International Business Expansion for Booths Supermarket: Analysis and Discussion

The report outlines the methods that a company may utilize to expand its business into international markets. It discusses the rationale behind Booths Supermarket's decision to expand internationally, the barriers faced during global expansion, and the implementation approach for internalization process for specific target market.

INDIVIDUAL
REPORT

Table of Contents
EXECUTIVE SUMMARY...........................................................................................................3
INTRODUCTION.........................................................................................................................4
ANALYSIS AND DISCUSSION..................................................................................................4
Company overview and rational for making business international...........................................4
Discussion on which country company should enter and rationale behind decision..................6
Typical barriers faced by company while global expansion.......................................................8
Implementation approach for internalization process for specific target market........................9
CONCLUSION............................................................................................................................11
REFERENCES............................................................................................................................13

EXECUTIVE SUMMARY
The project report will outline international business concepts and demonstrate how
certain companies may perform in global marketplaces. The project focuses the important
information that outlines the methods that a company may utilize to expand its business into
international markets. The study shows why companies are growing worldwide and how this
growth may help them acquire new business and achieve their objectives. The research will also
look at the many barriers and difficulties that an organisation may face while expanding into
global markets, as well as the globalization approaches that an organisation will employ to run
and manage a business in the global marketplace.

INTRODUCTION
International business is the situation where production of goods and services crosses
country borders. International business encompasses all commercial activities that take place to
promote the transfer of goods, people, technology, idea and resources across national borders.
Global market expansion for any organisation refers to the expansion in its activities on global
scale outside their home country by using for investment (Global Market Expansion, 2019).
BOOTHS SUPERMARKET is a supermarket chain in Northern England. BOOTHS
SUPERMARKET food wine and grocery is a private limited company which is operating in
supermarket industry and was founded by Edwin Henry Booth in 1847 and was incorporated in
1896. The company have around 27 retail stores in Northern England which offers food,
beverages and tobacco as the products. The project will give an overview of the organisation
which will be expanding that business in global markets. This report is the medium to define the
rational of the company for making their business go international. The report will also outline
some barriers which will be faced while global expansion and will highlight the implementation
approach for internationalization process used by the company in order to target the market.
ANALYSIS AND DISCUSSION
Company overview and rational for making business international
E.H. Booth & Co. Ltd was started by 19-year-old tea dealer Edwin Henry Booth in 1847
with the aim of selling best food and drinks. The brand was incorporated as private holding
company in 1896 where he added wine and spirits to their range (BOOTHS SUPERMARKET
The Good Grocers, 2021). The company started as tea shop in Blackpool which further grew into
first supermarket chain in North England. The chain is currently operating in various countries
such as Cumbria, Lancashire, Greater Manchester, Yorkshire and Cheshire. The retail super
market chain offers food, beverages and tobacco products. Juts from a team shop, the brand
made their path to first chain of supermarket in their area and started 28 stores across region.
The rationale for international business expansion for BOOTHS SUPERMARKET is to
gain competitive advantage which can be maximized through entering business into new
markets. By entering into new market, this will help in establishing new and strong customer
base which will be helpful in earning higher revenues. As BOOTHS SUPERMARKET will be

expanding their business in international markets, this will be helpful for the company to
diversity their marketplace and such expansion will be helpful in generating higher revenues and
maximizing business profitability. Through international business expansion, BOOTHS
SUPERMARKET will attract opportunity to access to multiple talents and engage in cultural
diversity which can be helpful for the business to work towards success. Through business
expansion, the company can perform all activities and have wider target market which can be
helpful for enhancing their brand image in global markets. BOOTHS SUPERMARKET will be
expanding their business in US through which they can target greater marketplace and generate
higher revenues. This business expansion will support the supermarket chain in expanding their
market outreach, increase asset diversification and grasp opportunity to assess international
talents (Benefits of business expansion, 2018). Business expansion has driven various
opportunities for business and this will bring more power in the market.
There are ample of reasons for business expansion for BOOTHS SUPERMARKET and
several advantages can be faced by business. Some of the advantages for business expansion
which has been availed by BOOTHS SUPERMARKET are listed underneath:
 Creating economies of scale- By operating in multiple or international markets, this will
allow the company to spread the cost of doing business operations and lower the cost of
operations performed by the company on the basis of customers (Advantages and
disadvantages of business expansion, 2021). Therefore, business expansion will be
helpful in enhancing economies of scale.
 Attracting new customers- By setting business in new market with new products and
services, this will help BOOTHS SUPERMARKET in attracting new customers.
Business expansion will offer large and diverse customer base by which the company can
generate higher revenues and maximize business profitability.
 Greater funding opportunities- Business expansion will help the business in making
positive position in the industry which will help the company in gaining necessary and
required funds (Advantages of business expansion, 2018). Through business expansion in
Korean market, BOOTHS SUPERMARKET can get greater funding opportunities which
will be helpful in enhancing business position and improving financial status of the
company.

