International Business: Strategy for Sainsbury's Expansion in Indian Market

This report discusses Sainsbury's rationale for international expansion, recommends India as a target market, and analyzes the country using PESTLE and Porter's 5 forces models. It also evaluates different entry methods, marketing, managing operations, and HR for Sainsbury's expansion in the Indian market.

International Business

TABLE OF CONTENT
INTRODUCTION.................................................................................................................................3
Overview of the organization and rationale for going international..................................................3
Recommending the country and country analysis to support rationale.............................................4
Critically evaluating a relevant strategy for the internationalisation process for the specified target
market. Analysing Different entry method, marketing, managing operation and managing HR.......7
CONCLUSION ..................................................................................................................................10
REFERENCES....................................................................................................................................11

INTRODUCTION
International business is the business that helps the organization to trade of goods and
services, technology and the expert knowledge across the borders of the different countries. It
basically involves the cross borders transactions of the products and services among the
different countries. The report is based on the Sainsbury which is the second largest
supermarket in United Kingdom. The report will outline the overview of the organization and
rationale in order to do internationalise the business. Further this report will outline the
different country analysis in order to support the rationale. At last this report will evaluate
about the strategy to internationalisation process for the target market and different entry
method, marketing, managing operations and managing the HR.
Overview of the organization and rationale for going international
Sainsbury’s Plc. is the largest supermarket chain In the markets of the United
Kingdom. The organization is having the 16.0% market share in the sector of supermarket. It
was founded in the year 1869 by John James Sainsbury by having the shop in the market of
London. The cited organization is the retailer in the UK and used to deal in the variety of
products and services in the different overseas market.
Rationale for going international
1. Increase revenue capital: When the organization is exhausted with the growth
opportunities in the domestic country that the company used to expand its market
in the international market (Sharma and et.al., 2020). The company do the
international expansion which makes the organization in order to increase the
revenue capital of the company.
2. Entry to new markets: When the organization has done the successful journey in
their home country than it used to expand its market internationally. The
organization must research the market where they have to expand its business.
This makes the company to enter into the new market and increase the
profitability of the business.
3. New customer base: Another benefit for the organization to expand its business in
the overseas market. This used to provide an opportunity to sell its products and
services in the new market and makes the new customers as well (Buckley,

Enderwick and Cross, 2018). Having the boarder customer’s base generates and
increases the sales of the company.
4. Gain competitive advantage: This is the most important factor for the company
in order to expand its business in the place where they are not having the business.
This is one of the reasons for the organization to expand globally and gain the
competitive advantage in the global market (Eden and Nielsen, 2020). Having the
new business will attract the customers and helps them to gain more profits.
5. Greater access to talent: This is another best benefit that the business will get in
order to expand its business in the international markets. Company will hire the
best and talented employees in the global markets (Nambisan, Zahra and Luo,
2019). By hiring the international talent provides the advantage to the company
and increases the skills of the employees.
Recommending the country and country analysis to support rationale
The company can expand its business in the markets of India as the company has no
existence in this market. The company by considering the best markets of India can start their
business in the Indian market. By using the different modes of entry the cited organization
can have its presence in the overseas market (Eduardsen and Marinova, 2020). The company
can also expand its business by having the online products available in the India which helps
the company to invest less in the decided market.
Country analysis to support the rationale by using different models
PESTLE analysis of India
Political factors: India is one of the largest democratic countries in the world and it
has the federal government (Cooper, 2020). The environment of the politics is basically
affected and influenced by the factors such as policies, politician interest and the several
political parties.
 A small change in taxation policy, income tax and sales tax will impact the business
operations. Nowadays, government encourages free business trading through different
types of schemes. Before implementing any decision, it is necessary for Sainsbury to
go through and keep track changing policies to smooth running of business.

Social factors: The social factor refers to the changing trends in the markets which
may impact the social environment of the business. The increase in the population will
increases the sales of the organization.
 Due to changing trends of customer there is change in demand and supply of
products. India has a population of more than 1.2 billion which is quite more than
many other countries. So, every customer has different taste and preference which
needs to be taken into consideration while implementing many new strategies.
Technological factors: A technological factor includes the changes in the technical
and increase in the development of the processes of market. The market is having the 5G
technology which makes the market more profitable. The organization can settle in this
market by adopting the new technology and having the new IT sectors in the market.
 It is the biggest opportunity for company to adopt new technology and use research
and development to meet its organisational goals and expand business globally.
Legal factors and Environmental factors: There are various legal changes that have
been implemented in India. These are recycling of the products, increases in the minimum
wages and the disability discrimination (Achinas and et.al.,, 2019). The markets have several
establishments and this will help the company to have their markets in the India.
 Nowadays, customers are more environment friendly, focusing on reduce the usage of
wastage, say no to plastic bags and carbon footprint and many more. If the company,
follow this trend then they can easily maintain its market position where competitors
are maintaining sustainability.
Economic factors: The factors and economic condition of the India is very stable
which will help the company to expand its business in the Indian markets (Srivastava, Singh
and Dhir, 2020). The country has good GDP and improving the GDP growth in the coming
years.
 Before, implementing any strategy the company need to keep track on changing
economic factors like foreign trade, licensing and many more.
Porters 5 forces Model

