International Business Management: Strategies for Successful Global Expansion

In this document we will discuss about International Business Management and below are the summary points of this document:- Entry mode: Choosing the right strategy for entering the international market is crucial for success. Core competency: Understanding and leveraging core competencies play a significant role in international business expansion. Operational strategy and corporate objectives: Various aspects such as organization design, product expansion, and financial management need to be considered for successful international expansion.

International Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Entry mode.............................................................................................................................1
Core competency....................................................................................................................3
Operational strategy and corporate objectives.......................................................................4
Intended organisational design...............................................................................................4
Scope for expansion...............................................................................................................6
Financial capital requirements................................................................................................6
Staffing Policy........................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
International business can refer to the traffic of services, goods, capital, technology and
knowledge across borders of nation and at transnational or international level. Engaging in such
business practise require accurate understanding of business and trade regulations as well as
legal requirements of the nation in which enterprise are operating their business (Mills and Smith
(2011)). Generally this business enterprise can be operated by the private companies or the
government. The Bronze Snake Company is an Australian fashion retailing organisation i.e.
known for their trendy and high quality fashion wears. Bronze Snake is aiming to expand their
business in Malaysia to create a global recognition and spread its branches in international
marketplace. Enterprise has planned to launch NEW FEMALE SUMMER COLLECTION in
Malaysia for entering in the fashion market of the country. The report will cover different
operational structures, patterns and entry strategy to trade in global market. This will focus on
different corporate objectives, entry modes, organisation design, product expansion, financial
capital management and many other aspects i.e. required for expansion (Onetti, Zucchella, Jones,
and McDougall-Covin (2012)).
MAIN BODY
Entry mode
Market entry modes can be defined as the ways of involvement and technique which
assist an enterprise to enter to enter in a market strategically and successfully. These mediums
differ on the grounds of risk of entry, control and commitment of resource which is required for
enterprise and given return on investment. The decision of starting business in international
market can highly impact on the results of enterprise. Bronze snake currently need very effective
strategy to start their business in the Malaysian market in order to launch their NEW FEMALE
SUMMER COLLECTION for women (Papadopoulos and Heslop, (2014)). Here are mentioned
some of the core market entry strategies that can be utilised by Bronze Snake to launch new
product line in Malaysian business market environment:
 Exporting: - Exporting is refer to trade in and directly sale to the purchased domestically
goods to another country. This is already well organized technique and very traditional
way of communicating and reaching directly into the other foreign business markets
(Zott, Amit and Massa, (2011)). For exporting products, it is not that mandatory to
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produce commodities in that targeted country as this method provides the facility to
exchange the products from parent organisation to host nation. Bronze Snake can manage
to export their products of women new summer trendy fashion clothing line from
Australia to Malaysia as this is cost effective and doesn’t require production system in the
host nation (Renwick, Redman and Maguire, (2013)). The major drawback of this
technique is that this consists of cost, scarcity, space and time issues that can lead to
major problems to enterprise.
 Licensing: - International licensing contract permits international organization, either
non-exclusively and exclusively to production a proprietor’s goods for a determined term
in a certain market. The resources and rights may involve trademarks, patents,
technology, managerial skills and others which can assist licensee to sell and produce in
the host nation. For this, licensee pays certain amount to the parent enterprise in the
exchange of technical assistance, allowed rights and intangible property. Bronze snake
can also provide their license to their very trusted companies and organization to prosper
in the same country (Ruigrok and Van Tulder (2013)). This will let them to do their
business smoothly, beneficial and their new technique so they can get enter in the new
market. In the way, enterprise can expand their business in Malaysia with saving
numerous resources and avoid loss at the same time.
 Joint venture: - A joint venture can be refer as cooperative organization established into
through two or more than two business enterprises for the aim of certain project or other
activity of business. Major issue of this strategy is that it can create conflict over
asymmetric fresh organizational investment and lead to lack of parent support. This is
usually also characterized by their shared items, governance, risks and ownership etc.
