free trade agreement theory is possible. This idea states that a free trade agreement between the UK and Australia would be advantageous since it is anticipated to raise demand for automobiles, alcoholic beverages, and substances (Irwin, 2020). The agreement will strengthen 3.5 million jobs' worth of UK industries. UK industries are expected to hire more personnel to ensure effective production to meet the demand from both domestic and international markets. In addition, the agreement will eliminate tariffs on Australia, which will enable Britain to compete with other firms by lowering the cost of its products (Business West, 2022). Britain already exports £4.3 billion worth of goods to Australia. An agreement on free trade with Japan will also help the UK. The trade agreement will open up new markets for UK companies in the food and beverage, life sciences, and smart manufacturing sectors—all of which have experienced economic declines since the COVID-19 pandemic. British companies will have a diversified option in the Japanese market, protecting their profits and keeping their workers employed (Wójcik & Ioannou, 2020). Drawbacks Even though the UK can benefit from signing new trade deals in many ways, there are several drawbacks to this activity for the nation (Song & Zhou, 2020). The trade agreement's drawback—an increase in immigration—is demonstrated by the fact that the existing trade agreement with India has increased the number of Indians living in the UK. India has included a preferential treatment plan in its bilateral trade agreement with the UK, which allows it to send Indian professionals and students to the UK. This has led to a rise in job outsourcing in UK industries, which has an immediate impact on job prospects for UK nationals. (Mohiuddin, 2017) states that the difficulties associated with a trade agreement outweigh the investment opportunities associated with the new arbitration regulations, which discourage foreign investors and companies from using international courts and increase the commercial risks involved in domestic operations. The decrease in tax revenue from foreign enterprises is an additional drawback of the UK's trade agreements with Australia and Japan (Noonan & Plekhanova, 2020). Customs taxes between the two nations were removed by free trade agreements, opening the door for duty- free items like lead, pearls, jewels, alcoholic beverages, spaceships, seafood, soap, lubricants, and aluminium from Japan to enter the UK market. This removes the capacity for the British government to put import duties on goods, which results in poor tax revenues that have an 4

impact on the GDP of the nation as a whole. Furthermore, the British auto industry's overcapacity can be attributed to the free trade agreement with Japan (Suzuki & Suzuki, 2020). The UK imports a variety of car manufacturers from Japan, providing British consumers with access to a greater selection of automobiles (Lake, 2017). This makes local industries more competitive, which has an impact on their efforts to grow and expand. Despite the advantages of more affordable and varied options for UK consumers, the trade agreement has a negative overall impact on the UK economy. Furthermore, the UK's natural resources and other raw materials may be degraded and overused as a result of the free trade agreement with Japan, which permits foreign businesses to open offices there. To capitalise on locally accessible raw materials, Japan is getting ready to launch industries for the production of cars and soap, among other things (GOV. UK, 2022). Due to lower production costs, foreign companies will be able to offer their products at lower prices, which will increase competition for domestic businesses. The end effect is a concentration of home industries, cheap commodity pricing, and a wider range of items, which could degrade the quality of already-existing products. Conclusion To expand the market potential for both small and large enterprises in the UK, trade accords including international trade are necessary. Since reversing its decision to leave the European Union, the UK has entered into trade deals with several nations to eliminate tariffs on UK exports to those nations. The UK economy has benefited from these trade agreements since they have increased exports, which have given UK companies a competitive edge over rival companies. as well as supplying resources to the regional UK industry. Trade agreements, however, can hurt the UK since they tax foreign corporations less, push out home businesses, and deteriorate the country's natural resources. It is ideal for the UK to keep pursuing new trade agreements with other nations, taking into account the benefits and drawbacks of doing so. Q2 Introduction The Adidas Sports Group is a worldwide corporation based in Herzogenaurach, Germany, that was founded in 1949 by Adolf Dassler. After Nike, it presently holds the second-largest position in the global sportswear market (Wildfeuer, 2018). This global corporation is focused on designing, creating, and producing athletic gear, including shoes, tracksuits, and 5

