BTEC Business Level 3 - Unit 5 - Task 2 - International Business
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Course
Unit 5 - International Business
Institution
PEARSON (PEARSON)
Btec business level 3 national diploma - unit 5, task 2 - international business... this is from a distinction* distinction* student in 2023
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International Business – Aldi
The company that I will be talking about is Aldi South and the country that I will be diversifying into
and reviewing consequences of the expansion will be United States of America.
External Influences
External factors are those that are outside the organization that influence the business. These
include:
Political.
Economic.
Social.
Technological,
Legal and Regulatory.
Environmental.
Ethical factors.
Political
The influence of governmental activities on corporate decisions is known as the political
environment. These actions can be taken by local, state, federal, or foreign authorities. These
changes will have a significant influence on the business environment's ability to compete and the
supporting infrastructure. Different political environments can provide a company with a variety of
different issues but also opportunities, it is about exploiting and making the most out of these to
ensure that the company comes out on top over their competitors. An example of a potential threat
would be if there is a higher degree of violence and a weak government, could cause a series of
issues that could stunt the growth of a company such as corruption, negligence, fraud and lack of
accountability.
ALDI is a global chain of affordable supermarkets with locations all over the world. The Russian-
Ukrainian war, which is negatively affecting several industries and corporations like steel, oil, and
energy, is evidence that conflict between nations will have an impact on a company's ability to
sustain itself. Furthermore, other nations must participate, which could jeopardise that nation's
stability. War and political unrest can lead to supply and import problems, which can have a negative
financial and reputational impact on the company. They may not be able to provide the best
products and services because they will have to offer alternatives and compromises. If there is any
issue with the international suppliers, it will have some kind of effect on the retailers.
Demonstrations against international stores, which are frequent, are another factor. This could be
for a multitude of reasons, for instance not following rules and regulations that result in the
detriment of the customer, environment or even personnel. An example of this is when protestors
ramshackle companies like Walmart and smashed through doors severely damaging company
property, this was because of political issues occurring at that period. It majorly affected the
financial position of that specific store as they had many people off work and repairs were needed to
be made.
Concerns about the fate of European businesses in the UK still exist after Britain decided to exit the
EU. It's a good idea to have a backup plan in case something goes wrong.
The United States is massive and has many different regulations in each state. The United States has
a strong democratic framework and an effective rule of law, as well as fair and transparent elections.
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,The country wields enormous political and economic power over both national and global
policymaking, and it is widely regarded as the world's leading superpower. However, the country is
under international scrutiny for its interventionist policies in the 'War on Terror,' which are straining
foreign relations while also fuelling and increasing the threat posed by terrorists.
Economic
The global economic environment has a significant impact on companies that export goods and
services. Global sales are affected by recessions, especially for premium UK goods. They are more
expensive due to their high quality, and if earnings decline, UK products would suffer. While the
economy is expanding, UK products often do well because wealthy people look for extremely
distinctive goods and services.
Brexit has caused prices to increase in the UK and the value of the pound to decrease. Due to
consumers turning to discount retailers as a result of price increases in other supermarkets following
the Brexit decision and the rising cost of imported goods, Aldi has grown at its quickest rate in more
than two years. Because consumers will be more aware of the need to balance their household
finances as a result of the increase in inflation, they will be more likely to eat at home rather than
out, which suggests that grocery sales at bargain retailers like Aldi may increase even more. The cost
of living crisis and high prices make it difficult for many consumers to afford the goods they need,
which lowers grocery sales.
The USA's well-developed economic structure draws its power from its manufacturing and service
sectors. The country's well-developed economic system is supported by the manufacturing and
service sectors. This is advantageous for a business-like Aldi. This is so that businesses may
determine when to grow and hire more staff. The fact that the USA is so successful shows that ALDI
should expand since there will be many chances for them to take advantage of. The COVID-19
outbreak forced the closure of every company on earth. During the lockdown, people were isolated
to their houses for several months. Almost a hundred thousand individuals lost their jobs and their
livelihood as a result of the outbreak and afterwards. Only the business and technology sectors were
thriving.