Bronze Snake can use this approach for entering in the market of Malaysia as this provide
financial and other support to enterprise and aid in meeting the business objectives. It can
prevent enterprise from major financial loss (Scullion and Collings (2011)).
 Franchising: The system of franchising can be termed as a framework in which parent
enterprise gets the royalties and fees from semi-independent enterprise in return of
agreement of becoming recognized trademark, to trade its services or products and often
to utilize its business pattern, system and format. System of franchisee is a risky
technique as this can lead to preserving franchisor brand image. This is beneficial for low
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political cost, risk but lead to lack of control. Bronze Snake can provide their NEW
FEMALE SUMMER COLLECTION to their franchisees in Malaysia and introduce their
business in the market. Through this, they can examine the response of consumer and
target audience without any major loss as well (Shenkar, Luo and Chi, (2014)).
This can claim from the above notion that The Bronze Snake can use different market
entry strategies such as joint venture, exporting, licensing etc. But Franchisee is most suitable
techniques for entering in Malaysian market for The Bronze Snake. This is efficient, cost saving
method that supports the availability of product in international market without its presence
though enterprise has to follow certain agreements and rules to deliver product as per the concern
organisation. On the other hand, other techniques were also appropriate but they contain the risk
of loss and procedure complexity to trade abroad (Hair Jr, Wolfinbarger, Money, Samouel and
Page, (2015)). Licensing can create lack of reliability, exporting can cause loss of financial assets
and joint venture will require agreements which can be a complicated and less reliable procedure
for The Bronze Snake to handle. On the other side, franchising procedure is efficient and can
lead to benefits for delivering their royalty and can create better presence in the market.
Therefore, this is suitable among other strategies of market entry (Yang, Hong and Modi (2011)).
Core competency
To pose the promotion of The Bronze Snake’s new trendy SUMMER FASHION LINE
for women’s against their lots of competitors in the business marketing environment. Here are
mentioned some major strengths which can help enterprise in succeeding in marketplace.
Strengths: The key strength of enterprise is its high quality of services and products
which makes it unique. Also, one of the core strength of The Bronze Snake is its trendy cloths
which can make the NEW SUMMER FEMALE COLLECTION launch in Malaysia successful
as there are few organisations in market that deliver cloths as per the trends. On the other hand,
strong market recognition and positive reviews of consumer has created good reputation of
enterprise in market which is also helpful to create good recognition in Malaysian market. Online
availability of enterprise is also one of major strength of organisation (Franke and Richey,
(2010)).
Weakness: The main weakness of enterprise is its limited reach and limited product line
which can lead to boredom among consumer. Also, lack of financial support is another weakness
of organisation that can lead to major fallback to company. In order to meet this, organisation
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need to launch new product line within a certain time period and manage a proper financial
administration.
Operational strategy and corporate objectives
Operational strategies refer to the techniques which an enterprise uses in order to reach
their determined objectives (Forsgren and Johanson (2014)). Via improving these strategies,
Bronze Snake can examine and implement effective and efficient structure for using resources,
personnel and work procedures. The enterprise examined that there are numerous tactics which
can be used to operate business in which, but The Bronze Snake use consumer-driven strategy to
keep their target consumer as the main concern and key focus to serve
Customer-Driven Strategy: Customer satisfaction is an effective and one of most suitable
strategy for The Bronze Snake for operating business in Malaysia as enterprise mainly focus on
providing trendy and value-added quality cloths in the international market to satiate the
demands of consumer. This type of approaches involve customer-centric approaches which
enterprise use for satisfying requirements and demands of target consumer group. This is good
approach which can assist The Bronze Snake to analyse the market of Malaysia and provide the
products and service suitable in their market. This is the core competency of chosen organisation
which builds one of the major strength of The Bronze Snake.
Corporate objective:
Founder of enterprise states that they still believe on the concept of Bricks and Mortar
Store. The Bronze Snake is one of the emerging fashion providers and retailer which is earning
more than $10million turnover each year (Fernie and Sparks, (Eds.). (2018)). Core corporate
objective of The Bronze Snake is to remain one of the trendy organisations and satisfy the
requirements of audience along with earning more than 10% benefits on ROI.
