Important of abroad operations for UK SMEs companies - Coursework Example

Importance Of Abroad Operations For UK SMEs Companies About 70% of Small and Medium Sized Enterprises (SMEs) in the United Kingdom are navigating the international market for greener pastures (Clive, 2013). The local markets are completely saturated and lack prospects of growth for new entrants. The market overseas represents a greater potential for growth and expansion. Competition from established businesses also poses a challenge to SMEs in Britain. The only way most SMEs can gain profits is by expanding in to the international market by reaching out to the audience abroad.

Smaller businesses have an 11% chance of survival if they export their products abroad while dependence on the local market is likely to lead to dissolution of a business (Simona, 2013). Prime Minister, David Cameron, realizes the importance of international trade for UK businesses and in his address to the Global Economic Forum in Davos, he stated that there is need for more businesses to go abroad. The government will support exports in order to promote growth and development of SME’s in the country (Clive, 2013).

The Prime Minister noted that the current Foreign Exchange rates of the UK give businesses a greater position on the international market. He recommended that local businesses take advantage of such factors as well as technology to navigate in the global market. International market gives UK businesses an opportunity to expand, improve on quality, time management and business relations. This leads to improvements in the general performance of the SMEs as opposed to depending on the local market.

The export business also gives SMEs bigger prospects of competing with large firms for suppliers and customer. This cannot be possible in a local market in the UK (Clive, 2013). With the popularity of the internet in the UK and abroad, SMEs have a lifetime opportunity to push their products and communicate with customers and prospects using the internet. E-commerce makes international business a lot easier for businesses. It is critical for businesses in the UK to expand in to the market abroad in order to reduce congestion I the local market.

The export business will also improve trade and political ties between the UK and other countries across the world (Simona, 2013). While the prospect of moving abroad may seem interesting and profitable for many businesses, many other factors need to be considered. Businesses need to conduct meaningful market research in order to determine which areas of the large global market that they will focus on. Planning involves getting the necessary tools and finances that will help a business keep up with competition from other firms.

Another key area is to know the legal framework of the countries on intends to join vis-à-vis the legal situation in the UK with regard to taxes (Clive, 2013). Another important aspect is to determine the mode of operation for the business in terms of its structure, leadership and products. Businesses also need to assess the suitability of their products in regards to the requirements of international customers. Products of a business have to be of high quality in order to remain competitive (Simona, 2013).

Bibliography Clive Lewis (2013). Exporting Abroad is Key for SME Growth, 16 October, 2013. Available at http://realbusiness.co.uk/article/24399-exporting-overseas-is-key-for-sme-growth accessed on, 11th march, 2014. Simona Sikimic, (2013). Made in Britain: Why UK SMEs are bringing Manufacturing back to blighty. 9 September 2013, available at http://www.londonlovesbusiness.com/made-in- britain-why-uk-smes-are-bringing-manufacturing-back-to-blighty/6249.article accessed on, 11th march, 2014.