International Business Assignment on Foreign Markets
Added on 2020-04-07
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STRATEGIES FOR ANALYSING AND ENGAGING WITHFOREIGN MARKETSINTERNATIONAL BUSINESS – IBID NUMBERTable of Contents1
1.0Introduction.....................................................................................................................42.0 Literature Review.................................................................................................................42.1 Suitability of Selected Foreign market.................................................................................42.2 Risks in the foreign market..................................................................................................62.2.1 Feasibility for Selecting Indonesia....................................................................................62.2.2 Threats and Opportunities for Woolworths in Foreign Market........................................72.2.3 Potential Risks...................................................................................................................82.2.4 Feasibility of Target Market..............................................................................................83.0 Discussion and Analysis......................................................................................................93.1 Analysis of Mode of entry....................................................................................................93.2 Analysis of Relevant Market Reponses...............................................................................94.0 Recommendation................................................................................................................125.0 Conclusion..........................................................................................................................12Works Cited.............................................................................................................................13Appendix 1...............................................................................................................................152
Executive Summary The present report provides an overview of the business expansion of Woolworths. Thecountry that has been selected is Indonesia. Woolworths has been focused on expanding theirbusiness since long but they were not clear about their ideas. IG Market Analyst Evan Lucasconsidered South East Asia as the best choice for Woolworths. Indonesia has been selectedfor expansion. Being a developing country, the country provides a huge scope for thebusiness. The GDP has been growing and the cost of expansion is low. The rise of the middleclass within the country and the increase in disposable income has further enhanced the scopeof Woolworth. The target market for Woolworths is the middle-class customers of Indonesia.Although competition is quite high in the retail industry, the scope provided the governmentwould help Woolworths to gain success. Franchising has been selected as the entry mode as itwould help Woolworth to cay out commercial activity by allowing the local sellers to the salethe product. Considering the current scenario, suitable recommendations are made. 3
1.0Introduction Business expansion is the stage when the company needs to fight with opportunities andperils. Business expansion deals with increasing the physical presence in different locationsto increase the customer base as well as the level of profitability. The present report wouldanalyze the opportunities and the risks of overseas business expansion with special referenceto Woolworths. Woolworths is one of the largest supermarket chains in Australia. Theorganization was established in 1924 with its Headquarter in New South Wales. They havealready expanded in different parts of the world and employs 202,000 employees globally(Appendix 1). This report would shed light on the different aspects of the expansion ofWoolworths in Indonesia. 2.0 Literature Review2.1 Suitability of Selected Foreign marketWoolworths has been looking for foreign expansion for expanding its customers. Whilelooking for overseas expansion, IG Market Analyst Evan Lucas considered South East Asiaas the best choice for Woolworths. Indonesia has been selected for expansion, as the processof expensing in this country can be cheap [CITATION the13 \l 16393 ]. The sales of thesupermarket chain in Indonesia has increased by 5.6% from the last year. Expansion inIndonesia would further improve the sales of the business organization. Indonesia has been selected for overseas expansion of Indonesia because the stable economicand the political condition would increase the disposable income as well as the purchasingpower of the individual. This would increase the growth of the grocery industry within thecountry. The government of Indonesia has also enhanced the flow of the Foreign DirectInvest (FDI) for boosting the growth in the grocery retailers. In the year 2016, the groceryretailers in Indonesia registered a current value growth of 8% while the number of the outletsremained static [ CITATION Eur17 \l 16393 ]. It is important to note that the current market is changing due to globalization and excessivecompetition. Hence, before expansion, it is essential to the suitability of the foreign market.In this case, Porter’s Five Forces would be used to analyze the Supermarket Industry inIndonesia for evaluating the future success of Woolworths in this country. Porter's FiveForces tool would provide a comprehensive, systematic and robust format to analyze the4
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