Comparative Analysis Of Beauty BLVD And JCB Companies

Activities

JCB is a British manufacturer of construction equipment with 22 factories worldwide and sells their products in 1500 countries. Today JCB has 22 factories around the world with 11 of them in the UK. As their machines are used globally this means some of their products have to be exported. In fact 75% of JCB products are exported to 140 different countries. These are dispatches within the EU and to third countries (outside the EU). As the UK is currently still in the EU JCB will benefit from free movement of goods and no custom checks which speeds up the process and keeps costs down however when JCB exports to third countries different rules apply to each country.

When exporting outside EU they will have to license and make declarations to customs through NES, pay Vat, import taxes and duties and follow transport procedures. JCB has factories in Asia and USA which means less products have to be exported from the UK which reduces costs and time.

Beauty Blvd

They are a British cosmetic company who now sells products internationally and is stocked in big chains including boots and topshop. Founded in 2013 by business partners as a beauty company but have now expanded into body care and color cosmetics. They have a range of different products for lips, eyes and face. By far its most popular product is glitter lips that really helped the business expand. They now have a partnership with International Hair Cosmetics who have a share in the business.

Markets

JCB operates in developed economies. Examples of this is the Europe and the UK. There is already support to help trade.

It's easier for JCB to set up in this market as it has support available from agencies and government not just in the UK but the EU too. It's easier to get financial support such as a bank load and advice from governments. There are established trading rules which are more clear and universal e.g. the EU has the same rules in all 28 countries. There is also much higher employment rates in this market with more suitable skilled workers. However there is higher tax rates and other tariffs that can negatively affect their net profit.

JCB also targets emerging markets. With the economy and infrastructure increasing in this market such as India it’s an ideal time for JCB to start selling in this markets. As JCB manufacturers construction equipment it’s perfect for all the new buildings. As JCB already has factories around the world exporting and shipping costs wouldn't be a problem. There is also little to none competition so JCB doesn't have to price as competitively and could lead to bigger profits.

Beauty Blvd

They sell their products to countries usually in Developed economies. Their products are more luxury products and generally developed markets have a wealthier population therefore more likely to buy their products as they have more disposable income and employment rate is higher compared to other markets. Although Beauty Blvd didn't originally target to sell to countries outside the UK they were receiving international orders mainly within the EU and they benefited from trading blocs as they could ship and trade more freely.

They cannot sell in other markets due to different laws and beliefs. As some of their products contain red wine they cannot sell in Saudi Arabia and as all new products are only tested on humans they cannot sell in China. Also employment rate is lower and therefore sales may be low as people have less disposable income and isn't seen as an essential item.

Why conduct business internationally?

Market leadership comes as a result as trading internationally. Although JCB has competitors e.g. caterpillar, trading internationally increases it market share and JCB could become market leader. Although it does have competitors such as caterpillar they are by far the largest. Its competitors has more smaller offices and although it manufactures machinery and engines they are often used sold to other businesses rather than using their own products like JCB does and caterpillar doesn't have the same international presence. Many UK businesses don’t trade internationally so JCB has an advantage and bigger market share. It also manufacturers in 21 other countries so it’s seen as an international business.

Trading internationally can mean fiscal benefit for JCB. In America they won a multimillion dollar contract to supply products for the US army. Without trading internationally this wouldn't be possible.

JCB has a technological and competitive advantage especially in countries which are less developed. JCB has the modern technology, trained staff and funds to produce quality products recognized globally quickly and cheaply compared to local competitors. This can lead to increase in market share and lead to market leadership. A order for JCB is going to be worth much more and be more personalized compared to an order for Beauty Blvd which means they have to stand out and live up to their reputation.

Beauty BLVD

Trading internationally can help Beauty Blvd gain market leadership. It has unique products however they are still a small business compared to competitors such as L'Oreal. Trading internationally can really help their unique products grow and increase market leadership by word of mouth and people sharing posts on social media. The popularity combined with its unique products that are protected by a pattern will lead to market leadership as they are popular and can’t buy them elsewhere. Trading in other countries that are less developed can also lead to market leadership as there aren't many other competitors so Beauty BLVD can gain a larger market share more quickly possibly leading to market leadership. Trading internationally helps economies of scale for Beauty Blvd. Although this may benefit JCB a little, this applies more to Beauty Blvd due to the size and price of their products. JCB is a more personalized product handmade in different countries, the majority in the UK, product whereas Beauty Blvd make 100s/1000s of the same product in a external factory in China in little time. As Beauty Blvd order hundreds/thousands in one order in benefits from economies of scale as machinery and utilities stay the same so when they are manufacturing thousands of products the price of each product reduces dramatically.

Increasing sales and profits is a benefit of trading internationally. As there is a demand for Beauty Blvd products such as glitter lips and they often sell out this makes people want to buy the products more. In eastern countries including Czech Republic, Ukraine and Russia there is a big craze for beauty products especially glitter products. Beauty Blvd is fulfilling this demand and as they were the inventor of the product and have it patterned and there isn't any similar products. As Beauty Blvd’s products have a single use or are only have a life span of a few uses this means they will get repeat custom regularly and people won't sell the products on however JCB’s products have a much longer life span and some will last decades meaning repeat custom is much less frequent. Also the owner of the product may sell it on.J

CB products may also end up in countries where they don't even target e.g. a digger may be made and sold in the U.K but in the future may be sold to a buyer in Ireland.

Support Available

British Chambers Of Commerce

They can help support JCB when trading internationally. JCB have to be a member of BCC to receive support. They promote partnerships between different businesses and organizations. Joining the BCC gives JCB exclusive member benefits including: AA roadside assistance, AXA HEALTHCARE, foreign exchange, Qdos consulting and energy solutions. This can benefit JCB especially the AA plan as JCB will have many vehicles on the road and having a good health plan can attract more workers to the company and improve productivity.

Department for international trade

This is a specialized department of the UK government. They offer support and advice on how to export effectively and increase the amounts of goods they sell overseas. JCB doesn't need this support as it already exports around the world and has factories in different countries to reduce the process. The DIT also ensures the business complies with legislation. This include bribery and corruption, human rights, labor rights, modern slavery and gender inequality. This makes sure that JCB is doing thing legally and may even become a more ethical company. This can give the business a better image and improve its usp.

The DIT also helps UK businesses expand in overseas markets. Information on the main forms, why businesses may expand overseas and investment opportunities available. Although the construction market shrunk JCB grew as a result of the support it received from these organizations.

UK Export finance

This is the UK’s export credit agency and a government department. They have 70 insures credit lenders to help businesses win export contracts by providing attractive financing terms to the buyer. They support exports for any size company in any sector. Integrity and prosperity into business activities such as human rights and slavery and expect the business to investigate any sign of this going on.

JCB can be supported by finance from foreign government with subsidiaries. With this finance JCB can expand into international markets such as China. This means that competition from other international manufactures such as Komatsu will lose market share. This means they could dominate the market share and may even become market leader.