Indulgence vs Restrain: Selecting Markets for Expansion

The assignment content discusses the importance of understanding cultural dimensions and strategic intents for businesses venturing into new markets. The article highlights the need to consider different cultures, societies, and economies when entering a foreign market. It also emphasizes the importance of surveys, models of cultural integration, promotions, and technology in developing an efficient entry strategy. The content provides insights from various authors and sources on topics such as globalization, entrepreneurship, international business environments, and cultural dimensions.

Global Business Environment
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Table of Contents
Introduction................................................................................................................................3
Driving factors of Globalization................................................................................................3
The driving factors of globalization include:.............................................................................3
PESTEL analysis for the organization.......................................................................................4
Effects of Globalization on Business.........................................................................................6
Solutions to challenges...............................................................................................................8
Structure, Culture and Governance............................................................................................9
Recommended routes of Entry.................................................................................................11
References................................................................................................................................12
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Introduction
The entire assignment talks about the globalization in the business environment and for
understanding the concepts of the Globalization process, a company called Good Tastes
Limited is chosen. Good tastes limited are a food manufacturing company offering its surplus
amount of food services to all its customers.
With the revolution in 1990, the Good Taste Limited offers products like soups and other
liquid foods which proves delicious and satisfies the tasty tongues of the customers. The
Good taste company focuses on satisfying the customers by offering them the reliable
services. The organization has beaten the kitchens in Cuisine by offering the non-vegetarian
foods and meals. The food industry supplies the variety of delicious foods and the cooking
ingredients both to the customers and the chain of the hotels. The major success of the
business was due to the effective global operations which made them to expand their business
internationally. The report helps in outlining ideas for the organization to expand its business
from Hong Kong to other markets in order to achieve the international marketing. The report
talks about the challenges faced by the company while entering into the new market.
Driving factors of Globalization
The driving factors of globalization include:
a) Technological advancement.
b) International trade.
c) International investment.
Technological advancement is one of the most important factors which help in the
globalization process. The technological advancements in the food industry include the new
refrigeration techniques which help in the preservation of the liquid foods and vegetables.
Technological advancement involves the introduction of new and innovative technologies
which helps in achieving the goals of the organization. The technological advancements help
the organizations in order to expand the global business. The advancements start from the
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invention of the new project, development, inclusion of innovative ideas, and finally the
entire delivery of the project (Salvatore, 2015).
International trade helps the organization to open up multiple channels which helps in the
expansion of the business. International trade helps in promoting the business and helps in
expansion of the business across several countries. In order to achieve the international trade,
the organizations have to make changes in the international business activities which start
from the supply chain management process to the final delivery of the product to the
customers (Hamilton and Webster, 2018). The Good Taste Limited organization was
involved in the international import and the export activities where the food is supplied to
several countries and a maximum number of customers are reached.
International investment is the process in which the global organizations invest their money
to carry out the international trade operations. The investment should be in a planned manner
so that the allocation of the resources is done in a planned manner to achieve the business
objectives. The resources are in the form of human and the financial resources and they are
allocated in a planned way (Nohria, 2017). In the case of the allocation of the human
resources, the human resources are allotted on several departments in order to ensure the
collective and collaborative work to achieve the goals of the organization. The human
resource allocation process begins with the recruitment of the skillful employees and
employing them to get the work done by them. It is the responsibility of the human resource
manager to allocate the human resources in an effective way so that the work is allotted to the
right people at the right time to achieve the business goals. In the case of the financial
resource allocation, the organization plans on the investment of the financial resources and
allocates them in the right manner to achieve the business goals. The financial resource
allocation includes the allocation of the financial resources on different functional
departments like planning, development, production, and the supply units (Hamilton and
Webster, 2018).
PESTEL analysis for the organization
Political: The political factors prevailing in the country can directly affect the food industry
of Good Taste Ltd. If the political power of the nation is high and the entire nation is under
the control of the political parties, then one can say that they can have influence over the food
import and export. Further if there is a political unrest or change of policies it would affect
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the business that makes the growth and development difficult for the business. So the
political environment is essential for the business to sustain and grow (Arthur, 2018).
