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The study of this report will focus on the different international political environment of UK like the bureaucracy, corruption level of the company, and trade control and employment law of the UK and its impact on the foreign business operating firms that is the important factors for the growth of the country. After that, the critical evaluation of the different competition and challenges of the UK that the foreign firms are faced with operating their business in the UK will be explained here. At the end of this report, the critical analysis based on the discussion about the different initiatives steps and approaches is presented here to overcoming the issues that are identified in the challenges and competitions sections.
Section-1: International Business Assignment
Critical discussion of the internal political environment of the UK impacts foreign businesses operating firms
Negative impact
The political excitement or environment of the UK has made a strong impact on the foreign business organisations to leading their business in the country. According to Bahoo et al. (2020), the bureaucracy rules, corruption level, tariff rules and laws, and the data protection law of UK 2018 are the significant political factors that are having a strong effect on the foreign firms such as the business activities of P&G, Amazon and business activity of Microsoft’s. Therefore, the discrimination law of the UK, employment laws, and trade control regulations of the company have made a negative impact on the company, leading to their business and expanding their market in the UK. Buckley & Casson (2021) argue that due to the political effects of UK the foreign companies are following some factors that can be helping them to overcome the issues such as-
Changes in the company's regulations
Impact on economy
Mitigating the risks
Political stability
It is the opinion of Ghauri et al. (2021) that the consumer protection laws, the intellectual property laws and the import restrictions on the quantity and quality of the products are increasing the adverse impact on the foreign business firms and developing the negative effects to enhancing the revenue of the firm. Moreover, the major cause or negative impact of the political environment are described below-
Education and environmental laws- It is the opinion of Akinsulore & Akinsulore (2021) that the UK government is focused on the environmental safety factors and educational level of the employees of the foreign business firms as those two factors also make an impact on the market growth of the UK. The antitrust laws mention the anti-rust behaviours that prohibited the competitions act 1998 and prohibit articles 81 and 82 of the EC treaty. However, the anti-trust laws mention the major three federal practices that are the Clayton Act, Sherman Antitrust Act and Federal Trade Commission act. According to Jaime-Paredes (2021), the political factors such as the protection of the local brands, the education margin and the environmental regulations are the key factors that have an adverse impact on the different foreign firms like P&G, Boots and Amazon in the UK.
Figure 1: Data protection Law in the UK
(Source: Cornock, 2018)
Data protection Laws- To protect the significant data and information of the customers and people the UK government has made some barriers for the foreign firms by setting the data protection act in 2018. Cornock (2018) stated that from this part it could be found that the regulation of 2016/679 of the European Parliament and the councils on the protection has developed the natural security and protection policies of the foreign and big multinational firms who are holding the business and handle the data of the huge number of consumers. Thus, the data protection act 2018 has mentioned some important points like maintaining confidentiality in the data, taking consent from the individual people before using their data or information and mentioning the different kinds of protecting features that create barriers for the foreign firms to operate their business in the UK.
Health and safety laws- Maintaining the health and safety of the employees and providing the proper remuneration to them are the significant political factors or policies of the UK government that are making barriers for the different foreign firms. Fahy et al. (2019) stated that understanding the different kinds of rules and regulations of the UK government is not easy to develop the business of the foreign organisations.
Discrimination laws- The UK government has developed the discrimination laws such as providing equal wages to the different kinds of employees, the gender equal process and providing equal opportunities to each kind of employee are the significant factors that come from the political issues or problems.
Competition regulations- Javeed et al. (2020) suggest that the UK government has developed the competition regulations among the foreign firms to develop the market growth and enhances the economic condition of the country.
Positive impact
The UK government has supported the foreign firms by offering activist and active foreign policies, strengthening the rules based on the different international systems and providing the support of the values. Bhattacharyya (2020) points out that the Department of International Trade (DIT) is looking after the different policies and business operations of the foreign countries and is looking after the process of the political factors. Furthermore, the UK government has reduced the extra taxes and charges at the time of the entry of the foreign firms and defined the different opportunities that provide a better brand image of the company. For example, the UK is provided a high rate of open market opportunity to foreign business firms, the business friendly environment regulations and is offered a liberal economy (Zappettini & Krzy?anowski, 2019). The experts are mention some significant assistance for exporters that the UK government has a setting like-
Provide the trade and investment factsheets
Provide the export opportunities in the different market
The official export agency of the UK is provided with the insurance and finances insurance
Looking after the process of economic factsheets
Srivastava et al. (2020) point out that the UK trade guidelines, the trade agreement policies and the Centre for Protection of National insurances are known as the significant process that helps the foreign business firms to develop their key activities and ensure their market presence in the UK. Therefore, the UK government has taken the patient approach of helping foreign firms to increase their effectiveness and develop their business in the country. It is the opinion of Brummer (2018) that the UK government has developed the employment protection act, the discriminations rules that are making a positive impact on the foreign employees and the foreign companies such as Amazon, P&G and other firms are making awareness about those factors and increasing their business in the UK. The economic system of the UK, the market economy, private individuals owning the international business landscape and the socialist economy are known as the common political factors that make contemporary issues and enhance the opportunities of the firms. Henceforth, the constitutional monarchy, the one party democratic system and the hierarchical political system of the UK are creating some positive and some adverse impacts on the foreign business firms leading their business in the UK.
