The significance of the global factors that shape national business Essay

The significance of the global factors that shape national business activities - Essay Example Hence, organizations must obtain knowledge of these global factors in order to make timely strategic business changes that can ensure long term business sustainability. International trade would assist a country to attract foreign investments and to improve its unemployment rate. This paper will discuss the impact of international trade and other key global factors (both positive and negative) on UK businesses. In addition, this will give an overview of EU and its various policies influencing UK businesses. International trade and UK businesses As the Penguin Dictionary define, â€Å"the exchange of goods and services between one country and another is called international trade† (as cited in Jain 2009. p.110). In most countries, international trade accounts for a significant percent of the gross domestic product. International trade is greatly assist countries to find out cheaper and potential markets for their goods and services. While analysing the impact of international trade on UK businesses, it seems that global trade helps the nation to grow its business sector. To illustrate, as per the DFID statistical data (n.d.), UK’s goods exports increased by 72% to $468 billion whereas services exports increased by 156% to $288 billion over the decade 1998-2008. Evidently, exports in UK have notably increased over the last decade and this situation in turn assisted UK business sector to gain more potential clients and suppliers. In addition, increasing exports indicate more revenues and profits for UK businesses and this growing inflow of money can aid UK business sector to promote its growth. Similarly, imports in UK have also dramatically improved during the 1998-2008 period. Over this decade, the country’s imports grew by 111.5% (Ibid). The significant rise in imports and exports promoted the development of other related business industries in UK. Market analysts opine that better international trade has greatly benefited UK business sector to spread risk during the global financial crisis 2008-09 and to maintain market stability to some extent. Finally, the international trade aid UK businesses to explore new potential expansion opportunities and to dominate the global business regime. Global factors influencing UK business Oil price is one of the major global factors influencing UK businesses. Recent reports indicate that oil prices are falling in UK due to fall in crude oil prices in the global market. This situation will certainly benefit UK business sector because falling oi l prices would assist businesses to improve their production costs and thereby profitability. The value of the Pound Sterling has been relatively stable for many years in spite of the recent global recession that dreadfully shook Europe. A stable currency encourages potential foreign marketers to establish trade relationship with UK businesses as it would allow them (foreign marketers) to enjoy high level of business certainty. In addition, the stable value of the currency contributes to maintaining stable oil prices, which in turn are helpful for the nation’s business sector. Similarly, a series of recent technological innovations positively influence UK businesses because the country’s technological landscape has highly developed and hence it is able to bear changes easily. Recently developed computer related technologies and automation of production lines have notably contributed to the expansion of UK businesses (Chaston 2009, p.100). At the same time, some negativ e global factors impede the growth of UK businesses. Many of the world’s leading economies including the United States are yet to recover from the impacts of the global financ