Social: The social factors are always linked with the lifestyle of the people. The lifestyle of
the people who are the customers of the food industry can have direct influence over the
business operations. The people who are the customers are the ones who always seek for
innovations in the products that they receive from the industries. In order to satisfy the
demands of the customers, the industry will look into new set of delicious products and
ingredients to fulfill the tasty tongues of the customers. Therefore, for globalization the
business has to measure the social behavior and the taste of the market to develop its products
and services likewise (Adekola and Sergi, 2016).
Environmental: The production of the product and its distribution has to take care that the
business doesn’t spoil the environment in the process of business development or operations.
Therefore, the way the business is conducting itself in the larger social environment to treat
the natural resources is the environmental effects for the business. The brand of Good Taste
has maintained a low carbon footprint in their processes of manufacturing and now aims to
further develop it with the most recent innovations that makes the environmental factors have
the needful aspects that enhance the environment like water, air and soil rather than spoiling
them with toxic wastes (Kirton and Maclaren, 2018).
Technological: The business of Good taste is going global where the markets that it serves in
have its own needs and demands. The technology helps all aspects of the business where the
stakeholders to the management are all connected via a wireless media of the day to track the
business progresses and market demands so that the future planning to meet those demands
can be executed. Further, use of technology in production processes has reduced manpower
intervention while standardized the product quality in the process making the business have
the efficiency to grow and sustain (Shatalov et al., 2017).
Economic: The aspect of economy determines the purchasing power of the consumers in a
market where the disposable income for purchase is higher. On the other hand as the
economy declines the purchasing powers of the consumers gets lowered. Hence the economy
of the markets that the business is working in has to be economically strong to sustain and let
the business grow as per its potentials. Hence the economy of the markets that the brand is
working in is good and thus it can be said that the business would sustain of the production
quality and consumer’s tastes are matched (Watson et al., 2018).
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Legal: The way the business conducts itself in the market, the laws and regulations those
binds the business are all been documented under the legal provisions of the market
economy. Therefore the way the business deals with the operations, labor welfare, pay taxes
and services in a market are all controlled by the economy. In Hong Kong the business laws
would be different if the brand was working in Australia. So these aspects of the legal
business norms would enable the businesses to grow globally in different markets as desired
by the Board of Directors (Hamilton and Webster, 2018). .
Effects of Globalization on Business
The businesses of the day are getting tough competitions in the existing markets that they are
operating in. Hence the globalization makes the business to seek the needful competence in
its operations that would help it to develop the needful skills which would further boost its
operations in other markets. The globalization has its challenges and gains which would be
discussed herein. Globalization means the business, people and nations are becoming
interconnected with the rise of technology, improved transportation and global financing of
the modern days helps the business cross borders to venture in a new market. So the effects of
globalized business helps the business to cross the boundaries and borders where it has to
also see that the control of the operations, welfare of the employees, economy, competitions
are all taken are of to make the venture successful in a market outside. Thus it aims to
improve its business potential and also aid people of various economies that it is working in
to have a better lifestyle for people and society as a whole for long term sustainability
developments (Rao and Goyal, 2018).
There are challenges in this operation format as well. If the economy or the legal aspects sees
a change in the market that the brand is operating in then the business may have a deep
impact so the political aspects of the market, social needs, taste etc are to be kept in mind for
the long term. The positive is that the market opportunities, sustainability, profits and market
share of the business grows with the globalization. Nevertheless, the business of Good Taste
has to ensure that the global opportunities are based on the economy of the market that it
wish to venture into (Schmitt and Schulz, 2016). The nations can be further divided as
industrial, developing and Less Developed in terms of economy. The product price and target
market is key for the business to choose from the aforesaid three nations to set up. Hence the
pricing, target market, operational cost, incomes that the business expects from such
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investments are the ones that determine the market that the business would choose (Leyshon,
1992).
