Internationalisation of Marshfield Bakery in Australia

This report discusses the internationalisation of Marshfield Bakery in Australia, including the rationale for internationalisation, country selection, market selection and entry strategy, barriers faced, and implementation approach.

Business

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Providing the overview of the chosen organization and rationale for internationalisation.........2
Discussing the country to be entered...........................................................................................3
Application of theory and models relating to process of international market selection and
entry strategy...............................................................................................................................4
Discussing the different barriers which will be faced by the organization to expand
internationally..............................................................................................................................5
Evaluating the relevant implementation approach for the internationalisation process..............7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
1

INTRODUCTION
Internationalisation is being defined as the company going to expand the business within
another new country. For the business to grow and develop it is very necessary for the company
that they continuously expand their operations. This is crucial as it will be assisting them to
increase their operational efficiency and the profitability of the business as well. the current
study is based on the Marshfield bakery. The current report will outline the internationalisation
of cited company in Australia. This current report will outline the overview of the company and
the reason for internationalising. Further the study will outline the recommendation for the
country as well along with the application of different theories and models relating to the
international market. Further the discussion relating to the barriers faced by companies at time of
the expansion will be undertaken. in the end the implementation approach for the
internationalisation will be done.
MAIN BODY
Providing the overview of the chosen organization and rationale for internationalisation
Marshfield bakery is a small shop being located in Chippenham in UK and is currently a
part of bakeries and Tortilla manufacturing of industry. The company produces quality
handmade cakes, biscuits and other related products (Eduardsen and Marinova, 2020). The
company is a small scale company and because of this the company wants to expand its business
and want to enter into new markets. Currently the company is looking to expand the business and
they are proposing to enter into new country and for this it is necessary that they effectively
evaluate the different countries and then finalise the decision to be implemented. The rationale
for internationalisation is that this will assist the company in increasing the working efficiency of
the company. the reason underlying this fact is that when the company will expand its working
then this will be improving the working efficiency of the company. this is necessary for the
improvement of the company and its profitability. Along with this internationalisation will help
Marshfield Bakery in improving the market stake and the global footprint as well. this will help
the company in improving the profitability of the company and will help in increasing the market
share.
Along with this another reason for which Marshfield Bakery must go international is to
attract the new consumers. This is very necessary for the reason that in case the new segment of
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consumer is being targeted then this will be helping the company to increase their profits and
growth (Metsola and et,al., 2020). Along with this another reason for the internationalisation is to
gain competitive advantage. This is very necessary for the reason that when the company will be
expanding in new market with good quality and innovative products then this will be assisting
them in improving the working efficiency. Hence, this will be providing a competitive advantage
over other companies.
Discussing the country to be entered
The country recommended to Marshfield Bakery is Australia because the country is
witnessing higher growth within the bakery field. Thus, this will be providing a better growth
opportunity to the company and will be assisting in improving the performance and profitability
of the company (Morley and et.al., 2018). The different reasons for which country Australia is
being selected are as follows-
Political factor- the political factor involves the different changes which are being
undertaking within the country. Currently the country is having very stable government and the
regulation are not very strict and bounding (Tran and Marginson, 2018). Hence, this will be an
opportunity to Marshfield Bakery as it will be improving the working efficiency and expansion
process in better and effective manner. Also, the tax rates are declining and subsidies are also
being provided by government to small companies for their promotion of the business. thus, this
will be helping the company in getting major benefits.
Economic factor- this includes the changes within the economic policy and other factors
which govern the working of the economy. These economic aspect includes the different types of
factors like inflation, purchasing power of consumer, interest rates, foreign exchange and many
other different related factors. With respect to Australia, the purchasing power the people is
increasing continuously and this will pose an opportunity for Marshfield Bakery (Morais and
Ferreira, 2020). The reason underlying this fact is that in this modern working environment the
consumer has shifted towards the high living standard and this involves consuming cakes and
other desserts as well. Hence, this will be providing better opportunities for growth and
development.
Social factor- the current attitude of people is changing and they are shifting to a modern
lifestyle wherein leisure is the major focus for the people. Hence, this will be an opportunity for
Marshfield Bakery as they also deal in the making innovative and health conscious bakery
3

