International Business Development: Opportunities and Threats for House of Dorchester in India

This report analyzes the opportunities and threats for House of Dorchester in India, including PESTLE analysis, Porter's Diamond theory, tariff and non-tariff barriers, trade blocs, and modes of expansion.

INTERNATIONAL
BUSINESS DEVELOPMENT
1

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
PESTLE analysis in India............................................................................................................3
The theory of Porter's Diamond...................................................................................................5
Tariff and non-tariff barriers within India...................................................................................6
The role of trade blocs and point out any trade blocs relevant to the international expansion of
the House of Dorchester..............................................................................................................7
Advice for House of Dorchester..................................................................................................8
Differences between good and services.............................................................................8
Modes of expansion...................................................................................................................10
Recommendation.......................................................................................................................11
The process of expanding business through exporting..............................................................11
CONCLUSION..............................................................................................................................13
References......................................................................................................................................14
2

INTRODUCTION
International business development can be explained as a specific field within the
commerce sector that helps an organization to grab new opportunities by introducing new
products and services into the new markets. The present report is based on the study of the
House of Dorchester which is a premium chocolatier that manufactures British-made chocolates
and sells them within the country. The company is headquartered in Poundbury, Dorchester,
United Kingdom. The present report aims to analyse the opportunities and threats the company is
facing in an increasingly competitive environment. It includes the presentation of tariff and non-
tariff barriers while expanding in the foreign market. The study will determine a foreign market
which is suitable for the company in order to expand its operations. The current study also aims
to identify whether it will beneficial for the company to import or export the products and
services or not. Moreover, it discusses the different modes that are available for the company in
order to expand its operations.
MAIN BODY
PESTLE analysis in India
If the company the House of Dorchester decides to expand its operations within the
market of India, there will be certain opportunities and threats for the company which needs to
assess. They are:
Political Factors
Political factors refer to the political stability of a nation and its impact on the operations
of the business. It has been identified that in India, the regulatory practices of the government are
in line with the international global norms which helps the Indian brands as well as the
international brands in providing them with the ease of doing a business. It has also been
identified that since India is a democratic country, it experiences the advantages of having
political stability within the boundaries of the nation. These aspects can be used as an
opportunity by the House of Dorchester in order to expand its business operations within the
markets of India (Brouwer, and Kohl, 2020).
Economic Factors
Currently, the Government of India is running deficit budgets. This refers to that the
because of this reason the sale of the Sugar and Confectionery industry within India is going to
rise within a short span of time and help them in increasing their profitability. Also, it has been
3

determined that the income level of the consumers have rose sufficiently as compared to the
consumers of the USA (Singh, and PADHI, 2020). This creates an opportunity for an existing
brand as well as the brands that are looking for expansion including the House of Dorchester to
gain customer engagements and increase their profitability with the help of launching market
campaigns.
Social Factors
According to a study, it has been identified that there are around 90 million health
conscious people in India which might not like having chocolates on a regular basis. This can be
a threat for the House of Dorchester as people might not prefer to buy the chocolate produced by
the brand, until and unless, they are made using low calories, or they have certain features which
could help the company in attracting the health conscious individuals towards the brand. This
can affect the sales of the House of Dorchester and lead to a decrease in the profitability of the
company.
Technological factors
A recent report with respect to the Indian market states that India is one of those nations
all over the world that has developed the most promising and innovative technologies in the
world. The city Bangalore that is within the boundaries of the nation, ranks among the list of
leading technology hubs across the world (Jacks, and Novy, 2020). Though, this is an advantage
as it can easily serve the companies within the country with innovative technology which can
help the company in making the business operations easy. However, it also adds to the list of the
threats as the company the House of Dorchester will have to facing cut-throat competition in
India in terms of technology and face technological disruptions constantly.
Legal factors
If the House of Dorchester decides to expand its operations within India, the company
will have to abide by certain laws for the purpose of carrying out its business operations
smoothly. The House of Dorchester will need to adhere to the common law that exists within
India with respect to the Sugar and Confectionary Industry. The House of Dorchester will also
need to comply with other laws such as employment laws, business laws, intellectual property
rights, consumer protection laws. These will guide the company with respect to the business
operations, hiring of employees, selling the products and keep a check of the prices that are set
by the company.
4

