International Business Strategy

This document discusses the concept of international business strategy and focuses on the case of Hunter Mason, a small medium enterprise in Australia. It explores the opportunities and challenges of expanding the business in China, including market entry strategies and a PESTLE analysis of the macro environment. The document also introduces the OLI Framework for evaluating international expansion.

INTERNATIONAL BUSINESS STRATEGY
INTERNATIONAL BUSINESS STRATEGY

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Contents
Introduction.................................................................................................................................................2
Part 1...........................................................................................................................................................2
SME in Australia.....................................................................................................................................2
Overview of the organisation...................................................................................................................2
Part 2...........................................................................................................................................................3
Micro environment..................................................................................................................................3
SWOT analysis....................................................................................................................................3
Market entry strategy...........................................................................................................................4
Macro environment analysis....................................................................................................................5
PESTLE Analysis..............................................................................................................................5
OLI Framework...................................................................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

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Introduction
Small Medium Enterprises are the businesses whose employee number is falls below
certain limits. Small Medium Enterprises required to expand the business at the international
level. It is essential for organisations to analyse the resources and capabilities while expanding
the business. The various strategic tools are implemented by the organisation at the workplace to
analyse the internal and external factors that affects the growth (Ng, 2012). In this report, the
discussion is made on the Small Medium Enterprises in Australia. In this report, Hunter Mason
has been taken into consideration to analyse the factors that helps the organisation to attain the
success at the international level. Hunter Mason has the good business in Australia but now it
wants to expand the business in China.
Part 1
SME in Australia
Hunter Mason is the small medium company in Australia. It has 13 employees who work
with the organisation to attain the success. It wants to expand the business in China where it has
the opportunity to do the business with the higher amount of potential. The company provides
the interiors fit outs and refurbishments services to corporate clients. It is the fastest growing
SME’s in the world. The company has personal network that makes it strong and it becomes
capability of the organisation that helps it to expand the business at the international level
(Hunter Mason, 2019).

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Overview of the organisation
Hunter Mason is the construction management organisation that provides the interiors fit
outs to consumers. It operates in construction industry as it provides the construction fit-out to
consumers to top clients and project managers. The company follows the approach of treating
each project and each client’s individually. It works with honesty, trust and with the help of
technical experts. It works with the top tier clients, project managers and property consultants
with the motive of delivering new spaces, and places. It has been found that the organisation
earned $ 14.6 million in a year. The company is growing with the percentage of 319.1% that is
good percentage to expand the business at the international level. The company is also awarded
as the Smart Company just because of its success due to 100% correct strategic decision (Smart
company, 2019).
The construction industry of Australia generates the revenue $350 billion in terms of
revenue. The industry contributes in 8% of Australia in Gross Domestic Product (GDP). It is
expected that the annual growth rate the industry is increasing with the percentage of 2.5% in the
next five years (Australian Insutry and Skills Committee, 2019).
In Australia, the firm who has employees less than 200 or equal is considered as the
Small Medium Enterprises (SME’s). SME’s is different from large firms in terms of revenue and
number of employees. Large firms have the business in the different areas and also have large
number of employees above 200 or 250 but in SME’s has less than 200 employees.

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Part 2
Micro environment
SWOT analysis
Strength
Strength of the organization is its employees that help to provide the services to its
clients. Hunter Mason has 13 employees that help to deliver the quality of services to consumers
by putting their full efforts to do the work (Hunter Mason, 2019). It is also awarded for its
projects and services that would be strength for the organisation.
Weaknesses
It has been seen that the weaknesses of the organization is that it has limited number of
people that helps it to provide the effective services to consumers. The organization faces the
issues while expanding the business at the international level (Ahmad, et.al, 2015).
Opportunities
It is observed that the Hunter Mason provides the quality of services to top clients or
project managers. The company has the opportunity to expand the business at the international
level with its capability to do the work. The organisation also earned the enough amount of
revenue from which they can hire more staff so that they can easily expand the business (Rose,
Deros, Rahman, & Nordin, 2011).
Threats

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It has been found that the organization have higher level of threat of competitors. There
are large firms that provide the high level of services as they have numbers of employees and the
large amount of funds to invest (Hunter Mason, 2019).
Market entry strategy
Hunter Mason is the construction management company that provide the quality of
services but it has limited number of resources to expand the business in the other countries. The
organisation requires the support from which they can enter the international market. However, it
has been found that there are various new market strategies through which the organisation can
enter the market such as joint venture, partnership, sole proprietorship, franchises and the others.
However, Partnership is an appropriate market strategy for the organisation as it helps to
increasing the fund amount so; that it can invest to expand the business at the international level.
As discussed above, the organisation has the limited amount of funds and capital due to which
they faces the issue while entering the new market that is why; it is recommended that the Hunter
Mason has to enter the new market with the partnership strategy (Ansoff, et. al, 2018).
Macro environment analysis
PESTLE Analysis
Political
 Single Party of the government is
Economic
China is marked as the 2nd largest economy