sports bags, among other items. Sports Performance, Sports Style, and Sports Heritage are the three primary categories into which MNE has separated its market groups. Adidas serves a global market, but its three most important regions are Asia, the United States, and Europe (Wildfeuer, 2018). Bavaria, Germany is home to the company's primary equipment manufacturing. Multinational corporations should think about investing in the UK to lower manufacturing costs, increase market potential, and gain access to readily available resources and raw materials for production (Moradlou et al., 2021). OLI Framework Adidas is concentrating on growing its business throughout many locations, much like a lot of other global corporations. Its strategic and natural resources, including technological and physical resources, were major motivators for establishing part of its supply chain operations in the UK (James, Mather, & Sheridan, 2023). Capital, raw commodities, and human resources. The business also hopes to expand the number of people who use its services in the nation and boost productivity to lower expenses. Selecting the optimal entry-mode strategy for the UK market is crucial for the organisation to ensure success. To guarantee efficacy and efficiency, it is imperative to weigh the pros and downsides of every tactic. International corporations frequently use joint ventures, acquisitions, and greenfield investments as methods of foreign direct investment (FDI). The Adidas corporation will select the best tactics to use in the UK market with the aid of the OLI framework (Tiwari, Srivastava, & Prakash, 2023). Ownership Advantage By expanding in the UK, Adidas will benefit from several ownership advantages, which will give it an advantage over rivals. The company will benefit from having patent and trademark rights for its products, among other things (Brown & Brison, 2021). The company has an edge over rival businesses like Nike, Puma, and UnderArmour which sell comparable products since it has the exclusive rights to make a certain design and style of sports apparel (Rungi, Morrison, & Pammolli, 2017). Adidas items are more likely to be preferred by customers due to their originality and distinctiveness when compared to other domestic brands and stores. The business will also profit from increased domestic brand awareness. Customers who enjoy Adidas products will find it more appealing because Adidas is the second-largest sportswear store in the world and has a sizable fan base in the UK. To produce its trainers, Adidas will also profit from cutting-edge technology capabilities. Adidas will be able to outperform its rivals because of the product's sophisticated character (Barbosa, 2022). 6

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Products made with this technology will outperform those made by competitors in terms of performance and effectiveness. The company's earnings and revenue will rise as a result. Location Advantage Adidas will gain a lot of geographic advantages from its plan to relocate some supply chain operations to the UK. The second significant benefit in broadening an organization's operations is location. Adidas will have a competitive advantage over operations in other nations thanks to its presence in the United Kingdom (Rachini, 2021). Among the benefits the business will have from its UK base are the following: Availability of natural resources and raw materials needed to make sportswear and footwear. According to (GlobalData, 2022), Germany's industries, which include Adidas, presently consume textiles valued at £110.17 million and export rubber worth £232.71 million. Lower production costs related to raw material supply can be achieved by locating some manufacturing operations in the UK. Furthermore, Adidas stands to gain from the removal of tariffs on its goods as the UK pursues trade agreements with other nations, notably European Union nations like Germany. I am in this nation. As a result, the business will be able to outbid both domestic and foreign rivals on the price at which it can offer its goods. Additionally, by making investments in the UK, the business will have a geographic advantage when it comes to access to the larger UK market. (GlobalData, 2022) predicts that the UK sportswear industry will reach $13.8 billion in 2020 and expand at a CAGR of 4% over the following five years. This demonstrates how Adidas can take advantage of the market. Internalization Advantage Investing in new domestic sectors, purchasing already-existing athletic goods businesses in the nation, or forming a joint venture with an established business in the UK are some of the ways Adidas can internalize its foreign direct investment and reap the following benefits: Outsourcing the manufacture of materials will result in lower costs (Autoo, 2017). Revenue for the business will increase as a result. In addition, outsourcing increases a company's profit margin by doing away with the need for intermediaries like wholesalers and merchants for its products. By spreading out part of its UK activities, Adidas will also be able to reduce the risks connected with other markets. Minimising potential hazards that could impact production efficiency and effectiveness can be achieved by the company by reducing its reliance on the main factory located in Bavaria, (Autoo, 2017). 7

In addition, by gaining access to the expanding sportswear industry in the UK and throughout Europe, Adidas will be able to bolster its competitiveness on a worldwide scale through outsourcing (Majcen, 2020). The UK market's brand reputation for the organisation will also be improved through this. Increased sales, revenue, and profit margins will result from this as it helps build more customer-centric connections. Through outsourcing, the business will also be able to benefit from the latest technological advancements and abundant natural resources. Conclusion Adidas, a multinational corporation based in Germany that creates sports gear and accessories, stands to gain from investing in broadening its activities in the UK. The benefits of this move will include exclusive advantages, like improved brand recognition, trademark rights, and patent protection for its products. The company will also profit from its geographic location in terms of having access to raw materials and natural resources for production, as well as the lack of customs duties as a result of a trade deal. The business will also gain from outsourcing advantages like lower outsourced expenses. To diversify its business and take advantage of market prospects in the UK, Adidas is anticipated to make investments there. 8

