2.2.1.the Importance of International Trade, Economic Integration and Global Markets to Uk Business Organisations

International trade is the exchange of goods and services between countries. The exchange includes import that the countries buy goods or services from other countries outside and export that the countries sell goods or services overseas. Trading of goods is available with clothes, food, stocks, wines, jewellery and many more products. Trading of services is also done like banking, consulting, tourism, or transportation. The international trade play an important role in the development of a country??™s economy in general and in the development of an individual organisation in particular. Essentially, international trade help a country become richer because rather than the country tries to produce every products which encompass products with no comparative and absolute advantages by itself, it could specialise some particular products which have the absolute and comparative advantages. Many countries are gifted with natural resources; therefore, they can manufacture products with cheaper production cost and sell at cheaper prices. International trade allows countries and customers have more chances to expose services and goods that are not available in their own country. There are many benefits which international trade can bring to organisations. They are as follow:
– It helps organisations expand its competitiveness and market shares in both domestic market and foreign markets.
– Organisation will be provided new segments leading to more potential customers.
– The remission of taxes helps organisations reduce expend.
– Organisations can take full advantages of their competitive abilities.
– Exports will increase sales and profits of organisations.
– International trade can help to reduce dependence of organisations on geographical markets when they want to extend portfolios.
– International trade is the best way to help organisations continue their operations whenever the domestic market is saturate.
– It has a part in stabilizing seasonal market fluctuations.
– Organisations can exploit international trade technology to develop their own transactions.
– International competition will increase production efficiencies and will help to extend the size of organisations.
– Organisations will have chance to experience in cultural exchanges between nations.
Furthermore, economic integration has become a common trend in the development of economy. The degree of economic integration can be divided into six stages:
– Preferential trading area
– Free trade area
– Customs union
– Common market
– Economic and monetary union
– Complete economic integration
Economic integration has brought many benefits to the countries. The more integrated the economic become, the fewer trade barriers exist. The economic and political coordination is much better. The economy are integrated, the costs for both consumers and producers are reduced, as well as trade increases between the countries taking part in the agreement. Integration also has positive effect on innovation and growth by creating more competitions between these countries. The market becomes wider; therefore, it allows organisations to sell their product to more consumers with no limit. Preferential trade can contribute to replace domestic production by cheaper imports from other countries; therefore, it reduces inefficient local production and minimizes the inefficient use of resources. The removal of trade barriers is reduced and the tariffs can be removed entirely. Consequently, organisations can save a lot of money. Economic integration encourages trade between countries which help organisations expand their operations in the market implicating skilful employees from over the world. Integrated economy also increases foreign direct investment from other countries. The relationship with other countries will be stronger. With many benefits, economic integration has become a important strategy of many countries in the world.
Nowadays, any organisations always want to become bigger and expand its transaction in foreign markets. Global market has become a promising place with many organisations. Doing business in global market offers a lot of opportunities to organisations to develop. Then, there are some benefits that global market can bring to organisations.
– Doing business globally will help organisations learn a lot of new knowledge and technology from foreign countries.
– The fierce competition in global market will always let organisations improve it efficiency to adapt the requirement from global market.
– Doing business outside domestic market will reduce the dependence on traditional markets.
– Sales and profits increase when organisations sell more products to foreign markets.
In summary, international trade, economic integration, and global market play an important role on the development of an organisation. They are can be a big challenge, but if organisation has suitable strategies to overcome, it will get a lot benefits. Going global is the common trend in modern economic. To adapt it origination have to perfect their own businesses to compete will other global organisations in the world.