Social
The presence of people in a certain location or establishment has an impact on the social
environment. This will subsequently affect how clients and businesses behave. Demographic change
can also result in social change. The statistical study of human populations known as demographics
includes factors such as gender, age, and ethnicity.
Since its citizens come from all over the world, the United States is the nation with the widest
cultural diversity. One in three Americans are either African American, Latino, Hispanic, Mexican,
Asian, or Native American. People from every corner of the world make up the country, which acts
as a melting pot for all different cultures and civilizations. The United States has the most advanced
and expensive healthcare system. People have recently grown to care more about their health. The
previous fast-food frenzy is to blame for the growth in diabetes and obesity. They are currently
adopting a healthier diet, lifestyle, and exercise routine. Racial conflict has been on the rise in some
American areas despite the lack of diversity, where the authorities have an autocratic attitude
towards Black people. Socioeconomic mobility is the key contributing factor. Socioeconomic mobility
lowers people's social class as a result of social and economic levels. Other races are not eligible for
several rights given to white people.
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, ALDI is currently one of the UK's highest paying supermarkets thanks to a salary increase for its 3000
employees. A higher standard of living for the populace will result from high salaries. They will be
capable of affording additional amenities like better food and healthcare, which would benefit
society. With its Get Ready to Eat Fresh Campaign, ALDI hopes to teach 1.2 million kids in the UK
how to cook nutritious meals. According to ALDI, clients should feel satisfied that they paid less than
they anticipated for a trolley packed with products. The pleasure of shopping at ALDI is enhanced by
the knowledge of financial savings.
Technological
Technology has an impact on how an organisation runs, sells its goods, engages with consumers,
suppliers, and competitors, as well as how it communicates with them. It refers to innovation and
reflects the potential success of a company as they will obtain a greater competitive advantage over
their opposition. Technological advances improve the ease of diversifying into other countries as
operations are simplified and made to be more efficient all while increasing profits of the company
allowing them to utilise a larger capital t ensure success of growth.
Also, because international trade has become less complicated, and communication has
substantially improved. It has made it possible for enterprises in the UK to benefit from
technological developments that have created new international markets. Several companies in the
UK import items at a significant discount, give them time to appreciate, and then resell them on the
UK market at a higher price. Trading is significantly more straightforward in the service sector.
Accountants are one type of service that foreign businesses frequently utilise in the UK that does not
require physical exportation.
With its position as a significant worldwide grocery operator, ALDI must stay current with technology
in order to expand its customer. Customers demand convenience from them rather than having to
stand in a long line for a few goods. It has provided its consumers with entry to an ecommerce
platform designed to serve both online and offline customers. Because ALDI promises value, quality,
and simplicity, they will be drawn to it. Using social media websites like Facebook and Twitter, it can
keep in touch with its customers and inform them about impending sales. The contactless payment
capability is one of the company's other significant technological advancements and allows them to
compete through cutting staff costs and increasing sales as more people can get in and out.
USA is a nation of business and enterprise and through this they have managed to utilise large sums
of wealth to be a large competitor in development of technology and innovation. Technology has
increased job opportunities and reduced production costs. As a result, many US companies have
relocated their manufacturing activities to other developing countries.. A large issue for the US is
that they have been established for a long period of time, but this means they are not as open to
change as other countries like North Korea and China. This may lead to potential issues as the
development of technological advancement is increasing exponentially.
Legal and Legislation
Legal and legislation is a set of factors that concern certain requirements that a company or
organisation must adhere to, to ensure that the will not be sued financially or be affected in and the
negative way.
USA have a series of states with differing sets of laws and legal requirements that must be adhered.
This can affect companies that are seeking to expand but also existing ones when trading and
functioning internationally. An example of a legal framework that is involved with the US is the
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