Corporate Social Responsibility and Business Expansion

The assignment discusses the importance of applying Corporate Social Responsibility (CSR) principles to all types of organizations. It highlights the benefits of CSR for value creation, reputation building, and customer loyalty. The assignment then delves into various modes of business expansion, such as exporting and joint ventures, emphasizing how CSR can be integrated into these strategies to achieve sustainable growth in competitive markets.

Rachel Misambu
UWL I.D. 21394903
International
Business

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................2
Business drivers behind company's expansion into a given country..........................................2
PESTLE Analysis........................................................................................................................2
Trade Barriers..............................................................................................................................4
Ethical and social issues to be considered into United kingdom SME......................................5
Cultural preference to be considered by business.......................................................................6
Expansion methods chosen by an organisation...........................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

EXECUTIVE SUMMARY
In the present context, international business plays very crucial role for the overall
development, expansion and diversification of business operations effectively and efficiently. As
Fruit & Veg. Co. is planning to launch new product in china which is Ultra Temperature
Processing milk which is prepared by heating of milk at 135 degree Celsius which helps to kill
the spores present in the milk. Their are many benefits of drinking UHT milk as this provides
certain nutritive benefits such as it contains calcium, calories, proteins and its is highly
pasteurized milk. In order to gain competitive advantage at the international market place which
will help the managers of Fruit & Veg Co. than they required to adopt latest technologies and
tools to achieve success and growth for long term. Fruit & Veg Co. is a small scale enterprise in
UK which wants to expand and diversify their business at international level. Consumer of china
mainly lay emphasis on hygiene factor of the product and are highly motivated and influenced to
purchase the products of Fruit & Veg Co. because of attractive and innovative packaging.
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INTRODUCTION
International Business includes cross-border transactions of various goods and services
between two or more countries. It refers to trade of products, technology, knowledge and
services across a country border or at international level. Popularly International business also
known as globalisation or internationalizing of a company. In this present report, Fruit & Veg.
Co. is chosen as the base company. It is a UK based company provide fresh fruits and vegetable
across South East of England. Company provide products to different hotels, bars, gyms,
hospitals (Beamish, 2013). In present context it is planning to introduce UHT milk as part of
their expansion. UHT milk is the ultra- high temperature processing, ultra- pasteurization
developed in 1970 which is known as the food processing technique that sterilizes milk by
heating it on the temperature of around 275°F which leads to the destruction of pores in the milk. UK is
third largest country as producer of milk after Germany and France. After 1990 UK produced
approximately 14.6 billion litres of milk in the year 2014 which was more than the past
production. Their is huge supply of UHT milk at global level because of its significant USP and
importance. The demand situation in UK market for UHT milk is very high as this provides
various health benefits as it is inclusive of calcium, folate, vitamins and is prepared in hygienic
conditions. In this present report, various business drivers, which aid the company while
expanding its operating activities in different countries. For this, PESTLE analysis has been
discussed in this report, along with various trade barriers. In addition to this, various ethical and
social issues which must be taken in consideration while operating business functions. At last
different expansion methods with cultural preferences before expanding their business at china
marketplace have been discussed in this present report.
Business drivers behind company's expansion into a given country
To expand a business organisation at china market it is essential for Fruit & Veg. Co. to
analysis and conduct a market research for expanding its product and services. As china is one of
the most attractive location in order to perform their business activities. Along with this it is
quite effective market for attaining growth at competitive marketplace (Brohé, Eyre and
Howarth, 2012). Due to low labour cost and size of business is potential, various investors
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considered china as a best investment country. In order to identify key business drives CHINA
which will help the company Fruit & Veg Co. while expanding business operations at china
market, PESTLE analysis aid the company in an effective manner. Also, with the help of this
analysis, company identify its profitability and market share in order to develop strategies and
plan by which company can enhance their profitability ratio. The various business drivers for
expansion of Fruit & Veg Co in China comprises of logistics cost, embraces cultural differences,
tax advantages, effective distribution system and legislations of government.
PESTLE Analysis
PESTLE analysis is a framework adopted by various organisations. In order to expand its
business operations at international market, it will aid the company in monitoring and evaluating
macro environment.
Political factors: Political factors usually involves government intervention such as rules
and regulation, norms and many more. Their are many government regulations in China
currently it is focusing on development of E- Commerce and also involves legal issues related to
dairy industry. In this case, political factor of china affects business environment, in terms of
various rules and regulation formulated by government of the country. For this, Fruit & Veg. Co.
need to analyse and evaluate various rules and regulation of china. Furthermore, company need
to examine overall market area before expanding its business activities with their latest product
which is UHT milk.
