UK Trade Relations Report

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Sales Strategy

We aim to strengthen our sales by establishing close liaison with potential clients. We will kick-start by proposing free consultation with regards to overall cost, delivery and service. Also, we intend to disseminate our management team's vast experience both with German gift manufacturers and artisans, as well as our expertise regarding the trade environment so as to attract our targeted segments of the market.

Sales Forecast

Sales rely on the various contracts that the business is likely to acquire in the two market segments. Revenue includes three sources: a commission rate charged from clients as per the dollar amount of the goods traded or moved, a projected average cost and lastly, an undisclosed profit margin.

A strong rate of growth is expected at the commencement of the business activity. The statistics below present the expected financial position over the next three years:

Side by side, the company will initiate and maintain an expensive marketing campaign, which will guarantee maximum visible presence of the business in its targeted market. Following is an outline of the marketing strategies as well as the objectives of the company.

Marketing Objectives

• Developing a website having company’s name and contact information with online directories so as to ensure an active online presence

• Establishing effective relationships with retailers, wholesalers, and distributors, both in the domestic as well as international markets

Marketing Strategies

In order to materialize a high inventory turnover, the company intends to incorporate several traditional and experimental sales as well as marketing strategies. The Import Export Company will advertise campaigns through internet, print as well as electronic media, public relations and word of mouth referrals. In addition to these propagating techniques, the company intends to develop strong communication and contacts with domestic and international trade brokers at the very start of the business. This will eventually create a strong network of brokers that will immediately start to divest product inventories. Mr Doe, having had extensive experience contacts in the industry will use this existing network of brokers to source products on behalf of the company.

The company’s management aims to use a full-fledge marketing campaign in order to increase its sales. This campaign will involve search engine optimization technique, which will enable the company to increased visibility when certain key-words related to import and export are typed in the search bars of major search engines. The company’s website too will be designed very carefully so that it showcases company’s operations, product lines, policies about trade and carrying items, as well as information on how to become a trade partner with the company.

Organizational Plan and Personnel Summary

Corporate Organization

Management Personnel

The main officers forming the backbone of our company are, President - Mr. Ali, Head of Exports - Mr. Hassan, and Head of Imports -Mr. Umar, all of whom graduated with honors from the University of London,with a bachelors degree in Marketing in 2012.

Such a qualified management makes it possible for the company to have strong capabilities and leadership in all aspects of trade relations, contracting, logistics, and selling.

Financial Plan

Underlying Assumptions

  • The annual revenue growth rate of the Import Export Company will be 16%
  • The owner will get $125,000 of the total debt funds for development purposes of the business
  • The acquired loan will have a 10-year term, with an interest rate of 9%

Sensitivity Analysis

There is no doubt about the fact that the company’s revenues will be affected by changes in the global economy. These changes mainly include the varying fluctuations of currency. However, since the business will function as both an importer as well as exporter of products, the effects of the tug of war between weak dollar vs. strong dollar are likely to cancel out each other.

The Business Opportunity

As far as UK’s trading industry is concerned, domestic investment and overseas trade are vital for its prosperity. This is the reason that the government, through its trade and investment policies, seeks to help UK businesses in succeeding overseas and also encourage international companies to work with UK-based businesses.

In order to create new markets and trading opportunities, thereby keeping the trade market alive and working, the government is also working to remove trade barriers. This will also enable equal access to markets for both the suppliers and consumers. In this way – ensuring market access on fair terms and keeping markets active and open – makes it possible for the rules-based international trading system to thrive effectively.

Trade partnerships with countries outside EU can pose challenges in the form of long distances and communication problems arising due to the difference of languages and business environment. Nevertheless, it can also bring with it a wide array of valuable business opportunities.

The UK has a vast network of trade relations with non-EU countries, and is ever-interested in to do business in open markets that comply with the World Trade Organisation’s (WTO) rules. Therefore, it seeks to resolve issues of trade barriers through its own efforts as well as EU’s help. As far as open markers are concerned, it takes EU’s help in negotiating commitments that are legally approved by the WTO or seeks to contract bilateral trade agreements.

Aiding material as well as practical support is available to help a budding company find business opportunities, trade missions, market information, financial support, as well as advice on custom duties, tax, and trade (international) paperwork.

The guide given below presents a summary of the support and opportunities a business can take due advantage of when trading in international markets of the Commonwealth, American and the Asian and Pacific regions.

Trade Opportunities - Key Sectors

UK Trade & Investment has distinguished several number of export opportunities that UK businesses can engage with in the following sectors:

  • Food and Drink
  • Education
  • Electronic Healthcare Systems
  • Renewable Energy
  • Biotechnology
  • Security

UK Trade Relations with the Commonwealth

The Commonwealth refers to a diverse group that includes 53 countries, comprising of developed, developing and the least developed countries (LDCs). It includes both large countries, such as India, as well as small island nations.

Markets of these countries offer a plethora of trade opportunities for UK in almost all sectors, including, agriculture and Information Technology. In the case of developing countries and LDCs, you can bid for contracts that are funded by aid agencies. For Commonwealth countries, you can do business through subcontracting to larger businesses that are already involved in trading with these countries.

The UK as well as EU has close relations with the Commonwealth. Both the UK and the Commonwealth approve of the benefits that come with reducing trade barriers, however, the Commonwealth also works to ensure that the developing countries are not unfairly made to face competition from larger, developed and richer countries.

The Commonwealth privileges its member countries, including UK, through preferential trade access. Commonwealth countries also constitute many regional trading groups named as follows:

  • Africa, Caribbean and Pacific countries (having a trade and aid agreement with theEU)
  • the North American Free Trade Agreement
  • the Association of South East Asian Nations
  • the Free Trade Agreement of the Americas
  • the African Union
  • the Asia Pacific Economic Co-operation

Trade agreements also exist between most of these organizations, EU and the UK.