products which will be surely liked by the consumers (Galloway, Numajiri and Rees, 2020). This
will be helping the company in increasing the profits and sales of the company.
Technology- with respect to the technology, Australia is a country which is
technologically advance. Hence, this will be helping Marshfield Bakery to use of the latest
technology and this will help the company in improving its profits and sales of the company
(Saridakis and et.al., 2019). The use of latest technology will help Marshfield Bakery in
improving the working and operational efficiency of the company in better and effective manner.
Thus, with this analysis of the PEST it is clear that Australia is very beneficial for the
expansion of Marshfield Bakery (Bamberger, Morris and Yemini, 2019). The reason for the
expansion is that when the working of the country will be good then this will be providing better
opportunity for growth and development of Marshfield Bakery.
Application of theory and models relating to process of international market selection and entry
strategy
The process of internationalization need to be followed in proper and effective manner as
it provides a base to the company in increasing the efficiency of the company. when a company
goes within international market then this increases the market reach and this improves the
efficiency of company and provides for a wide growth opportunity as well (Cassetta and et.al.,
2020). For this the use of different theories and models need to be applied so that Marshfield
Bakery can implement within the expansion of the company. For this the implementation of the
staged model is being applied for Marshfield Bakery. This staged process need to be followed by
Marshfield Bakery so that the implementation of internationalisation within Australia can be
done in better and effective manner.
The first stage of this model involves domestic marketing stage wherein the company
first tries to highlight the domestic marketing strategies which is being implemented by the
company. Thereafter the next stage involves the pre- export stage in which the company analyses
that whether they need to export the product or they need to go out in other country itself.
Further the third stage involves in the experimental involvement stage (Robson and Wihlborg,
2019). This stage involved the experiment involvement which includes the analysis of the ways
through which a company can enter within the international market. Here and experiment is
conducted that whether the going on in new country will be beneficial for the company or not.
Further the next stage involves active environment where in the company actively involved
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within the process of internationalisation. This is beneficial for Marshfield Bakery as with the
help of this process the company can easily enter within the Australian market and flourish.
Along with this there are different market entry strategies which can be used by Marsh
field Bakery in order to enter within the Australian markets. The different types of market entry
modes being available for Marsh field Bakery are follows-
Joint venture- This is a type of method where in the company join hands with another
company for a project. When the project is completed then the joint venture comes to an end.
This is very good method of expanding the business within the other countries (Mittelmeier and
et.al., 2019). Within this type of method the sharing of risk and profit is being the divided within
both the parties according to their need and requirement. Once the objective of the venture is
being completed then it comes to an end with consent of each and every venture participant.
Merger and acquisition- This is another type of method where in the company can
merged its operation with any other company already being present within Australia. Along with
this merger in acquisition will assist Marshfield bakery in entering to Australia with any large
company which will help them to grow and developer to a great extent (Prashantham and et.al.,
2019). Also this method will provide the benefit of gaining competitive advantage within the
market. The reason underlying this factors that when company enters into another country with
existing competitors then the competition is reduced and Company can operate in better than
effective manner. And this will be providing a competitive advantage and the benefit of economy
of scale as well.
Discussing the different barriers which will be faced by the organization to expand
internationally
Language Barriers: Marshfield Bakery will face the various difficulties because of the
difference in the language that is spoken in United States vs the language that Australians speak.
Company will have to make sure that the product of the company or name does not mean some
other thing in the language of Australia (Mendy and Rahman, 2019). The company will have
difficulty in communicating with the suppliers and other partners of the company. Creation of
miscommunication will hinder the performance of the company.
International company structure: This is the another barrier that the company will face
regarding taking up of the decisions for the structure of the company that will allow it to compete
in the global market (Rahman, Akter and Radicic, 2020). The structure of company should be
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formed in such a way that it can make sure that the top tier management of the company can
have proper control over the international business. Being a small scale enterprise it will be a
major barrier for the company.
International Accounting: The pattern in accounting will be changed when the company
will start its operations in Australia it will have to do accounting in accordance to the taxation
rules of Australia (Mendy, Rahman and Bal, 2020). System and rates for taxation are different in
UK and Australia. Cost calculation and pricing strategy at global level: Setting up price by
Marshfield Bakery for its targeted consumers in the foreign market will also be a barrier for the
company. Picking up of correct pricing strategy is highly essential as it lays direct impact over
the revenue generation of the company.
Cultural Differences: Every country have its own culture, consisting of traditions, arts,
holidays and social culture. The culture of UK and Australia are very different. It will be a
barrier for Marshfield Bakery to adjust with this diversity in culture (Mendy, Rahman and Bal,
2020). Company will have to make sure that their operations does not hurt the sentiments of the
natives of the country they want to establish their business it. A lot of time will be consumed in
understanding the culture of the country. Managing Global Teams: This is another barrier that
will obstacle the initial entrance of the company in new country as well as its further functioning.
