International Business Management: Entry Modes and Frameworks for Global Expansion

This report discusses the entry modes for global expansion in international business management, including foreign direct investment, exporting, licensing, and franchising. It also covers frameworks for analyzing the external, internal, and competitive environment of a company, such as PESTLE analysis. The case study of Hayward Tyler Ltd. expanding to Poland is used to illustrate these concepts.

International Business
Management
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Executive summary
Global businesses are addressed as the transaction or the activities of the business which
takes place other than the own boundaries of the state. Mainly it comprises of the sale of
products which takes place between the different nationals. Moreover, by the way of cross
boarder trade, the countries can gain more foreign exchanges which also results in the facilitation
of the imports as well as exports. There also lies the various types of entry modes by which the
company can move forward in the other states. Licensing, foreign direct investment, exporting
are some of the said modes. Other than this the framework must have to be used by the company
in order to ensure its profitability and sustainability.
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of the company....................................................................................................3
The Entry modes with respect to expansion in global market.........................................4
Meaning of international trade...........................................................................................5
Country of Choice.................................................................................................................6
Discuss the different types of frameworks in order to analyse the external, internal and
competitive environment of the company..........................................................................7
Recommendation..................................................................................................................9
CONCLUSION..............................................................................................................................10
References......................................................................................................................................12
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INTRODUCTION
The term international business management has been addressed as the management of
the operations of business which takes place within the organisations. Generally by this means it
serves and operates the markets in number of countries at the same time(Wieland, et.al., 2020).
Therefore there is required the understanding as well as skills more than that of the expectations
of the normal business, such as the capability of doing transaction related to multi currency and
also the management of the cross borders transactions. Similar to that of the normal one the
international business also comprises of the various aspects such as the directing, planning,
staffing, organising and controlling(Buckley, Enderwick and Cross, 2018). The company which
has been taken up for the said report is of the Hayward Tyler Ltd. Which specialises in
manufacturing and designing of the motors as well as pumps for the sector of energy. The
company being established in United Kingdom, offers number of services along with the use
advanced technology. The said report tries to draw various aspects related to the mentioned
company along with the entry modes which are being taken by the company for the purpose of
its international expansion. The report also analysis the other aspects with the help of various
tools such as PESTEL, SWOT and model of Porters 5 forces.
MAIN BODY
Overview of the company
The company named Hayward Tyler Ltd. Being situated in united kingdom,
mainly executes its business operations in the sector of manufacturing. The company is
considered as one of the leading one in the whole industry which also helps in enhancing its
brand image along with its durability as well relatability among the customers. The major areas
in which the company is dealing are of the manufacturing of the pumps and motors and that too
with the use of oil and power. Because of such reasons the Hayward Ltd is also reasoned as one
of the best quality providing company specifically related to the motors and pumps(Armijo,
2019).
Moreover, the company with the service of 2300 Bcps and 600 nuclear pumps in the
international market the company has very well managed to gain the long term reliability in the
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global market. Also the workers who are bing the part of the company are considered as the asset
, reason being in actual sense they are ones who performs the operations of the enterprise in more
efficient and effective manner. Other than this some of the states in which the company is
providing its services as well as products are the UK, China, India, Unite states, etc.
Furthermore, the place where the company is carrying out its manufacturing activities is the
Michigan(Högselius, 2022).
Current strategy
The model of Bartlett and Ghoshal – its generally aids the organisation who wants to to
get expand their extent in global market as well while indicating the various suitable strategic
options. Mainly the said strategies are based on two aspects which are the global integration and
the local responsiveness.
International strategy – this particular measure is used by the companies when there
lies the similarities between markets. Here the organisation carry out their activities in the other
state while keeping their headquarter in their own states(Schühly, 2022).
Multi-domestic strategy:- this strategy is taken into consideration when there is a small
difference between the market demand and few benefits from globally integrating.
Global strategy:- When the market demand and the economies of scale are vital, this type of
strategy is used. The subsidiary company are allocated in different countries but all the activities
are done in headquarter country.
