International Business

~ Managing financial, social and environmental risks, opportunities and obligations

Elkington's Triple Bottom Line

• Overall business performance is based on people (social), profit (financial) and planet (environmental)
• Businesses are assumed to be profit-maximisers and profit is the traditional measure of business success

Benefits:

• Encourages CSR
• Encourages businesses to think beyond profit

Limitations:

• Hard to be reliable and consistently measure people and planet
• No legal requirements so not many businesses incorporate it

Innocent Drinks

Planet:

• Bottles are made from a minimum of 35% recycled plastic
• Minimise use of pesticides and don't use ones on the Pesticide Action Network list

People:

• Suppliers have to meet farm worker's rights and wellbeing standards

Profit:

• 10% of profit goes to charity

~Treats EU countries as one bloc, guarateeing the free movement of goods, services, people and capital ("four freedoms")

• Set up in 1957
• Currently consists of 28 countries but the UK will leave this as a result of Brexit
• Removes barriers to trade
• Unifies national rules at EU level
• Allows maufacturers to make a product to meet one EU standard rather than having to research and meet lots of standards for different countries
• Minimum standrads - Countries can make these tougher for products made in their own country but must still allow products that meet the minimum standards to be sold in their country
• Maximum standards - Countries are not allowed to change them (i.e. tougher or weaker)

Led to Red Bull being banned in France for 12 years after French government claimed it was harmful, but EU courts ruled it could no l9onger be banned unless a health risk was proven.

Economists are expecting a loss of £75 billion if the UK is not longer a part of the ESM.

Vodafone:

• Has headquarters based in London and Newbury
• London HQ employs 200 
• Newbury HQ employs 2,400 
• Is considering moving headquarters out of UK unless an agreement can be met whereby UK can stay in ESM
• Has already increased staffing numbers in Brussels

Microsoft:

• Based in Washington
• Has increased the price of some of its software by up to 22% due to weak pound
• May have to increase prices further if the UK leaves the ESM as new trade tariffs will be put in place
• Has UK offices in Reading, London and Manchester, employing around 100,000

~An independent department within the goverment that carries out investigations about mergers, takeovers and markets, and enforces competition and consumer law

• Reduces anti-competitve behaviour
• Ensures that dominant businesses do not abuse their power so protecting public interest
• Can fine companies if they do not meet customer service expectations
• Can put price caps on certain products if there is evidence of 'profiteering' (charging excessive prices)
• Ensures that service, quality, profit and price is similar to what is acheived in competitive markets (surragate competition)
• Encourages competition by lowering/removing barriers to entry

- CMA approved the merger of Ladbrokes and Coral (October 2016)

- CMA cleared VTech's acquisition of LeapFrog (January 2017)

- Cineworld were allowed to buy 5 cinemas from Empire Cinemas (January 2017)

- David Lloyd Gyms were allowed to purchase 16 Virgin Active gyms (June 2017)

- JD Sports were allowed to purchase Go Outdoors (June 2017)

~ The Consumer Rights Act became law on 1st Oct 2015, replacing three pieces of consumer legislation: the Sale of Goods Act, Unfair Terms in Consumer Contracts Regulations, and the Supply of Goods and Services Act

1) Products must be of satisfactory quality, fit for purpose and as described

2) Consumers have 30 days from when the product was bought to return it

3) After the 30 days return period, the retailer has to be given one opportunity to repair or replace the goods

~ Helps consumers if things go wrong or if they are treated badly

~ Encourages businesses to ensure the quality of their product, as if it is faulty then it will have to be refunded, therefore losing money

Environmental Protection Act (1990)

• Litter, fly-tipping, fly-posting, grafitti, and dog fouling are illegal and known as 'anti-social behaviour'
•  Anti-social behaviour is "the everyday nuisance, disorder and crime that has a huge impact on victims’ quality of life"
• Can be given on-the-spot fines or an anti-social behaviour order (ASBO)

Climate Change Act (2008)

• National emissions must be cut by 80% by 2050
• Carbon budgets set that cap the amount of greenhouse gas emissions allowed in each 5 year period

Marine and Coastal Access Act (2009)

• Aims to achieve clean, healthy, safe, productive and biologically diverse oceans and seas
• Manages activity in coastal areas and implements Marine Conservation Zones 

Waste & Resources Action Programme

~ Vision is a world where resources are used sustainably

• Set up in 2000
• Works with governments, businesses and communities to improve resource efficiency
• Re-inventing how products are designed, produced and sold
• Re-thinking how products are used and consumed
• Between 2010-15, WRAP initiatives reduced carbon dioxide emissions by nearly 50 million tonnes (equivalent to annual carbon dioxide emissions of Portugal)

Primary sectors are:

1) Food and drink

2) Clothing and textiles

3) Electricals and electronics

Britvic - Robinson's Squash'd

• Launched in 2014, a pocket-sized 20 servings pack designed for on-the-go use
• Weighs 25g less than a 1 litre bottle, saving nearly 5g of carbon per serve
• Uses half of the amount of water to produce
• 2,340 more Squash’d bottles fit onto a pallet and weigh nearly 600kg less, making transportation more efficient and saving carbon
• Reduces waste from packaging
• Britvic’s sustainability strategy over the past five years has been reducing the weight of its packaging to reduce waste and carbon emissions

~ Benefits the business and the environment

~ The intergration of markets into the global economy, resulting in the world becoming increasingly interconnected

~ The largest companies are MNCs (multi-national companies) and TNCs (trans-national companies) rather than national companies

• This means they operate in different countries, e.g. McDonald's, Starbucks, Apple

~ Most common in financial markets, e.g. insurance, and commodity markets, e.g. coffee

Why has globalisation increased?

1) Transport has improved - allows goods to be shipped around the world at relatively low costs

2) The internet - fast, 24/7, use of social media allows different markets globally to be targeted, widespread use of smartphones makes purchasing goods easier than ever

~ A mulitchannel sales approach to give the customer an intergrated shopping experience

~ Uses different platforms to seamlessly connect with the customer and give a consistent message

• E.g. Facebook, Twitter, website, blog, call centre

~ Needs to engage consumers

~ Aligns the company's message, goals, objectives, and design across each channel and device

~ Ensures the service level, responsiveness, and quality of service received is consistent and high

Disney

• Beautiful, eye-catching, mobile-responsive website
• Disney app allows you to explore the parks, and review the attractions, entertainment and restaurants
• Can also create an itinerary, wishlists and pre-book rides to avoid a queue
• Once at the park, the app shows waiting times, allows you to book a restaurant and find characters to meet
• MagicBand used to unlock your hotel room, enter the parks, and pay for food/drink/merchandise in the parks

~ Every element of the customer experience is identified and catered for

Electronic Commerce

~ Selling and buying products/services through the use of electronic systems, e.g. internet

• Big impact on place element of marketing mix - no physical environment so website needs to be carefully designed
• Websites need to look professional and be easy for consumers to use
• Affects operations - products are sent straight to the customer rather than to stores
• Delivery needs to be quick and cost as little as possible

Mobile Commerce

~ Selling and buying products/services via a handheld device, e.g. smartphone or tablet

• Many companies have developed apps in order to make it easier for consumers to purchase goods, e.g. can be done on-the-go
• However, some do not like the smaller screens, and device could lack space for app to be downloaded

Lush

~ Simple, clear and optimised for small screens, also with convenient search bar

John Lewis

~ The app clearly states shipping options and costs on the home page

Paperchase

~ Sophisticated, with product categories and a store locator with a photo of each store alongside opening times

Missguided

~ App and website are consistent and have recomendations based on previous purchases

All are successful because they are consistent and appeal to their target market

Fiscal Policy

~ Refers to the government's spending plans and tax 

• Taxes pay for pensions and public services, e.g. NHS, education, defence, and law and order
• Income tax, national insurance, VAT, excise duties and corporation tax
• Government usually run fiscal deficit (spend more than its tax income)
• Some businesses benefit from government spending, e.g. BAE Systems sell weapons to British Army

Monetary Policy

~ Involves Bank of England changing either interest rates or money supply in order to influence the level of spending

• Loosened during recession to try to create increase in demand = recovery
• Low interest rates usually result in more borrowing, e.g. to buy a new car, and businesses can pay off big loans  

~ When the economy of a country is becoming more advanced, usually by rapid growth and industrialisation

~ In 2001 the countries below were classified as the potential powerhouses of the world economy

                           Brazil                    Russia                    India                    China

~ However, with wages in these countries rising, it is now cheaper for most companies to move production to the countries below

~ These countries are also in a good position geographically for world trade

                            Mexico                Indonesia                Nigeria                Turkey

~ Lowering costs by reducing capacity, usually done by shutting factories or stores and making redundancies

Reasons why companies retrench:

1) To survive a recession - consumers spend less and markets get smaller so sales fall

2) Delayering to improve competitiveness - removing layers of management lowers cost and can improve motivation in the long-term. E.g. Telekom removed 750 middle managers.

3) To prevent losses at the end of a product's life cycle - retrench done before sales fall during decline phase to avoid losses

4) Strategic change of direction - firm's which have overdiversified retrench in order to focus on areas with most potential. E.g. Whitbread sold off other firms to focus on budget hotels, coffee shops and pubs.

~ Reshoring is when a business closes down its overseas facilities and brings it back home