Figure 2: Number of private sector businesses in the UK in 2021
(Source: Statista, 2022)
According to Statista (2022), from the statistical data, it could be found that the foreign companies such as the construction firms are making a profit of 913.82% in 2021 by developing their business in the UK and the professional, sciences and technical activities have developed their business more than 848.77% in 2021. From those parts, it could be highlighted that the business policies of the UK government, the lower rate of taxation, and the foreign business policies are the key to the success of the different foreign firms in the country. Thus, the intellectual property laws and by reducing the import reactions the UK government try to increase the business expansion of the foreign firms in the country's market that are directly associated with the economic growth of the country. The cross-cultural factors, the employment rules, the salary issues are creating impact on the foreign business firms to leading their business in the UK and expanding the market in the world popular country.
Section-2: International Business Assignment
Critical evaluation of the challenges and competition the UK faces to trade with the Pacific Trade Bloc
The United Kingdom is one of the most industrialized nations in the world and it needs countries where it can market its finished goods and acquire raw materials. In the opinion of Du & Shepotylo (2022), keeping this in mind, the country has to undertake several treaties and agreements for smooth exchange of goods and services whereby the country can extract extra profit. Towards achieving this goal, the United Kingdom has to undertake several measures to forge treaties and agreements. According to Gaur (2020), the impact of globalization on the operation and development of multinational enterprises has helped the country to move ahead.
The UK is the world's second-largest services exporter. Now the benefit of the United Kingdom's start-up and the business firm would increase as services become more globalised (Du & Shepotylo, 2022). A modern trade bloc and agreement with a regional bloc like CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) is a pacific trade bloc that will benefit Britain as it makes travel easier for business people moving between CPTPP countries.
Challenges facing trade between the United Kingdom and CPTPP (Pacific trade bloc)
According to Clark (2022), the challenges faced by the suppliers for not continuing, the trade was raised from 2.3% to 42.4%. The CPTPP abolishes tariffs on 95% of goods traded between members and puts away other obstacles to trade across four continents. The various dealers of the UK vehicles had faced the same challenges of free trade. It is opined by Pempel (2022) that it is a fact that the UK already has trade agreements with some of the member countries but joining the free trade area would include approximately £ 9 trillion of GDP in 2009. Since, the UK is reducing tariffs it could increase competition and risk and compromise the standards. This is a major challenge that the country faces in this bloc.
Respondents pointed out various priorities and factors for service sectors like digital, law, environment, finance and public services, which might clash with other factors and the different countries, may have different priorities (Mc, 2018). The wholesalers of the Pharmaceutical companies had faced the challenges of finance in the Up.
Many member countries of the bloc pointed out the need for the UK to set its regulatory framework with a view to developing and delivering standard products for both home consumption and export to foreign countries. In the opinion of Pempel (2022), the consultants of the computers had set their regulatory framework in the United Kingdom this may affect the financial policy of the United Kingdom.
According to the Pacific bloc, the member countries have to transfer mechanisms and digital technologies to member countries like Indonesia, Japan etc. Nevertheless, under UK law, personal data is forbid to be in abroad due to security reasons.
If the challenges can be sorted out by the UK and Pacific bloc countries, the consultants of management would have faced their mechanism problem due to security issues (Mc, 2018). The bloc can have an effective business on machinery and transport equipment. Japan was the largest import partner for machinery and transport equipment covering 20.6 % of total bloc imports. Road vehicles and the mechanical parts needed to be manufactured (Morgan, 2018). Therefore, imports of vehicles to Japan corresponded to 7.2 billion in 2015-2020. The leading block's markets for UK exports of chemicals were Japan, Canada and Australia while miscellaneous manufacture was imported from Vietnam. The Up’s inward foreign direct investment position with Japan had the highest value among the member countries. According to (Price, 2018), it may be stated that the eleven countries of the Pacific bloc are Australia, Brunei, Canada, Chile and Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United Kingdom.