Environmental factors
In today’s world, the consumers are well aware of the impact of manufacturing process
on the environment of a particular nation (Shtal, and et.al 2018). Therefore, it is important for the
House of Dorchester, to make use of such technology that is renewable in nature, carry out the
business process in environmentally friendly manner and implement the use of policies such
5R’s. This will work as opportunity for the company and provide the company to attain
competitive advantage within the markets of India.
The theory of Porter's Diamond
There are four determinants of this theory that helps a company in deciding its factors that may
help the organization in achieving competitive advantage. They are:
Firm strategy, structure and rivalry
The House of Dorchester plan to implement the strategy of diversification in order to
expand its operations within the markets of India. The diversification will be used to launch
those products in the markets of India which are required essentially by their consumers. This
will help the company in attracting new customers towards the brand. Since, the company is
planning to implement the strategy of diversification, it will make use divisional structure of
organization while operating in the Indian market. Under this structure, the company will analyse
the organizational products and will divide the teams on the basis of the needs of the products.
Further more, in order to gain the competitive advantage with the new market and to beat the
existing competitors, the company will try to serve the needs of the consumers as much as
possible.
Demand conditions
When deciding to go global or expanding the business operations in more than one
country, it is important to understand the needs, preference and the market demand of the nation
in which the company has decided to expand (Alanzi, 2018.). Similarly, the House of
Dorchester will need to identify the market demand and needs of the consumers existing within
Indian market. Since, the customers of India are health conscious, the House of Dorchester will
need to provide the customers with chocolates that are healthy friendly, consumes a less amount
of sugar and calories and ensure that the manufacturing processes are carried out in an
environmentally friendly manner.
Factor conditions
5

Factor conditions can be understood as the availability of resources that are required in
order to carry out the business operations within a nation. It has been determined that India is a
suitable country for the House of Dorchester in order to expand their business. The company can
acquired land in various cities within the Indian nation, they have the opportunity to acquired
unskilled labour at low rates for carrying out unskilled activities. Similarly, since is a
technological hub, the house of Dorchester will easily get skilled employees for those which
helps the company in attaining those tasks that requires skills. Therefore, the Indian market is a
suitable place with respect to the resources for the purpose expanding the business operations
within the foreign markets.
Related supportive industries
The of Porter's diamond states that in order to achieve success with respect to a specific
industry, it is important that the whole industry in which the company operates succeeds within
the market. Therefore, before proceeding the plan of expansion, it is important for the House of
Dorchester to check whether the Sugar and confectionery industry in India are successful or not.
Tariff and non-tariff barriers within India
There are certain tariff and non tariff barriers that exists within India which would affect the
trade of the House of Dorchester. These are:
Import Lincensing
it is a type of non-tariff barrier that exists within the Indian market. This is used by the
Indian government for the purpose of restricting goods that are going to be imported within the
country (Honma, and et.al 2020). This trade barrier is used by the Indian Government in order to
reduce the sale of foreign goods within the country by charging and imposing high tax rates and
promote the sale of goods which are being manufactured by the Indian brands. Import Licensing
requires organization such the House of Dorchester to take licence from the Indian government
with respect to setting up their business within the India before they could proceed with such
actions.
Testing, labelling and Certification
The Government of India has set up certain commodities that needs to be certified by the
Bureau of Indian Standards and the National Standards body before they could be sold in the
Indian market. Moreover, all the companies that exist within the boundaries of India or aims to
expand their business operations within India needs to abide by the standards that have been
6

provided by the Food Safety and standards Authority of India with respect to the manufacturing,
processing, distribution, sale and import of food. Therefore, the House of Dorchester will need to
abide by these standards in order to carry out their business processes within the Indian market.
Customs duty
It is a kind of tariff barrier that is imposed by the Government of India on those goods
which imported within the country. Customs duty vary as per the category of the products that
are being imported within the country (Masih, and et.al 2019). The rate of tax is 10% which is
applied on the value of goods and is paid by the exporter of the goods . Moreover, Goods and
Service tax(GST) is also applicable on the imported goods within the country in the form of
International goods and service tax (IGST). All of these, taxes will affect the prices of the
products offered by the House of Dorchester into the Indian market.
The role of trade blocs and point out any trade blocs relevant to the international expansion of
the House of Dorchester
Trade blocs is a set of countries across the world that helps in promoting and managing
the trade activities all over the world. The countries work together in order to liberalize the trade
between different countries improving relations between them with the help of trade. By
enhancing and promoting the trading activities between different nations, the Trade blocs helps
in enhancing the economic condition of a nation.
The most relevant Trade blocs that can help the House of Dorchester in India includes
AFTA i.e., Asean Free Trade Zone (Patil, 2018. ) . AFTA is a trade Bloc agreement between the
Asean countries that promotes and supports trade and expansion between all the Asian countries
by providing them with international ties. Though, the agreement is only made for the benefit of
the Asean countries, however, the house of Dorchester has the option to communicate with the
AFTA in order expand its business operations within India.
7

