(P1) and establish groundwork in the country. China

(P1) Explain the internationalbusiness environment in which a selected organisation operates  Inthis report I will be explain the type of business environment of whichJaguarLandRover operates within. I will be providing information and conductingresearch of which will show you the importance of national trade to the countryitself (China) and will be looking into the way the country imports and exports.It is important that I identify to you what it is like for China to trade inthe current markets and any barriers that they may be faced with in trade. Internationalbusiness oversees all of the activities that take place that allow the transferof goods, services, resources, people, ideas, and technologies across theworld. International business can take place in a number of different formats:•Themovement of goods from country to another (exporting, importing, trade)•Contractualagreements that allow foreign firms to use products, services, and processesfrom other nations (licensing, franchising)•Theformation and operations of sales, manufacturing, research and development, anddistribution facilities in foreign marketsWhat is Chinas current economicstate? It isclear that in Chinas current financial climate, they are working hard on makingit easier for companies that are wishing to bring business from foreigncountries to invest and establish groundwork in the country.

China is currentlyundertaking a vast series of measures to ensure that all operating countriescan predict a steady growth on their foreign investment, making the proceduresmore internationalised for growth. Withthe never-ending growth taking place in China, the opportunities in China areendless and the market is one of the largest across the world. With thisgrowth, it carries a large possibility to be successful in China. Taking abusiness to an environment such as China requires much patience and a largeunderstanding of the business environment. Thereis comprehensive legal framework and a set-in stone judicial system works hardfor its foreign investors. It works to protect proceedings.

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This of course isencouraging to foreign investors. Chinahas an ever-reforming economic market and strive for transformation. Chinastransforming market, the economic reforms that China has been attempting toimplement over the past two decades have begun to have an effect of both companies’individual initiative and entrepreneurship. From Chinas ventures and programmesset in place, the poverty levels throughout the country have dramaticallydeclined and subsequently the average income has reached its highest level,boosting the economy.

Chinas economic growth is very sustainable. It hassuccessfully sustained at a percentage of 9.5% over the past 26 years. In 2009the Chinese economy reached a record $4.814 trillion, this being about a thirdof the size of the US economy. It a large economic growth in China and a highernumber of income for its citizens, China is able to continuously grow and allowfor businesses and brands to launch branches in the country. Inaddition, Chinese Government pursued agricultural reforms, dismantling thecommune system and introducing a household-based system that provided peasantsgreater decision-making in agricultural activities.

Besides that, non-agriculturalactivities like village enterprises in rural areas were also encouraged.Similarly, the government promoted more self-management for state-ownedenterprises in order to increased competition in the marketplace, and createopportunities for China’s domestic enterprise directly contact with the foreignones.I willnow be looking into the JaguarLandRover Company taking their business to Chinaand operating their business in a foreign country. It is essential that whenyou are tapping into the Chinese market that you adapt your workings to ensurethat you are innovative and flexible. This is something that JaguarLandRoverhave done.

Going into the venture with an adopted long-term approach allows thecompany to build a strong work force in China. JaguarLand Rover first established a presence in China over a decade ago. It has over4,000 employees as well as more than 200 operational retailers. Additionalactivities include four regional offices, three training academies and a LandRover Experience Centre.

JaguarLand Rover is committed to inspiring future generations of Chinese automotiveengineers. The Jaguar Land Rover apprentice training programme was created sixyears ago and today 400 apprentices graduate from its 10 training centres eachyear. Thecompany has developed a compelling corporate social responsibility (CSR)programme in China, creating the Jaguar Land Rover Children and Dream Fund,working with the Soong Ching Ling Foundation. Jaguar Land Rover has committedto invest RMB 50 million over three years in an initiative that supports anddevelops underprivileged young people.Theorganisation would have needed to of considered that in a foreign country, theywould be faced with much stronger competition, as there will already besuccessful organisations in that field that have originated or had a presencein China.

