Challenges and Scenarios in International Business: A Case Study of Cheeky Panda
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This report discusses the challenges and scenarios in international business, with a case study of Cheeky Panda. It assesses various modes of overseas expansion and their impact on the company's potential to expand successfully.
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Table of Contents INTRODUCTION...........................................................................................................................1 MAIN BODY...................................................................................................................................1 TASK 1............................................................................................................................................1 A. Explanation of main challenges which threatened globalisation in pre-Covid-19 period.....1 B. Explanation of which of three scenarios outlined by author is most likely to happen and why?............................................................................................................................................2 TASK 2............................................................................................................................................4 A. Critical assessment of various modes of overseas expansion that are present to company as well as which mode is appropriate and why?..............................................................................4 B. Impact of identified globalisation scenario that has on company's potential to expand successfully using this mode?....................................................................................................5 CONCLUSION...............................................................................................................................5 REFERENCES................................................................................................................................7
INTRODUCTION International business is defined to trade of products, services, technology across national boundaries and at a transnational scale. It generally involves cross border transactions of products as well as services among two or more than two countries. It is also termed to be globalisation. It is basically defined to be trade of offerings by companies across global boundaries. It is basically relates to any situation where production and distribution of products and services crosses national limits (Vrontis and Christofi, 2021). Globalisation is a shift towards a more integrated global economy which could create larger opportunities for international business markets. It could take place in in internationalmarkets for running business. This report is relied on international business which is classified into two tasks where task 1 is based on an article of globalisation of scenarios in post Covid-19 and task 2 is based on case study of Cheeky panda that supplies eco friendly products. In task 1 it consists of various challenges which threatened globalisation and situations that are outlined by author of article. While task 2 involves assessment of various modes of overseas expansion that are present to company and impact of globalisation scenarios on company's capability followed by its conclusion. MAIN BODY TASK 1 A. Explanation of main challenges which threatened globalisation in pre-Covid-19 period. It has been identified that era of globalisation, open borders as well as global value chains are under pressure in terms carrying out business practices successfully (Terziev and Klimuk, 2021). With pre Covid-19 period protectionism, populism and climate change is considered under major challenges of economic globalisation. Along with Covid-19 has created vast challenges that could raise a question on outbreak of pandemic disease which has negatively impacted economic globalisation business practices. According to present three scenarios that are mentioned in article some of major challenges that has created a barrier towards globalisation in pre Covid-19 period are as follows:ï‚·Economic recession:Due to carrying offree trade policies in performing globalisation practices it create an issue for economic globalisation practices to collapse and change it fundamentallysupplychainofcompany'sofferings.Asanoutcomecoronavirus pandemic could structurally transform internal business practices. 1
ï‚·Measure of protectionist:By carrying out pressure on globalisation it has rise as a protectionist challenge for companies which is being increased globally (Grosser, 2021). It has been identified that World trade organisation has estimated that stockpile of importing restrictive measures has increased in year of 2009 and as a result it has affected 7.5% of global imports presently. Along with between 2018 and 2019 World trade organisation has recorded approx. 102 new trade restrictions methods.ï‚·Trade war:Due to trade war between US and China it has considered as a challenge for companies for carrying their business practices of global trade. As due to potential of rivalry it has led to a method of economic decoupling forcing with various American and Chinese companies for shifting their supply chains.ï‚·Supply chains:Due to safe guarding of business practices at international level it has lead to create a major challenge in identifying proper supply chain for their products into international markets. As a result it has hampered working practices of companies I higher numbers and it could lack in productivity of companies.