UK Sme’s Critical Thinkings Examples
The issue of international trade appeared to be permanently growing today; it is significant to be aware of what its major factors are and how they impact the development of the worlds’ economy in general and UK SME’s in particular.
The key field of international trade is the global economic framework (economy), i.e. international marketing; such processes as, for instance, the exchange and consumption provided by the companies in their internal economies and in the global market. As a consequence of the international trade, the capital obtained the considerable flexibility, looking for the most appropriate and beneficial possibilities. The process of financial globalization has increased the impact of global markets on the performances of lending and borrowing by the citizens of various states (Aizenman & Pinto eds. 2006). This process has resulted in the growth of the global network of financial establishments and corporations, and to basic alterations in their framework of the enterprise of flows of capital management. Simultaneously, the process of financial globalization influences different states, as the competition of national economic systems for credit stocks of capital, which are freely reallocated on the scale of the international economy, emerges to be tougher in new circumstances.
The notion of international trade incites the states to look for the new opportunities to enhance the investment interests of the internal economic system. As a result, this issue is extremely pressing; it is important to conduct a survey of the causes and obvious consequences of the financial globalization to UK SME’s as well as its future growth on basis of particular examples. What is more, the paper aims to analyze the impact of global factors on UK business organizations; additionally, the evaluation of the influence of European Union on UK business organizations.
It is worth saying that there is proof that each process which is caused by the financial globalization and the negotiations of highly developed countries in the economic field of the poor states has a successful end. The global crisis increases, and the leading business players cannot do anything about it. What is more, it is also worth drawing attention to the fact that the countries that do not let much interference in their economics (like India, for instance), keep developing in these conditions at the time when such countries as, Germany or France are obliged to live more frugally, since their capital is seriously effected by crisis.
UK SME’s within the Framework of International Trade
Generally, SME’s are interpreted as manufacturing company with less than 100 employees and non-manufacturing firm with no more than 50 people of staff. In United Kigdom of Great Britain, there are approximately 300,000 of SME’s; they constitute 98% of local economy. These enterprises are predominantly focused on such activities as export trades, hospitality business, wholesale and retail, and clothing industry. In 2005, the World Trade Organization eliminated quota system and this resulted in difficulties for textile and clothing industry of many companies. The effect of globalization increased and SME’s were forced to implement new technologies in order to enhance their high-value-added manufacturing process. Undoubtedly, drastic changes in Information Technologies and the ways of communication presented new opportunities for UK SME’s transformed the concept of business relationships.
Indisputably, today’s globalized world undergoes the time of drastic changes where lucrative collaboration between the countries is the most significant achievement. In order to interact successfully, one should use some effective rules for trading. Therefore, every state including the United Kingdom of Great Britain is aware of the International trade law which is applied in every situation of multinational communication. Besides, the members of global trading have their own established rules for providing stability at the world market. All the stated above facts can be seen as the arguments for the topicality of the subject under consideration.
Generally, International trade law consists of appropriate principles and customs for handling trade between different countries. It is considered to be a basis for the international interactions in such spheres as human rights, war, trading, globalization, tourism, outsourcing, global finance and business. Moreover, sometimes it can be used for regulations of the activity between private sectors as some states are the members of the World Trade Organization (WTO). Thus, this brunch of law is quite a complicated area for researchers who should take into account the numerous levels of trade organizations and interactions. Particularly, they include bilateral trade agreements, regional trade agreements and multinational trade agreements; each of them has its own history and dispute settlement procedures.
According to the current researches, one of the most perspective fields of International trade law investigation is the intellectual property rights. The interest to this notion can be explained by the development of the Internet resources and other types of multinational communication, which are used in order to spread the products of intellectual property around the world. The World Trade Organization attempts to guarantee the law-abidingness with the help of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and take all the measurements to escape the violation of the law.
