International Business: Expanding Business Activities in Foreign Markets

This report focuses on the international business strategy of GlaxoSmithKilne, a pharmaceutical company based in London, and its plans to expand its operations in India. It includes an analysis of the industry, the host country's political, economic, social, and technological factors, and the cultural analysis of India. The report also evaluates the most appropriate entry strategy for GlaxoSmithKilne and provides recommendations for its success in the Indian market.

INTERNATIONAL BUSINESS

1. EXECUTIVE SUMMARY
The present retort in based international business that defined as to expand the business
activities in foreign market to enhance market share. Hence, report based on firm as
GlaxoSmithKilne, pharmaceutical industry based in London. Furthermore, report will cover
industry analysis to analyse the threat exist in host county as India in which business operation
needs to be expended.

Table of Contents
1. EXECUTIVE SUMMARY.........................................................................................................2
2. INTRODUCTION.......................................................................................................................4
3. CRITICAL ANALYSIS..............................................................................................................4
Evaluation on selected product for internationalization.........................................................4
Macro environment analysis of the host country...................................................................4
National competitive analysis for the host country................................................................5
Culture analysis of the host country.......................................................................................6
Evaluation of the most appropriate entry strategy ad international market strategy..............7
4. CONCLUSION & RECOMMENDATION................................................................................8
REFRENCES.................................................................................................................................10

1.0 INTRODUCTION
International business defined as trade of goods, services, technological advancement
across the borders of nations and at global scale (Verbeke, 2013). Therefore, this process called
out as commercial transaction that occurs among two or more regions. By expansion of business
activities into international market, this can be possible for entity to serve large customer that
leads to enhance market share profitability.
1.1 Company background
The chosen entity is as GlaxoSmithKilne (GSK). It is one of the leading pharmaceutical firm.
It is entity that is planning to access the factors that can influence its growth of business in
external market such as India.
1.2 Scenario and scope
Furthermore, report will outline the External business environmental factors,
national competitive analysis and cultural analysis of the country in which company wants to
operate and expand its business. Also, evaluation will be conducted on appropriate entry strategy
and the internationalization plan. Lastly, recommendation given for business success in host
country such as India.
2.0 CRITICAL ANALYSIS
2.1 Readiness for internationalization.
The present report will be based on working of GlexoSmithKiline (GSK) this is British
multinational pharmaceutical company that headquartered in London. It is the entity that deals in
products such as pharmaceutical vaccines, oral health care, nutritional products and over the
counter medicine etc. For enhancement in operational activities in the foreign market, this entity
is looking forward to improve quality of product and their services to capture larger customer
attention in host country as India.
2.2 External environmental analysis of the host country.
2.2.1 PESTLE
The PEST analysis must be carried out as this assist to understand the environment to
carry out business expansion successfully. Henceforth, these are outlined as-:
Political factors- This is components that greatly influenced by features such as legal rules,
philosophies of numerous political parties etc. Herein, the taxation system is quite advanced such
as income tax, service tax and sale tax are forced by union administration. Therefore, the