Transnational strategy:- It is basically used in condition where there is demand of local
needs while getting benefits through international market. The new team management
along with staff members are needed which help in developing shared values and
knowledge.
Moreover, the current marketing strategy which is used by the HAYWARD TYLER is of
transnational strategy by which the company expands their business in global market.
The Entry modes with respect to expansion in global market.
The mode of entry by any company has been addressed as the structural agreement by the way of
which the organisations makes the decisions with respect to the expansion of the company into
other countries other than the one in which it is established(Kesler, Kates and Kesler, 2019)..
There lies the number of ways in which the company can make a move, out of which some of
them are as follows -
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 Foreign direct investment – It is considered as one of the most common mode of entry
which can be taken by the company. In simple terms it has been defined as the process by
which the companies executes their operation in other states being controlled by the
entities of foreign country. The primary aim of the said type of entry mode is to create the
number of new facilities in the other various countries. Moreover, it has been bifurcated
into two heads which comprises of the wholly owned subsidiaries as well as the joint
ventures. Where the former comprises of the companies which are wholly owned by the
other foreign company whereas the latter one is addressed as the scenario where two or
more organization participates in one single organization.
 Exporting – It is considered as the other important mode of entry which can be opted by
the organizations. It is also considered as one of the most commonly used mode by the
companies for the purpose of internationalization. By the means of this mode the
company sells their products and services in the global market. Furthermore, It is the
most appropriate way of performing business operation in international market as it do
not highly impact the human resource of the organization because a few number of
employees are expected to be posted abroad.
 Licensing – it being the other mode of the entry which is adopted by the companies in
order to expand their existing business on global level. Under this the licensor provides
the right to the foreign company to make use as well as benefit of their reputation and
name. The said agreement also comprises of the right of using the intellectual property
for certain specific period of time.
 Franchising – The aspects of franchising to many extent are similar to that of the mode
of licensing reason being by this measure the parent company allots various rights to
small enterprise in order to do the similar business in the similar manner as that of their
own. Moreover it also provides the number of guidelines for the reference of subsidiary
company same as that of the licensing. Some of the major examples of franchisee
agreements are McDonald, Pepsi food limited, etc.
Meaning of international trade
The term has been addressed as the exchange of goods and services which takes place between
two or more parties which are the countries in the case of international trade(Pflüger and
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Tabuchi,2019). It helps in providing the various types of services as well as goods to the agreed
states and parties. The said measure comprises of its own importance reason being it aids in
supporting the overall economy of the individual country as well as the whole world(Siddik et.al,
2021). Similarly, it also makes an impact on the supply and demand of the concerned products,
which as a result also gets affected by the global event. Majorly the international trade comprises
of the three aspects which are discussed as follows –
 Import trade – it is addressed as the scenario where the goods and services
are purchased by the resident or the party of one state by the resident or party
of the other national.
 Export trade – it is addressed as the situation where the goods and services
which are being manufactured in one national are exported or sold to the other
parties of the other nationals(McCalla and Valdes, 2018)..
 Entrepôt trade – it is referred to scenario of transhipment where the products
are stored and further are subjected to the import and trade before ethe process
of re-export. Moreover, it also not comprises of any additional application of
the duties related to customs.
Advantages –
The aspect of competition can be one of the major advantages of the concept reason being the
international trade aids in increasing the overall competition which ultimately results as a benefit
for the local suppliers. Therefore, it is required on the part of suppliers to deliver the goods and
services while ensuring their quality in order to sustain the competition in the global market. The
other benefits can be of the economics of scale, where the global trade has a direct nexus with
the enhancement of the economics of scale of the state. Hence the companies in order to sustain
the market are required to produce the higher quality of the products(Gray, 2019).
Disadvantages – The lack of experience as well resources can be one of the major disadvantages
specifically on the part of small or newly settled companies as they fail to perform well in the
global markets as compared to the other already existing companies. The other can be of the over
dependence, whereby the companies can get easily affected by the unfavourable conditions
related to the demand of the goods and services.
