International Business: Expansion of Sun Flour Bakery in Dubai

This report discusses the internationalization of Sun Flour Bakery and its expansion from London to Dubai, UAE. It covers the rationale, barriers, and relevant approaches for the company to go international. The report also includes data analysis, implementation approaches, and challenges faced by the company.

International Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................5
LITERATURE REVIEW................................................................................................................5
DATA ANALYSIS.........................................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

Executive summary: the present report is based on the internationalization of the “Sun Flour
Bakery”. The report contains the data based on the expansion of the business from the London to
the Dubai, UAE. The report shows the rationale and the barriers faced by the coming while going
international. Further, report also shows the relevant approaches in the context of the company to
go international.

INTRODUCTION
International business is defined as the process in which the organization decides to sell their
products and services across the boundaries of the nation and this is also known as global
business. The international business includes the cross border transaction of the goods and
products between two or more countries (Cavusgil, and et.al). The Sunflower Bakery which is
currently offering services and products in London and wants to explore and expand their
business in the international market in Dubai, UAE. The Sunflower Bakery have many products
in their menu list like biscuits , cup-cakes , cakes, pastries, breads and many more. The main aim
of the Bakery is to provide to their customers so that every age group people can eat the food
products. There are many reasons for expanding business into international market like for
increasing revenue potential, for new customer base, gain competitive advantage, expansion
allows to diversification and also for greater access to talent.

MAIN BODY
LITERATURE REVIEW
The organization expand their business in the international market because of getting more
profitability and growth in the target market. For this the organisation needs to select the
international market and that depends on basically two factors which are segmentation and target
market strategies.in the segmentation the organization divide the market into different segments
according to the customer needs and requirements. Selecting a market is very important for
staring any business in the global market. According to (GÖRGÜN, and BARDAKÇI, 2020)
there are many steps involved in the international market selection like the first step is to
determine the objective and scope of the international marketing as it is very beneficial for the
organization to know what to achieve in the target market and also about the competitors. The
second step in the international market selection is to know about the parameter of the selection
like company’s resources, market situation, policies, nature of rivalry and many more. After this
the organization do preliminary screening which helps in removing the unwanted and non-
potential market and after this the organization do the shortlisting of the target market in which
the unwanted market gets eliminate and the potential market get tested for the further process.
The shortlisted market then evaluated and selected on the basis of benefits and profitability they
are providing to the organization. From all the shortlisted markets the best one get select and
launched in the market and then the customers tested the product and give reviews and
feedbacks. Based on the feedback the operational team can do any modification required in the
product launched. Once the product is tested then the company launch products in bulk and this
is known as commercial production.
For expanding the business into the international markets there are marketing entry
routes in which some planned strategies are set for implementing and delivering the products in
the global market. For the marketing entry strategies the company need to understand about the
competitive advantage and growth of the organization. (Schellenberg, Harker, and Jafari, 2018)
states that for the marketing entry the strategies are depend upon three factors which are
marketing, sourcing and control. Also there are many strategies available for doing entry in the
international market like the first one is direct exporting in which the organization directly sells
their product into the international market. This is one of the most commonly used strategies by
the company and best for the start-ups. The next one is piggybacking and in this some companies

sell their products to the companies who are working outside the national borders and the
company can add their products in their groups.one of the popular strategy for marketing entry is
franchising in which an individual pays for the right to manage the stores on the behalf of the
company and this is a type of chain retail company.
International business is very exciting but also face some challenges as every country
have their own government, culture, policies , laws and other parameter that have to followed by
the organization. The international market gives very much exposure to the organization but
there are some barriers that have to face by the organization and by the employees as well. Here
are some barriers faced by the organization while expanding the business in global market.
Language Barrier: it is very important to understand the language of the country in which the
organization is expanding their business because it has been noticed that many organizations face
the issue of language barrier because of not knowing and understanding the native language of
the country in which they are starting the new venture. As per (Sharma, and et.al, 2018) it is
essential to understand the product is well understood by the customers and by understanding the
language of the customers the organization will able to run the business in a smooth manner.
Cultural differences: Each country have their own culture to follow and which consists of
holidays, traditions, foods, social activities and arts which is followed by the individuals. While
starting any business in a new country it is important to learn about their culture. This gives a
respect to the emotional intelligence required for doing the business.one of the example of
cultural differences can be seen in United States and Spain. In United States the working hours is
9 a.m. to 5 p.m. but in Spain it is from 9 a.m. to 1:30 p.m. and from 4:30 p.m. to 8 p.m. and the
in between time is for lunch and rest and employee feel refreshed by this.
Currency exchange and inflation rate: This is also one of the major barrier faced by the
organizations when doing business in the international market. (Arenas-Gaitán, Sanz-Altamira,
and Ramírez-Correa, 2019)illustrated that the value of currency in one country is never the same
in the other country like sometimes it is more and sometimes it might be less. Inflation rate have
also been seen in many countries in which products are sell in a much higher rate.
Managing global teams: one of the biggest challenge in international marketing is managing the
employees who are living in all over the world. There are various issues faced by the
organization while managing the global team like cultural issues, language issues, time issue and