 To strengthen brand image- BOOTHS SUPERMARKET will be able to improve their
organizational image through business growth because they will be able to target a larger
number of consumers, satisfy their expectations, and assure greater customer satisfaction,
all of which will help to build the organization's brand image in the new market.
 For enhancing business growth and sales- BOOTHS SUPERMARKET supermarket
will be able to enhance product sales by expanding into new areas, which will assist in
the company's growth (Anggadwita and et.al, 2017). As company expansion is a method
of achieving business development, it will aid in attracting consumer attention, allowing
for the sale of a greater number of items and resulting in significant business growth
which will be profitable for the organization.
 To maintain competitive position- BOOTHS SUPERMARKET supermarkets can
increase innovation which will lead to product creation, and assist in retaining
competitive advantage from their operation in new worldwide markets, allowing them to
manage competition and maintain their competitive position within the industry.
Discussion on which country company should enter and rationale behind decision
Global business expansion is the process of expanding a company's services beyond
international borders in order to increase income by selling items to new parts of the economy
and to provide innovation and variety to the company's product line. Internalization is a strategy
used by many organisations to grow their operations into new local and international markets,
allowing them to reach a larger number of customers.
BOOTHS SUPERMARKET intends to extend its operations in Korean market in South
Korea. BOOTHS SUPERMARKET, the supermarket chain will have various possibilities to
improve their competitive position and boost their brand image in global marketplaces. As a
result of their company expansion in South Korea, this brought various opportunities for the
organization to strengthen their customer base (Bahadir and Gumus, 2016). BOOTHS
SUPERMARKET, supermarket chain will be able to confront competition and strengthen its
roots within the business in South Korea since the firm will be able to produce larger sales and
optimize profitability by introducing innovative goods that will attract a large number of
customers. The growth of BOOTH supermarket in South Korea will assist them in growing their
business into new markets.

BOOTHS SUPERMARKET has experienced a variety of benefits and challenges when
developing their company in the Asian market; these advantages and disadvantages are
mentioned below:
Advantages of global expansion for BOOTHS SUPERMARKET
BOOTHS SUPERMARKET may acquire a variety of benefits by developing their
business in South Korea, and some of these benefits are stated below:
 Economies of large scale- As supermarkets now represent a major portion of the retail
business, BOOTHS SUPERMARKET supermarket chain has benefited from the
economies of scale that come with big-scale operations.
 Diversified product range- Even though every day and necessary products are available
under one roof, it allows a company to fulfil customer demand, allowing BOOTHS
SUPERMARKET to gain a competitive edge and make more income.
 Freedom of selection- This has been one of the benefits BOOTHS SUPERMARKET has
seen while operating in the global market in South Korea, since it allows customers
complete freedom of choice in supermarkets (Busom and Vélez-Ospina, 2021). As the
supermarket will not employ any salespeople and customers will be able to pick items
based on their preferences, it will be easier to provide a high-quality customer experience
and achieve customer happiness.
 Fair and fixed pricing- BOOTHS SUPERMARKET will benefit by offering items at
low and affordable rates in their store, which will benefit both the shop and its
consumers. Consumers will be able to shop for items at more cheap rates, which will
benefit the organisation (Chau and Deesomsak, 2015). At reduced pricing, the
supermarket will be able to attract a larger number of customers, increasing revenue and
profitability.
Drawbacks of global expansion for BOOTHS SUPERMARKET
BOOTHS SUPERMARKET experienced several challenges when expanding their
company in South Korea, and the following are some of the drawbacks that the grocery chain
may face are:

 Probability of defects in perishable products- Supermarkets sell perishable items such
as fruits, vegetables, dairy goods, and other items that might spoil if not sold within a
certain time frame.
 Higher capital investment- As a big-scale retail business, BOOTHS SUPERMARKET
must deal with goods and services of everyday need, which is a disadvantage because it
requires a huge capital expenditure.
 Difficult for customers to form decisions- Customers have to choose and checkout their
items on their own owing to pandemic and self-service, which has become tough for
customers and has harmed the organization's customer loyalty.
 Lower customer satisfaction- Customers' satisfaction levels suffer as a result of having
to choose items on their own without support, which results in the decrease in interest in
the business.
 Higher unemployment- Due to various digitization and self-service technologies in
supermarkets, job prospects have decreased, which has hampered BOOTHS
SUPERMARKET's ability to fulfil all duties properly and consistently.
Typical barriers faced by company while global expansion
International company expansion is the process of producing and selling goods and
services across national borders and internationally. There are a variety of barriers that an
organisation may encounter while extending its business into global markets, and these barriers
might include laws, regulations, languages, cultures, and other variables that contribute to or
detract from a company's success and profitability (Dupraz, Nakamura and Steinsson, 2019).
BOOTHS SUPERMARKET has also encountered several obstacles when expanding their
business into global Korean countries, particularly in South Korea. The following are some of
the obstacles that the firm has encountered:
 Cultural gap- Companies with multiple locations have their own culture, which is
followed by management while functioning in that location and so acts as a barrier. When
managing teams in different locations, cultural differences can also exist, and these gaps
might be based on hours and workdays, which leads to a lack of teamwork and makes
operating in global markets more difficult (Jensen and et.al, 2020). BOOTHS

SUPERMARKET, for example, has run into severe cultural problems in expanding its
business in South Korea, posing a risk to the company's operations.
 Language gap- This has been a significant barrier to international business development,
since the spoken language of a country can have a direct influence on sales and the
company's ability to continue operations, leading to massive losses. It may also degrade
the company's reputation in the industry by creating and presenting a poor brand image.
BOOTHS SUPERMARKET encountered multiple linguistic challenges that it has had in
the past as a result of language barriers, which have resulted in a difficulty understanding
others' views and opinions.
 Incline in operational risk while recruiting staff- One of the barriers that led to the
increase in pressure was a lack of employees, and a staff shortage which have an
influence on operational activities and company sustainability (Kaszowska-Mojsa, 2020).
BOOTHS SUPERMARKET, for example, had operational risk, obstacles and issues in
employing employees in worldwide markets due to cultural and language variations,
which affected the company's ability to communicate effectively and choose the best
candidate for managing the company's daily operations.
 Poor supply chain management and incline in uncertainties- Imports, exports,
transportation, and logistics provide a barrier for a company that works across national
borders, influencing its capacity to continue operations. BOOTHS SUPERMARKET had
a number of supply chain management issues that limited its ability to import, export, and
deliver items to companies operating in global markets.
 Tax and compliance barriers- The company's expansion into new markets has been
restricted by dealing with international trade, taxes, tariffs, and customs. BOOTHS
SUPERMARKET has faced a number of problems when it comes to tax code completion
and compliance, including an inability to grasp all barriers and a lack of awareness of
trade norms and rules.
Implementation approach for internalization process for specific target market
Internalization is a term that defines the process of designing a product so that it may be
consumed in a range of nations. Internalization helps companies expand their global footprints
outside their native markets, which may be utilized to determine client preferences (Meager,
2019). Internalization is the process of developing new goods, services, and internal procedures

