Contemporary Business Environment Y2 Revision

Complex Environment of Business:

Complex Environment

• Organisations e.g. businesses, charities, government bodies

• Stakeholders (networks)

• Environment (local, national and international

Stakeholders definition:

Stakeholders: Any individual or group who can affect or is affected by actions, decisions, policies, practices and goals of the organisation. (Carroll and Buchholtz 2000)

4 types of stakeholders (DIIE):

• Direct: Have a visible role within the organisation or the support and regulation of it

  • e.g. owners of a company such as Loughborough University Council

• Indirect: those who don’t have a visible organisational role but whose interests can be enhanced or threatened by its actions

  • e.g. students, local community, civilians

• Internal: entities who have a role within an organisation

  • e.g. employees, owners, managers

• External: not involved in the business per se but activities are connected

  • e.g. customers, suppliers of the university

Stakeholders of Organisations:

community, government, financiers, owners, agents, customers, competitors, subsidiaries, associates,

Dimensions and layers of the International Business Environment:

• Economic, Financial

• Political, Legal

• Technological

• Ecological

• Cultural and social

Layers: Business enterprise —> local community —> national environment —> region —> world

They both intertwine in which layers and dimensions are interconnected

• e.g. Political + National Environment: political system and the degree of civil and political freedoms

Political influences on an organisation

• Regulations and technical standards

• Investment incentives and currency

• Ownership restrictions and laws

  • governments can create the rules and frameworks that affect organisations operations, which can change overtime.

External influences on an organisation:

• Global influences and globalisation

• PESTLE forces (Makos, 2024)

  • Political: Trade and tax policies, leadership changes, regulation, political trends

    • e.g. EU introducing General Data Protection Regulation —> impacting IT investment, customer relationships and data-handling practices

  • Economic: Taxation, VAT, inflation, investment, interest rates

    • Ireland having low corporate tax compared to EU average —> Apple and Google establishing European headquarters in Ireland

  • Social: Social and cultural changes, demographics, education and lifestyle

    • e.g. Nike’s expansion of its product line to include diverse models reflects shifting demographics and body-positivity movements, youth-appeal

  • Technological: digital market innovation, sustainable tech, software development

    • e.g. Robotics replaced human production lines, automated technology services e.g. McDonald’s self-checkout screens

  • Legal: Profit margins, patents, copyright, legislation

    • Laws have been introduced to prevent companies from Tesco from changing product prices without informing customers

  • Environmental: climate change, sustainability policies, regulation, renewables

    • IKEA has made significant strides in environmental management, emphasising on renewable energy, sustainable materials and product life extension —> become a circular business by 2030

• Market forces e.g. competitors, suppliers, distributors

How does the Government support businesses

• Government support e.g. subsidies and expertise

• Cybersecurity training

• Digital platform performance

Organisational and Individual influence on Government Politics

• Organisation size

• Public perception and image

  • Non-profit organisations can contribute e.g. Marcus Rashford

• Lobbying —> changes in legislation

• Corruption and crimes

Lobbying:

Lobbying: The act of individuals or groups attempting to influence government decisions such as laws and policies

• Lobbyists (who may represent businesses, TU, charities etc.) try to persuade politicians or public officials through meetings, reports and campaigns.

Political stability impacting organisations:

• Business success stems from informed decisions about investment / expansion

  • You need the economy / environment to be stable, predictable and reliable

  • Role of leaders such as business, public sector maintain, helps to maintain stability —> steady growth

• Impacts :

  • political discourse, conflicts, rising prices, economic uncertainty

  “Trump to impose 25% tariffs on steel and aluminium imports” (FT)

Why do organisations monitor the political environment?

• Economic environment is influenced, e.g. fiscal and monetary policy impacts growth and spending power

• Political stability affects market attractiveness and attracts investors

• Governments pass legislation that affects the relationship between businesses, clients, suppliers and competitors

  • employment laws, VAT changes

Government Levels in the UK:

• National (Westminster)

• Devolved (Edinburgh, Cardiff, Belfast)

• Regional (Country), unitary

  • Policy include

    • opportunity creation e.g. science parks

    • Northern Powerhouse e.g. innovation, transportation, investment

    • Local Enterprise Partnerships

• Local / District (Borough Council, Leicester City)

“The government’s central mission is to level up every part of the UK by spreading opportunity, empowering local leaders and improving public services” (Government spokesperson)