Language will also be a barrier when attempting to build a successfulbranch in a foreign country, it would be essential for JaguarLandRover to haverepresentatives that speak Mandarin, the main language that is spoken in thecountry. Advertising in the country will also have to appeal to the culturethat is present, it is certain that an advert that is presented and understoodin a country such as America won’t be perceived or understood the same inChina. Business Etiquette is also a strong factor that would need to be adaptedwhen doing business in China. An uncommonly known fact is that when doingbusiness, shaking hands is deemed to be bad and unacceptable so bowing hastaken its place. This is part of the Chinese culture and is something thatJaguarLandRover employees would need to understand and be aware of.

Inconclusion I have explained the international business environment in JaguarLandRoveroperates in. I have explained the different challenges of which the businesswill be faced with and how they can overcome them.      P2 describe the mechanisms thatregulate international tradeInthis report I will be identifying the various different mechanisms that have aneffect on and regulate international trade. When trading in a foreign country,there are number of barriers than an organisation would be required to considerwhen attempting to trade internationally. If these regulations were notfollowed, it is possible that the organisations will cause trouble forthemselves as they would be disobeying the rules set from the country they areattempting to operate in.

I will be identifying six different regulations thata company looking to trade in a foreign country would have to follow. Regulation: Trade -What is itand why would it effect a company?Tradeis an economic concept of there is buying and selling involved in a process ofgoods or services being purchased or being paid for. Trade can also be seen ascompensation being given to each other in a situation or the exchange of goodsor services, this is where no money has traded between the two parties. Themost commonly seen mechanism of trade is the transaction of money through the twodifferent parties. Trade may also be exchanged online between the two differentparties, this is known as a barter or payment with an online currency. Tradecan simply be seen as the buying and selling of social securities. Tradetransactions range in complexity, this could be from the simple purchase of aproduct from a store to multi-international policies setting rules and regulationsfor imports and exports.

Trading is facilitated through three different typesof exchanges. These being payment in the specific countries currency, the exchangeof goods and services or virtual on-line services and currency.Regulation: Quotas -What is itand why would it effect a company?A quotais an imposed restriction by your counties government of which places a limiton the number of or the monetary value of a product.

It can also be a restrictionof which regulations that number of goods that can be imported or exported duringa particular time period that has been imposed. Quotas are widely used withininternational trade as it assists with the regulation of the volume of tradebetween the different countries. It is known that sometimes specific goods havequotas imposed to reduce imports into the country. With certain restrictions,it could allow for domestic production in increase since there would be restrictionon foreign competition.Quotasare different to that of tariffs or custom regulations of which a tax isimplied to a product or service by a specific country.

A quota is a protectivemeasure that is imposed by the countries governments to control the amount oftrade throughout countries.Regulation: Incoterms -What isit and why would it effect a company?Incotermsare specific trade terms that are published by the International Chamber ofCommerce that are implied in both international and trade contracts. They arecommonly used in international trade agreements as it strives to assist tradersof whom are working from different countries to work with and understand one another.

Incoterms were developed in 1936 and are continuously updated to conform to thenew and improved trade practices. Trade terms are used in a variety ofdifferent countries, but would have different internal meanings when useddomestically. Incoterms are recognised to prevent confusion arising in foreigntrade contracts by allowing buyers or sellers to understand rules andregulations throughout transactions. Regulation: Free Trade -What isit and why would it effect a company?Freetrade is simply the economic policy that involves discriminating against importsand exports to jurisdictions from foreign countries.

This involves buyers andsellers from different economies that voluntarily trade without implying thedomestic tariffs being applied to the process. These being quotas, prohibitionsand subsidies for the goods and services they have provided. A free tradepolicy is simply the absence of any other trade restrictions or policies put inplace. Free trade is not positive promoted as companies strive to trade thisway when they can already do so.

Governments with free trade agreements (FTAs)do not necessarily abandon all control of taxation of imports and exports.Regulation: Embargoes -What isit and why would it effect a company?Anembargo is a regulation put in place by the government of which restricts exchangeor trade between specific countries or the exchange of specified goods. This isa regulation of which is usually implied when an unfavourable political oreconomic circumstance arises between nations. The restriction simply isolatedthe country in hand and formulates difficulties for its government.Astrategic embargo prevents the exchange of any military goods with a country. Atrade embargo restricts anyone from exporting to the target nation.