Advice for House of Dorchester
For the expansion of the business in international marketplace the company need to exchange
the product and services through the export and imports of goods and services which considered
as the most effective. For increasing the production of the chocolate, the premium chocolate
producing company required to import some resources which includes, sugar, Cocos, vegetable
oil etc. In context to that the company can hire or import the labour from different marketplace
in order to meet the different means of production. Simultaneously the House of Dorchester will
export the product and services to different countries in order to satisfy the large numbers of
consumer and increase the productivity and profitability of the company in effective manner.
Differences between good and services
Commodities: it refers to the product, articles, or merchandise that the company offer to the
consumer in exchange for money in order to satisfy the needs and wants of the buyers. Basically,
the product or the commodity are the tangible assets of the organisation with the physical
existence that individual person can touch, feel, and see. The product can be reorganised with the
size, figure, shade, and weightiness of the product. In the context of the organisation chocolates
are the product of House of Dorchester which is the main means of earning profit (Lupton, and
et.al 2020).
The process of providing the product to the consumer are manufacturing, storing , promoting,
and marketing, transporting of good to deliver to the consumer. The product is homogeneous in
nature.
Services: it indicates the intangible activity , amenities, benefits, or assistance that the business
unit or the enterprise provide the individual person in order to meet their requirement in effective
manner. The consumers or the customers pay for the services in order to experience or acquire
the benefits effectively. In order to gain all the payment, the individual person hare its value,
skills, and knowledge with other that satisfy the consumer. The service of House of Dorchester
includes the delivering of product from one place to another, features of paying and buying the
products is considered as the services which organisation provide for the comfortability and
8

flexibility of the buyers. The services are heterogenous in nature. Services are provided to the
consumer in order to sell the the product in an appropriate manner.
9

Modes of expansion
The available modes of expansion of the House of Dorchester are mentioned as follow:
 Exporting: it is renowned as the most convenient way of expending the business all over
the world. In the process of export, the company the organisations good and survives
from one boundary to other boundaries with the assistance of different means of
transport. Basically, the company shipping the commodity to another nation in order to
provide the products of the company to satisfy the consumers in effective as well as
efficient manner. Exporting is the way of providing or sharing the product and services
in order to increase the business productivity and profitability of the company. Moreover,
the company can approach the customer in easy way. Along with that it is the process of
increasing the business relationship with the other members ( Ngamcharoenmongkol,
2018).
 Wholly owned subsidiary: it is the mode of expansion in which the outstanding share of
the organization is complete owned by another company which also renowned as the
parent company. All the subsidiaries include vertical incorporation of supply chain,
divergence , risk management etc. The parent company maintain the daughter company
in the host natation. It is effective because the parent company already acquired the
targeted marketplace with proper knowledge and the information of the taste and
preferences of consumes.
 Joint venture: it is another process of entering in the different marketplace in which the
two or more then two business entity come up with the resources or capital in order to
operate the business jointly or together. In this expansion method the company in hands
together to accomplish the common goals. Both the companies share loss and profit or
income as well as expenses equally. Basically, joint venture is rage form of partnership.
 Licensing: the company can go for the licensing in order to expend the business in the
international marketplace. Basically, the licencing is the process in which the
organisation gives rights to deliver the product and services of the company in different
market segment. In this process the company aim to acquired the international entity
( Ruzekova, Kittova, and Steinhauser, 2020) .
 Franchising: with the assistance of franchise the company can provide the product and
services to the international customers. Basically, the company offer the business ideas to
10

the franchisor to share with the customers as the product or services in exchange of the
capital or the money.
Recommendation
From the analysation of different modes of expansion, the company should utilize the exporting
of the business in the international marketplace. This mode of expansion ids highly preferable by
the many multinational organisation in order to increase the growth perspectives. The reason
behind utilizing this strategy or mode is highlighted as follow:
 Enhance competitiveness: with the assistance of exporting g and marketing of exported
product on international levels give assistance in increasing the brand value in the
marketplace. Furthermore, it increases the competitive advantages in the marketplaces .
 Increasing the sales of origination: with the assistance of exporting the company robots
the sales of the brand as it attracts large numbers of the customers, it increases the
potential of the company to invite the customer in order to gain better experiences.
 Higher profit: it gives assistance in increasing the profit ratio as it increases the value in
the marketplace. Due to export of the product the company create impression on the
customer in the marketplace. Moreover, if the company provide product or chocolate as
per the taste and preferences of the company then it is highly acceptable but the people
and rise the demand in the marketplace (Twarowska, and Kąkol, 2013).
 Increase the availability of the resources at lower price: due to the expansion process
the company can build the relation with the other hosting country which help in
purchasing the raw material at cheap price. Due to that it will be easy to produce the
chocolate at the lower cost with the adequate supply of resources .
The process of expanding business through exporting
The company can have opportunity to expend the business in the new marketplace with the
assistance of exporting the products which leads to increase in the sales of the company. Due the
exporting the organisation can segregates the wide range of the product in different marketplace.
The exporting can provide the successive factor for the organisation order to survive in the
market for long period of time.
 The profits of exporting: it creates opportunity to expend the business and introduce the
business enterprise image in the international marketplace. Due to exporting of chocolate
11