1. Competition in the industry: Competition keeps the different markets in trends
and makes the markets to grow on continuous basis. By having competition in the
market it motivates the market to perform better. Having the competition will
makes and motivates the company to grow in the Indian market. Having low
competition will increase the prices of the products. By this the company will earn
more profits in the Indian markets.
Nowadays, companies are adopting pricing strategy in which they are cutting
down their product price to attract more new customers which may impact
profitability of firm. They are also launching high impact marketing strategies to
spread awareness about brand which includes campaigns, advertisements and
many more. As Sainsbury wants to expand its business internationally they need
to focus on competitive rivalry. They need to also focus on strategies used by
other Indian companies to meet its organisational goals.
2. Potential of new entrants into industry: Nowadays, many new companies are
entering in the market which is becoming threat for industries. The company’s
market position can be affected by other competitor’s ability to enter in the
market. before taking any important decision about products the cited organisation
needs to understand the concept about barriers to entry related to Indian markets,
in order to preserve a favourable position and take better opportunity of it. For
example- the firm needs to know about the barriers to entry such as access to
inputs, new technologies, strong brand identity and economies of scale.
3. Power of suppliers: supplier power can provide an idea about how easy it is for
suppliers to increase products or service prices. So, before implementing any
decision, the company needs to focus on power of suppliers in particular country.
The more effective supplier the company will choose, the easier it will be to
switch to a good product at affordable alternative. If the company will not
determine power of supplier, then they cannot understand the concept of how
unique is the product that they are providing to customers. So it is mandatory to
have multiple suppliers then only business can achieve better position in the
market.
4. Power of customers: nowadays, customers have more power related to
bargaining and this will impact directly on quality and pricing of products. If the

company wants to expand its business in international markets, then they need to
understand the concept of power of the customers. In today’s business
environment, customers have power when they are fewer in number but there are
lots of options available in the market for them (Irfan and et.al., 2019). There are
different sellers and it is easy for customers to switch and this power will impact
directly on pricing strategy. When in the small amount customer purchase
products, then their buying power is very low.
5. Threat of substitutes into industry: with the help of this force the Sainsbury can
get idea about how easy it is for customers to switch from a business’s goods or
service to that of a competitor. By using this method, company can easily examine
the number of competitors in the Indian market and how their quality and prices of
products can impact. In addition to this, it will also examine about how much of
profit margin those other firms are earning (Isabelle and et.al., 2020). By having
this method, company can easily understand the concept about how to perform a
competitive analysis in order to stay ahead of other competitors in the
marketplace. To take full benefit of this method the firm needs to properly
calculate about COGS to know about cost of goods sold. For example- if the
customer feels that they are getting much cheaper products from other company
they can switch towards other brand substitution (Wati, 2018). This will weaken
market position of company and may impact profitability also.
Critically evaluating a relevant strategy for the internationalisation process for the specified
target market. Analysing Different entry method, marketing, managing operation and
managing HR
Internationalisation- Basically, it is a method or systematic process used by
company to design its products or services in such a way that it may be readily consumed
across different countries (de Wit, 2019). If the company wants to expand its business across
multiple countries and willing to spread brand image globally then they follow various types
of strategies to attract more customers and meet their requirements. As Sainsbury wants to
expand its business in Indian market then they must follow proper procedure which includes
sequences of servicing modes and make necessary arrangement through which the company
provides services at global level.

In today’s business environment, global knowledge and new technology networks are
increasing (Sharipov, 2020). With the increasing trend about all this, the high pressures on
company to expand its business is seen more. Globalization has major impact on company’s
productivity and performance plus it has impacted the economic condition of countries. This
includes sales, revenue, profitability and others. Before implementing any entry method,
Sainsbury needs to focus on barriers and its impact.
Market entry strategies- By adopting this strategy, company can sell its product or services
outside its domestic market (Watson and et.al., 2018). with the help of this market entry
strategy, the firm could easily increase its market share and develop business in emerging
markets which create profitability for the firm’s operations.
 Exporting is one of the best way to expand business in which the firm can export
goods (Holtbrügge and Berning, 2018). Here, the options are firm can be directly
involved in the export process or have a commercial intermediary that negotiates good
which is known as indirect exports.
 If the company opt for foreign direct investments, then they can easily meet its goals.
But make sure to focus on pricing strategy of particular market and reduce the risks
by doing risk analysis.
 As the firm wants to expand its business in Indian markets then they need to clear the
concept of investment and make decision based on that (Thomas and Maine, 2019).
As nowadays, creation of company’s franchisee or expanding business through other
source needs high investment than the acquisition of an existing market.
 In order to enter in the Indian markets company needs to keep following points: first
of all, the firm needs to understand the diverse market and strategies towards specific
target segments which includes income of people, population, regions, taste, trends
and others (Capone, Li and Malerba, 2021). After doing segmentation, firm needs to
understand the concept of targeting, in which they need to offer products to its target
market. positioning can be helpful after targeting, in which firm will decide how to
meet the goals of customer and how to reach to their target market. This overall
process is known as STP approach.
 In franchising, the firm chooses to be a franchisee in order to sell goods to customers.
Sainsbury has opportunity to open its franchisee in the Indian market by following all