Basically, it is worth knowing that Intellectual Property Rights are the legal rights granted by the UK government for the sake of providing the creative output protection in case any violation occurs. It is possible to determine different kinds of rights. For example, IPR can take the form of copyrights, trade secrets, patents, trademarks and geographical indications. Providing fair IPR practices, the government is aimed at establishing the equality and balance in trade and employment in other countries, providing the national economic growth. To be more precise, because of piracy hundreds of British SME’s lose billions of dollars and their employees lose their jobs. That is why the UK government has developed several regulatory bodies to control this issue, such as National Intellectual Property Law Enforcement Coordinating Council and Strategy Targeting Organized Piracy. Currently, the government is more directed to regulating the import policies; obviously, one can notice that the Office of British State Representative is called to identify countries with inadequate IRP protection, authorizing the International Trade Committee to prohibit UK imports of infringing products.
UK SME’s Specifics
The idea that UK SME’s face more difficulties as compared to big companies is supported by Melville, Kraemer and Gurbaxani (2004). They state that it is possible for SMEs to avoid fierce competition when the company is operating within a particular segment of the market, thus avoiding direct opposition. The main task for the enterprise is to specify the values of its products and services and concentrate on them because these actions will distract the company from price competition. For the majority of UK SME’s this strategy will be predominantly built on creative and innovative approach to business organization, systematic updates and improvements, flexibility of ideas and actions and reduction of time for production and distribution. Therefore, SME’s can always benefit from its size and main peculiarities of their organization due to various objective reasons. Moreover, they should use special technologies while operating on apparel market because this sphere is changing constantly due to the appearance of new trends. According to reports, consumer demand for clothing is now more fragmented and discerning (Brassington and Pettitt 2005).
Because of major demographic changes and availability of many materials and styles, retailers have become more careful in manufacturing high level of stock. Correspondingly, these tendencies caused the fragmentation of the modern mass market and taking advantages of the long-run manufacture. Thus, it is vital for the marketers to investigate the reaction of the customers on available collections, their thoughts and ideas, needs and expectations they usually express in the conversations with the other people in social networks, on blogs and personal sites. Basically, the researchers argue that this is the cheapest way to monitor the market and act according to the requirements of modern globalized world.
Global Factors on the Affecting Side
Considering the global factors in terms of its influence on UK business organizations, it is worth mentioning that the business environment is much impacted by various global forces as well as trends aimed to figure out the way the enterprises cooperate with its clients and meet the principles of competition. As for the issue of competitiveness, it takes its root in economy. It is defined by nation’s productivity, social infrastructure fiscal policy, and the microeconomic environment. As for the highly developed countries, including Great Britain, they are characterized as the successful nations which contributed a lot to the world's economy and technology. Obviously, with such a huge expansion and economical leadership, UK companies’ success has positively affected the quality life of British nation in terms of income, low unemployment and Internet technologies.
In particular, the organization’s policy should be focused on ethical, moral and honest attitude of the company towards the other institutions, employees, customers, investors and creditors because these virtues will be beneficial for the company. Thus, good communication with these participants of the market will enhance the media coverage and the company will be positively reflected by the media sources. Besides, the management has to provide the media with the full, reliable and updated flow of information about all the important activities of the company in order to communicate with the surrounding environment. The structure of the organization should involve special mechanisms that are aimed at preparing, editing and spreading the information to the media sources in order to ensure full and positive coverage. Moreover, the members of the organization should be involved into the civic and community affairs in order to increase the flow of positive information associated with the company and create its favorable image.
Indisputably, modern world is influenced by the drastic changes in the traditional understanding of the marketing communication due to the appearance of the Internet-based technology. It is proven that they make great contribution to the marketing process and the majority of companies attempt to implement the new policies and strategies in order to encompass larger amount of the customer and affect their habits and visions in the web environment. Basically, modern approach to the successful communication in the sphere of business in general and marketing in particular is constructed on the mixed use of all the available means of media: press (newspapers and magazines), radio, television and the Internet. It is believed that such a strategy is vital for the multinational organizations that are performing on the global market and are influenced by the modern tendencies of globalized community.