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handling the country.
 The development of infrastructure is
another factors in which the
government of China is mainly focuses.
 The government announced the RMB 4
trillion to invest in developing
infrastructure for the development of
economy.
in terms of GDP (Hertiage, 2019).
It has been evaluated that the purchasing power
of consumers is high as the economy of China
is the largest economy.
It is beneficial for the organization as the
demand of people of China as they are agree to
invest the high amount in construction projects.
Social
 China is one of the most populated
countries in the world.
 China is also a place where the tourist
comes to visit the place which is
beneficial factor as the brands or
government invest the amount.
 The people of China follow the trends
due to which they always update their
houses and invest the amount to
renovate the houses.
Legal
 Government of China also implements
laws to protect the rights of consumers
such as right to safety, right to speak
and the others.
 The government of China supports the
industries that develop the economy by
contributing in it.
 The export and import rebate is also
increases from 14 to 15% which is
beneficial factor for the company while
exporting or importing the raw material
to another country.
Technological
 China is also one of the countries where
Environmental
 China is the most populated country in

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the technology is the main element to
finish their work.
 China’s Government always focuses in
rapid advancement areas such as
education, high-tech, patents, academic
publishing and the others.
 The main focuses of China are on
innovation that is beneficial for the
organization to grab the large
number of consumers or top
authorities by developing innovative
buildings (Moutinho, & Vargas-
Sanchez, 2018).
the world.
 The various environmental policies will
develop by government that helps to
solve the issues related to weather such
as water problem, soil problems and the
others.
 The company has to implement the
environmental policy at the workplace
to survive for long time in China
market.
OLI Framework
(Source: Moutinho, & Vargas-Sanchez, 2018)

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It is a model that helps the organization to evaluate the ways in which it can enter the
market and earn the good amount of revenue. The framework ties up with the three factors such
as ownership, internationalization and location that help to determine the ways in which the
organisation can attain the success in the expansion project. It is also known as Eclectic
Paradigm model.
Ownership-
It defines the right ownership style for the organization while enter the market.
Partnership is an appropriate ownership style for Hunter Mason to enter the market of China.
Location-
It refers the location in which the organisation has to establish the business. In the case of
Hunter Mason, it has to establish the business in the area where the companies and cafes such as
Shanghai China, Busan South Korea and the others. Shanghai China is the appropriate city for
Hunter Mason to establish the business (Asialink business, 2018).
Internationalization-
It defines the way in which the organisation can enter the market. It is observed that the
government of China does not put more restriction over the companies and the new markets can
easily enter the market. The company has to build the contract with the other construction
company of China and also it has to take the licenses to do the work in the market.

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Conclusion
From the above limelight discussion, it has been concluded that Hunter Mason has the
capability to expand the business in China. China is an appropriate market to earn the revenue
that is beneficial for an organization. As per the analysis, the company has limited resources to
enter the market that is why; it is recommended it has to enter the market in partnership way. The
environment of China market is beneficial for Hunter Mason as it is largest economy in high
power of willingness. The company has to enter the market by taking the licenses of government
of China in Shanghai China. The company will earn high profit in coming future due to its
quality of services to consumers.

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References
Ahmad, S. Z., Abu Bakar, A. R., Faziharudean, T. M., & Mohamad Zaki, K. A. (2015). An
empirical study of factors affecting e-commerce adoption among small-and medium-
sized enterprises in a developing country: Evidence from Malaysia. Information
Technology for Development, 21(4), 555-572.
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Asialink business. (2018). Major cities for doing business in China. Retrieved from:
https://asialinkbusiness.com.au/china/getting-started-in-china/major-cities-for-doing-
business-in-china?doNothing=1
Australian Insutry and Skills Committee. (2019). Industries. Retrieved from:
https://nationalindustryinsights.aisc.net.au/industries/construction
Hertiage. (2019). China. Retrieved from: https://www.heritage.org/index/country/china
Hunter Mason. (2019) Our Story. Retrieved from: http://huntermason.com.au/our-story/
Moutinho, L., & Vargas-Sanchez, A. (2018). Strategic Management in Tourism, CABI Tourism
Texts. Cabi.
Ng, H. S. (2012). Development of intangible factors for SME success in a developing
country. International Journal of Academic Research in Business and Social
Sciences, 2(12), 198.