You can easily procure information with regards to developments in trade policy from the Department for Business, Innovation and Skills (BIS). For country profiles, business opportunities, trade missions and exhibitions, you can get in touch with UK Trade & Investment (UKTI). Also, UKTI offers support and assistance to small businesses.

UK Trade Relations with the US

For UK businesses, the US is the main overseas investment market as well as export market. The US market is quite diverse because the country has many states and regions and it also constitutes a free trade area with Mexico and Canada. The US’s business culture and several other practical facets of living and working are different from those of UK. Therefore, it would be easier and more cost-effective to work with those UK businesses that are already involved in trading with the US or US businesses that are already established in the UK.

A notable change in US’s trade policy has recently taken place, according to which climate changes need to be prioritized. This has created new business opportunities with respect to environmental systems and products.

The UK and US also share bilateral trade relations and in 2007, theEUand US created the TransAtlantic Economic Council (TEC), that comprised of business forums, while legislators and consumers used this platform to promote open trade.

UK Trade Relations with Canada

After the US, the UK is categorized as Canada’s second biggest trading partner in the world. The government signs contracts bilaterally, as well as through the Commonwealth and theEU.

Trading with Canada brings several advantages with it; there’s no language difference, the business culture is familiar and the number of UK businesses established in Canada is considerably high. Also, in the exporting arena, UK products have the advantage of preferential tariffs, granted to them by the Commonwealth agreements. This gives UK businesses advantage over businesses of otherEUcountries. Canada and theEUare also currently involved in negotiating an agreement with regards to an economic partnership.

The strongest sectors of UK-Canada trade are technology, science and clinical research. Opportunities also exist in the sectors of oil and chemicals, media services and engineering.

You could benefit from the additional opportunities offered by the 2010 Olympic and Paralympic Winter Games in Vancouver and the 2012 Olympic Games in London.

UK Trade Relations with the North America Free Trade Agreement Area

There exist manifold trade opportunities for UK businesses in the markets of the North America Free Trade Agreement (NAFTA), which include US, Mexico and Canada. The UK has bilateral trade relations with these three countries, both on an individual basis as well as through EU.

There are already many UK business trading and investing with the NAFTA countries. It would be preferable, both in terms of convenience and economic feasibility, for you to start trade in collaboration with these businesses. Also, the NAFTA countries, in an attempt to combat climate change, offer business opportunities in the environmental market as well.

It is necessary for you to acquaint yourself with NAFTA rules if you wish to trade within this region. NAFTA’s regional market is quite intricate and integrated. Also, much of the manufacturing market has been shifted to Mexico sinceNAFTA’s inception in 1994. Resultantly, Mexico has seen rising prosperity and development of its consumer market.

One third ofthe NAFTA’s trade is concentrated in the sectors of energy, automotive and agriculture. These sectors and the resulting trade, however, have been adversely affected because of the current economic crisis. Also, NAFTA’s trade benefits have been unevenly spread among the three countries, all of which want to revise certain parts of the agreement.

These three countries also involved in bilateral free trade with other countries. For example, Mexico and EU have a free trade agreement, while negotiations between Canada and EU are still in process. The US and the EU also have a free trade agreement.

UK Trade Relations with the Free Trade Area of the Americas

The Free Trade Area of the Americas (FTAA) comprises a total of 34 member countries. This means that there is a vast range of different economies involved, which would create numerous business opportunities for UK companies. There are also several industries in these countries, also imposing several national laws on businesses.

Themember countries of FTAA, including some Caribbean islands and all of the Americas, are working to create a free trade area, which includes the North American Free Trade Agreement as well. The working groups ofFTAAare currently working on the following nine trade issues:

  • Services
  • Agriculture
  • Market access
  • Government procurement
  • Dispute settlement
  • Investment
  • Intellectual property
  • Subsidies, countervailing and anti-dumping duties
  • Competition policy

Special committees have also been created to take care of:

  • Participation of civil society
  • Smaller economies
  • Institutional issues
  • E-commerce

TheFTAAkeeps its Hemispheric Customs and Tariff Database for market access updated. In addition to delivering country information and contacts to national governments, the FTAA also works with regional development banks, for example, the Inter-American Development Bank.

The UK and FTAA countries have bilateral relations. The UK also becomes a part of EU’s bilateral relations with these individual countries and also its negotiations on a region-to-region basis so that a trade co-operation agreement could be developed with theFTAA.

UK Trade Relations with Asia and Pacific

The UK and individual Asian and Pacific countries have a bilateral trade relationship. These countries present a variety of business opportunities, including basic and high-tech industry and services. Aid-funded trade also exists between these countries and the UK.

The Asian and Pacific countries comprise of small islands and LDCs, including Bangladesh, and also major economies like China, Japan and India. Smaller but sophisticated economies like Australia, Taiwan, Malaysia and South Korea also exist in this region.

Recently, bilateral government discussions were held between the UK andTaiwan, China, Australia, Malaysia, New Zealand and Korea. The UK, through the Commonwealth and the EU, also indulges in regular trade contacts with countries of the Asian and Pacific region.

EU has region-to-region as well bilateral agreements with several Asian and Pacific countries. The most strengthened of these is with members (the Pacific island) of the Cotonou Agreement on Trade and Aid. There are dialogues going on in this respect with China and Japan as well. Also, free trade agreements are currently being negotiated with the Association of South East Nations (ASEAN), Korea, and India. Aid and trade agreements are also being made with the Central Asian countries of the Caucasus.

Through the EU, the UK also takes part in region-to-region co-operation in trade and consistent contacts with the Asia Pacific Economic Co-operation (APEC), ASEAN, and the Asia-Europe Meeting.

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