References Autio, E. (2017). Strategic Entrepreneurial Internationalization: A Normative Framework. Strategic Entrepreneurship Journal, 11(3), 211-227. https://doi.org/10.1002/sej.1261 Barbosa, D. L. T. (2022). Adapting to the new sporting goods market era: Adidas differentiation in digital retail (Doctoral dissertation). https://run.unl.pt/bitstream/10362/144719/1/2021-22_spring_45089_duarte-barbosa.pdf Brown, K. M., & Brison, N. T. (2021). Think like Adidas: A Quantitative Analysis of Adidas' Trademark Protection Strategies. Marq. Sports L. Rev., 32, 445. https://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1825&context=sportslaw Business West. (2022, February 4). How will UK businesses benefit from Free Trade Agreements? Retrieved January 18, 2023, from: https://www.businesswest.co.uk/blog/how- will-uk-businesses-benefit-free-trade-agreements Garcia, M.J., (2023). Post-Brexit trade policy in the UK: placebo policy-making?. Journal of European Public Policy, pp.1-27. https://www.tandfonline.com/doi/pdf/10.1080/13501763.2023.2235380 GlobalData UK Ltd. (2022, May 10). GlobalData plc: Sports clothing to dominate the UK sportswear market by 2025. GlobeNewswire News Room. Retrieved January 19, 2023, from: https://www.globenewswire.com/en/news-release/2022/05/10/2440024/0/en/GlobalData-Plc- Sports-Clothing-to-Dominate-the-UK-Sportswear-Market-by-2025.html GOV.UK. (2022, November 30). The UK's trade agreements. GOV.UK. Retrieved January 18, 2023, from https://www.gov.uk/government/collections/the-uks-trade-agreements Irwin, D. A. (2020). Free trade under fire. Princeton University Press. https://books.google.com/books?hl=en&lr=&id=1D63DwAAQBAJ 9

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

James, A. M., Mather, S., & Sheridan, K. J. (2023). Rethinking the Fashion Value Chain: How Reshoring Can Create a Localised Product Lifecycle and Support Sustainable Economic Growth. In Novel Sustainable Alternative Approaches for the Textiles and Fashion Industry (pp. 1-39). Cham: Springer Nature Switzerland. https://link.springer.com/chapter/10.1007/978-3-031-37060-1_1 Lake, J. (2017). Free trade agreements as dynamic farsighted networks. Economic Inquiry, 55(1), 31-50. https://ideas.repec.org/a/bla/ecinqu/v55y2017i1p31-50.html Majcen, A. (2020). Adidas AG: powerful brand making strides in key markets (Doctoral dissertation). https://run.unl.pt/bitstream/10362/106043/1/1239400062- 16259_Anja_Majcen_2019-20_S1-34448-36-Anja_Majcen_124450_1349002595.pdf Mattoo, A., Rocha, N. & Ruta, M. eds., (2020). Handbook of deep trade agreements. World Bank Publications. https://books.google.com/books?hl=en&lr=&id=6UYAEAAAQBAJ Mohiuddin, O. (2017, May 5). Pros and cons: Bilateral trade agreement between post Brexit...Euromonitor. Retrieved January 18, 2023, from https://www.euromonitor.com/article/bilateral-trade-post-brexit-uk-india Moradlou, H., Reefke, H., Skipworth, H., & Roscoe, S. (2021). Geopolitical disruptions and the manufacturing location decision in multinational company supply chains: A Delphi study on Brexit. International Journal of Operations & Production Management, 41(2), 102-130. https://dspace.lib.cranfield.ac.uk/bitstream/handle/1826/16418/Geographical_disruptions_a_ Delphi_study_on_Brexit-2021.pdf?sequence=4 Noonan, C., & Plekhanova, V. (2020). Taxation of digital services under trade agreements. Journal of International Economic Law, 23(4), 1015-1039. https://academic.oup.com/jiel/article-abstract/23/4/1015/6017350 Rachini, E. (2021). Sustainability in the fashion world: a competitive advantage not a limitation. http://tesi.luiss.it/32293/1/726591_RACHINI_EDOARDO.pdf Rungi, A., Morrison, G., & Pammolli, F. (2017). Global ownership and corporate control networks. IMT Lucca EIC WP Series, 7. https://dx.doi.org/10.2139/ssrn.3031955 10

Song, L., & Zhou, Y. (2020). The COVID‐19 pandemic and its impact on the global economy: what does it take to turn crisis into opportunity?. China & World Economy, 28(4), 1-25. https://onlinelibrary.wiley.com/doi/abs/10.1111/cwe.12349 Suzuki, H., & Suzuki, H. (2020). The British Car Industry and Anglo-Japanese Relations in the Post-War Period. Japanese Investment and British Trade Unionism: Thatcher and Nissan Revisited in the Wake of Brexit, 25-38. https://link.springer.com/chapter/10.1007/978-981- 15-9058-0_3 Tiwari, M. K., Srivastava, V. B., & Prakash, V. (2023). Transaction Cost Perspective and Evolutionary or Multistage Internationalization Theory. Tuijin Jishu/Journal of Propulsion Technology, 44(3), 2671-2685. https://www.propulsiontechjournal.com/index.php/journal/article/download/769/556 Wildfeuer, J. (2018). Branding and customer satisfaction: A research about the Adidas Group. https://core.ac.uk/download/pdf/161427789.pdf Wójcik, D., & Ioannou, S. (2020). COVID‐19 and finance: market developments so far and potential impacts on the financial sector and centres. Tijdschrift voor economische en sociale geografie, 111(3), 387-400. https://onlinelibrary.wiley.com/doi/pdf/10.1111/tesg.12434 11

Code (Rab Deepak friend 25oct) (1)

Related Documents