Private vs Public sector companies:

• Private Sector:

  • owned and managed by individuals/companies

  • For-profit, non-government operated

  • e.g. manufacturing, hospitality, financial services

  • 2025 - 5.7M private sector businesses in the UK

• Public Sector:

  • owned and managed by the government

  • e.g. fire services, health service, public schools, police

  • e.g. NHS, approx 1.5M employees**, £140bn** budget**, 18%** spending as proportion of Gov Exp

  • 2021 - 5.75m; 33m UK workforce

  • Largest public organisations in the world: US DoD, NHS, CNPC

3 key differences between Private and Public Sector:

• revenue

• accountability

• competition

Organisation objectives, for profit vs non-profit:

• For profit:

  • Primary purpose of generating profits

  • Operate in private sector, owned by individuals or groups

  • Subject to legal and financial framework

  • e.g. manufacturing, services, technology

• Not for profit:

  • Primary purpose is public benefit

  • Tax exempt + generate funding through donations, sponsorship

e.g. charities, social enterprise

Social Enterprise (non-profit):

businesses that trade to tackle social problems, improve communities, people’s life chances or the environment

• Make money from selling G&S in open market —> reinvest profits back into

• “SEs leverage economic activity to pursue a social objective and implement social change” (Mair et al., 2012)

National vs International Organisation differences:

National vs International:

• New markets + market saturation

• Efficient production

• Proximity to key resources and customers

• Access to technology and skills

• Tax and regulation

Small vs Medium Organisations + SMEs:

• Small:

  • Turnover < £6.5m

  • Balance sheet < £3.26m

  • Employees < 50

• Medium:

  • Turnover < £25.9m

  • Balance sheet < £12.9m

  • Employees < 250

• SME: small-medium enterprise

  • make up 99% of private sector organisations

  • Contribute employment, choice, supply and innovation to economy

Multinational Enterprise: (Peng and Meyer, 2016)

Multinational Enterprise: A firm that engages in FDI by directly investing in, controlling and managing value-added activities in other countries (Peng and Meyer, 2016)

Legal form and structure determining the type of Organisation:

• Legal structure determines tax payments, grants received and business structure an organisation adopts

• e.g. sole trade, partnership, Private Limited Company or Public Limited Company

Decision factors determining the type of organisation:

• Internal: Size, Motivation, Ownership, Limit liability

• External: Industry nature, Infrastructure, Taxation, Legislation

Globalisation definition (Buckley et al,, 2018 and House of Lords, 2002)

Globalisation: “The global movement towards cross-border integration of trade capital, communications and other factors that is creating an increasingly interdependent world” (Buckley et al., 2018)

• Increasing international interactions and accelerating trade, capital and information flow (House of Lords, 2002)

• Diffusion of global norms, spread of democracy and proliferation of treaties (House of Lords, 2002)

International Business (Peng and Meyer, 2024):

International business: Businesses engaging in international activities and / or the activity of doing business abroad (Peng and Meyer, 2024)

Global drivers of Globalisation and examples:

• Profit and Non-Profit Organisations:

  • Traditional TNCs e.g. Apple, BP

• Global reach for Non-profit organisations:

  • e.g. Oxfam, Red Cross

• Supranational Organisations (for trade):

  • e.g. WTO, World Economic Forum, USMCA

• Supranational Organisations (not specifically for trade):

  • e.g. United Nations, World Bank

Economic Groupings vs Trade Regions in terms of scope and politics:

	Economic Groupings	Trading Regions
Scope	Broad economic cooperation in trade, finance and labour	Primary focus is trade agreements
Examples	EU, G7, BRICS , Eurozone, Free Trade Areas ASEAN	USMCA, MERCOSUR,
Political Integration?	Sometimes e.g. EU political institutions	Usually none
Regulatory harmonisation?	Often includes economic policy beyond trade	Tariffs, quotas and trade barriers

Examples of Economic Groupings:

• European Union (EU): Political and economic union with a single market and shared policies, 27 countries

• G7: Informal groping of major economies (USA, Canada, UK, France, Germany, Italy, Japan) discussing global economic policies

• BRICS: A group of emerging economies (Brazil, Russia, India, China, South Africa) focused on trade cooperation, investment, development and infrastructure

• OECD: The organisation for Economic Co-Operation and Development consisting of high-income economies that collaborate on policy

Wiseman et al., 2026 Trump and EU diversification:

“US trade partners are pushing to diversify their economies away from a newly protectionist United States”

“The free trade agreement between India and the EU brings much needed oxygen to a world increasingly dominated by trade conflicts,”

“The U.S., he posted, would reduce tariffs on Indian imports after India agreed to stop buying oil from Russia, which has used the sales to fund its four year war in Ukraine”

• Political influence upon Economic Groupings, highlighting intersection between economics and international relations

EU Criticism:

EU Criticism:

• Right-wing extremism

• Economic disparity, including East vs West

• Further enlargement to Slavic, Eastern nations

• Fiscal differences

• Free Markets vs MAGA / Protectionism

• European defence NATO, issues over spending, military activity and cohesion

Examples of Trading Regions:

Trading Regions:

• USMCA: United States, Mexico, Canada Agreement reducing barriers between North American Countries

• ASEAN Free Trade Areas (AFTA): A trade bloc in Southeast Asia aimed at tariff reduction and catalyst for free trade and mobility of resources

• MERCOSUR (Southern Common Market): South American trading bloc with economic cooperation

• European Economic Area (EEA): Trading arrangement between EU and non-EU countries like Norway, Iceland and Leichtenstein

National governments impacting international business:

• Attracting FDI through economic policy such as reducing national debt, improving means of resource and labour mobility and reducing corporate tax to allow for R&D

• Tax incentives in which reducing corporate tax to allow for R&D

• Lobbying / trade missions to encourage international business cooperation

• Economic Patriotism, coupled with domestic business dealings, can result in domestic expansion of businesses

  • Trump placing tariffs on other countries of 15% increases domestic production and output of domestic businesses, fuelling patriotism and self-sufficiency

Disadvantages of Globalisation (EDUCBA, 2026):

• Increased income Inequality:

  • countries excluded from trading blocs like AFTA and MERCOSUR cannot reap benefits of cheaper and freer trade, so they miss out on economic potential

  • OECD concentrates “wealth in the hands of a few multinational corporations, widening the gap between the rich and the poor” (EDUCBA, 2026)

    • This links to a loss of sovereignty and greater reliance on TNCs and foreign institutions rather than domestic patriotism and domestic decision making

• Environmental Degradation:

  • Cross-border integration of labour and capital requires transportation, enacting negative environmental impacts

  • Specialisation and Competitive Advantage may lead to increased environmental degradation for countries that specialise in manufacturing or agriculture

  • Unstable Global Markets:

    • Trump’s Terrible Tariffs have caused global market volatility due to unpredictability but also rapid change in trade costs and re-shuffiling of investor portfolios

  • Cultural Homogenisation:

    • Globalisation has resulted in the spread of social elements such as Hollywood movies and fast food franchises, resulting in the erosion of tradition and values in developing countries (EDUCBA, 2026)

      • underlying replacement by Western Culture in terms of politics, cultural, social factors and economic activity (Neo-Colonialism)

Benefits of Localisation (Ramesh, 2026):

• Global Brand Recognition:

  • Localisation helps companies build brand recognition and establish a strong presence by adapting norms and brands to resonate with diverse audiences

    • According to the 2017 Web Globalization Report Card, the world’s top twenty-five websites now support an average of 54 languages

    • e.g. Nivea, who customise products and promotions to suit preferences of each market, as well as language adaptability and inclusion

• Market expansion:

  • Allows businesses to enter new markets and expand their global footprint via service and product customisation

    • e.g. Starbucks’ in China, modifying its store menu to Chinese culture and engaging customers with social media —> robust brand presence

• Improved customer loyalty:

  • Demonstrating a commitment to meeting needs of exclusive needs of local consumers

    • Tailoring products, services and communications to enable local audience resonation, businesses can foster deeper connections, build trust and retain customers

    • e.g. Amazon, providing localised customer support and assistance in various languages, as well as personalising assistance and troubleshooting

      • cultivating meaningful customer relationships in the long-term and establishing loyalty

Risk Analysis:

• Opportunity, Perception and attitude, reward, mitigation, risk averse vs taking

• Ongoing activity because of global dynamism

The process of identifying and analysing potential future events that may adversely impact a company (Hayes, 2024)

• Country wide: political instability, economic risk, civil unrest, economic risk etc.