to help a company expand into new markets. Internalization may be achieved in a variety of
ways, allowing firms to target specific markets and grow their operations across national and
international borders.
The following are some examples of business growth or internalization strategies:
Licensing- Licensing is another way to expand a worldwide company. A license provides a
foreign business the right to utilize intangible (intellectual) property for a defined period of time
in return for a fee in international licensing.
 Merits: The licensing strategy to business development will help the company generate
passive revenue, reduce risk, make it easier to enter international markets, increase self-
employment opportunities, and give it the ability to develop innovative marketing tactics
and new business chances.
 Demerits: These factors lead to a rise in cybercrime and intellectual property theft, as
well as a trust on the licensor license, who bears all risk in the partnership.
Franchising- Through franchising, a parent corporation authorizes another company/firm to
conduct business in a certain manner (Orlando and Zimatore, 2018). Franchising differs from
licensing in that it generally necessitates the franchisee's agreement to considerably stricter
operating standards. Furthermore, although licensing is more prevalent among manufacturers,
franchising is more prevalent among service businesses such as restaurants, hotels, and rental
services.
 Merits: Franchising may help a company explore a new profession in a new sector since
it involves less risk, assistance in keeping a loyal customer base, and the development of
a strong brand image.
 Demerits: This globalization strategy requires a significant initial investment, has a low
degree of creativity and invention, and shares financial information with companies.
Exporting- Exporting is usually the first step in a company's worldwide expansion
(Shahiduzzaman and Layton, 2015). In other words, exporting involves selling products or
services to clients outside of the country, either directly or indirectly through foreign distributors
or agents.

 Merits: Exporting is a technique of globalization and business expansion that relies on
large economies of scale and improved markets.
 Demerits: Exporting has several disadvantages, including a lack of focus on domestic
marketing and current consumers, as well as high labor expenses due to export
standardization and trading charges.
Foreign direct investment (FDI)- The term "foreign direct investment" refers to operations
carried out in one country by companies located in another. The building of new infrastructure in
another country is usually included in FDI.
 Merits: Economic growth, human capital development, increased exports, currency rate
stability, and the formation of a competitive market are all benefits of foreign direct
investment.
 Demerits: When a business develops through foreign direct investment, it increases
prices, inhibits local investment, and exposes the company to higher risk from political
changes and adverse currency rates, all of which can have a detrimental impact on its
financial stability.
BOOTHS SUPERMARKET plans to grow its operations in the Korean market, especially in
South Korea, using a franchising strategy to worldwide expansion (Summers, 2015). This will
provide an opportunity for BOOTHS SUPERMARKET to enter the South Korean market, as it
will allow them to target a larger geographic area and generate higher revenues, as supermarket
chain competition in South Korea is low, providing an opportunity for BOOTHS
SUPERMARKET to strengthen their roots in the market and attract a larger number of
customers.
By establishing a franchise in the South Korean market, BOOTHS SUPERMARKET will
be able to build a strong customer base, which will aid in the creation of a favorable image of the
company in the sector by avoiding risks and dangers that might disrupt operations and negatively
impact sales and profitability. BOOTHS SUPERMARKET will also register their trademarks;
the firm will make a budget and develop a sales plan through which they will be able to do all
management tasks that will aid in increasing business profitability.

CONCLUSION
The goal of this study is to describe the principles of internalization, which is a technique
that many businesses use to extend their operations across borders. An organisation may target a
bigger number of people, cover a broader geographic region, and improve its brand image within
the industry and new market place by expanding its company. As can be seen, business
expansion is a strategy to company growth that allows an organisation to produce more sales,
expand its customer base, and enhance its profitability. It can be concluded that there are
numerous barriers that an organisation may face when expanding their business globally; some
of these barriers, such as language and other barriers, are responsible for impeding the
organization's brand image, as well as resulting in a lack of continuity in operations.

REFERENCES
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Online
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<https://bluebackglobal.com/global-business-expansion-four-steps/>
BOOTHS SUPERMARKET The Good Grocers, 2021 [Online]. Available through
<https://www.BOOTHS SUPERMARKET.co.uk/>
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<https://www.youngupstarts.com/2018/08/29/5-benefits-of-expanding-your-business-
into-global-markets/>
Advantages and disadvantages of business expansion, 2021 [Online]. Available through
<https://www.eulerhermes.com/en_global/news-insights/business-tips-and-trade-advice/
advantages-and-disadvantages-of-expanding-a-business.html>
Advantages of business expansion, 2018 [Online]. Available through
<http://www.9east.com.au/advantages-of-business-expansion/>