The reason why going global so important for UK businesses.
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Discussion with renowned global trade expert Murdo Beaton and Abdul Mann, creator of the cloud-based export solution EdgeCTP.
OK, gentlemen, the question for today is: Why is going global so important to UK businesses?
Markets have changed over the years and we now have to seriously think about whether we do still have a traditional domestic market. The global scene has taken over and we now have a global market. UK businesses have to survive in global market and on that basis it is important for UK business to consider going global, that is to expand their marketplace beyond their own domestic shores. Couple this with the UK Brexit situation, UK businesses should consider International Trade and going global It is good for:
- The development of the business.
- The development of the personnel.
- Learning more about business practices and etiquette.
- Making a business more competitive.
As well as being important to businesses and their growth strategy it is also, of course, hugely important to us as individuals living in the UK. Our government relies heavily on revenues generated by our exporting businesses for foreign exchange, which is badly needed to buy in products and materials that we do not produce in this country. So while the market continues to evolve we can only say that the importance of going global for UK businesses has never been as great as it is now.
Yeah, I think I’d agree with that as well. Basically, I think it also increases the number of customers that they can reach, because of the number of global customers that you have overseas and it helps the UK economy. As you pointed out it brings revenues back into the country and creates jobs. Even from a macro level, it’s good but from a micro level,l from the business themselves, it enables them to be able to increase the number of customers.
We also have to understand that the UK market is in itself a relatively small market in the global sense. It does have its parameters in terms of capability of releasing potential to many businesses. There does come a time when businesses have to consider that further growth may not be possible at an economic level in the domestic market. That they have to consider cross border activities. Maybe first in easier markets culturally and through business practices like the European Union markets, then beyond these boundaries thereafter.
Also, I think with technology being the way it is it’s made life easier. Emails, for instance, have replaced the traditional letters that people were sending backwards and forwards. Market research tools like Google has kind of made it so that access into overseas markets has become a lot easier as well.
Yes, essentially what is happening is the business location is no longer as important as it used to be. It doesn’t really matter now where your business is located in order for you to function in the global marketplace. What is still important however is the sources of the products and services that you intend to supply. They now have taken on, maybe a greater level of importance than before, so the origin of products, the origins of services vis-a-vis technologies used. This is important in overseas markets. So while the location of your business is not so important, the origin of your product or service can still have a huge influence on your success.
OK, we’re going to cover this in detail in later sessions, the question would be if there was a cynic in the room “What does Britain produce for it to be able to export overseas?” Looking at it from an economic point of view,is Britain still a manufacturing based country or producer country such as say Germany, Japan and China, so forth? Or is it more a service based consumer economy which is why our trade deficit looks like it is, which is more imports coming in that exports?
I think Napoleon said “Britain is a nation of shopkeepers”, I think we still like to be considered as manufacturers rather than shopkeepers. Now, unfortunately, our manufacturing industry really did take a bit of a thump, although it is now trying to revive, it is still not what you’d consider as where it ought to be in terms of what traditionally the UK was regarded highly for, and that was its manufacturing capability. However, on the service side, we are outstripping many of our competitors in terms of proficiency and quality. Yes, UK services are highly sought after in global markets. I’m not talking exclusively here about financial services. There are many other services types that are very important to global businesses and we in the UK are fortunate enough to be able to supply many of these service types at a high-quality level.
Nevertheless, we would still like to hold onto the idea that we are also a nation of manufacturers, and yes we do manufacturer products. Unfortunately one of the downsides is that many of these manufacturing bases are now controlled by overseas interests, but at the end of the day we already said it IS a global market now rather than a domestic one so the question is does it really matter as long as the UK is actually gaining in one form or another .
Yeah, and coming back to the individual business wanting to export, it’s good for that business but like you said its also good for the economy as a whole, and also it means they’re competitive on the global scene so when competitors come in from overseas into the domestic market, then the guys in the domestic market are also able to “face-off” to them.
Yes, that is absolutely true. It’s not necessarily that they have to “face-off” to them in terms of price, they may also have to “face-off” to them in terms of new technologies that are continuously evolving in the global marketplace. So our companies have to be capable not only of retaining their own position in the domestic market but in also competing against these companies that come into the UK in overseas markets Some people might say it is best to meet your enemy on foreign soil rather than on your own soil, so maybe you should gain some experience of your potential competitors before they come here rather than after they get here because fighting with your back to the wall is not always a good thing.
I hope you enjoyed this. If you’d like more information on international trade, go to www.edgectp.com.