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Country of Choice
The management of the company is planning to expand their business activities in Poland.
Poland is in the centre of Europe. Poland has a well-developed market and is one of the most
dynamic economies in the world. It has the sixth largest economy in GDP (PPP) in the European
Union. Many large global companies have chosen Poland for investment and opening of
international centres and welcome candidates from all over the world. The IT industry has grown
significantly in recent years with increasing interest from top international companies. The
Polish labour market is very attractive to multilingual people(Ejsmont and Gheribi, 2018).
Nevertheless, many Poles speak English at a very high level as a second language. Starting a
company in Poland is one of the most attractive options. It ranks first in the number of
investment projects in Central and Eastern Europe. Thanks to the business-friendly environment
and FDI (Foreign Direct Investment) policies, about 22,000 jobs have been created. Poland is
currently one of the fastest growing economies in the European Union (EU). With a strong
domestic market, low private debt and low unemployment, there has never been a better time to
start a business in Poland(Schwens, et.al, 2018).
Discuss the different types of frameworks in order to analyse the external, internal and
competitive environment of the company.
PESTLE analysis
It is defined as a tool used by professional organizations to analyse the macroeconomic
environment in order to understand the external environment of the organization(Paul, 2019). It
is important for a business organization to know the external environment in order to develop
effective strategies(Demirtas et.al, 2021). The following is the application of the corresponding
framework in HAYWARD TYLER –
 Political factors – The political factor comprises of the rules which are formulated by the
government of the country. Moreover, with respect to the company the, there lies the
form of stable government in the country as a result of which the company can make its
policies for the long run and are not required to alter them on regular basis(Achinas,
et.al ,2019).
 Economic factor – the said factor consists of the exchange rates, the rates of inflation
and deflation as well as the tax rates and the GDP of the country(Leiber, Stensaker and
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Harvey, 2018). As the economy of the country is classified as the economy of the high
income by the world bank making its rank on 19th number in terms of GDP. Hence the
said fact to an great extent can be proved as an advantage for the company. Other than
this the employments rates of the country are also very high which ultimately increased
the buying power of the people(Zahari and Romli, 2019).
 Social Factors - It consists of the aspects such as the religion, the purchasing habits of
the people, their level of education and way of living. Basically they are the factors which
makes an impact on the lifestyles of the people. Further as the company is lacking in the
housing facilities, hence the expansion of the company can result in benefiting the same
by employing more number of employees.
 Technological factors – the market of the country comprises of the massive broadcasting
and is considered as one of the leading player for the purpose of exportation of new
technologies. Moreover, as per the reports of 2021, on an average the total of 87% of the
population have access to the internet while possessing excellent technical skills. Thus
the promising e-commerce sector of the country can proved to be an added advantage for
the Hayward Tyler company.
 Legal factor – the constitution of the country furnishes the independence of the judiciary
thus as a result of which the companies who wish to get expand in Poland are entitled to
have the permit with respect to its work. Also the legislations of the country specifies the
benefits of annual leaves to the employees. Hence the said liberal approach aids the
company for carrying its operation in a more effective way.
 Environmental factors – it comprises of the regulations which ar4e being formulated by
the authorities of the state for ensuring the protection nature (Schellenberg, Harker, and
Jafari, 2018). Moreover, the country comprises of the number of beautiful sceneries and
places which attracts the large number of tourists thus it is required on the part of
company to work while taking care of the aspects of various environmental concern such
as the air pollution, waste management ,etc.
SWOT analysis
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This analysis is basically a framework of micro environment elements which are used by the
organisation in order to determine the internal environment of the company(Puyt et.al, 2020). In
relation to the HAYWARD TYLER, this analysis has been discussed below:-
Strength Weakness
The momentous advancement with respect to
the quality of governance as well as the
institutions. Other than this the high FDI
attractiveness and the low labour costs can
greatly benefit the company for the purpose of
its expansion in Poland.
