Fundamentals of Business

International trade

Extract from Supply management magazine.
Globalisation rules the modern procurement world.

. 4 in 5 businesses source globally.
. Benefits of global sourcing are moving beyond pure cost cutting
60% cite ethical and environmental concerns as having significant impact on global sourcing
. Research released by The Chartered Institute of Purchasing and Supply (CIPS) today shows that globalisation rules the modern procurement world.

81% of UK-based procurement professionals surveyed source globally, or over 4 in 5 businesses, and furthermore, the vast majority (96%) think that globalisation has not been exploited to its capacity in the procurement and supply chain profession.

International trade is the exchange of goods and services across international boundaries or territories. In most countries, it represents a significant share of GDP. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact. Increasing international trade is the primary meaning of "globalisation".

Free trade is usually most strongly supported by the most economically powerful entities with nations that stand to benefit from exploitation of cheap labour, though they often engage in selective protectionism for those industries which are strategically important such as the protective tariffs applied to agriculture by the United States and Europe.

The regulation of international trade is done through the World Trade Organization at the global level, and through several other regional arrangements such as MERCOSUR in South America, NAFTA between the United States, Canada and Mexico, and the European Union between 27 independent states.

Ben Benefits of International trade efits Some companies can achieve economies of scale, whereby it would have been impossible to do so in their own country.
An example of company that have achieved economies of scale through international trade.

Primark
Primark Valu Value Proposition:
e Primark targets young, fashion conscious under 35's, offering them high quality, fashion basics at value for money prices. Almost half of sales are in Womens' wear. A quarter of sales are dedicated to Menswear and Childrens' wear, with other items constituting the remaining sales. Buying and Merchandising teams in Reading and Dublin travel internationally to source and buy up to the minute fashion basics that best reflect each season's key fashion trends. Primark's offer to the customer is one of high quality merchandise, at value for money, backed by Primark's service promise. Primark prides itself on its loyal customer base.
A strong consumer proposition has been developed for the Primark brand and embodied in the line "Look Good, Pay Less Less" which communicates Primark's value based offering in a precise manner, to its core target audience. The was no way they would have been able to achieve this if their production was in UK.