Introduction

The Combination of internal and external factors that influence a company's operating situation
The business environment can include factors such as: clients and suppliers;
its competition and owners; improvements in technology; laws and government activities
and market social and economic trends.

International Trade:
International trade is the exchange of capital goods and services across international borders.

Adam Smith:
The principal benefits of foreign trade is not the importation of gold and silver, but the carrying
out of surplus produce for which there is no demand and bringing back something for which
there is

Advantages (Pros) Of International Trade:

Sell your surplus goods:
You can sell your surplus goods to another country which might not have the resources.
Manufactures that are efficient and can manufacture more than they can sell at home can easily
trade the goods to another country. Companies like Microsoft, Apple and HP are trading globally
and dominating markets away from home because they have produce surplus, on the other hand
developing nations do not have the necessary skills to manufacture these gadgets. In the process
of doing so these companies are making lots of money, this would have been difficult to achieve
if they had only focused on the domestic market.

Trading Globally Reduces The Dependence On One Market:

If your business is only in one country the danger is that should the market be hit by a recession
then you are likely to be affected badly. If your business is spread all over the world then you can
have an advantage that one or two sections of your market is not hit by the economic problems.
The Recession in 2008 was mainly felt in Europe and America while continents like South
America, Asia and Africa were not hit hard, those companies that had expanded to some of the
continents heaped the benefits was close to normal.

Expanding products globally improves domestic competitiveness:

If your products are being sold across the borders this tends to enhance your brand making your
product attractive. While you can find it difficult to capture the home market if a business is

going to go global and make its mark this could all change. So it is better for your business to be
judged in different markets.

The path for expanding globally:

Has now being made much easier because there is an
increased liquidity of capital that is available throughout the world. Trade agreements among
countries are being signed making global trade easier. So unlike in the olden days transferring of
resources is much simpler. So instead of seeing borders the world can now be viewed as one
global village. It has now become easy to trade globally and no serious company would wish to
ignore this basic fact.

Disadvantages (Cons) of International Trade:

There is a lot of labour exploitation:
There is a lot of labour exploitation which includes long working hours and low wages. While
the company can benefit from such conditions this is likely to be a time bomb. This inequality
brings along some conflicts, which can actually affect the investment that you would have
brought in. Some developing countries have had a lot of demonstrations and riots because of this
inequality. There is every chance that you can easily lose your investments if you set up your
business in a rogue country.

Trading globally benefits corporations:

Trading globally benefits corporations that have economies of scales, Companies that have a lot
of capital are likely to do well under this environment. If however the company is small there is
every chance that it will be easily overrun. Globalisation has the disadvantage of creating very
big companies yet destroying small companies that have potential. So even if one is to expand
their company to trade globally they are likely to encounter the threats of fighting big
multinational companies.

Trading globally compromises:

Trading globally compromises the environment in a number of ways. There is usually
competition that forces companies to extract all that they can in an effort of maximising profits.
This leads to a lot of pollution and the destruction of valuable natural resources. In the long run
the impact of the destruction is likely end up affecting the whole human race. As a conclusion
nothing is going to stop trading globally on the contrary it is expected that this is going to
increase as more countries loosen up their borders. This opens up whole new markets for the
companies. The biggest challenge would be to balance the increase in trading globally and
cutting down inequalities in income and also preserving the environment.

UK Economy:
The United Kingdom has the sixth-largest national economy in the world measured by nominal
GDP and eighth-largest in the world measured by purchasing power parity. The UK's GDP per
capita is the 22nd-highest in the world in nominal terms and 22nd-highest measured by PPP

WORLD TRADE ORGANISATION (WTO)

The World Trade Organization (WTO) is the only global international organization dealing with
the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed
by the bulk of the worlds trading nations and ratified in their parliaments. The goal is to help
producers of goods and services, exporters, and importers conduct their business.
The world trade organization (WTO) is the only international organization dealing with the
global rules of trade between nations. Its main function is to ensure that trade flows as smoothly,
predictably and freely as possible.
The WTO agreements are lengthy and complex because they are legal texts covering a wide
range of activities. But a number of simple, fundamental principles run throughout all of these
documents. These principles are the foundation of the multilateral trading system.

Globalization:
The process by which businesses or other organizations develop international influence or start
operating on an international scale

Advantages:
Developing international trade and companies
Enhancing information speed
Reducing the probability of beginning a war

Disadvantages:
Unemployment
Great dependence of one country on others
Extreme pollution of environment

Protectionism:
Government policy aimed at shielding a fragile economy, or weak or critical sector, from cheaper
or better imports through imposition of high duty rates, quotas and time consuming inspection or
quality regulations. All countries practice protectionism in one form or another but, generally,
without going to any extreme. See also trade liberalization.

Emerging Markets:
New market structures arising from digitalization, deregulation, Globalization and Open
standards that are shifting the balance of economic power from the sellers to the buyers. In such
markets information is freely and widely available, and is almost instantly accessible. To
compete in these scenarios, a firm must adopt new processes based information technologies,
and must keep a close watch on the price, quality, and convenience trends.

European Union (EU):

An alliance of European states that works together to address mutual concerns.

Its Regulation:
Regulations are the most direct form of EU law - as soon as they are passed, they have binding
legal force throughout every Member State, on a par with national laws. National governments
do not have to take action themselves to implement EU regulations.
They are different from directives, which are addressed to national authorities, who must then
take action to make them part of national law, and decisions, which apply in specific cases only,
involving particular authorities or individuals.
Regulations are passed either jointly by the EU Council and European Parliament, or by the
Commission alone.

Group of 20 (G-20):
A group of finance ministers and central bank governors from 19 of the world's largest
economies, and the European Union, The G-20 was formed in 1999 as a forum for member
nations to discuss key issues related to the global economy. The mandate of the G-20 is to
promote growth and economic development across the globe.