the riles and regulation related to it (Oguji and Owusu, 2021). They must need to
follow the quality, advertisement strategy and pricing strategy of franchisor’s and
make necessary changes if applicable. Here, they need to follow advertising standards
and operate business according to their business systems and techniques to be
successful in marketing.
Target market strategies- As Indian consumer want health and stability for living
because they thing living a healthier lifestyle is important. Along with this they want to
achieve financial stability and needs to be protected against threats related to health. So
Sainsbury needs to focus on these factors before implementing any strategy. By having this
method company can target its customers by focusing on growing sales and brand awareness
in a specific customers. Moreover, firm needs to concentrate on demographics which can
create opportunities and beneficial for products sales in the indian market. The major benefit
of using this method is company can drive more loyal customers by providing service
offerings. If the sainsbury marketing team working effectively to reach target market then
profitability can be achieved.
Marketing startegy: The marketing strategy is defined as the overall game and
objective of teh business which helps the organization in order to reach the consumers and
making the customers as thevtarget customers of their products nad servives. The marketing
strategy for the organization is basically depends on the entry method that the company use to
enter in the India (18 Powerful Marketing Strategies To Grow Business Faster, 2021). The
organization can invest and can build the caapacity for craeting th greater market and to have
economie sof scale. Company msut have the various job and other opportunities for the
country where it is palnning to expand its business. The marketing strategy compromises of
place, price, promotion and product. By integrating nad analysing these marketing startegies
of the cited organization it makes the company to know about the competivness in the
market.
Managing operations: Operations maangement is the wide concept which helps in
controlling the process of production nad the other business operations in the effective and
possible manner. The professionals of the comapny use to balance the operating cost of the
company in order to maximize the net operating profit. Maanging the operations is basically
the administration of the practices of the business in order to craete the highest level of

efficiency in the entity. The company msu have good operational startegy in orderto manage
teh business outside the country.
Operational strategy are the set of discussions and decisions of the company which
makes the comapny to have proper production nad properdelivery of the goods nad services
in the market (What Is an Operations Strategy? Definition and Benefits, 2022). This starteg
will help the organization to have better production and proper delivery of theproducts in the
markets of India. The oranization must have the good operational strategy which helps the
organization to have proper manufacturing and delovery of the products in the international
market. This will manage and improves the productivity by loweringthe per unit cost of the
product.
Managing human resources: Human resources are the most vital part of the
organization. The organization must have the good team of the human resource which makes
the company profitable in the markets of India. In orderto manage the human resource the
organization can use the committed expert HR strategy. This strategy is internal and helps the
organization to have different markets. In this startegy the company use to have focus on the
distinctivenes and focuses on tetalent management in the entity.
By uisng the above cited strategy the organization can manage the human resources in
the overseas market. This strategy helps the organization to have its emphasis on the
differentiation and to have the best talent mnagement in the new markets of the India. This
will povide the opportunity for the Indians to have the job opportunity in the comapny. This
makes the employees to provide the security and to hire the right people for the right job. The
comapny can alsoprovide training to the human resources which helps the comapny to have
better productivity. By this the human resources can make the fair and effective teams which
makes the organization profitable in the overseas market.

CONCLUSION
From the above report it is evaluated about the overview of the organization and
rationale in order to do internationalise the business and make the business profitable. Further
this report has evaluated about the different country analysis in order to support the rationale
and the recommendations in order to enter the new market and country. At last this report has
described about the strategy to internationalisation process for the target market and different
entry methods, marketing, managing operations and managing the HR.

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Online
What Is an Operations Strategy? Definition and Benefits. 2022. [Online]. Available through:
<https://www.indeed.com/career-advice/career-development/operations-
strategy#:~:text=An%20operations%20strategy%20is%20a,operations%20are
%20the%20operations%20strategy.>
18 Powerful Marketing Strategies To Grow Business Faster. 2021. [Online]. Available
through: <https://www.engagebay.com/blog/powerful-marketing-strategies/>