Market Entry Strategy of UK Supermarket : Report
Added on 2020-01-23
14 Pages5414 Words72 Views
Market EntryStrategy1
TABLE OF CONTENTSIntroduction......................................................................................................................................3Literature review and critical analysis.............................................................................................3PESTLE analysis of India ...........................................................................................................5Porter diamond model..................................................................................................................7Risk analysis................................................................................................................................8Different type of market entry strategy........................................................................................9Conclusion and recommendation...................................................................................................11Recommendation.......................................................................................................................12Reference.......................................................................................................................................132
INTRODUCTIONIn the modern era, internationalization has become very important for overall growth andsuccess of any business enterprise. Nowadays, the competition among business operating inretail sector of UK has become so intense that it is not easy for companies to gain high marketshare and attract customers. Further, due to limited number of customers in home market andgrowing competition it has become very crucial for organizations to seek opportunities forinternational growth and expansion (Meyer and et.al. 2009). Entry is new market can be a riskymove for any organization as need and demand of people tends to change from market to market.However, it can be argued that entry in new market with the most appropriate strategy canprovide several kinds of benefits to a company. For example by finding new customers ininternational market, businesses have an opportunity to increase their existing sales and profits(Uhlenbruck and et.al. 2006). On the other hand, it can also support firm in getting competitive advantage over itsmajor rivals . The present research report is based on Asda which UK based chain ofsupermarkets. Instead of focusing only on single product or service, the company has diversifiedits range of products and also offers services related to finance and mobile phones. Founded inthe year 1949, the selected organization is now second largest chain of supermarkets in Britain.At present Asda is facing very tough competition from market players such as Tesco, Sainsburyand Morrision. All the above mentioned brands are trying very hard to acquire market share ofUK's retail supermarket. Thus, Asda has an opportunity to enter country such as India which iseconomically growing with a very good pace. The present study, depicts market entry strategywhich can be used by Asda for India market. LITERATURE REVIEW AND CRITICAL ANALYSISIn the present scenario, the concept of internationalization is getting day by day popularalong with the passage of time. It can be stated that there are variety of reason due to whichcompanies prefer to opt the strategy of internationalization. According to the view of Das,Roberts and Tybout, (2007) the entry strategy in new market relies upon objective of company toa great extent. This means, in order to adopt the most effective and appropriate strategy,businesses are first required to develop aim and objective of entering new market. However,3
Claver, Rienda and Quer, (2007) has argued that firms also have opportunities to adopt standardmarket entry strategy which is most commonly preferred. The main reason behind expandingoperations into new international market is to increase sales and profits of a business enterprise.Along with this, it also supports companies to go for innovations in existing products andservices (Global Market entry strategy, 2004). This sometimes acts as competitive advantage fororganizations and assist them in getting high market share. As it has been already discussed that Asda is facing very high or intense competition inmarket such as UK. This has forced the brand to make changes in its products and services atregular intervals in order to attract customers.. Along with this, it is also facing problems inattracting new customers and retain its old ones (Zott and Amit, 2008). At present the brand hasadopted for aggressive marketing strategy, in order to acquire adequate number of customers butstill it is not able to achieve its desired objective to becoming leading chain of supermarket retail.It can be expressed that the company can expand its operations to other international marketssuch as India to acquire new customers and enhance its existing financial performance (ForeignMarket entry strategy, 2013). In last one decade the economy of nation has grown really well andit has also supported foreign investments to a great extent. Apart from this, the large population of Indian market will support the brand to attractlarge number of customers. On contrary of this, Brouthers and Hennart, (2007) has argued thatthe major challenge which has been faced by foreign businesses in expanding their operations toIndian market is related to diversified population. The nation is having very diversifiedpopulation and the need/demand of people in the market differs from each other to a great extent.According to Klepper, and Sleeper, (2005) most of companies fail in entering market becausethey do not carry out appropriate research before entering the same. Adequate research not onlysupport in getting aware about customer demand but it also provides businesses with informationrelated to the level of competition existing in the new international market. Therefore, before expanding its operations in market such as India, it is required by Asdato carry out market research. This will support in getting aware about the overall businessconditions and macro environment of the nation. In addition to this, by carrying out riskassessment, the brand can gain adequate data related to the major risk associated in doingbusiness in new international market which is India (Abraham, 2006). The use of models such as4
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