Companies face difficulty in effective management of the employees that live in different parts
of the world. If in its new establishment in Australia the company will not be able to find
required workforce, then it will have to seek the neighbouring countries in seek of personnel for
the company (Hultman, Iveson and Oghazi, 2021). This will put the company in the situation to
face barrier regarding managing the global team. It will have to deal with the complexities in
managing the diversity in its workforce.
Currency Exchange and Inflation Rates: The dollar value in the UK’s currency will never
be equivalent with that of Australia, or any other country Marshfield Bakery will aim
establishing its business in. It is very crucial for the firm to familiarize itself with the inflation
rates of the targeted country so that prices of the services and products of the company can be set
in accordance with the same (Felzensztein, Deans and Dana, 2019). Failing in doing so would be
a major barrier for the company. Politics: Stability in the politics of Australia along with its
foreign trade policies and relations with other countries inclusive of United States will play a
major role in the decision of Marshfield Bakery to start its operations in that country.
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Evaluating the relevant implementation approach for the internationalisation process
For making the process of entering into whole new market in a different country
altogether, requires the need for certain strategies or approaches that can help the firm in making
the process easier. The survival of a firm in international market is represented by
implementation of an effective strategy to internationalization (Vissak, Francioni and Freeman,
2020). Depending upon the needs and requirements of the products or services that are offered
by a firm this type of strategy is decided from the different strategies. The aim of the company is
to maximize its profits and make them equal to the perceived value of the company subtracted
the costs or expenses generated in achieving the profit. Based on this the strategies are
international, multi domestic, global, and transnational strategy (Surdu and et.al., 2018). Multi
domestic strategy is best to adopt when the aim is focus on the customization of the product for
making it suite the needs of local audience of the market. Global strategy is adopted by the
companies with the aim to reduce the costs and earn maximum amount of profits. International
strategy is for creation of value through transfer of skills, product or services that the company
excels in into a foreign market and make profits with this introduction. Transnational strategy is
adopted in the situation of existence of high level of pressure over the reduction in cost along
with the response from local population of foreign country and chances to use the skills of the
company in competing with these pressures is present (Tien and Ngoc, 2019). For smoothening
the process of internationalization for Marshfield Bakery it is recommended to implement multi
domestic strategy. This will help the company to understand the need of locals of Australia and
earn its name through making up of bakery products customized as per the customer preferences.
Doing this will be beneficial to create popularity in the Australian market.
The above explained strategy will help the firm in implementing Stage 1 of stage model
mentioned earlier in this report. The stage of the stage model is concerned with the establishment
of domestic market and can be done through multi domestic strategy (Qi and et.al., 2020).
Further the Stage 2 is export research and planning, the implementation of which will be based
on the analysing of the environment factor as per the pestle analysis model that is used earlier in
the report. For easy implementation of industrialisation as per the stage 2 Australia have been
selected for the expansion purpose of concerned firm. Stage 3 of the model which is known as
initial export sales the Marshfield Bakery will target at customers of all ages with extra focus on
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teenagers as the trend of bakery items is most among them (Abdi and Aulakh, 2018). The next
stage that is Stage 4 for expanding the sales in international market the company will aim at
positioning its product according to the needs of the customer so that profits can be earned by
offering and satisfying the needs of the consumer thorough customized products (Chetty, Karami
and Martín, 2018). The stage 5 of the staged model is investment abroad. Marshfield Bakery will
implement this stage by slowly increasing its investment in the foreign country. The company
will firstly open a store in Canberra city for selling its bakery products. After gaining the support
from customers and making a place in market the company will target at opening a new store in
the same city but at different location by this the goal will be cover customers of the entire city
(Surdu, Mellahi and Glaister, 2019). Then different cities will be targeted, in this way the
company will implement internationalisation effectively in the country.
Further the barriers that were covered in the prior section of the report will also have to
be considered so that the internationalization process of the company can be implemented
smoothly. These barriers can be overcome by the Marshfield Bakery by using the existing
knowledge of the company in attaining expertise in local market (Yayla and et.al., 2018). For
becoming an expert in Australian Local market the company can hire a specialist for guiding
them in relation to the taste and preferences of the consumers there. Doing this will remove the
barrier of differences in language and culture of two countries. Further the accounting and
taxation related obstacle will also be removed in a similar way of hiring a specialist for the
purpose of seeking into the matter.
CONCLUSION
On the basis of the above report it has been concluded that internationalization is the
process following which a company enters into another country. The report has outlined the
importance of industrialization to a company in its expansion and growth perspective. This report
has provided a brief overview of the company named Marshfield Bakery that aims to establish
business in other country. The report has suggested the company to set up its new establishment
in Australia based on analysing the external factors through pestle model. Further the report has
discussed the various theories and models like stage model that are recommended to the
concerned firm for internationalization. In addition to this various barrier that will hinder the
entrance of company have been analysed. Lastly in this report approach for implementation of
industrialization have been covered.
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