International Business Report: Hofstede, PESTLE, Ansoff's Matrix

This report provides an in-depth analysis of international business, focusing on market entry strategies and the challenges faced by companies expanding globally. It examines the application of Hofstede's cultural dimensions, PESTLE analysis, and Ansoff's Matrix to understand the external environment, cultural impacts, and strategic choices. The report explores the case of General Motors-Holden's potential entry into the Chinese market, evaluating political, economic, social, and technological factors. It discusses the significance of cultural adaptation, particularly highlighting the differences in power distance, individualism, and uncertainty avoidance between Australia and China. Furthermore, the report offers recommendations for navigating the complexities of international business, including adapting to cultural nuances and formulating effective strategies for market penetration and development. The report concludes with a discussion on the critical importance of understanding cultural differences and adapting business strategies for success in the global marketplace.

INTERNATIONAL PAPER

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
LITERATURE REVIEW................................................................................................................4
DISCUSSION AND ANALYSIS...................................................................................................7
CONCLUSION..............................................................................................................................10
RECOMMENDATIONS...............................................................................................................10
REFERENCES..............................................................................................................................12

EXECUTIVE SUMMARY
These reports shows the brief of the organisation and the industry, Brief includes the Authority
of the company, history of the company and the origin of the company. Further these reports
goes on to shown the literature review of the theories which explains the status of the host
country in which company is looking to go, status has been explained through the PESTLE
analysis as it help the organisation in knowing the external environment of the market, Hofstede
culture dimension as these has helped the organisation in knowing the current status of the
culture and also used the Ansoff's Matrix model which has helped the business in knowing the
risk related to entering in the new market or introducing the new product in the market. Further
these report shows the discussion about the Literature review of the theory what are the difficulty
and what are the beneffits for the business to enter into globall market. In the end report shows
the recommendation for the orgaisation need to implement in the global market.