Intended organisational design
The term, organisation design is the procedure of selecting the traits of organisation’s
primary characteristics that designer aims to posses in company. For the purpose of successfully
introduce the NEW SUMMER FEMALE PRODUCT LINE in Malaysia; The Bronze Snake
need to create an effective structure and organisational design (Stokes, Wilson and Wilson,
(2010)). This design refers to the structure and pattern of entire components and determining
utilisation to manage the whole company. The Bronze Snake need to create an accurate layout of
organisational design for performing more appropriate and easy operation pattern that can lead to
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smooth running and reduce the risk of loss. Major function of designing structure is that it
delivers assistance in aligning task to worker, resources, informing process of employee, rules
and expectation and accumulating information. There are mainly five organisational design
forms comprising global area, product, global consumer, global consumer and matrix. Here is
elaborated entire design concisely:
 Global Consumer: It is mainly employed when an enterprise serves their services to
different customer units or consumers, along with certain requirements and delivering
special expertise and paying attention to details (Ehlich and Wagner, (Eds.). (2011)).
 Matrix Design: It is one of the hardest and complex designs which can be defined as the
superimposing result form. This has numerous advantages i.e. flexibility of company,
brings entire functional divisions together and involve strong managerial working. On the
other hand, this consists of long decision-making process, unstable products and unstable
environments which are one of the major disadvantages of this tactic.
 Global Product: This concept aligns responsibilities of specific commodity and products
to eliminate operating division within company (Dunning, (2013)). Marketing,
managerial experience, manufacture efficiency and flexibility are the major benefits of
this sort of organisational design. On the other side, complex coordination or cooperation
and unnecessary duplication are the key drawbacks of this report.
 Global Area: It allocates the firm’s actions and activities around specific areas and
regions worldwide. Key drawbacks of this method are slow process of diffusion of
technology and resources duplication (Tarique and Schuler, (2010)).
 Global Functions: The design of global function allows firm to improve departments
which have international duties for common enterprise function such as finance, human
resource management, research and development etc. Centralised control and experience
transfer is advantage of this organisational design. Its complex coordination and
duplication of resources is one of key weaknesses of this approach.
After examining the whole case of organisation and different organisational designs, this
can claim that Global function and Global product is most efficient and suitable designs which
The Bronze Snake can follow in order to operate a successful business in the international
market (Jeston (2014).). Enterprise highlight its emphasise on the trendy cloth providing and
product quality along with creating an international recognition which can be possible through
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using these patterns of enterprise. NEW SUMMER FEMALE COLLECTION can be
disseminated in the market of Malaysia using these techniques which are helpful to expanding
their business. Consumer can not only access service from stores but can also order the products
on-line through which can deliver services in entire Malaysia.
Scope for expansion
Malaysia is nowadays examined as one the highest leading fashion brands which is
emerging each and every day as the economy of country is more open and promoting
industrialisation these days. Revenues in the segments of fashion in Malaysia are US$943 in
2018 which is expected to increase 10% in 2019 (Theron and Terblanche (2010)). The market is
wider in Apparel segments with US$637 market value. Malaysia is one of the most export-driven
economies that do not provide vast scope to fashion in-store retailers only but provide open
market to the e-commerce activities (Cheng, Yip and Yeung (2012)). More than 25.08 active
users of internet are there in Malaysia in which 15.3million users are online shoppers who prefer
to trade online. As per the recent survey of Vogue, people are willing to buy products online as
much as they do in-store shopping hence the number of online shoppers are increasing rapidly in
Malaysia. The Bronze Snake is expanding their business in Malaysia which is popular for its
large Apparel market. Hence, enterprise has vast scope of development in future as they provide
not only good quality but trending cloths worldwide (Mellahi and Collings (2010)).