ï‚·Sustainable development:With rise of coronavirus pandemic one of major challenge in carrying out business practices on international basis which could accelerating progress on sustainable development objectives. Due to pandemic disease it has set back human development which could hamper sustainability practices of company. ï‚·Risk of financial crisis:As coronavirus pandemic has lead to challenge of financial crisis in international markets that has resulted in thriving global value chain working practices which slows down economy of countries. B. Explanation of which of three scenarios outlined by author is most likely to happen and why? The three scenarios that are outlined by author states about post situation of Covid-19 with its impact (Christofi,Vrontis and Cadogan, 2021). These three scenarios deals in carrying out business practices after pandemic disease. These three scenario are as follows:ï‚·Scenario 1:Implementing localisation practices rather than using globalisation business practices.ï‚·Scenario 2:Carrying out regionalisation practices in place of using globalisation. ï‚·Scenario 3:Continuation of carrying out international business practices. 2
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From these scenarios that are outlined by author in article the scenario which is most likely to be happened in corporate business is usingpractice of localisation rather than globalisation. As due to rise of coronavirus pandemic there are various challenges which have occurred and faced by corporate markets and companies. Due to rise of coronavirus pandemic it has given rise to financial crisis and economic slow down in term currency (Peng and Lin, 2021). These concerns havecreated recession and safety issues as well towards supplying of products and services to customers. With rise coronavirus pandemic every country's markets are facing economic issues and they have faced financial crisis duestoppage in running out business practices with concern of spreading of disease among individuals. Along with many other challenges are faced by markets and in order to deal with them these situations are likely to be happened for dealing with international business practices. And from outlined scenarios use of localisation practices could as an alternative for dealing with economic situations of countries rather than taking use of international business practices. As in this scenario coronavirus pandemic could lead to collapse of global value chains as national governments for adapting protectionist policies as well as could force companies to relocate their production services closer towards business country in order to avoid a reliance number on foreign suppliers. They could carry participation of companies in both inter-regional and intraregional value chain that could be decreased. By applying localisation policies with protectionist mode it could help in avoiding certain risks that are to be produced by foreign suppliers (Bratianu,Stanescu and Mocanu,2021). As financial crisis with a due time could be resolved by taking use of offerings of home country. Along with economic globalisation practices could be handled by having limited number of suppliers of home country. These practices could lead in maintaining a close supply from nearer places in order to get currency value chain towards companies. This practice could lessen chance of facing of loses in corporate markets. TASK 2 A. Critical assessment of various modes of overseas expansion that are present to company as well as which mode is appropriate and why? From case study of Cheeky panda it has been analysed that company is considering their overseas expanding practices in Western Europe. And in order to carry out expansion practices 3
in international markets it is essential for company to implement some modes of overseas expansion in order to perform expansion practices effectively. These practices provides help and guidance to Cheeky pandain order to carry their overseas expansion practicesin Western European markets. For carrying up a critical assessment of various overseas expansion modes that present in company and could be implemented by them for expanding their business practices are explained as follows:ï‚·Exporting:It is considered to be easiest measure of entering an international market. This entry modes carries an advantage of avoiding expense of establishing operations in new international countries. Cheeky panda could use this overseas expansion mode for distributing their eco friendly products in a new country that is carried on contractual agreements with a local distributor (Pufpaff and McCann, 2021). There is a promotion technique where Cheeky panda required to let potential customers know about its offerings which could be carried through advertising, local force or trade shows.ï‚·Licensing and franchising:It is said to be specialised modes of entry which has intellectual property factors of licensing with new technology. This overseas mode of expansion carries fast entry, low cost and has less risks. This mode basically allows anotherindividualtoduplicatecompany'sbusinessindifferentlocation.While franchising states in receiving a fee from individual duplicating business along with selling their business. This overseas expansion mode could be used by Cheeky panda for expanding their business practices at Western Europe.