Competitions Faced by the UK and the Pacific trade bloc
The various factors frame for the bloc supports the UK objectives as it provides very supportive and effective competition, both legal and enforceable which enables trade to open and subject to fair competition both in the UK and the bloc's member countries(Sohn, 2019). Which includes the protection of customers from frauds and deception quite common in commercial activities? According to Price (2018), in the last week the company, “Dominic Raba" had come into the controversy that the commercial relationship will be exhausted for not globalizing the companies of the UK.
The Asia Pacific region is an emerging trading bloc and many countries in this region are raising their economic standard for becoming from developing countries to developed countries. In the opinion of Ogbor & Eromafuru (2018), it could be a highly competitive zone for the UK to establish itself as the superpower among them. Moreover, it is also observed that some subdivisions of the pacific region have created an internal trade competition and that could provide a huge cost to countries such as the UK. It is opined by von Kameke (2022) that eSports revenue in Asia is almost $492.1 million and it is rising day by day. Thus, being a sporty nation the UK must have to bring innovative products and services for competing with the companies in the Asian countries. Moreover, as the countries in Asia have more young people companies all over the globe are trying to invest in this continent for better revenue and company growth. Thus, the UK requires the pushing force for competing with the indigenous as well as the foreign countries for that matter. Moreover, Ogbor & Eromafuru (2018) argued that Singapore has become the most-watched tournament of esports events in 2021. Thus, the potentiality and intensity of this region would make the UK innovate and produce qualitative products for competing with the other organisations in this particular region. From the data, it is observed that China is producing utmost influence within the Asia-pacific region. As opined by von Kameke (2022), the highest numbers of pro gamers live in China and it is 1.28k.
In the trans-pacific regional trade bloc, the negotiation for getting the market entry is a big challenge for any company. Therefore, the UK companies may have to negotiate a lot and even come under the price for getting into the market. Therefore, the pricing strategies must have to be designed properly with the ratio of the qualities of the products. In the opinion of Dadush (2022), unless and until the trade agreement does not adapt to anything it is difficult to make an impact in the market and the political support would be reduced for that matter. In the current volatile situation, it would be highly competitive for the UK to have an easy competitive edge in the competitive market. Therefore, it is required a high amplitude of the negotiation process with the government and the approach must have to make the goods recession for greater profit within the market (Spyridonidou & Kalogeresis, 2018). In some Asian countries, the lack of leadership and its impact could make a huge barrier within the market. Thus, the government of state could make some policies, which could hurt the foreign countries in maintaining the product's quality and process to market entry for that matter. Therefore, Olayungbo & Iqbal (2021) argued that one country must have to build a higher level of competitive policies and ease of doing business strategy to have further foreign businesses within the country. Hus, in that way not only the country but also the total regional bloc would be profitable.
Section-3: International Business Assignment
Critical analysis of the steps and initiatives the UK taken to overcome the identified challenges and competition issues
From the above sections, the key challenges are mentioned that the foreign business organisations are faced with expanding their business in the UK market. The experts highlighted the different points that helped the UK to overcome the challenges and competition among the foreign firms that are identified above.
Financial Market Services Act 2000- By developing the financial services regulations act and making some significant changes to the financial services act 2000 UK government tries to take the advanced features in their business that help the foreign firms to develop their business in the UK. Monavari & Rasekh (2018) suggest that making the changes like changing the financial regulations, adopting open features and natures for the foreign firms and enhancing the investment policies are the key steps for the UK to develop the foreign business and overcome the financial barriers that the firms are faced.
Hiring the special team to overcome the public, environment, law and digital conflict- By hiring the special team for looking after the different public affairs, maintaining the environmental factors and looking after the laws and regulations of the country is an important step for the UK to developing the activities of the foreign firms and overcoming the issues. Wachter & Cassel (2020) stated that by taking an open mentality, cross-cultural strategies and increasing the effectiveness of the inner atmosphere of the foreign firms the UK government is trying to improve the business expansion and economic growth of the firm. Hire a specialist team and investigation team is one of the significant steps for the UK that help the country to identify the contemporary issues and overcome the problems or challenges that help the foreign firms to increase their business in the UK market.