Credit rating:

Credit rating: An evaluation of the credit risk of a prospective debtor such as an individual, business or company (Kronwald, 2009)

AAA = strong economic position and low default risk. UK was AA in 2022

Organisation of risk:

Financial risk, innovation, compliance, Management, HR, Reputation

UK current issues of concern:

budget, IR target, Net Zero approach, tech giants and influence of social media

Investment Framework (Laserre, 2012):

Market and Competitive Opportunities = MCO + Risk

• High MCO + Low Risk = High Attractiveness e.g. scarce opportunities

• High MCO + High Risk = High Risk, High Return e.g. VC investment

• Low MCO + Low risk = Low risk, Low Return e.g. government bonds

• Low MCO + High risk = Low attractiveness e.g. void investment

Financial Risk; Systematic vs Unsystematic Risk:

• Exchange Rates: Translation, transaction and economic exposure

• Systematic Risk (undiversifiable and unavoidable): impacting market wide e.g. inflation or recession

• Unsystematic risk (diversifiable and avoidable): specific to certain types of investment, security e.g. industrial action

Political Risk with quotes:

• Macropolitical: impacts all businesses in an economy

• Micropolitical: affects some businesses e.g. SME

• Examples: government change, policy change, regulation change, war, terrorism

• Impact of Risk vs Likelihood of Risk occurring

“Nearly 50% of firms avoid foreign direct investment because of political risk” (Giambona, Graham & Harvey, 2017)

“54% of participants believe political risk has increased, whereas only 8.4% believe it has decreased” (Giambona et al., 2017)

Legal Risks:

Product liability, contract terms, accidents, environmental damage, IP rights

Environmental Risks:

• Long-term, uncontrollable but preventable

• Reputational Risk: sustainability and greenwashing

• Supply chains vulnerable to natural disasters

• Climate change, water scarcity and deforestation

Cultural Risks with quotes:

• Differing communication styles can lead to misunderstandings and failures e.g. Walmart in Germany experiencing communication clashes

• Language barriers can lead to marketing and operational mistakes e.g. HSBC global slogan “Assume Nothing” was mistranslated in several countries as “Do Nothing” —> rebranding procedure costing $10 million

• Differing management styles such as hierarchy and decision making can cause organisational and structural conflict e.g. eBay in China: open online marketplaces vs relationship-based transactions

• Ethical norms, unethical behaviour and ethical disagreements may occur, linking to religious and cultural beliefs

Knowledge Economy:

Knowledge Economy

“At the heart of capitalism is creative destruction.” (Schumpeter)

Economy based on creation, distribution and use of knowledge as the primary driver of economic growth

• Human capital, intellectual property, innovation, tech-based services and creative industries

• Goal: leverage knowledge and expertise to create economic value

• Human capital + technology = knowledge economy

“All sectors are knowledge-intensive, responsive to new ideas and technological change, are innovative and employ highly skilled personnel engaged in ongoing learning” (Smith 2000, AEGIS 2003)

“Greater reliance on intellectual capabilities than on physical inputs or natural resources” (Powell and Snellman, 2004)

Knowledge Economy broad quotes:

“At the heart of capitalism is creative destruction.” (Schumpeter)

“All sectors are knowledge-intensive, responsive to new ideas and technological change, are innovative and employ highly skilled personnel engaged in ongoing learning” (Smith 2000, AEGIS 2003)

“Greater reliance on intellectual capabilities than on physical inputs or natural resources” (Powell and Snellman, 2004)

4 key reasons for innovation + innovation process:

• Sustainability and business responsibility

  • “By 2030, the gap between global demand and supplies of fresh water is expected to reach 40%” (Guardian, 2015).

• Competitive Advantage

• Technological advancements

• Globalisation and changing consumer behaviour

Innovation —> development —> productivity —> economic output and efficiency

Innovation definition and types:

Innovation: The introduction of new ideas, goods, services and practices which are intended to be useful

Opportunity —> Concept —> Validate —> Develop —> Deploy

• Transformational: changing daily lives e.g. telephone, social media

• Radical: new product or system e.g. mobile phones

• Incremental: step-by-step improvements e.g. software updates

• Other types: Product, Organisational, marketing, open, frugal low-cost, social, technological

Evaluation of Innovation:

Evaluation of Innovation

• Entails high levels of uncertainty and complexity

• Asymmetric or incomplete information

• Oversimplified: building solutions is easy but finding the right problem to solve is difficult

• Rocky: 70% of upstart tech companies fail, usually around 20 months

• “More than 40% of new products fail” (Castellion and Markham, 2013)

Key determinants of innovation (Morrison, 2023):

• Education and learning, including access and technological focus

• Infrastructure: transport, communication, public utilities

• Sustainability: carbon reduction, renewables, biodiversity

• Regulation: rule of law, ease of start-ups, legal framework, funding schemes

• Knowledge economy: networks, R&D links, local high-tech business, international transfers

• Politics: stability, governance standards, democracy and accountability

Knowledge Economy + Stats:

Knowledge Economy: An economy using knowledge as a key source of competitiveness, dependent on quality, quantity and accessibility of information available.

