Market Expansion of Mile Bakery in International Markets: Entry Strategies and Barriers

This report analyzes the market expansion of Mile Bakery in the international markets of Australia, including entry strategies and typical barriers faced by the organization. The report includes relevant models, such as PESTLE and Porter's 5 force analysis, and suggests the franchising model as the best entry strategy. The report also discusses language and cultural barriers, as well as managing global teams.

International Business

EXECUTIVE SUMMARY- In the report the market expansion of the MILE BAKERY have
been shown. And all the relevant models are been shown out in the report, That analyse the
market-conditions and market competition that the organization will be facing by expanding its
business from the local markets of London to the international markets of the Australia. The
conducted report also shows how the organization have faced the typical barriers while setting up
the business in the Australian markets.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Business expansion of mile's bakery in the markets of Australia:...............................................3
Analysing the appropriate models that are related to the process of international market
selection and the entry strategies:................................................................................................3
The relevant pestle analysis to enter the markets of “Australia”:................................................4
The Porter's 5 force analysis approach for “MILE BAKERY”:..................................................5
Market entry strategies for “MILE BAKERY” in the markets of Australia: .............................6
Typical barriers that will be faced as the organization expands internationally:.........................7
The Relevant implementation approach for the internationalization process of the business of
THE “MILE BAKERY”:.............................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
International business expansion term refers to the process of expanding a business from the
local boundary to the international markets in all over the globe (Guercini, and Milanesi, 2020).
The business of Mile Bakery and workshop located in the Fitzrovia, London. The MILE
BAKERY products like pastries, breads and viennoiseries are developed with the technique,
precision and care by a passionate group of chefs tills from the morning to the end of day, so the
consumers can enjoy the freshly baked items all day that are filled up with the love of team of
MILE BAKERY. So the report based on the business expansion of the Mile bakery in the
international markets of the AUSTRALIA and what all entry strategies will be used to enter the
markets of the AUSTRALIA. Further, in this report the typical barriers faced by the MILE
BAKERY in entering the markets of the Australia will be discussed in the report and the relevant
implementation approach would be given in the internationalization process of the business of
the MILE BAKERY in the specified target market of AUSTRALIA.
MAIN BODY
Business expansion of mile's bakery in the markets of Australia:
The expansion of the business in the markets of Australia can serve the business in wonders and
opening of the MILE BAKERY in the Australian market will be beneficial as bakeries are
unaltered and serves with the personal magicians formerly known as chefs and bakers (Lee, et.al
2019). Opening the bakery business in Australia by expanding it from the local boundaries of
London to Australia will be the most suitable step as the bakeries are loved by the localities of
the Australia, and the locals love to spend time their and make connections with the people. The
love for the cakes and muffins has stationed the number of peoples in the country.
Analysing the appropriate models that are related to the process of international market selection
and the entry strategies:
The relevance of the pestle analysis related to the report is coming under because it will be
showing the various factors affecting the environment of the business and the porter's 5 force
analysis will be showing the competition to be faced by the MILE BAKERY in the international
markets in commencing the business the following are demonstrated below:

The relevant pestle analysis to enter the markets of “Australia”:
1. Political factors: As stated by the Boddewyn, and Brewer, (1994)Different regulations of the
government in the industry of food and beverage industry have been laid down in the for the
business operations. It includes the food storage regulations, cleanliness, expiration dates, food
transportation, etc. that all given out under the Food Safety Act, 1991 and ordered by FSANZ.
SO, the business MILE BAKERY before expanding in Australia should make a look on the
different policies led by the Australian government to ensure nutrition and safety of people.
2. Economic factors: The revenue share of food and beverages industry has seen in the high
growth. The another aspect that should be seen out is the increasing labour rates in the country.
The increment in the salaries can be good for the employees but not in the food and beverages
industry as the profits are need to be distributed in the employees. The pandemic have threatened
the economies towards the recessions by increasing the unemployment and left people cautious
about spending money this aspect should be taken care off.
3. Social factors: The entry of the MILE BAKERY in the international markets creates issues as
nowadays people are more health conscious and are much concerned about the diet by avoiding
the salt, sugar, etc. in the food. So, the before entry due to healthy trends going in the
environment the MILE BAKERY should look out about the taste preferences of the targeted
consumers in the Australian markets and deliver the relevant products by keeping up with
healthy and organic trends.
4. Technological factors: As per the views of Silva and et.al (2017) shift in the modern era and
the pandemic Covid-19 have increased the use of e-commerce and automation the business setup
of the MILE BAKERY should install the e-commerce websites and different platforms so the
target customers in the Australia can see their online presence and can have food online in their
house itself using the modern technology. Also, before moving into the international markets the
bakery must evolve with the automation tech to cut-off the labour costs and increase the
profitability and lower down the human error.
5. Legal factors: The MILE BAKERY should take the possible safety regulations as of working
in the food and beverage industry and working in the new environment of Australia the company
must take care of the food and health protocols established in the Australian environment. So, the
MILE BAKERY must conduct their operations according to the safety and health regulations
being levied there.