government of the India has high political pressure on the pharmaceutical entity and make them
safe for the use of patients (Bai, Cordeiro and Sarkis, 2020). Thus, expansion of
GlexoSmithKiline in India market can be successful as this government take varied steps that
assist to take care or health of citizen with use of modern technical advancement.
Economic factors- The economical situation of India is quite stable. Therefore, reduction in
industrial certifying and liberalization of foreign capital has resulted into continuous
development in India economic environment (Langley, Oliver and Rouleau, 2020). Thus,
GlaxoSmithKline can operate their business activities as economical conditions are quite stable.
India's government taking steps towards to enhance economic growth by putting focus on
important projects of business expansion.
Social- There are varied social and cultural components that includes poverty, obesity and
expansion of diabetes are growing concern for pharmaceutical in India. These unhygienic
condition affects the working of country in huge aspect (Buehler, Falkenberg and Schaeck,
2019). Due to this, GlaxoSmithKline can be successful in managing business operation as entity
takes proper research and development to find out the proper solution for health concern.
Technological- The use of IT technical advancement in manufacturing of pharmaceutical
industry plays the huge role. Thus, expansion of GlaxoSmithKline can be successful as this will
create new business prospectus in coming time with new service and therapy system as this aids
in customize treatment and direct to patients advertising. High level of machineries is needed so
that all things can be conducted in effective and efficient manner. With the use of technological
advancement, the entity can perform their business activities in the proficient aspect.
National competitive analysis for the host country.
To expand business activities at overseas level, this is crucial for GlaxoSmithKline to
looks over the features that can affects the processes in host country. Therefore, these are termed
out in following context such as-:
Threat of new entrants- It can influence the working of enterprise with superior likelihood of
higher return and ease in operational activities in business (Buehler, Falkenberg and Schaeck,
2019). Thus, GlaxoSmithKline must reflect the factors of threat that can attract the new entrant
of pharmaceutical industry. It is the firm that is already operating its business foreign market.
This is industry that needs to have lot of investment and political interruption. Thus, quality is

one of the focus of this entity. Due to high number financial resources and political influences
the threat of new entrant is moderate.
Threat of substitute- In pharmaceutical industry the risk of substitute commodity such as
medications and other pharmacological merchandise is quite low in India. Hence, chosen firm
will not face any major threat in relates with auxiliary products. Though GlaxoSmithKilne has to
face some glitches while increasing its business in overseas market regarding availability of
substitute products as there can be substitute of commodities that avail in quite low prices.
Bargaining power of consumers- This is low in India. GlaxoSmithKilne will not face
significant effect in regards with factor of bargaining power that can influence the foreign market
expansion. Thus, strength of negotiating power of patients is low and they have not any other
options to purchase the medications at lower price. GlaxoSmithKilne has benefit of this feature
while growing its business in overseas market.
Bargaining power of suppliers- The intensity of this component is low. There are number of
entities that deals in this area is not huge in India (Verbeke, 2013). However, Development of
business of GlaxoSmithKline in Indian market will not generate issues of negotiating with the
suppliers.
Competitive rivalry- The strength of this factor is quite high. Henceforth, there is great level of
rivalry among the corporations as there is not higher number of firms in Indian market. Hence,
alteration in rates of the medications and or starter of new medicine makes direct influence on
the business processes of chosen entity in overseas market.
2.2.2 Summary conclusion
Henceforth, this can be stated that Pestle is tool that aids to analyse the conditions of the
market. With help of this political, economic and technological impact of the industry in new
market can be identified.
2.4 Culture analysis of the host country
Culture analysis also plays an important role. It is important for GlaxoSmithKilne
company to know about the type of culture of India because in this country it wants to expand its
business (Drucker, 2018). Knowing beliefs, values of India can affect the way of performing of
Glaxo SmithKilne Company.
Hofstede culture insight