The survey of the market from both primary and secondary sources about the culture, social
status, taste, opportunities in the markets of the developed and developing nations of the
globe are to be collected. Industrialized nations are those which have a very healthy
economic environment. The Gross Domestic Production (GDP) along with the Gross Per
Capita Income of the people is higher compared to the rest. The nations of such nature are
few like US, Canada, China, India, Turkey, Easter European economies, Japan etc. The less
developed nations are those which have the least developed economies in the Globe. There
the levels of poverty are higher and the residual incomes are low for the consumers to go for
products of Good Taste. The developing nations are the ones those are picking up fast; they
are based on agriculture and small scale businesses of production which are also raw material
producers for the developed economies. The business may target this market as well since the
diversity in the developing nations is large (Dau et al., 2017).
Once the business has chosen its target market the business has to venture to seek the
localized bases which they may call the business port for that market. Hence, the limited
technologies won’t be a hindrance in such a place has to be confirmed to set up the business
there. This gives the business its needful boost in admitting the plans for the chosen market
while globalizing. The difficulty is that the business is in its first attempt of going global so it
may try different models there where the online media can be used for sales without a large
investment on the ground in the form of restaurant building or staffs to serve in them. This
would keep the cost low and make the venture do in accordance to the business styles that is
prevalent in a market. For an example if the brand ventures in India like huge market the App
for sales of their products from a central point in every urban center may be served via third
party delivery services like Swiggy or Zomato like mobile based apps (Melo Zurita et al.,
2018).
Hence the business has to face the situation and seek the challenge to be covered with few
retail outlets in major metropolitans’ in the later stages but to venture into the e-commerce
model is best suited for a business based out of Honk Kong. The model in such case is the
best way to go for Globalization of a brand with least risk but most efficient services are
needed for such venture that would make the business stable to develop the needful
infrastructures that would be built for the Metro clients in a later stage. So the earnings and
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the sustenance along with gain in market share are of prime concern and challenges to the
businesses. In the developed nations there is the biggest scope and marketing opportunities
are in plenty (Holland, 2018).
However, the challenge is the market entry which already has a vary array of competitors in
its casket. So the challenge is to overcome those and come to a point where the ways to
overcome the challenges are to be designed by the business so that they may involvement
them with success to go globalized (Ravanfar, 2015).
Solutions to challenges
The challenges like market selection can be overcoming with a good study of the existing
businesses business models and how they have changed it with time. Where the gap lies
would be the Unique selling Proposition (USP) for the business. And that would be made to
seek an entry into a already existing sector. The venture has to do tie ups with the local
vendors of logistics which further would assist the business to reach the end users. So the
planning of the centers of production, packaging strategies, taste suitable for the market like
studied has to be done before being admitted into a market. This makes the planning and
strategic alignment for the business right and makes the business take the needful steps to
ensure this challenge of risk taking is well addresses with a data bank (Saleem, 2015).
The survey may also predict the economy and so the pricing which has to be such that the
business can withstand the cost and do proper projections of sales in the future for needful
acquisitions that sees that targets are met. So the many risk that the financials have to bear
has been reduced with survey and promotions before the launch. This is the big part of the
marketing plan to develop the promotions that highlights the USP and also gets in the best
deals so that more and more people joins with the business via the apps. This would ensure a
consumer base creation, awareness, and thus growth in any economy where the venture seeks
to globalize. The strategic flexibility, budgeting, execution of the promotion plans, gathering
the needful consumer data for target audience pitch like activities helps in making the global
organizations have the competence to venture in a new market. These challenges are such
that it may hamper the business processes but a planned and well developed organizational
skill may help in making it successful. This has to be had while expanding into new markets.
The promotion means a lot to the new venture in the Global context as on date
(Courses.lumenlearning.com., 2018).
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So supposing the brand targets Australia and India as the markets to enter next it has to do the
survey of the food tastes there and the kind of innovation and additions would attract clients
so that the policies for the 3 operational markets post globalization is managed well. Hence
the structural aspects in those markets are discussed below.