6. Environmental factors: In accordance with the Jiang, and et.al (2021)As working in the food
and beverages industry the MILE BAKERY must take care of the usage of meat and other
confidential products in their bakery items and must be aware of impact that would be there in
environment putted by the business. The meat industry have left over with the foot print because
the meat farmers have to expand their farms in order to feed their herds. This led to the
destruction of the forests in many parts of Australia and unexpected forests fires have also
caused huge damage to the natural habitat in Australia.
The Porter's 5 force analysis approach for “MILE BAKERY”:
Internal rivalries: The internal rivalries for the MILE BAKERY like BOXPARK CROYDON,
BAGERIET, ETC. work as the players to compete with the MILE BALERY and the expansion
idea in the international market will give the first mover advantage to the business but it will face
the modern trends towards the consolidations and economies of scale. The business of MILE
BAKERY will also be competing on the key factors like quality, relationships, pricing, and valid
differentiations with the competitors in the local markets of Australia.
Entry barriers: With low entry barriers the economical beneficial scales are not enough to get
successful in the industry of food and beverages. The main aspects of new successful company
are ability of leader to acquire enough distribution channels and to build the brand recognition
and brand loyalty. So, the MILE BAKERY should take up the business in Australia by launching
the retail outlets and these can be easily established if a company have the known brand name.
These will be beneficial for the MILE BAKERY to enter the markets of Australia.
Power of buyer: Buyers in the industry of food and beverage primarily related to the bakery
industry like super markets, hotel chains, convenience stores, grocery stores, etc. by giving the
suitable offers to the company entering the market of Australia will help to make profits to the
bakery as it will find the place to introduce their products. As a result, the buyers will be making
the low prices and volume up the discounts. But the large members of the industry will be
developing the playing field and creating more profits.
Power of suppliers: In the bakery industry the suppliers doesn't have much power because of the
well-developed products and the nature of commodities they sell of in the markets. But bakeries
get affected by the swings in the prices of the raw materials, the changes in the global supply are
kind of supplier's negotiation power.

Threats of substitutes: There are numbers of substitutes in the bakery industry thus for coming
in the international markets of Australia the MILE BAKERY should look on the preferences of
their targeted customers and then launch up the relevant products in the particular markets.
Dependence on the price and factors of convenience will help the business to keep the
individuals engaged in switching the substitutes by generating competition.
Market entry strategies for “MILE BAKERY” in the markets of Australia:
The market entry strategies are used when the business is going in another market or the
international market by allowing the business to grow its revenue and generate new potential
buyers but there are chances that this process could be difficult and complicated. But using the
best market entry strategy for the business can be beneficial as it will be help the business of
THE MILE FACTORY to grow on fast basis in the international markets of the Australia.
Licensing: licensing will help the MILE BAKERY by allowing the other company or bakery
functioning in the Australia to use the properties of the bakery in their region. The assets in the
licensing are commonly intangible like productions techniques, patents and trade marks. The
licensee will be paying off the fees to obtain the right for using the property. But there are certain
circumstances too of licensing as the bakery will lose the rights from their property. The licensor
will get dependent on the licensee for the revenue generations.
Franchising: The use of the franchisee model in the Australian market will help the MILE
BAKERY in opening out the franchisee outlet in the well organized markets of Australia. This
kind of similar to the licensing model but in this intellectual rights are sold to the franchisee. The
rules and regulations of the of how franchisee carries out the business will remain strict like if
any of the processes must be predated and specific factors are to be used in the manufacturing.
Joint venture: In the opinion of the Medcalf, (2019)A joint venture mainly consisting of the two
companies establish a new joint business. As one remain local one and another one from the
international markets. This will help the bakery to establish its brand image in the global markets
with the help of the local partner and also to gain knowledge about the foreign markets by
involving the cost sharing. But there are some issues that can create issues about who'll be
investing how much and what will be invested and in which manner the profits will be
distributed.

Partnership: The term partnership means the association of peoples or group of peoples
involved in the activity. The way to enter the market of Australia with the coming into
partnership with the local partners can help the business of the MILE BAKERY in so many ways
and can provide up with the advantage of reduced costing in investment and the MILE BAKERY
will be seen as a local entity of Australia. But there are disadvantage too in coming with the
partnership as it requires the huge amount to invest up with the local partner.
As per the business activities of the MILE BAKERY the franchising model of the entry
strategy will give numerous advantages as it will be helping the bakery to create its own legal
identity in the markets of the Australia and the new international market conditions under the
franchisee model will give numerous advantages to the business as compared to various entry
strategies. As the business related to the food and beverages industries works well in the
franchisee models. Franchisee provides the several benefits like: brand recognition, low failure
rates, profitability, low risks, built in customer's base and business assistance, etc.
The reason for not choosing the other strategies for the international expansion of the
MILE BAKERY are as follows:
1. unlimited liabilities
2. Lower productivity levels
3. clash in between company and objective
4. product adaptations
5. damage to brand value
So, franchising model of the business of MILE BAKERY will give more benefits as compared to
the other entry strategies models to move to the international markets of the “AUSTRALIA”.
Typical barriers that will be faced as the organization expands internationally:
Internationalization of the business includes the profits, losses, risk factors, implementation and
adoption of the new policies and many more things. The business of the MILE BAKERY by
going in the global markets by increasing the sell of goods and services in the markets of
Australia the company will face various barriers in its international markets which are stated as
under:
1. Language barriers: At the time of going international the main barrier comes in
between is the language barrier because it is important for that native language of the