Economic factor: Economic factor directly affect the economic performance of a
business enterprise, which includes interest rate, inflation rate, domestic product and many more.
In context to Fruit & Veg. Co. they are coming up with their new product UTH milk which is for
children (Clarke, Tamaschke and Liesch, 2013). There is various organisation which deal in
dairy milk products. On the other hand, quality of those products is not up to the mark, so it
create opportunities for the company while entering into the new market. With the support of
government an organisation will be able to attain sustainability at market place. The various
economic factors in China includes potential urban growth, abundant labour availability, high
inflation rate and increased prices of property.
Social factors: Social factors includes values, traditions, beliefs and many more. Social
factor play's very important role in demographic sector as changes occur on constant basis. In
context to china, milk products demand is high as compared to other countries. The different
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Social factors plays crucial role as there is constant change in demographics and some of the
factors involves religion, emigration, education and consumer lifestyles. As a result, it creates
opportunity for Fruit & Veg. Co. to enter into the china market with new product which is UHT
milk for children. Company need to understand and evaluate taste and preferences of their
consumer, so that products should be offered accordingly. By proper market evaluation they can
modify or achieve cultural values and trends of consumer buying behaviour (Cuervo-Cazurra,
2016).
Technological factors: Technological factors include advanced technologies. In
reference to Fruit & Veg. Co., they produce milk with high technology of production in
distribution channel. In this manner, company can survive in Chinese market with the help of
innovative ideas and technologies. Their is drawback for business to customer industry as it does
not have secure and safe online payment system.
Environmental factors: It includes climate change such as weather, nature or working
style of the country. In context to Fruit & Veg. Co., they need to understand trends, taste and
preferences of customers. So that they can offer product and services accordingly. Also, it is
necessary for the company to keep environment factor into consideration so that products are
packed according to that (Dunning, 2013).
Legal factor: Regarding customer's and employees, there are various laws and
legislations faced by a company. It includes employees health and safety rights while
manufacturing goods. In context to Fruit & Veg. Co., before expanding their business company
should know about their employees as well as customers health. So, it will be a great opportunity
for an organisation by providing high quality UHT milk in China market.
The above mention elements are some of the main factors that help in the growth and
success of a business. Fruit & Veg. Company having opportunities in developing their new
product at market place of china. In order to gain success company should provide high quality
of UTH milk to their customers.
Gap identification
Fruit & Veg. Company has to evaluate market place as well as competitors strategy, in
order to gain success and competitive advantage at the marketplace of china. As a result, they
can meet the requirements of customers as well as maintain a competition at market (Folsom and
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et. al., 2012). By using advance technologies and tools, company can use its resources in an
effective manner.
Competition
UHT milk having high competition at China market. Competitors of UHT milk are pure
milk and DANA. To avoid the competition Fruit & Veg. Company, have this opportunity to
promote their product and services in attractive manner. Company having low competition at
china because competitor company providing low quality products to their customers.
Trade Barriers
In present context, trade barriers refer to those rules and regulations implemented by
government of the country while internationalising business activities. It includes import policy
which shows in tariffs, testing, labelling and many more. In the present context, Fruit & Veg.
company plan to expand their business activities in china market. For this there are certain
barriers faced by the company are as follows:
Exchange rate controls: It refers to control all those transactions which are connected to
international payments or receipts. Self-imposed exchange transaction is one of the major trade
barrier in china. In present context, Fruit & Veg. Company expand its business operations in
china marketplace. Although there are various trade barriers but due to less competition company
having high competitive advantage at marketplace. As a result, companies biggest trade will be
its involvement and investment (Hamilton and Webster, 2018).
Tariff of china: It is a kind of tax duty imposed on some specific categories of imports
or exports. China impose tariffs by initiating from 100% upon imported products. These tariffs
include value added tax, custom duties and many more. In present context, Fruit & Veg.
Company plan to expand its business activities in china marketplace. It is an opportunity for the
company as they can manufacture their product freely at the competitive marketplace. On the
other hand, uncertainties face by the company is that they will have to pay high duties or taxes
on their product.
Subsidiaries: It is considered as an incentive for the company by their government or
nation as it helps in reducing their cost. It is a policy where international companies cannot
compare with the price offered by domestic companies with similar products. In present context,
Fruit & Veg. Company wants to extent its firm at international marketplace which is china. So
that they can develop opportunities and run their business effectively(Jenkins, 2013). In this case,
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company face an uncertainty which is they are not able to compete with target market price. As a
result, possibility of comparison automatically reduces.