Becausemany nations rely on global trade, an embargo is a powerful tool forinfluencing a nation.Regulation: Barriers to Trade-What is it and why would it effect a company?Barriersto trade are specific measures that have been applied by the governments orpolitical authorities in their retrospective countries. They are introduced tomaintain that imported goods or services from foreign countries lesscompetitive and appealing than the products that are produced and sourcedlocally. But not everything that prevents trade can be characterised as abarrier to trade.

ABarrier to trade can be linked and identified to a specific product that hasbeen traded. It could also be a barrier that has been implied in an administrativeway for example the rules and procedures that are connected with a transactionthat has to be carried out. In a number of areas, special international groundrules have been agreed, which limit the ways in which countries can regulatetrade. It means that some barriers are legal while others are illegal.In conclusion,I have identified and described that mechanisms that regulate internationaltrade and summarised the meanings of each factor.

P3 describe how the environmentand culture of another country affects a business operating internationally.Inthis section of the report I will be identifying the how the culture of Chinaand its environmental practices would have an effect on JaguarLandRover operatinginternationally. I will be looking at the environmental and social factors thatwill affect JaguarLandRover and look at how it will affect their operations inChina. Theexternal business environment in Chinas is very challenging and has a highcomplexity. China is still a communist state and is still going through arapidly changing process off substantial environmental and social change. Thereis an everchanging economy in China of which brings with it substantial costs. Throughoutthe past number of years, China has set it self an extensive list of targetsand predicated growth for its internal expansion.

Chinas political and legal environmentis relatively volatile and has a harsh vetting process for foreign businesses wantingto operate in China such as JaguarLandRover.It isimportant to explore the external environment for a business such as JaguarLandRoverthat have decided to create a branch in China. They would be required toidentify factors such as the current Urbanisation, Wealth, Poverty and socialinequality. They would also need to consider the current ageing population andthe ongoing air pollution and working conditions of the individuals that willbe working in the companies’ factories. Chinasenvironment has been deemed as terrible throughout previous years, with vastamounts of pollution that does not appear to be getting any better. The currentlevels of pollution in Chinas capital are currently at a level of 80 microgramsper cubic centimetre.

This of which is still tremendous amounts away from the WorldHealth’s Organisations target of just 35 micrograms. This is a serious issueand subsequently fails to capture the changes that are occurring internally andthe business ventures that are continually taking place. A teamof British and Chinese scientists published the results of their research inNature Geoscience that said they believed that China’s coal consumption hadpeaked around 2014 and that China’s economic growth had, in fact, alreadydecoupled from coal consumption. The”new normal” period of slowing economic growth has set in and a gradualreduction in water, soil and other kinds of pollution has followed. Accordingto data released by the Ministry of Environmental Protection on November 30, byend 2015, heavy metal emissions had fallen by 27.7 per cent compared with 2007.

Thereis a strong toxic heavy metal pollution throughout China that is continuously causingproblems for the countries water and soil. Whilst there is a decline in thepollution and in reflection it looks good for the environment, clearing up pastoccurrences is not easy and therefore pollution will continue at no fault oftheir own. Social Culture in ChinaChina ishome to one-fifth of the worlds population and is therefore one of the worldsfastest-growing economies. When visiting the county, you are able to see thecountries ancient culture crossed with the forever modernising process going onwithin the country.

Chinas communist party holds strict control over mostaspects of those that live within China, especially for women. But theseprocesses have been Improved recently.With apopulation officially over 1.

3 billion and an estimated growth rate of 0.494%,China is very concerned about its population growth and has attempted withmixed results to implement a strict birth limitation policy. The government’sgoal is to stabilize the population in the first half of the 21st century, and2009 projections from the U.

S. Census Bureau are that the Chinese population willpeak at around 1.4 billion by 2026. Asimilar factor of which has to be considered is the ongoing trend of employmentthroughout China in relation to the unemployment levels. The countries unemploymentis currently at a very high rate and subsequently a big company such asJaguarLandRover bring a large number of jobs to the country would be highlybeneficial.