• “About 40% of GDP in the UK is generated by knowledge intensive industries such as education, health and telecommunications”

• 2021: Knowledge workers are 49% of UK workforce (ONS, 2021)

Knowledge definition and types:

Knowledge: the ability to understand information, and to then form judgements, opinions, predictions and decisions based on that understanding.

• Explicit: Formal language knowledge, data and formulae etc.

• Tacit: Personal, subjective, intuitive and instinctive

• Know-What: Facts and statistics of importance

• Know-Why: Scientific knowledge of principles and laws, underlying technological development

• Know-How: Skills or capabilities to carry out a task e.g. businessmen judging market prospects for a new product

• Know-Who: Information about relationships, social interaction and social knowledge

Knowledge Management definitions:

Knowledge Management: Identifying and gathering information from documents, reports and sources (people) and to be able to search that content for meaningful relationships (Kumar et al., 2006)

Data Mining definition:

Data Mining: A process used by companies to turn raw data into useful information by using pattern-detection software à analyse data, develop effective marketing strategies and maximise profits

Market Basket Analysis:

Market Basket Analysis: A data mining technique used to understand the purchasing behaviours of customers by explaining combinations of products purchased, as well as repeat purchases, consumer likings and enhancing product placement

Adidas Case Study: Tasked with producing the FIFA World Cup football for South Africa 2010 (open innovation):

Adidas Case Study: Tasked with producing the FIFA World Cup football for South Africa 2010

• Incumbent ablities: design knowledge, manufacturing capability, sales and marketing expertise

• Issue: Company lacked expertise in aerodynamic research and testing

• Found experts in the Sports Technology Institute Loughborough University

  • Adidas entered collaborations to access highly specialised knowledge to develop the Jabulani football, based on comprehensive aerodynamic research conducted at Loughborough ***(*Adidas Annual Report, 2009)

Barriers to knowledge transfer:

• Poor engagement with outside organisations

• Lack of investment in R&D, employment

• Lack of commercial and technical skills

• Financial viability

• Spread of misinformation, inaccurate information misguiding decisions

Closed Innovation Case Study (1945-Mid 1980’s):

• Firms adhered to philosophy: Successful innovation requires control

• Companies generated their own ideas à developed, manufactured, marketed and distributed themselves

• Internalised innovation is prioritised

• Erosions caused by knowledge worker mobility and a rise in private venture capital

Advantages of Closed Innovation:

Advantages of Closed Innovation

• Protection of intellectual property by developing ideas internally, maintaining tight control over assets and reducing risk of IP theft

• Greater control over innovation process

• Optimise resource allocation, tailoring concepts to align with objectives

• Internal competitiveness fostered, driving innovation, growth and breakthroughs

• Apple Inc is renowned for its reliance on internal resources and expertise, helping them gain a competitive edge in the consumer electronics market.

Open Innovation definition and issues:

• Definition: The use of purposive flows of knowledge to accelerate internal innovation and expand markets for the use of innovation (Chesbrough et al., 2006)

• Companies cannot afford to be self-reliant on research but should instead buy or license processes of inventions (i.e. patents) from other companies

• Inventions not being used in a firm should be moved externally via joint ventures or licensing

• Issues: Can we ever be “fully open”, trust between internal and external organisations, poor deal agreements, logistic and geographic complications

Open Innovation vs Closed Innovation:

Open Innovation	Closed Innovation
We need to work with intelligent people within and outside the company	Intelligent people work for us
External R&D can create significant value; internal R&D is synecdochic to create value	We must fuel and develop our own profit sources from R&D
Internal x External cooperation	Internal à victory
Partner with Universities, cooperations and science parks to create knowledge	We will own all results from contracted research with universities
We should profit from other’s use of our IP; we should buy other’s IP if it advances our business model	We should control our own IP so competition doesn’t profit from our ideas

Business failure definition:

• Definition: The discontinuance of a business due to the lack of adequate financial resources, cessation of operations with loss of creditors, operations and an exit from the business population.