The aspect of large developments gaps with
that of the European Union average and the low
efficiency of EU funds investments can be the
major weaknesses. Also the poor business
environment as compared to that of the other
can also be one reason.
Opportunities Threats
The company have the opportunity with
respect to the adoption of common currency by
the country. Also the increase in large
infrastructural investments and the rise in
employment level can result in the possible
opportunities.
The slow pace of structural reforms and the
poor coordination with respect to that of the
long term development strategies and policies
can be one such threats to the
company(Kudriavtceva, 2019),.
Porters five forces model
This framework means to the strategic management tool that are utilised by the company in
accordance to evaluate their competitiveness in the market area of the respective organisation in
the sector. In case of the company HAYWARD TYLER, its five forces are mentioned below
briefly:
 Threat of the new Entrants – It means to the threat to the organisation which is posed
by the new entrants who are selling the similar goods in the market area. This assist in
evaluating how likely for the new rivals to tap the competitive market area in which the
organisation operates in. In case of the company Hayward Tyler, as management
specialises in manufacturing of the pumps and motors which requires major capital in
order to set up the plant of it as well as it requires the goodwill which can help them in
their sales. So this threat acts low for the company because it is hard for the new entrants
to possess the equal reputation as well as investment(Boafo, Kraa, and Webu, 2018).
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 Power of Suppliers – This force means to the level of dominance which the suppliers
can exert on to their consumers in order to negotiate the prices according to them. In
relation to the company Hayward Tyler, as management is planning to scale their
operations in the different country which is Poland, so initially the management will be
having few suppliers of their raw material which can increase the chances of suppliers
exerting pressure on the company in accordance to their rates. Hence this threat can act as
high to the firm.
 Power of Buyers – Consumers are the people or the different organisations that
purchases and consumes the products of the company and this force evaluates the
dominance level of the consumers as well as their impact on the pricing and quality of the
goods. In context to the Hayward Tyler, company is having the amazing brand reputation
around the world which gives them the advantage if the company expand their operations
in Poland as well as they are manufacturing the quality products so it will be hard for the
buyers to negotiate the rates in according to them. Therefore, this force of the buyers is
low for the company(Duke, 2018).
 Threats of the Substitute- This forces refers to the availability as well as accessibility of
the imitate or substitute products which is similar to the offered goods of the existing
firm. In relation to the company Hayward Tyler, as organisation is dealing in such
product which cannot easily be copied or substituted but some of its product might be
replace from the other substitute products. So, this threat of the company act as moderate
for them.
 Competitive Rivalry – This threat refers to the competition of the firm in their existing
or new market area. In case of the company Hayward Tyler, this force is high for the
company because there are several organisation in Poland which deals in the similar
products as of the Hayward Tyler. So it can impact negatively to the profitability and
growth of the organisation in new market area.
Recommendation
 The market of Poland can be targeted by the company while making the effective use of
its prevailing resources such as the measure of using the technique of digital marketing
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for the purpose of launching the product in the target market. This also helps in fetching
the large number of customers by just having a click.
 The company must also go for the measure of franchising mainly for the purpose of
expanding their business in Poland as by the way of this the successful supply of the
products can be ensured in the target market.
 The company should also take care of the aspects of cultural sensitivity as touching the
stones of polish religion can fetch the company and its product the more controversy
rather then the only measure of sales(Bruijl, 2018).
CONCLUSION
From the above report it has been reasoned that the development of business activities in the
other nation is considered as the worldwide business the executives. It is found as a vital for the
business association to totally dissect the climate of a specific country prior to beginning
activities there. It assist the Management of business association in a fostering the successful and
proficient systems which with bringing about the turn of events and development of business
association. HAYWARD TYLER is expected to do the ecological examination of the Poland by
applying a few systems which incorporate PESTLE, SWOT and doorman's five powers.
Likewise, a concise inward outer alongside the serious investigation has been done which present
a short presentation of cutthroat climate of Poland. A few of suggestions have been additionally
given to the organization to really extend their business.
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