ï‚·Partnership and strategic alliance:It is another expansion mode that is carried through strategic alliance with a local partner. It basically involves contractual agreement among two or more than two companies stipulating that involved partieswill cooperate in a certain way for a particular time to accomplish a common motive (Kotyla,2021). It basically shares cost reduce investments that are required and also it is considered to be a local entity. This overseas expansion mode could be used for entering their business practices into Western Europe. As it could carry its practices with a partnering company which could help in establishing their business practices in Western Europe effectively in their markets. ï‚·Acquisition:This overseas expansion mode is a transaction where company could gain control by purchasing other company's stock, exchanging stock and paying towards 4
owners. In this Cheeky panda could acquire company of Western Europe and could carry their expanded business practices as a whole. FromtheseoverseasexpansionmodeCheekypandacouldimplementbusiness expansion mode of exporting in order to carry their business practices in parts of Western Europe. It could proved to most effective business expansion modes as it does not requires to get license for running practice as well as there is no requirement of paying any fee for performing business practices (Aparicio, Ramos, Casillas and Iturralde, 2021). Cheeky panda could easily sell their eco friendly products to parts of Western Europe. B. Impact of identified globalisation scenario that has on company's potential to expand successfully using this mode? By using overseas expansion mode ofexporting it could create in having international business practices in global markets. It could be analysed that from above identified scenario which reflects on usinglocalisation business practices rather using international business practices some how could create an impact on Cheeky panda for implementing their overseas expansion mode of carrying out exporting in Western Europe. As Cheeky panda could face barriers in performing exporting practices of their eco friendly products in Western Europe. Along with there is high risk of exporting products to other countries as individuals of Western Europe those prefers localised products and offerings willnot avail company's services which could lead to reduce in sales revenues of company (Kolcava, Rudolph and Bernauer,2021). There is issue that could be arise in market is of trust and faith as most of customers do not trust on other country's product and services that could lead to create low customer base for company in European markets. CONCLUSION It has been concluded from above report that international business is considered to method that relates in carrying out business practices across global boundaries. This report shows explanation of various challenges that are faced by companies in pre Covid-19 period and various identified situations that happened in Covid pandemic times. Along with it carries an explanation of case study of Cheeky panda that wants to expand their business. It assess various modes that are required for having overseas expansion of company. At last there is explanation of determined globalisation scenarios that could an impact on company's potential for expanding 5
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their business practice. It could create a barrier in carrying out business practices effectively in international markets. 6
REFERENCES Books and Journals Aparicio, G., Ramos, E., Casillas, J.C. and Iturralde, T., 2021. Family Business Research in the Last Decade. A Bibliometric Review.European Journal of Family Business.11(1). Bratianu, C., Stanescu, D.F. and Mocanu, R., 2021. Exploring the Knowledge Management Impact on Business Education.Sustainability.13(4). p.2313. Christofi, M., Vrontis, D. and Cadogan, J.W., 2021. Micro-foundational ambidexterity and multinationalenterprises:asystematicreviewandaconceptual framework.International Business Review.30(1). p.101625. Grosser,K.,2021.Gender,businessandhumanrights:Academicactivismascritical engagement in neoliberal times.Gender, Work & Organization.28(4). pp.1624-1637. Kolcava, D., Rudolph, L. and Bernauer, T., 2021. Voluntary business initiatives can reduce public pressure for regulating firm behaviour abroad.Journal of European Public Policy.28(4). pp.591-614. Kotyla,C.,2021.Automatice-invoicedataentryintotheAISsystemofPolishlocal government.In37thInternationalBusinessInformationManagementAssociation Conference. International Business Information Management Association. Peng, M.Y.P. and Lin, K.H., 2021. International networking in dynamic internationalization capability: the moderating role of absorptive capacity.Total Quality Management & Business Excellence.32(9-10). pp.1065-1084. Pufpaff, M. and McCann, D.P., 2021. Combating Toxic Products in China: Concerned Parent Turned Responsible Entrepreneur. InDoing Good Business In China: Case Studies In International Business Ethics(pp. 185-190). Terziev, V. and Klimuk, V., 2021. Factors and mechanisms affecting innovation development of industrialbusinessorganizations:cooperativeresourcemodel.AvailableatSSRN 3903790. Vrontis, D. and Christofi, M., 2021. R&D internationalization and innovation: A systematic review, integrativeframework and future research directions.Journal of Business Research.128.pp.812-823. 7