As per the Hofstede culture analysis, all culture analysis can be done in a detailed manner such
as:
Collectivism/individualism: In this context, it is analysed that, Indian society and culture has
both traits. Collectivism can be found in the high preference societies in which all people are
expected to behave in the best way. On the other hand, individualism side of Indian culture
originates in dominant religion which does not have governing body. They are free to choose 1
or multiple of Hinduism gods (Nishi, Christakis and Rand, 2017).
Hierarchy/Egalitarianism: It is a country where people are heavily dependent on the boss or
those people who have power of direction. From last few years there has been some changes
occur which improved lower castes and improve their lives. On the other hand, there are some
lower castes and some religion which lacks in education and healthcare systems. So, it can be
said that it can affects performance of GlaxoSmithKilne.
Status by position/status by achievement: In India there is one of the main factor which affects
people to the great extent which is reservation quota. There are some castes who are given
special discounts and reservations only because they are counted in the list of below poverty line
(Indian Cultural Analysis, 2016). It creates dissatisfaction among those people who are skilled,
educated and knowledgeable than lower castes of people. It may create conflicts.
Evaluation of effective market entry strategy
In the context of market entry, it is stated that selection of the best market entry is the key
of success of business expansion for companies. It is important for them to identify and evaluate
for expanding business and enter in the new market. One of the main reasons of selecting the
best market entry strategy is to make business successful as an inappropriate way of entering in
the market can decrease profit margins or increasing cost.
There are several ways by which GlaxoSmithKilne can enter in India for expanding business but
for selecting the best one it is important to analyse all ways in a critical manner.
Direct exporting: It is one of the common and the most used strategy of entering in the new
market. As per this strategy, GlaxoSmithKilne can sell it services and products directly in India
and into to appropriate Indian stores.
Franchising: It is one of the easiest ways of entering into the market. Company does not require
investing in promotional and other activities as franchising company has well-established brand
already. In this franchisor or a franchising company, in this case it may be an Indian

pharmaceutical company, licenses its copyright, trademark and other important things to
franchisee (GlaxoSmithKilne) in order to allow them to open and operate business under their
brand. It is beneficial for both franchisee and franchisor.
Licensing: It is somehow like franchising but in this type, licensor provides an authority and
rights to licensee to use main company’s or licensor’ manufacturing process, brand name and
others. Licensee can take some competitive advantages in this type (Nilsson and Sala, 2018). It is
somehow critical because if in case, licensee falls to maintain a sells target than it affects the
image of licensor brand which can be harmful for both.
Buying a company: It is complex and critical for market entry as in this strategy, company
needs to buy a land in host country in which it wants to operate. By buying company in host
country, company can expand its business and sell its products. One of the main disadvantages
of this strategy is it can increase cost and if in case, expanded company falls to sell products than
it may have to bear loss.
From the above it can be said that direct exporting will be the best strategy of market
entry for GlaxoSmithKilne because it can allow this company to have better knowledge about
market. One of the main advantage and reason of suggesting this one is there is complete control
on operations is of this company as no one can interfere in business operations (Hofer and Baba,
2018).
Prediction on company’s growth in next three years-:
In India, Pharma industry is growing at the compound annual growth rate that is more
than 15% over the last five years and this also has significant opportunities for growth. This is an
organisation that is depends on technological advancement of faster the production of medicines.
India is taking continual steps towards to improve their medical services. In order to growth in
pharma line, India is looking towards three new priorities such as innovation, performance and
efficient forecasting. So, the entry of new GlaxoSmithKline will be favourable to India as well as
to entity. In the upcoming three, with innovation and quality services the entity would be able to
earn effective market share rare and profitability would be enhanced to at least 25%.
4. CONCLUSION & RECOMMENDATION
From the above study, it has been summarized that internationalization is the best way of
expanding business and increasing market share. It has also shown that internationalization and
expanding business in other countries is difficult or the toughest task because companies need to

analysis all business environmental factors in a detailed manner. With the help of PESTLE and
Porter’s 5 forces analysis model. Companies have made themselves able to identify current
market condition and business environmental factors of those markets in which it wants to
expand its business by operating business activities. Further, it has also discussed importance of
knowing beliefs, values and other main elements related to culture of the country and market in
which company wants to operate in order to identify suitability of products which company
wants to sell.
On the basis of above study, it can be recommended to the company that it should make
use of SWOT analysis in order to link it with market entry strategy. As per the strength of its
products and its business it can make the best market entry decision. Joint venture can also be
beneficial for this company if it does not have an effective financial stability, so, it can be said
that selection of market entry strategy depends upon strengths and weaknesses of the company.

REFRENCES
Book & Journal
[Online].
Indian Cultural Analysis. 2016. Available through:
https://tudelft.openresearch.net/page/18696/cultural-analysis>