international company should be considered before going into the run (Kadede, and et.al
2021). The business of MILE BAKERY can hire up a native speaker to over come the
language barrier and to let the business function efficiently.
2. Cultural differences: As the different countries have different languages as same they
have the different cultures as well (Haller, and et.al 2019). Entering the international
market of Australia will be allowing the MILE BAKERY to adopt the different cultures
of the market. And this step is important for the business while entering the international
markets to adopt the native culture to get more customers and generate profits.
3. Managing global teams: Management process of the employees who lives all over the
world but functions as a team creates many barriers in the international business. To
maintain the relationship with the global teams the organization must assist with regular
check-in by using the video chats as the interaction can be done in real time. Due to the
distance and also in the time of pandemic, communication becomes the main barrier.
4. Inflation and currency exchange rates: Observance of the inflation rates in the country
before starting the business is important as these rates from country to country and will
impact the labour and material costs and also the product cost (Cepel, and et.al 2019).
The value of the host country's currency and the international country's currency will vary
on different rates and it will change in products rates too causing the currency exchange
barrier.
5. Implications of policies, relations and foreign politics: The proper looking out of the
news related to the country where business of the MILE BAKERY is going to function is
closely be examined as the new policies implemented in the nation can impact the labour
laws, taxes, educational systems, transportation infrastructure, etc (Ahmad, and et.al
2019). the nuances of international business like political orders, policies, and relations
can impact the business of the MILE BAKERY.
The Relevant implementation approach for the internationalization process of the business of
THE “MILE BAKERY”:
When the business is globalizing the business activities and moving into the international
markets in search of the greater and vast markets. The business of the MILE FACTORY by
reaching the international markets of the Australia, will be facing some major key challenges this

can be sorted by applying the best suitable approach to globalize the business. Some relevant
approaches are given below:
1. Direct exportation: The burden to research and plan about the foreign distribution
comes when the exporter decides to export his products directly in the targeted markets.
The process of exporting is a venture type of process as it requires a batch of strategic
planning from the exporter to generate the most from the particular process. With the
proper guidance from the commercials of the markets and authorities can make one gain
the maximum profits from the selected markets (Li, and et.al 2018). And for the selected
business of the “MILE BAKERY” as it function on small size this process can be used
but only when they are able to commit the proper number of staff. It will not provide
many problems as it does not include the brokers and franchisors who take up the profits
of exporter in between and this will help business to gain more profits.
2. Indirect Exportation: As like the direct exportation the business of the MILE
FACTORY in the indirect exportation the sources of the firm acts like an agent for the
exporter in incorporating the service of the firm. The international traders by having the
right appropriate knowledge of the markets are capable of finding the viable market. But
the exporter still have the control on the activities. This will be seen as a good way for the
MILE BAKERY to know more about the new technologies and also about the
competitors in the markets of Australia.
3. Foreign presence: The another way to take over the market are is creating the foreign
presence in the targeted markets which is handled out by the exporter or the
representative accompanying the products to the targeted consumers (Wang, 2019). In
this process someone as a representative in Australia on behalf of the MILE BAKERY
will be using the company's product and the representative may work on the commission
basis or under the certified contract that defines representative all the rules and regulation
regarding the business of MILE BAKERY.
4. Home manufactures and assembly: As the focus of the exporter will be on the
converting the raw material to the finished goods (Zhu, and et.al, 2020). The companies
decide to do so as they have specialized in certain fields and require the help of another
company that is in international markets to finish up the product then this model of

approach is good to do so, but in the business of MILE BAKERY this cannot be done as
they focus in providing the freshly made products for their customers.
So, as per the above report the business should pick up the process of indirect export as in this
process the business of MILE BAKERY would be directly giving the products in the market to
the targeted customers with the help of a representative and with the help of the representative
the company will be generating the good amount of profit in the Australian markets and will be
able to create a well-developed brand value and image in the Australia.
CONCLUSION
The above report based on the business of the MILE BAKERY demonstrate the expansion of the
business from coming out of the local markets of the London to the international markets of the
Australia (Srivastava, and et.al 2020). The above report shows out how the company will face
the barriers and what are its solutions and how will it be overcoming in the markets of the
Australia. The report also shows the relevant models based on the various factors that will be
affecting the environment in different various ways and how will be the organization will cure it
to go all the way up in the international markets of the Australia and generating the good amount
of revenue in the global market by creating their own brand value and successful image in the
global markets.

REFERENCES
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