In the United Kingdom, the retail industry includes both food and non-food products. It is concerned with all types of enterprises that sell directly to consumers, including big chains and other department shops through independently managed platforms. The retail industry is one of the most technologically advanced, innovatively structured industries, with the best information and technology infrastructure. It features one of the top e-commerce systems, selling not only to locals but also to people all over the world.
According to statistical evidence from academics, the e-commerce platform in the retail industry accounts for approximately 11% of global total internet sales, specifically in the retailing industry. It, therefore, goes without saying and appreciating that by and large, the retail industry forms one of the most innovative and highly technological and sophisticated industries in the UK economy.
Customary, the UK retailing industry has got many branches both within and internationally, making it one of the key contributors to the Gross Domestic Product (GDP). A good example of such retail store, which is performing well both locally and globally, is the Tesco Company that has the largest occupied retail space. Various researches, who work in this sector, sharply indicate that the industry approximately contributes to the economy with about £17.5bn collected from taxes. On the other hand, regarding employment statistics, the industry provides employment to over 2.4 million people both directly and indirectly.
Trade Theories and Economic Policy
Trade theories are designed to explain the reason and purpose of trading. These theories help us understand the factors that led to the evolution of trade. Many theories help us understand trade at the international levels. These theories try to explain the reason as to why some countries are economically doing well compared to others.
These theories include the theory of absolute advantage. Adam Smith advanced this theory. The theory advocates that the wealth of a nation is not contingent upon the gold reserves it has but rather to be based on the living standard of the people. It holds that by a country specializing fully into activities that they are well in, they automatically develop competitive edge and competencies against another country (Levin and Feldmann 2012, p.4). Potters theory of trade elucidates that for the country to excel in a certain industry, it has to fully engage in massive innovations that will propel upgrading of the industry. The theory identifies several determinants for this to happen which include: the availability of local market and its capabilities, local demands, local supplies and domestic firms feature (Reuvid and Sherlock 2011, p.96). For instance, retail industry in the UK is much innovative. It has come up with e-commerce platform for managing client’s needs. There are also such theories as mercantilism and protectionism (Sitkin and Bowen 2013, p. 58). The main idea of the first mentioned theory according to Sitkin and Bowen (2013, p. 58) “mercantilists believed that a country should increase its holdings of gold and silver by promoting exports and discouraging imports.” Regarding protectionism, this theory is applied when country denies any import agreements in order to increase trade and exports.
Ethics of International Trade
Ethics is the universally accepted code of conduct. International trade has got much to do regarding ethics. It should be understood that ethics to change from one country to another. What is considered ethical by one country may be at the same time is considered unethical by another country.
Ethical practices range from the management of the firm, its corporate social responsibility and its stand towards corruption.it is therefore recommended that for a business to go international, it should fully understand the ethics of that foreign country (Reuvid and Sherlock 2011, p.64).
Strategic Marketing and Trade and Supply Chains and Trade
The international business must come up with required marketing strategies that will enable them penetrated the global market. This may include the product mix of the company product (Reuvid and Sherlock 2011 p.38). Supply chains help to link countries to trade across the globe. Supply chains and global trade are both hinged to the absolute theory of international trade. Producers have to come up with proper logistics that will ensure their products are well distributed to different countries. The shift in retail business from West to Asian countries is the very reason why stakeholders in the retail industry in the UK are fighting to come up with new supply chains (Chen 2015, p. 326) This is done so that they come to terms with foreign producers and serve the client effectively. The East has now become one of the most potential destinations for UKs retail products. This thus calls for new and proper ways of dealing with them.
Global Trade Distribution Channels
International business requires the intensive channel to see the product moved from one country to another. The better and how robust this are, the more success. International distributional channel include channels such as the use of intermediaries who sell products in a different country on your behalf or as your agents (Reuvid and Sherlock 2011, p.46).
The second international distributional channel is through franchising whereby an investor, instead of investing directly in a country, he uses a franchisee to enter into a foreign country. Optionally, the investor may decide to seek direct licensing into the market.
Trade Laws
The international trade laws mostly include rules that are appropriate and customized for handling trade between many countries. These trade laws are used by private sectors of trade in legal writings. However, the World Trade organization (WTO) is a global body that sees through transaction between countries and the private sector. The international trade laws are rooted on the theories of liberalism of economies which was experienced in Europe and later after by America (Constantinescu and Ruta, 2015, p.134) We can, therefore, say international trade laws are aggregate legal rules of the new lex mercatoria and international legislation.
The World Trade Organization has a scope that endeavours to provide a frame work for implementation and administration of agreement thus promoting a great coherence to its members (Eaton and Romalis 2016, p.3432). The policies provide a forum for trade policy review. With all the endeavours, the WTO aims at; maintaining the laws without discrimination, reduction of trade tariffs and barriers, harmonization of national regulations and balancing of trade liberation.
International Logistics
Management of logistics help in the covering of physical movement of raw material products from the point of origin until the end which is when the customer or user gets the final product (Reuvid and Sherlock 2011, p.76). International logistics can be referred to as the “global supply chain management”. The primary objective of this is development of a cost efficient mechanism of delivery. This greatly depends on the reliability of transportation network globally. Global logistics has seen improvement over the years due to advancement in shipping transport and air.
Trade Finance and Documentation
Decades back, global trade finance was taken to be well functioning and liquid. Trade finances have now been monopolized by banks which aid in the distribution of the trade finance assets to the new investors around the globe. Banks offer securitization of trade finance assets which are later distributed in the capital markets (Rushton and Baker 2014, p.77). Trade finance can be said to be a special classic asset which has characteristics i.e. it’s self-liquidating. However, it may involve some frequent payments. The tenor here is mostly short but it can also be long dated, this is according to a client or industry wants. Trade finances have led to innovations through the BPO. International trade documentation requires documentation procedures for exporting, shipping banking and importing. The presence of correct paper work offers efficiency in making payment in big organizations and multinational companies during trade (Baldwin and Lopez 2015, p. 1688). Documentation also reduces the risks that a customer will refuse to pay the supplier. Examples of trade documents include; payment sectors, official control sectors and commercial transaction.
Future of International Trade Distribution
The future of international trade distribution will relate to new distribution and exchange models. It is evident that in future, the digital platform will sculpt to shape the international distribution of trade in terms of export of shipments (Cowen 2014, p.44). According to recent reports, there are suggestions that the future will really favour bilateral and regional agreements over the global WTO. This will lead to the improvement of the overall distribution and global trade.
References
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