Concentration on Sustainability
Among one of the major global factors influencing UK SME’s is the need to focus on sustainability. Sustainable design is based on the three main principals. The first one is the principle of Economy of Resources. This principal deals with the reduction, reuse, and recycling of the natural resource that are used in a building. Each principal has its some strategies. They are as following:
principal includes energy;
Energy conservation strategy deals with processes that require constant energy flow such as heating, cooling, lightning, and other equipment operations. The type of the energy that will be evolved most of all in a building determines what type of building it will be, and what will be its location. What is more, energy efficiency strategy implies the use of manufacturing processes and producing products, which require less energy as usual.
Water conservation strategy deals with all types of water consumption such as drinking, cooking, washing and cleaning, flushing toilets, irrigating plants and even sewage.
Material conservation strategy concerns all the materials that are used not only in building hoses or other buildings, but also waste that is left after the construction and installation process.
The second principal is the principal of appropriate Life Circle Design. It deals with design, construction, operation and maintenance, and demolition. The life cycle of a building includes three phases: pre-building, building, and post-building. Pre-building phase includes site selection, building design, and building material processes. It does not include any installation. On these phase we choose what location and what materials will be the most appropriate and the most profitable depending on the type of some certain area and the aims that some certain building are to have (Williams 2007).
Building phase starts when the building is being physically constructed and operated. According to the principals of the sustainable design, the building has to be harmless to the environment. What is more, all the materials that are used in construction the building should not keep any threat to people’s health. Furthermore, according to the principals of sustainable design, all the materials should be of a high quality. In such a way they will continue the life span of the building and different products and materials will have to be replaced less frequently. All of these, in its turn, will reduce the impacts of producing replacements (Kim & Rigdon 1998). Moreover, all materials should have low-impact on the environment and on people’s health. That is the reason for choosing only non-toxic, sustainably produced or recycled materials (Sassi 2006).
Post-building phase begins when the building becomes inappropriate for normal and comfortable living in it. On these stage owner decides on what kind of building they can still use the material from the previous one, because the main peculiarities of any sustainable building is that it can be recycled or reused. For the reason of renewability all materials should come from nearby. In such a way all materials that are not longer used can be composted.
The third main principal of the sustainable design is the principle of Humane Design. This principle deals with the comfort of the person who is living in the building that is constructed according to the sustainable design. In modern society, people spend their lives indoors. That is the reason, why Humane Design principle is the most important. The main aim of it is to provide people with safe and healthy building. If to preserve all demands, such a building will guarantee the following:
productivity (Kim & Rigdon 1998).
Advances in UK SME’s
Undoubtedly, modern industry is developing with high tempo and even the companies with perfect reputation and more than 100 years of experience are obliged to change in accordance with the current tendencies. Thus, the application of new approaches and compatible methodologies is the prerogative of the modern management teams. In most cases the entrance of the foreign competitors into European market causes difficulties for the firms grown on strong traditions and years of operation within the industry. Moreover, drastic changes in the sphere of advanced technologies also have some impact on the further development of the global market.
We are living in the modern world and are becoming more accustomed to information technologies. With the rapid spreading of the globalization process, not only in terms of technologies, but also in terms of international cooperation, we are making one more step towards improvement of our business. Dealing with IT as the complex phenomenon, UK SME’s should consider everything linked to it: information systems, computer software, computer hardware and programming languages. When managing any kind of organization, it is impossible to imagine our efforts without IT as today most of the business operations are constantly becoming automated. The business value, for its part, denotes all forms of value that determine the health and well-being of the company in the long-run
Principles of Economic Growth
Undoubtedly, the issue of economic growth is essential in XXI century due to the appearance and fast development of the companies and extreme compatibility of the modern market. Thus, it is a necessity for UK SME’s to pay more attention to the available marketing techniques and approaches in order to target the customers; the marketers should define the products and services that are valuable for the customers and model their behavior with benefits for the company.