INTRODUCTION
Transaction of goods, technology, services, capital from one nation to another nation
known as international business. Companies can expand their business by entering in
international market. Present study is based on General Motors-Holden , it is Australian auto-
mobile company that try to enter into the china's market. This report covers the evaluation of
opportunities and threats faced by the company by analysing the political, legal, economical,
social, technological factors. Report will give the recommendation through which firm will be
successful business venture by achieving cross- cultural proficiency. It will include reviews of
different authors on international business by using various theories.
MAIN BODY
LITERATURE REVIEW
Hofstede Culture Dimenstion
As per the author Hamilton and Webster, (2018) theory given by Professor Geert
Hofstede shows how the culture affects the working of the workplace. Culture is defines as the
personality of the organisation. Culture includes the internal and external environment, ethics,
value and goal under which business operate. According to this policy there are six dimension of
the national culture.Power Distance Index (PDI), This dimension looks at the lower authority
member of the society and also upon their view of inequality of power distributed between lower
and senior authority. The main purpose of the PDI is to uncertain the way through inequality
among people can be handle in the right way. Individualism Versus Collectivism (IDV), As per
the author Picciotto and Mayne, (2016)This dimension looks at the two aspect of culture first one
individualism in which person are expected to look on or take care of own and the immediate
family at the same time in the Collectivism is a aspect in which individual expect their relative or
group to help the individual and also in return individual help the opposite party. In
Individualism self image is define as a “I” but in collectivism it is defined as a “we”.Masculinity
Versus Femininity (MAS), This dimension shows the expectation of the society at the one side
in Masculinity society expect the achievment, rewards, herosism and assertiveness for the
success at the same time in the Fermininity society looks at the emotion and welfare of the
individual by looking at the modesty, cooperation and the quality of the life. Uncertainty
Avoidance Index (UAI), This dimension shows the level of Society ucomfort due to the
uncertaniy and ambiguity. The most important issue related to this dimension is that how society
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dealt with the future happening of the society. Long Term Orientation Versus Short Term
Normative Orientation (LTO), As per the author Neelankavil, (2015) This dimension looks at
two different type of goals of the organisation, one who takes the decission after facing the
challenges are the Short term normative and the one who takes the decission to face the future
challenges are comes in Long term Orientation. Indulgence Versus Restraint (IND), This
dimension shows the behaviour of the society, Indulgenc shows the tendency of society to allow
the individual to achieve their need freely at the same time Restraint shows the tendency in
which high norms are set to achieve the goal for the individual.
Ansoff's Matrix
As per the author Zander and et.al., (2015) model developed by the H. Igor Ansoff shows
that business is always depended on the performance of their new or existing product in the new
and existing market as the product is the ultimate thing which is offered to the customer by the
organisation These model shows the different strategy of the business. Market penetration,
This strategy explains the growth of the business. In this strategy organisational looks to sell
their existing product into the existing market. This strategy generally looks increasing the sell of
the existing product and also looks at increasing the market share in the existing market, it also
help the business to gain a more customer and competitive advantage in the existing market.
Market Development, This strategy explains the growth of the business in the new market. In
these strategy business look to sell the existing product into new market. This strategy may be
achieved by many ways such as exporting the product to the new geographical area across the
border or by choosing the new distribution channel to distribute the product in the new market or
by using a different marketing tool to promote the product in the new market. Product
Development, As per the author Buckley, (2017) This strategy explains the strategy in which
business looks to develop the new product as per the need of the customer in the market. This
strategy emphasis on the Research and development technique of the organisation. Also this
strategy tries to address the need of the customer in the new market and at the same time also
emphasis on developing the product which is new and unique in the new market.
Diversification, This is the strategy in which business try to introduce their product into the new
market to have a wider market area cover in the new market. This strategies requires the proper
idea of the new market and proper assistment of the risk as business in entering into the market
for the first time. These strategy is the right balance between risk and reward.
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PESTLE
According to the Hamilton and Webster, (2018) analysis of the macro factors helps the
company to measure the risk associated with elements so that firms can develop their strategies
accordingly to deal with such complexities effectively. These factors include political,
technological, economical, legal environment. Before implementation of any plan it is important
to have the knowledge of market, strategies of competitor, environment, etc. Political factors
help to determine the role of government and government policy in the company. It includes the
tax policy, trade restriction, import and export duties, agreement of trade between the countries,
etc. it is necessary for organisation to form the strategies by considering these rules. For
example: if Holden plan to enter into new country then it has to emphases on political condition
of the market so that it can make its strategies to deal with political fluctuation effectively.
As per the view of Stahl and Tung, (2015) company directly affect by the changes in
technology. It plays important role in the company in order to grab the market share and
opportunity present in the market. Firm can get the benefit over competitors by introducing new
technology for production, for the sales, for communication with the customers. Changes in
technology involves the huge amount of investment so before the investment managers must
analysis the positive and negative impact of technology closely. Technological advancement aids
in improving production abilities and managing the business across the world significantly.
As stated by the Adekola and Sergi, (2016) economic factors affect not only the
performance but also the profitability of the organisation. These component is connecting with
cost, rate of interest, demand and supply of goods and services, wage rate and also with the
inflation and recession. Major factor is interest rate which directly influence the cash flows and
returns. Like, purchase or investment become loss for company when interest rate of particular
country is high. It also affects the growth of companies. Enterprise can make profits by providing
their product at a reasonable price directly to the customers. Price and cost are the two factors
which help the entity to make the maximum profit. For example, if Holden enter into the china's
market then it is beneficial for company because china's economic condition is good.
As per the view of Rohlfer and Zhang, (2016) changes in market trends, taste and
preferences of consumers, lifestyle, level of education, gender, religion, health, size of
population, product quality etc. influence the firm. These affect not only the buying behaviour of
buyers but also determine the opportunity for company. This forces give the information related
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to the needs of the customer. Changes in social preferences impact on business, as firm has to
make changes in its strategies so that it can address the needs of consumers.
Hamilton and Webster, (2018) stated that it is necessary to consider legal components as if
legal norms are too rigid then it would be difficult for business to sustain in such market for
longer duration. There are some laws which are mandatory for a company to follow which
include the safety measure law, consumer rights and laws, product safety, advertising standards
etc. for example, when Holden enter into the china market then it requires to follow the
environment protection measures.
DISCUSSION AND ANALYSIS
Hofstede Culture Dimenstion
Hofstede Insights of a China or culture of a China is very different from the culture of the
Australia, GM Holden has to adapt the culture of a host country to have a good performance in
the globall market as culture plays a very important in the success of the business. Differences
and changes which need to be address by the Holden is as follow:
Power Distance is very high in the China as compare to the Australia as a result of it organisation
has to take proper care of the employee by introducing good policy in the organisation as Power
Distance or inequality always laid to increase in the employee turnaround rate in the organisation
which laid to increase in the recruitment cost and operation cost. Holden has to offer good
remuntration and incentive package and also need to keep the motivation level high of the
employee but at the same time Individualism in the Australiais very high as compare to the
China which will help the organisation in building a good working environment in the
organisation as when there is sence of we as compare to I than it makes employee feel good to
work in the organisation which result in increase in productivity of the business (Neelankavil,
2015). Masculinity factor in Australia and China are not having that difference which will help
the organisattion in carring forward their strategy and policy from Australia to China as that
policy had already brought a good result for the organisation. Uncertainity Avoidence level of
the China is also not that good as compare to the Australia which will again hurt the company as
these factor is also related to the employee, Holden has to make or change their policy regarding
the employee as both the big factor which are related to the employee is are not in the company
side. Long term orientation of the China is very high as compare to the Australia which will help
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the organisation in facing all the future difficulty very efficiently as Long term orientation makes
the organisation to take a decssion in advance of the future happening. Indulgence level of
Australia is to high as compare to the China which will harm the organisation as these will
increase the demand of the people in the organisational and company has to satisfy that demand
(Stahl and Tung, 2015).
Ansoff's Matrix
As Australia and china is having a big difference in their market as number of consumer
is very high in the china as compare to the Australia as Population of the china is very much at
the same time Per Capita Income of the consumer is very high in the Australia as compare to the
China as the result quality of life is also high in the Australia. Holden is require to uncertain the
market of China before entering it otherwise it can be risky for the organisation (Rohlfer and
Zhang, 2016).
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Figure: Hofstede Culture Dimenstion
(Hofstede Culture Dimenstion, 2019)