technological issues. For keeping a good relation with the global team it is important to do
regular check in by the help of video conferencing.
A relevant implementation approach is required in the international marketing as this
is the process of making the business more innovative and attractive as compared with the other
competitors. According to (Morgan, Feng, and Whitler, 2018) these approaches adopted by the
companies help in the overall development and growth and also increases the productivity of the
company as well. Similarly there are many implementation approaches which can be followed by
the company like the adaption perspective approach and this approach provides a standardization
to the elements of marketing mix strategies like product, price, place and promotion. Another
approach is transaction cost approach which helps in knowing the cost of the approach so as to
make it easy for the customers for buying the products. This is one of the oldest form of
approach and used by most of the organization. The evolutionary perspective approach is also
one of the important approach and this approach is used to see the growing operations because of
the expansion in the international market. In context with (Anning-Dorson, 2018) this focus on
the overall decisions taken by the organization for going into the international market. For
maintain the integrity between the companies who are moving from one market to another for
increasing the profit margin and revenue one of the very well-known approach is required known
as global integrity perspective approach and this is used for having an integrity in the global
market between various organisations.
DATA ANALYSIS
As per the data that has been considered above in order to get detailed information within
this study, it has been identified that there are certain procedures of international market
selection and entry strategies which includes:
 Exporting: The company “Sun flour bakery” by choosing the model of direct exporting
of their freshly hand made products in the international market of Dubai can represent
their business. The company can establish their business there in Dubai by appointing the
local distributor or agent who will be looking out for their business. The appointed
individual will become the face for their business internationally.
 Licensing: The model of licensing in the business of the “Sun flour bakery” is likely to
say that transferring the rights of the company to use the products and the services to the

other firms that will be operating in the Dubai. This strategy is seen as a useful strategy to
enter the international markets when the one appointed for the business have the large
market share in the international market. The licence given to the firm operating
internationally can use it for marketing or for the products of the parent company.
 Franchising: Franchising is the best way to operate in the international country by
creating the brand image and huge customer base. This model for the business of the “sun
flour bakery” will work well as it gives the different brand image in the international
country on the basis of the strong brand recognition (Zamil, and et.al, 2020). The
company can also create their good brand image by generating the competition in the
markets.
The franchising model for the expansion of the business in the Dubai, UAE is the best as
it will provide the business to grow and create its international presence and the business would
be able to create its presence in the international market and the brand image will be strenghtned.
Although there might be a possibility that the company have to face certain typical
barriers in expanding internationally such as:
 Language barriers: The process of internationalization comes with many barriers and
the language barrier is one of them because the consideration for the language being
spoken in the international country being selected for the expansion is the important. The
peoples working in Dubai is mostly outsiders or non-residents, so the language barriers
will be coming in the expansion process. The company must hire out the local native
speaker who can co relate with the staff members and can take care of the business
operations in the effective and fluent way. Investigation for the interpreters will benefits
in the smooth functioning of the business “Sun flour bakery”.
 Cultural differences: The different countries have different language the same way there
are different cultures too ( Clavijo-Olmos, 2022). The cultural difference includes the
traditions, foods, social norms, holidays, arts, etc. so while going international in Dubai
the business of “Sun flour bakery” should adopt the culture of the UAE to continue its
smooth functioning and attract the different customers from the various groups.
Understanding the emotional intelligence and the respect fullness of the customer for the
functioning of the business successfully is the important aspect. Learning the culture of