The Impact of EU Policies
Considering the European Union, one should be aware that it appeared as a supranational organization applying to both economical and political aspects of its members. In view of some experts on business, European Union has managed to form the common market. What it means is that this organization provides the principle of free movement of goods; what it more, it also incorporates trade, working force as well as the capital within the members of European Union. Consequently, such a practice influences in a way that the companies are given the chance to enhance its sales and revenue via enhancing the market zone. All in all, apart from the abovementioned advantage, such a free movement between the members also entails high rivalry among the variety of many other business players within certain sector of industry (Wurzel 2002). The thing is that the companies possessing the competitive edge in comparison with the others are likely to benefit from such an impact of EU policies; nevertheless, there will also be a number of the enterprises forced to meet with failure.
As for EU policies, it is necessary to make mention of two main ones, which are agriculture and fisheries policy. Regarding agriculture policy, it is focused on yielding a number of particular advantages to UK organizations. It is important to draw attention to that among the major benefits that agriculture community is likely to gain one should name the improvement of productivity, stabilizing the market, providing goods at available prices for the customers, etc.
Concerning fisheries policy, it is worth saying that there is much criticism directed at this policy. The failure of this very policy is based on the following thing: Europe planned to become the biggest importer of fish products, which has to be productive; however, it becomes apparent that this plan is hard to be implemented. The CFP has lead to rather unsatisfactory outcomes due to showing the incapability to settle on a solution to the problem of reorganizing fish stocks. Despite the fisheries minister George Eustice demonstrating his approval of these reforms, the rest of British people were mainly pessimistic. The Common Fisheries Policy emerged to result in a failure due to its flaw concept.
Among the other EU policies affecting UK business organizations, it is also necessary to mention transport and the environment fields. The thing is that UK government states that there are many negative effects that European environmental and transport regulations cause. As for the one example showing the drawbacks of EU policy in the above-mentioned area, it is necessary to pay attention to that, for instance, according to one recent study, the property developer was obliged to pay a serious sum of money in order to transport the newts; the sum was £200, 000, and it is because of European principles of treating the animals’ habitats.
The analysis of the economic growth journals and other available sources of information help the reader to have a brief look on the latest tendencies of the financial market in general (Reinert 2012). Thus, according to the authors of various researches, contemporary international trade occurs as the result of technical means to implement newly established marketing strategies. This phenomenon applies the technological development in the financial sector to maximize the benefits from already functioning trading strategies. Thus, the scholars suggest focusing on the economic growth strategies and their effect on the market and its players. The reasons for its fast development were competition, innovation and regulation. According to many market specialists, international trade makes contribution into the market liquidity, price discovery and market efficiency.
As for the global factors in terms of its impact on running business, it is also obvious that globalization encloses both advantages and disadvantages. The thing is that there will always be the companies benefiting from the increase in the market, on the one hand, and meeting with failure, on the other. The same about the policies adopted in European Union, which can either bring in revenues or invoke the negative effects.
Aizenman, J., Pinto, B eds., 2006, Managing Economic Volatility and Crisis (Cambridge University Press).
Brassington, F., Pettitt, S 2005, Essentials of Marketing, Prentice Hall, Harlow.
Kim J., Rigdon B 1998, Sustainable Architecture Module: Introduction to Sustainable
Design. National Pollution Prevention Center for Higher Education.
Melville, N., Kraemer, K., and Gurbaxani, V 2004, “Review: Information technology and
organizational performance: An integrated model of IT business value,” MIS Quarterly, 28(2), 283-322.
Radaelli, C. M 2005, Diffusion without convergence: how political context shapes the
adoption of regulatory impact assessment. Journal of European Public Policy 12, 5: 924-943.
Reinert, K 2012, An Introduction To International Economics. Cambridge University Press.
Sassi, P 2006, Strategies for Sustainable Architecture. Taylor & Francis.
Williams D. E 2007, Sustainable design: ecology, architecture, and planning. John Wiley
Wurzel, R. K 2002, Environmental policy-making in Britain, Germany and the European
Union. Manchester. Manchester University Press; and Jordan, A., Wurzel, R. K. W., Zito, A. R. (Hrsg.) (2003a): “New” Instruments of Environmental Governance? National Experiences and Prospects. London: Frank Cass. Environmental Politics, Special Issue 12 (1).
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