Market development strategy will be difficult for the Holden to apply in the China as the
standard of living of the china is respectively very low, so selling the higher rate product to that
public will be very difficult and will certainly result in reducing the sell of the companies
product which eventually affect the profit of the company in negative aspect and surving in the
global market without profit will centainly result in creation of a risk of shutting down of the
business. Product Development strategy is the best strategy for the Holden, it will cost high for
the organisation in survaying and uncertaining the need of the Customer in the host market but at
the sametime it will also help the business in developing the customer friendly product which
certainly result in the increasing the market share of the company and will also increase the
customer relationship with the organisaion which eventually increase the profit of the business
but at the sametime organisation need to keep in mind that they have to produce the product with
lower cost as compare to the Australia as the Quality of Life of China in very low as compare to
the Australia due to the High population (Cumming, and Zahra, 2016). Diversification strategy
will be the last step but the thoughest step as in these step company has to introduce the new
product into new market, This policy will create a risk for the company as company is entering
into the China market for the first time but at the same time it will also help the company as
company is able to cover a wider area of market as compare to the Australia. Entering into
Global market is always create a risk and award company assessing the risk well always found
way to success.
PESTLE
From the literature review it is analysed that if Holden is planning to enter into the china
market then company must have the knowledge about rules and regulation of china's
government. China's rule are very rigid and other companies can not enter into the market easily
so it can be a threat for Holden. When firm enter into the market then it is compulsory for
organisation to follow the rule like property rights, patent, licence etc. As china is high income
country where people have capabilities to spend their money to purchase the things due to this
china's consumer market is second largest market, purchasing power of people is good and GDP
growth rate is also high. Hence Holden can get success in this market if it enters into it with
effective strategies. Organisation must keep in mind the culture, taste and preference of customer
of China, their lifestyle, age etc (Meyer and Peng, 2016) . which help entity in producing goods
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asper needs of buyers. Local sellers are also present which act as competitor and they create the
price war which becomes threat to business.
Automobile industry of China is growing well; every year its profit is increasing with the
rapid speed. Hence it is the potential market which may create opportunity for Holden to get
global presence.
Holden has well known company in the domestic market, it has adequate financial
resources hence it can collaborate with the local companies of China easily. This will support in
gaining attention of local buyers and influencing their decision as well. As china's tax policy is
not rigid for the local firms so it can be beneficial for company. In china labour cost is also low
so it can be a benefit for organisation. Holden can use many innovative ideas for sales
promotion activities, for marketing which helps to achieve the success in Chinese market.
People of china are aware about the impact of environmental factor so government make many
environmental protection rules which have to be follow by the entity. If Holden can cope up
with this protection rules then entity can get success (Rohlfer and Zhang, 2016).
CONCLUSION
From the above study it can be concluded that company needs to analysis the government
regulation before entering into the international market. After analysing of macro factor
company can identify the opportunities and threats present in that market. Firm needs to analysis
the cross culture environment because it shows the taste, buying pattern of customers, their
preferences, needs which help to get success. Economic condition of international market also
affect the business. If international market is growing market then company get the success
easily. If entity enter into the market with some new ideas, or with the support of local market
companies then it will increases chances of success.
RECOMMENDATIONS
After going through above report it has been recommendate that GM Holden need to take
a strick action toward their policy regarding to the employee as there are many factor such as
PDI and UAI are very bad in the China as compare to the Australia which will not satisfy the
employee in the organisation. At the same time company also need to asses the China market
before going into the market as there is many difference in the market of the Australia and China
such as higher population in china and low per capita income in the China, So company have to
invest good amount of money in research and development pogram. Company have to also
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properly understand about the policy of the government and need to follow that as the policy of
the Chineese governemnt is very rigid as compare to the Australian government.
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REFERENCES
Books and Journals
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Picciotto, S. and Mayne, R. eds., 2016. Regulating international business: beyond liberalization.
Springer.
Neelankavil, J. P., 2015. International business research. Routledge.
Zander, I. And et.al., 2015. Born globals and international business: Evolution of a field of
research. Journal of International Business Studies. 46(1). pp.27-35.
Buckley, P., 2017. International business. Routledge.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Stahl, G.K. and Tung, R.L., 2015. Towards a more balanced treatment of culture in international
business studies: The need for positive cross-cultural scholarship. Journal of International
Business Studies. 46(4) pp.391-414.
Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Rohlfer, S. and Zhang, Y., 2016. Culture studies in international business: paradigmatic shifts.
European Business Review. 28(1). pp.39-62.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Cumming, D. J. and Zahra, S. A., 2016. International business and entrepreneurship implications
of Brexit. British Journal of Management. 27(4). pp.687-692.
Meyer, K. and Peng, M. W., 2016. International business. Cengage Learning.
Online
Hofstede Culture Dimenstion. 2019 [ONLINE] Available through: <https://www.hofstede-
insights.com/country-comparison/australia,china/>
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