Benefits of Single Market of EU - Essay Example

The major benefit of a single market is a reduction in border costs. They are similar to import tariffs because they also raise the price of exports in the foreign market. A decrease in border costs has a great and positive effect on integrating regions as a tariff reduction. It helps in trade creation and trade diversion and changes in the terms of trade. It also affects the incentives to invest.

Reduction in border costs produces strong competition in the home market and a better competitive position in the foreign market. It also increases the cost of products for exports and their reduction simultaneously improves home country firms' position on foreign markets and exposes them to more intense competition at home. These are some general benefits that can facilitate any business looking to expand in the EU market. But for doing specific planning it would be appropriate to undertake a general quantitative analysis of the social-economic functioning of the market, carry out a quantitative survey, and undertake a qualitative analysis of the strengths and weaknesses of the market.

These three steps will help in found formulating a strategy for specific areas of the business. For doing this analysis it is appropriate to have detailed data on the following aspects. Once the reliable data i. 6. Prices can be easily compared because of Euro. Reduction in non the tariff barriers8. Adoption of the Common External Tariff 9. No threat of fluctuating exchange rates thanks to the Euro. These are some general benefits that can facilitate any business looking to expand in the EU market. But for doing specific planning it would be appropriate to undertake a general quantitative analysis of the social-economic functioning of the market, carry out a quantitative survey, and undertake a qualitative analysis of the strengths and weaknesses of the market.

These three steps will help in formulating a strategy for specific areas of the business. For doing this analysis it is appropriate to have detailed data on the following prospects. The socio-economic role of the market in the EU context.Balance and healthy competition between the market competitors.The market's role in promoting local production.Possible internal and external partners in accomplishing this strategy. Once reliable data is available about the above-said areas. It would be easy for planners to formulate a strategy for the expansion of the Company in the EU single market and beyond.

Besides the benefits of the single market, there may be some threats or hurdles that may cause problems. It is important to consider these three eats before I, implement the expansion strategy. These hurdles may be a Lack of knowledge about the demands of the marketplace of coordination between the trading partiesCultural or traditional differencesPurchasing power and price factor of the different markets within the EU or outside EUAfter going through all these preliminaries reliable information can be gathered. This data will be greatly helpful in adopting a correct course of action.