External environment illustration External environment theory

International trade

Internatioanl trade

For centuries Britain has been a country that relies on international trade. We purchase goods and services from other countries and in return we sell them goods and services produced here. An import is a purchase by UK citizens from overseas. An export is a sale by UK citizens to a member of another country.

Visible and invisible trade items

For the purpose of classification we call the tangible goods that we trade visible items. We call the services that we trade invisible items. Exports bring currency into the UK whereas imports lead to an outflow of currency.
The UK has always done well on her invisible account. This is because we developed a world-wide reputation for commercial services. Some of our major invisible earnings come from the following:

  • Selling insurance policies through Lloyd's.
  • Bank services to foreigners,
  • Tourists spending money in the UK.

On the news every month we hear that the UK has made a surplus on invisible trade showing that we have sold more invisible services than we have bought. The accounts for a particular month might show:
  • Invisible exports £100 billion
  • Invisible imports £80 billion
  • Invisible surplus £20 billion


At the same time the UK frequently makes a loss on her visible trade.
A typical current account showing the UK's trading with the rest of the world in a given period, may therefore look like the following:

The current account of the UK balance of payments gives a good guide to current trading in visibles and invisibles with the rest of the world.



Supporting Documents

These downloads will help to put external-environment theory into context using real world examples from real businesses.

The use of the marketing mix in product launch
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Find out how NIVEA used external-environment theory to succeed in the manufacturing industry by downloading our premium case study.

Planning effective marketing strategies for a target audience
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Find out how adidas applied external-environment theory to thrive in the sportswear industry by downloading our premium case study.

The use of social media in promotion
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Learn how National Trust used external-environment theory to prosper in the non-profit industry by downloading our premium case study.

The marketing mix in the food industry
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Discover how McCain Foods used external-environment theory to thrive in the food & drink industry by downloading our premium case study.

Positioning the brand
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Find out how Chap Stick used external-environment theory to prosper in the healthcare industry by downloading our premium case study.