Financial capital requirements
Financial capital is one of the most significant issues and aspects while entering into new
market as over-costing can lead to major loss to host enterprise and parent enterprise. It is
essential for enterprise to maintain required capital and funds to perform all the operational
efficiencies and activities without any pressure (Meskendahl (2010)). The Bronze Snake need to
follow numerous legal requirements, taxation and trading policies to enterprise in Malaysian
market along with investing financial resources in the industry. The Bronze Snake has prepare
$50million budget for the expansion strategy and created a layout of all expenses. In order to
manage the funds, organisation has planned to take assistance of bank.
Staffing Policy
It can be said that human resource management is a very important part of every
organisation but it is also a major concern for the international businesses. Also, there is various
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kind of staffing policies that are being followed in these organisations in order to hire or recruit
employees and along with this it also helps in controlling the organisation in a proper manner
(Trkman, (2010)). In international business of the Bronze Snake, in order to recruit staff, the HR
manager is required to know that from where they will be hiring the employees. There are
various kinds of HR management practices that can be used by HR of The Bronze Snake while
recruiting the staff members. They are as follows:-
Ethnocentric Staffing: It is a kind of staff technique in which the main positions of the
organization is being filled with the employees of the parent company. It is also believed these
employees express their enterprise in a much better manner and are also able to properly align
the foreign offices with the headquarters (Briscoe, Tarique and Schuler (2012)). Therefore, while
doing staffing, the employee’s who are currently working with the company is selected and are
transferred to the country where the company is doing their business. There are various kinds of
benefits of this kind of approach of staffing like the company will have good control over the
subsidiary company as the employees will be similar. Also the operations that are being
conducted there can be closely watched. But there are few negative thoughts as well in this like
the culture followed in parent company and subsidiary country will be different so there is a
chance of clash. The Bronze Snake Company can make use of this approach while doing staffing
process in Malaysia.
Figure 1: Ethnocentric Approach
Polycentric Staffing: This is also a kind of hiring technique in which the human resource
manager of the company hires people for the international business (Bageac, Furrer and Reynaud
(2011) ). The main purpose of adopting the approach is mainly to reduce the cost of foreign
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operations in a gradual manner. It is also believed that many times companies that initially adopt
ethnocentric approach later shifts to polycentric approach. The main purpose of taking this big
step is to understand the local marketing conditions of the country, their cultural and legal
requirements in a better manner. All these activities are being managed by the HR team who is
working in that country. There are various advantages of this approach like it develops the
morale of the local staff people and it also helps them in getting better government support. But
there are few drawbacks also like there can be lack of communication between host and parent
company and there can be lack of knowledge as well (Verbeke, (2013)). The Bronze Snake
Company can make use of this approach in order to mix the culture of both the destinations.
Geocentric Staffing: In this kind of staffing policy, the focus is on recruiting the best
employee for the company irrespective of what nationality they belong. The main thought behind
creating this strategy is that there are various kinds of talented people all around the world and
therefore everyone should get an opportunity to prove them and does not depend on their
nationality (Astrachan (2010)). The main benefit of this kind of strategy is that the company gets
so many expertise staff to achieve the aim of their company and also the employees’ gets to learn
something with each other. Its drawback is that the cost of training and compensation of an
employee is excessively high. The Bronze Snake Company can make use of this approach as it
will make their work environment effective.
CONCLUSION
This can affirm that to operate international business, organisation need to cooperate and
coordinate numerous factors include the strategy development, staffing etc. Bronze Snake is
looking forward to expand their business in Malaysia with launching of NEW TRENDY
SUMMER FEMALE COLLECTION. In order to expand their business, they need to take care of
the lots of in regard of performing business in the international marketplace such as legal permit
for the Malaysian Government for trading in their nation etc. Enterprise needs proper entry
strategy for launching their products such as licensing, exporting, joint venture, franchising etc.
Apart from that, enterprise will require proper corporate objectives and effective organisation
strategy in order to compete their rivals and for this, enterprise needs to do the strong market
footing in the business environment of the Malaysia country. A company also require effective
staffing policy for managing the business activities in international market as well.
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