the international country is beneficial to generate the revenue and creating the brand
image.
 International management: The challenges that comes in between the international
expansion includes the international management this barrier affects the business on
account of language barriers, cultural barriers, time zones and variables of technological
access and reliability. During the pandemic Covid-19, the distancing was coming as the
big issue by creating the lack in the communication this is also damaging the
management in the organizations. So, the company “Sun flour bakery should take the
proper measures to take care for the management in the international outlet of the
company.
 Currency exchange rates & inflation rates: while expanding the business in the
DUBAI, UAE the company must get familiarize with the rates of Dubai Dirham and the
rates of the currency and should be looking for the inflation rates in the country as to
over-come the impacts on the material costs and labour costs and also take care of the
product pricing to attract more numbers of the targeted consumers towards their business
of the bakery products (Ross, 2019). The exchange rates of the currency in between two
countries can be of related values or cannot always on the equal basis and thus, the value
of the particular currencies cannot be worth buying the goods and services in the
international markets. By understanding the exchange rates and inflation rates while at
the time of expansion will help the company to value their products at different locations
over the period.
 Governmental policies and relations: Political factors, laws abiding the food and
beverage industry and the local rules to run the business in the international country are
important to take care off before coming into the run in Dubai, UAE. The rules set out by
the Dubai government to run the business and to run the food and beverage business in
the country should be taken care off. The licence and approval from the Dubai
department of economic development (DED) will be required for the company “Sun flour
bakery” to come into the run for the business in Dubai, UAE.

After complete evaluation over the topic in detailed way, it has been evaluated that there
are certain approaches which are generally known as Implementation formulation for the
internationalization includes
 Ethnocentric approach: This approach concentrates on the single community of
corporation. They allow business to advertise in the local language of the international
country, and they sell out the products which are modified according to the needs of the
targeted customers from the international markets (Aguilera, and et.al (2020)). The
ethnocentric approach will allow the business of “Sun Flour Bakery” to understand the
markets of Dubai in the better ways. Companies following the ethnocentric approach
doesn't trust people from different regions, and they lean to be region focused. This
approach allows the HR of the business to appoint the right and effectively working
individual for the right job on the basis of their skills and knowledge and as per the
willingness of the individual to perform for the organization.
 Polycentric approach: This approach is for the human resource to recruit the staff for
the multinational company. In the polycentric approach the HR recruits the host country
staff for the managerial leads in the branches established in the international countries.
These approach involves the low hiring costs and training is given with the less problem
for adjustment and communication as all the recruited staff is from the same region. By
using this approach of marketing the business of the “Sun Flour Bakery” will be able to
use the multilingual approaches to reach huge customer pace. This approach will be
providing the best possible benefits to the business of “Sun Flour Bakery” as the staff is
from the host market, they will provide better productivity as they have the better
knowledge of the host market.
 Regio-centric approach: The Regio-centric approach is mainly works by adopting the
marketing strategy for the group of the international countries that are being grouped. The
characteristics of these international countries are similar, but the management focuses on
the region. Under this approach the recruitment is done by using the international method
of the recruiting managers, where managers are selected from the different countries
lying within the geographical region of the business. In this approach of
internationalization the business of the “Sun Flour Bakery” would be hiring or

transferring the individuals from the same region and filling up the positions required for
the business in international markets of Dubai, UAE.
 Geocentric approach: This is the international recruitment approach by which the
multinational companies recruit the best individuals irrespective of the nationality,
because for the international expansion the selection of the qualified, talented and
competent individuals is very important (Guercini, and Milanesi, 2020). By using the
geocentric approach for the business the company can get the pool of senior executives
who'll be having the international experiences and contact with across the borders. Thus,
this expertise can provide the benefits to the company by accomplishing the objective of
the company. They also provide resentment reduction like unfair usage and treatments.
Hence, as per the data that has been collected to get in depth information about the topic,
the things that have been analysed includes different approaches which states that the
ethnocentric approach is best for the international expansion of the “Sun Flour Bakery” to the
Dubai, UAE. The ethnocentric approach will give the numerous advantages to the business like
better coordination in between the host country and the parent country, it will provide effective
control on the subsidiary outlet, the culture of the parent company can be easily adopted by the
subsidiary company and it also infuses the beliefs and the practices in the foreign country.
Accordingly, with the advantages there are disadvantages too for this particular model of
approach like the staff from the parent country may find it difficult to adopt the changes in the
host country due to cultural differences. The guidance for the employee living far from the
country will also become a disadvantage in the functioning of the company.
CONCLUSION
From the above report it has been concluded that the business expansion for the “Sun Flour
Bakery” is important for the business to grow and entering the oversea markets and to improve
the growth of business. Further, The report have discussed the business of the company and the
rationale of the expansions of the business and the country UAE why it is beneficial for the
expansion and the relevant models have been shown for the expansion in the market entry
strategies and the report have discussed the typical barriers faced by the organization in the
expansion process from the London to the Dubai, UAE. Relevant implementation approaches

have been shown above for the international expansion of the business. Report is properly based
on the expansion of the local business to the international markets of Dubai, UAE.

REFERENCES
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