Adopting more digital transformations system- In this digital era, while other countries are focused more on the digital transformation system, the UK government has still focused on the traditional process that has not achieved a better achievement for the country. It is the opinion of Heavin & Power (2018) that creating the new digital technology for achieving business and developing the transformations system that help the UK government to handle the different issues of the foreign firms. Furthermore, by adopting the digital process and technology and achieving the significant business areas the UK tries to improve the process and investigations of the different foreign firms. Camarinha-Matos et al. (2019) reported that the advanced features of the digital transformations such as using the IA process, and automatic and big data analytics process is helping the UK to store the records of the big firms and foreign customers and developing the key activities of the foreign organisation.
Enhances the trade policies and regulations- By developing the features and attributes of the trade policies and regulations for the foreign companies the UK has taken better steps for the improvement and development of their economic growth and overcoming the contemporary issues that the foreign firms are faced with. According to Baccini (2019), it could be found that the UK government is focused on reducing the entry charges, raising the openness of the new entrants and regulating the new policies that develop the business of the foreign firms and get them to market expansion. The market expansion process of the foreign firms is also associated with the economic, political, environmental and technological growth and development of the country.
It is the opinion of Usman et al. (2020) that adopting the new features, enabling the fair competition with the Asian and Pacific region and focusing on raising the economic conditions of the firm are the most significant processes that help the UK to overcome the challenges and increase the competitive advantages of the country. International business is an important aspect that describes the political issues of the individual country that make both the positive and adverse impacts on the foreign firms and develop the economic condition of the firm. Vargas et al. (2020) reported that the UK has focused on making expert research and planning to develop the business of the foreign firms in the country's market, increase the initial export sales and expansion of international sales that are the part of the international marketing. Therefore, undressing cultural sensitivity, learning about the people's thoughts and focusing on the international strategies are the significant steps the UK that they have taken to overcome the business challenges of the foreign firms. Vargas et al. (2020) argue that the trans-pacific regional trade bloc's negotiation for getting the market entry is a big challenge for the countries. To reduce the challenges and problems of the trans-pacific regional trade bloc the UK tries to maintain the particular trade policies and improve the process of international business.
To develop international business, the UK needs to conduct the market analysis and make the awareness about the different countries and regional political excitements that has made an impact on the foreign firms. Dahlfors et al. (2021) stated that by changing the local regulations that affect the business, taxations issues and licensing and certifications factors the UK government has developed the key activities for the foreign firms that are developing the business expansion of the foreign business organisations. The plan of market entry and the evaluations about the international competitions and Asian-Pacific issues the UK has made the analysis about the market position overcoming the business issues.
Shu et al. (2021) point out that adopting innovative strategies and making alliances with the different international firms is one of the important steps of the UK in helping the country's foreign firms to develop their business in the UK market. By making good relationships with the Asian-Pacific regions, the UK can understand the different international markets and their business model and can develop their individual marketing process, digital transformation system and business policies that can make a positive impact on the foreign firms. Mazhar et al. (2019) suggest that the UK has followed the 3 significant international strategies in their country to expand the market of the foreign firms, for example, global strategies, multi domestic strategies and transactional strategies that developed the market process and international business of the country. Planning and focusing on exporting the services and products are the significant key steps and points that the UK has to develop for overcoming the different barriers or issues of the country to develop the marketing of the foreign firms. Harrison (2021) stated that to focus on the globalisation process and developing the country's position in the global market, the UK has developed the combined process in their country that is to increase the business of the foreign firms and look after the economic growth of the country. Development, processing, and traditional and digital approaches all are significant steps that are associated with the development process of the country. To overcome the political, digital, technological and environmental issues the country needs to hire a specific group of authorities to maintain all of the business issues and look after the process, rules and regulations of the foreign business. It is the opinion of Srivastava et al. (2020) that building a standardised, immediately recognizable brand, simplifying the policies and regulations and consolidating the management process are the lower costs the UK can achieve their market growth by inviting more foreign firms into their country. The growth of the country is dependent on the market growth and the presence of foreign firms.
Conclusion
From the above report, it can be concluded that international businesses require high strategic and practical knowledge from that perspective. Thus, in that report, the UK and its political influence on foreign countries have been discussed. Thus, the negative impacts such as discrimination, health and data protection laws and positive factors such as the UK's foreign business conductive policies have been explained over here. Furthermore, the UK is now on the way to joining the Asia Pacific trade bloc so the challenges and competition have been described. Later on, the steps such as enhancement of the trade policies and regulations with the digital transformation for overcoming the challenges and competition by the UK have been discussed.
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