• The Business Environment is fluid, unpredictable and can cause problems for organisations of every size

Causes of Business Failure + quotes:

• General Environment (economics, technology, society and politics)

• Immediate Environment (customers, suppliers, competition, credit institutions and stockholders)

• Corporate Policy (strategy, investment, commercial operations, finance and personnel)

• Entrepreneur Characteristics (Inflexibility, management, technical skills, stigma of failure)

• Company Characteristics (Size, maturity, industry, flexibility, culture)

“Failure experience can be beneficial in the long run, helping to equip individuals for success in subsequent ventures (at least in the identification of opportunities)”

(Mueller and Shepherd, 2016).

• Google expect an 80% failure rate on New Product Development

“It’s fine to celebrate success but it is more important to heed the lessons of failure (Bill Gates)

(Scarborough, Wilson, Zimmerer 2007) definition of Entrepreneur

An entrepreneur is one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on those opportunities.” (Scarborough, Wilson, Zimmerer 2007)

3 reasons why entrepreneurs struggle with external environment change:

• Human capital

  • “Represents the knowledge, information, ideas, and skills of individuals” (Becker, 1964)

  • Entrepreneurs need a mix of general, firm-specific and distinct human capital

  • Entrepreneurs must adapt to environmental change, technological development and market dynamics

• Excessive environmental change and information overload

  • “Firm processes to generate and share market intelligence can create problems if the processing capacity of the individual is overloaded” (Ocasio, 1997; Souchon et al., 2004).

  • Managerial attention becomes clouded, attention cannot be directed sufficiently to tasks, and the issue of bounded rationality

• Resources and capabilities

  • Investments can create path-dependent resource rigidities (Leonard Barton, 1992)

  • For youthful firms, availability of slack resources can fundamentally alter behaviour, encouraging discovery of new products but still requiring revenue streams to fund

Aspects of an Entrepreneurial country:

sufficient finance, developed infrastructure, capital and labour mobility, cultural, business and supply competition, economic stability

How to counter harmful stereotypes about Entrepreneurship:

• Research to disprove data or generate new data

• Sharing stories / articles via social media

• Offering platforms, support and funding for less represented to share their stories and grow their business

  • “Minority businesses make up 1/6 of the 6 million businesses registered in the UK”

  • Only 1 in 3 UK entrepreneurs are female; women account for 17% of business owners (RBS Group 2013)

• Elevate different types of Entrepreneurship:

  • Lifestyle, Social, Female, Ethnic, Born-global, Dark, Social Media

Total Entrepreneurial Activity (TEA):

• A metric used to measure how active people are in starting new businesses within a region.

• % of adults (usually ages 18–64) who are either:

  • Starting a new business, or running a business < 3.5 years old

• The highest TEA rates can be found in Angola (41%), a low-income economy

  • Middle income levels such as Guatemala at 28% and China at 25%

3 Examples of SME’s and data:

• Revolut

  • Market: Global digital bank (70M+ users)

  • Worth: $75bn

  • USP: All-in-one banking app

• Ben & Jerry's

  • Market: Strong in premium ice cream

  • Worth: Part of Unilever (billions revenue)

  • USP: Ethical sourcing + unique flavours

• Gymshark

  • Market: Fast-growing global fitness brand

  • Worth: £1bn+

  • USP: Social media & influencer marketing

What do SME’s contribute to an economy:

• WTO SME’s represent over 90% of the business population, 60-70% of employment and 55% of developed GDP

• SMEs held for around 20% of patents, one measure of innovation, in biotechnology-related fields in the Europe.

• Employment: In the UK, SMEs account for 60% of private sector employment. EU – 66% employment.

• Tax, competition, niche market, innovations, suppliers and socio-cultural benefits

• International activities such as suppliers, networks, FDI, ventures and franchising

  • dependent on speed, market knowledge, strategy and resources

Issues for SME’s:

Issues for SME’s

• Insufficient finances and market knowledge

• Lack of foreign market connections, export commitment

• Lack of foreign channels of distribution

• Lack of productive capacity and capital to finance foreign expansion

• External factors - competition, international niche markets, network partners, catalysts, global volatility, geopolitics