in the new marketplace allow the organisation to open new outlets in the new market with
new targeted market. The company can increase the sales of the company.
 Finding exporting opportunity: for expending the business the individual person
supposed to increase the network by making investigation about the customer and their
taste and preferences in effective as well as efficient manner. With the assistance of the
government authority sponsorship the company acquire the knowledge about the market.
Along with that the authority or bank assist in raising the capital for business
establishments.
 Financing the export of the company: the UK authority is providing great support to
the business form in order to increase the contribution in the economy. Due to that the
company can easily rise the fund from the bank, government or the financial instituted.
 Setting up of exporting agreement: in order to export the right product to the right
customer or the supplier. In order to safe the organisation from different challenges and
risk it is important to make agreement between them. This approach give assistance to the
organisation in order to increasing the business inappropriate manner ( Tien, N.H., 2019).
 Managing the currency risk: the fluctuating currency rate of another country create
difficulty in manging the profit of the organisation because the supplier or the customer
provide exchange currency in their local mode of exchanging money. With the oscitance
of the technology the organisation cannot jeopardize the profitability.
Procedure of export
In order to accomplish the the goal in appropriate manner. In context to that the company should
follow some essential steps in order to export the goods of the company such as
 Need to check out the process of another country’s export
 It is important to analysis the shipping rules and ;licencing required for exporting the
goods.
 Along with that it is important to know the receiver’s detail in order to make sure the
product is ship to right person or not.
 Moreover, it is important to bifurcate the goods and series in proper alignment.
 The most important step is to make the invoices of the document associated with the
goods.
 Maintaining the record and information of the data.
12

CONCLUSION
From the above report, it has been determined that India is a suitable place for the House
of Dorchester for the purpose of expanding its business operations within the country. The
present report has covered a PESTLE analysis of the Indian market with respect to the Sugar and
Confectionery industry for the purpose identifying different threats and opportunities for the
company. The report also includes a relevant theory which helps in formulating strategies for
expansion within the international market. The theory that has been used in the present report is
Porter's Diamond Model. Moreover, the report has identified the relevant trade bloc for the
purpose of expansion. It also includes the process of expansion that the company should within
the Indian market. Further, the report has also covered all the available modes of expansion for
the House of Dorchester in order to expand their business operations. Lastly, the report has also
covered if it beneficial for the company to import or export the products or not.
13

References
(Books and Journal)
Alanzi, S., 2018. PESTLE Analysis. Project Management.
Brouwer, A. and Kohl, T., 2020. Trade Blocs. In International Encyclopedia of Human
Geography (pp. 335-339). Elsevier.
Honma, Y., and et.al 2020. High-quality sugar production by osgcs1 rice. Communications
biology. 3(1). pp.1-8.
Jacks, D.S. and Novy, D., 2020. Trade blocs and trade wars during the interwar period. Asian
Economic Policy Review. 15(1). pp.119-136.
Lupton, and et.al 2020. National income inequality and international business
expansion. Business & Society, 59(8), pp.1630-1666.
Masih, J., and et.al 2019. Market Capturing and Business Expansion Strategy for Gluten-Free
Foods in India and USA Using PESTEL Model. Agricultural Sciences. 10(02). p.202.
Ngamcharoenmongkol, P., 2018. Central Food Retail: Business Expansion and Brand
Architecture Strategy. Asian Case Research Journal, 22(01), pp.199-218.
Patil, D., 2018. Sustainable Bio-Energy Through Bagasse Co-Generation Technology: a Pestel
Analysis of Sugar Hub of India, Solapur. Journal of Emerging Technologies and Innovative
Research. 5(12). pp.661-669.
Rutto, R., and et.al , 2019. Effects of Foreign Direct Investments On Kenya’s Manufacturing
Exports To Regional Trade Blocs In Africa.
Ruzekova, V., Kittova, Z. and Steinhauser, D., 2020. Export performance as a measurement of
competitiveness. Journal of Competitiveness, 12(1), p.145.
Shtal, T.V., and et.al 2018. Methods of analysis of the external environment of business
activities. Revista Espacios. 39(12).
Singh, A. and PADHI, S., 2020. India and trade blocs: A gravity model analysis. Theoretical &
Applied Economics. 27(4).
Tien, N.H., 2019. International economics, business and management strategy. Dehli: Academic
Publications.
Twarowska, K. and Kąkol, M., 2013. International business strategy-reasons and forms of
expansion into foreign markets. In Manage. Know. Learn. Int. Conf (pp. 1005-1011).
14