Global Economic Environment And Marketing
The external global economic environment consist various factors such as political, economical, social, technological, environment and legal they all can affect the smooth running of an organization and its operations as well. The economic environment could be segregated into the micro environment that could affect the decision of an organization and its employees as well. There are various factors in the economy acts external constraints for your business. Micro economic factors are intentionally and non intentionally affect the economy of an organization it includes various factors such as taxes, inflation, recession, currency exchange rate, savings rate, etc.
On the other side International trade is the exchange of services, goods and capital from one country to another country that includes varieties of government and individual activities. International trade is beneficial for the growth of the economy as well it shows the gross domestic product of the country.
The TTIP (Transatlantic Trade and Investment Partnership)
The TTIP (Transatlantic Trade and Investment Partnership) is the agreement of trade between the United States and the European Union in order to encourage the trade between these two countries and facilitating economic growth. When TTIP successfully introduced at that time it developed the largest free trade zone at the international level that eliminates the barriers of the investments and trade in the European Union and in the United States. For United States European Union is the initial market that exports goods and services. For the United States, European Union is considered as the largest investor. Introducing TTIP would develop the biggest opportunity and platform to the European Union and the United States for the free trade (Hamilton & Webster, 2015).
Recently this is the largest market of the trade with having around 50 % of the world GDP as well as 70 % of the total world trade for worth 1.7 billion Euros in a day and 732 Euros in a year of services and goods traded. The fact which is known by the entire Europe nation recently is fighting with the recession and all the growth of the country depends upon the trade. In that case TTIP is considered the biggest priority for the country (Howse & Eliason, 2015).
There are varieties of companies in the European Union and the United States and they all are considered as the small, medium sized companies. On the basis of Atlantic Council these organizations account for the large popularity of the employment and they also make contribution by providing two third parts of the private jobs in the United States. On the other side in the Europe Small, medium enterprises are doing well than the United States companies as it is developing almost 85 % of the private jobs SME’s are considered as the crucial link for the economic growth and innovation for the United States and European Union as well (Jain, Trehan, & Trehan, 2010).
By eliminating the rest tariffs of the transatlantic will increase the capability of the organization of Europe and America in order to sell the goods and services to each other. The streamlining procedures of customers will bring the services and products to the markets efficiently and cheaper as well. Enhancing the recognition at mutual level and regulatory coordination of the equal protections of safety will permit the SME’s to emphasis on the relevant resources for the development of product in an innovative manner. Around 89 % of the food exporters of the European Union as well as 92 % of the exporters of Beverages are from the SMEs. In the United States they charge very high tax rate on the dairy products like (139 % higher). Almost 50% of the worldwide European Union exports of scientific, technical and professional services export from the SMEs (87%). SMEs are considered as the vital part for the textile industries of the European Union as it exports almost 60% of the textile form there (Melo, 2015).
A Hong Kong company Li and Fung, this is available for the supply chain manager at global level and mainly for the European Union and United Kingdom. It has various departmental stores, ecommerce sites, catalogue – led companies, specialty stores and hypermarkets. The impact of TTIP to an outsider company is understood by taking this company as Example. TTIP (Transatlantic Trade and Investment Partnership) has its own positive and negative impact to the Hong Kong Company Li and Fung.
Positive impact of the TTIP to Li and Fung
- Economic growth for the countries – TTIP (Transatlantic Trade and Investment Partnership) benefit to all the country and its organizations whose get connected with it as it provides free trade and that helps the organization to make better focus on the productive areas which provides benefits in future and that leads to develop the economy of both the country buyer and seller as well(Mennen, 2010).
- Develop strong relationship to the United Nation and the European Union – TTIP helps the company Li and Fung to make strong relation with the both countries US and EU through trading. TTIP is strengthen the ties of these countries as it is known that the Li and Fung is trading and export goods and services to the Unites States and the European Union that for sure make their relationship better and they want to do trade with these countries again in future(Mercer, 2013).
- Provides Ease to introducing new product and service – with the help of TTIP (Transatlantic Trade and Investment Partnership) countries can export and import goods and services into the market of United Nation and European Union in cheaper price(Muchemu, 2012).
- Global economy – global economy development could be traced when the large number of buyers and seller exchange good and products with each other. By this their growth of the economy is developed. Progress of economy is connected with the world trade and those countries who indulge more in global trade could have larger chances to grow more in comparison of those countries who do not have much involvement into the international trade.
Decision in pricing, communication and product could encourage the development of economy of any country. By transforming from fixed price to market price system can achieve the objective at faster rate (Muchemu, 2012).
- Globalization – it is the procedure of incorporation and interaction between the organizations, governments and people of the various nations. This is driven by the international investment and trade and provided help by the information technology. There are various advantages of the globalization to a Hong Kong and company Li Fung such as:
- Helps to decrease the poverty
- Make contribution in the integration of technology
- Make addition to the company’s profit and revenue
- Develop good relationship between the European Union and the United States.