Structure, Culture and Governance
The McKinsey’s 7S structures are as below:
This model suggests the way the business has to develop its internal structures in a particular
culture or economy to make the operations as per their desire. Style, structure, shared values,
Systems, Staff, skills and strategy are the elements that makes the model work in a particular
economy. It divides the soft from hard qualities where the hard factors are Strategy, structure,
systems while Style, staff, skills are the components that gives the functioning a style and the
staffs values to work for (Kirton and Trebilcock, 2017).
This is a very competent model when the business is managing structural change, help
implement new strategies, identify the changes in future and facilitate to merge local business
into itself. Such models are very needful to be well devised and implemented in the case of
globalization. Sustained competitive advantages of the product are manifested once the
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internal qualities are met as per the theorem. This makes the organization grow the
competitive advantages and competence for a larger market share with the values of the
model that it implements to act further (Jurevicius, 2018).
Strategy is the plan for the business which it wishes to execute to reach a targeted goal. So a
good strategy has the qualities to answer both the short and long term business advantages.
Structure is the formulation of the hierarchy or divisions and units in the new economy that it
is in to serve. Hence the structure would depend on the basis of the delivery levels of the
people who are working with the business and with time may be increased with the larger
share (Murray et al., 2017). Systems are the procedural aspects that the business follows in its
operational models. Skills are the firm’s ability in its employees to deliver the needful to all
in the business so that they have the strategy that would carry them forward. The way the
business is going to recruit the people in its globalization venture is the staff aspect of the
model where a lot of work needs to be done so that they perform the way the business needs
(Bowen et al., 2015).
The style of functioning is a classic and distinct identity of a business which develops its own
internal culture of communication, cooperation and operational exchanges in a manner that
style of doing business depicts. Shared values among the employees have to be brought in
where they would have the similar targets and goals to achieve so that the behavioral aspect
of the business internally and externally is well maintained.
The Hofstede’s model too adds to the diversity that the business may face due to the change
of business environment to go global where the social aspects are to be understood in its all
six dimensions (Hofstede Insights, 2019). These are as follows:
National Culture: The way the people accepts things and the taboos for few cultures are
issues which have its own dimensions.
Power Distance Index: This is very important where the lesser important member of the
society may have a distance from the higher one where the power distance due to class
difference or age is seen. Such is the PDI and it demands justification.
Individualism Vs Collectivism: People in some culture are acquainted to work as
individuals and don’t share their achievements with others but some others have the quality to
work together and share the success together. The values of Japan are totally different to that
in the US (Young, 2017).
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Masculinity vs Femininity: The way the society treats its people is the way it is been taken
as in this case. Heroism, achievements, rewards are masculine while care, empathy, carting
are the traits of Femininity.
Uncertainty Avoidance Index: The business tries to deliver its best gain the best from them.
However, if the retention of the ambiguity is such that it has to have the control over the
future, so that the uncertain effects don’t bother its operations much.
Long versus Short term Normative Orientation: The way the business is designing its
venture in the future for its globalized operations has to be made in a way that suites its
strategy. So the strategic inclination of short or long is the indicator of the time orientation.
Indulgence vs Restrain: The business has to know whether to be associated with some
events or be away from them. This gives the business an idea of what issues it should
advocate for and which it should not in a given culture (Whalen, 2016).
Based on the aforesaid two models the cultural dimensions and the strategic intents of the
businesses are directed making the managers for the new venture understand what to do and
what not to in a particular culture. This helps as the measure stick for the business in its long
run and makes it an efficient fit of the business.
Recommended routes of Entry
The business has to select the markets like Australia and India in separate manner as the
societies and cultures are very different. The taste for food, the quality, the ingredients used
are all very essential for the business working in such foreign economy has to work out and
project that makes it the manner that best suites the business development in that economy.
The surveys and the models of cultural integrations are to be given priority while strategizing
the entry strategy. Further, the promotions, the benefits for initial launch, retention of
consumers, new innovations in the markets according to the specialties of the place etc are to
be added in the delivery plan when the decisions would be supported by the management due
to its competence to be in that economy that the business has selected. The recruitment and
grooming of the staffs, integration of real time data communication technologies are also
strategic key to the business development aspect of the brand in the new economy it is
landing into. The best use of the technology for promotion and distribution would be the key
to its start in such economies identified.
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