Thereis also the issue of gender roles that would have to be combatted if a companysuch as JaguarLandRover was to launch a Chinese branch. Traditional beliefshave always placed men ahead of women in the social hierarchy, and the issuehas been exacerbated since the Communist government initiated the one-childpolicy. Age-old beliefs created pressure on families to produce a boy so thefamily name will carry on. The result is an ugly history of female infanticideand abandonment, which hasn’t yet been eliminated.

However, under Communism,women have made great strides in other areas, particularly in working andtaking on greater roles in professional and public life. They are able toinherit property.Behaviours, Etiquette andValuesChineseculture has traditionally prized the worth of the group over the worth of anyone individual; the rise of Communism has enforced this. For the Chinese,failure to do one’s duty is dishonourable, not only to the individual but tothe entire family.

Deference and obedience to one’s elders are of the utmostimportance, as are ideas of hospitality and social ties. Several generationsmight live in close quarters and have contact with one another daily, and neighboursvisit and interact on a regular basis.Inconclusion I have described how the environment and culture of another countryaffects a business operating internationally.    P4 describe how the monetaryenvironment affects businesses that operate internationallyInthis final section of the report, I will be discussing how international businessesare financially supported and their impact on the monetary environments.

Internationalmonetary environments are simply internationally agreed rules and supporting institutionsthat are able to assist and facilitate trade across borders. It also assistswith the reallocation of net capital between different countries both insideand outside the European union. They are able to provide a safe and securemeans of payment for sellers and buyers from different nationalities andcountries. In order to operate successfully, the business needs to be able tolet off confidence and be able to provide liquidity and depth for thefluctuating levels of trade throughout countries.

Thereare a number of different factors that affect the international monetary environment.The success of the transferring of money is essential as it is common in largercompanies that vast amounts of money are required to be moved online and not alwaysin the traditional ways of cash swaps or checks. International payment methods: Letters of credit:Thisis a letter of which you receive from your bank that ensures that a buyer orbusiness partners payment to the seller or college will go through, be acceptedand received on time and is of the correct amount.

The letter requires that inthe event of which a buyer or business partner does not have the finances inorder to make the payment, the bank will cover the full amount of the purchase.Differing laws may play a part in international dealings and therefore theletters of credit are a very important aspect of international trade.International clearance andbanking: Internationalclearance and banking is a system of trade where the transition phase of acontract is entered on an international level. It is also designed to be ableto promote and lift world trade and the international markets efficiency.  It is common that international clearing transactionsare overviewed by an international clearing house.Foreign exchange:Foreignexchange is the exchange of one currency for another or the conversion of one currencyinto another currency.Foreignexchange also refers to the global market where currencies are traded virtuallyaround the clock.

The largest trading centres are London, New York, Singaporeand Tokyo. Exchange rate fluctuations:Thisis the rate of which the value of an international currency is determined by thefree market. When a currency has a fluctuating exchange rate, the value changesconstantly depending on supply and demand. Although there are some advantages offluctuating exchange rates.

This is that it tends to be much more efficient forthe company economically. Although on the other hand it allows for the currencyand trade to be much more volatile.Trade insurance:Tradecredit insurance, business credit insurance, export credit insurance, or creditinsurance is an insurance policy and a risk management product offered byprivate insurance companies and governmental export credit agencies to businessentities wishing to protect their accounts receivable from loss due to creditrisks such as protracted default, insolvency or bankruptcy.Thereare also a number of institutions that support international business relationsand their finances.

It is common for business of which have not ventured intoforeign countries and currencies to need advice, and this is what institutionsuch as the ECGD, UKTI and the EMU are there for. International institutions alsomonitor the importing an exporting of goods. It allows the company to be surethey are complying to the correct rules, regulations and costs and that theyare also receiving the correct amounts for their services.Examplesof institutions that support international business with their finances: Institutions:ECGD (Export Credit Guarantee Department), UKTI (UK Trade and Investment), EMU(European Monetary Union).Inconclusion, I have described how the monetary environment affects businessesthat operate internationally.


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