Regulation: Certain rules and regulations are abide by government of china in order to
maintain success at the competitive marketplace. As government of china is more concerned
about the value of products which includes packaging charge, insurance premium and many
other services. Thus, Fruit & Veg. company need to adopt various rules and regulation in order
to perform their business operations (Killing, 2013).
While expanding business organisation at china market these are some trade barriers.
Furthermore, company need to formulate strategies by which they come up with effective
products and services in order to gain competitive advantages.
Ethical and social issues to be considered into United Kingdom SME
For expansion of business operations of the company at international level they are
required to comply and adhere to both social and ethical responsibilities. These responsibilities
are closely related to allocation of resources, fulfilling social obligation, compliance, and
violation of rights of both employees and customer's. With reference to Fruit & Veg Co.
company must adhere to both ethical and corporate social responsibilities as the company is
planing to launch a new product which is UHT milk at international level. By complying to these
responsibilities the company can perform its business activities and tasks in effective manner in
the markets of China.
Corporate social responsibility (CRS): CSR refers to both ethical and social issues
which affects the environment as well as the overall society. Main aim of CSR is that it helps in
improving public image of a company. Along with this, by providing customers good quality
products and by satisfying their needs company can improve their market share. CSR activity
mainly adopted by a company who works for the overall development of the society. As a result,
company can enhance their business operations and activates in an effective way (Majaro, 2013).
In other words, it can be said that it is a continuous commitment given by Fruit & Veg. company
in order to fulfil their social as well as ethical responsibilities. Both organisation as well as
society gain benefit with the help of CSR activity as it helps in enabling them to promote and
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attract positive attention in their efforts. It also said the company while contributing for
economic development as it will help in enhancing living standard of people. In order to
maintain suitability and growth, company should adopt CSR activity. In a recent study, it has
been evaluated that approximately 91 % of customers across the world, expect that company
contribute in the overall development of the country as well as of the society.
In today's competitive market, consumer is very much aware about importance of CSR
activities. In addition to this, Fruit & Veg. company taking more interest towards social as well
as ethical issues. Which as a result, affect the profit margin of the company and attract more and
more customers towards their company. Along with this, with the help of CSR activity company
can improve their brand image at the competitive market place (Papadopoulos and Heslop,
2014). In this manner, company can maintain sustainability at the marketplace for a longer
period of time and capture large customer base.
Cultural preference to be considered by business
Every country has their very own culture and background. Fruit & Veg. company wants
to expand its market by introducing their new product which is UHT milk at china market. For
this, it is necessary for the company to examine the market trend, customer taste and preference
and according to their requirements company need to produce their products. Herein, every
activity should be conducted in an effective manner in order to maintain sustainability for long
period of time. In addition to this, there are different cultural factors which is considered while
operating different activities of a business organisation:
Preferences and taste: Proper research and market analysis is necessary for every
company in order to attain success at competitive marketplace (Picciotto, and Mayne, 2016). It is
essential for Fruit & Veg. company to conduct proper research so that they can know their
customers’ requirements and needs. As a result, they can produce products according to their
customer's demands and wants, which will aid them in attracting more and more customers. As a
result, company, can gain more profit and maintain competition among various rivalry
companies. Thus, with the help of strong and premium quality products company gain
competitive advantage at marketplace.
Buying behaviour of user or customer: In china, buying behaviour of buyer is quite
different as compared to other countries customer. Customer of china mostly influenced by
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attractive packaging of products along with this they emphasis more on hygiene factor. In
context to Fruit & Veg. Company , proper market analysis is required within the target market
which is china. Before expanding their business in China company need to evaluate consumers
buying behaviour and manufacture their product accordingly. Proper survey or observation
should be conducted while introducing their product which is UTH milk at the marketplace of
china.
Above mention points are some cultural preference which should be considered by
business organisation while expanding their operating activities at international level which is
china (Picciotto, 2017). It is necessary for a company to analyse market area before collaborating
their business. Along with this, in order to maintain suitability, growth, success and competitive
advantage company need to analyse culture background of the target country.
Expansion methods chosen by an organisation
It is essential for business organisation to adopt suitable expansion mode or participation
strategies to enter into foreign market which comprises of various risk and proper allocation of
resources which leads to gain on return on investment. Herein, Fruit & veg company can adopt
various methods for expansion which are defined below:-
Exporting: Exporting refers to the process of selling of good and services produced in
one country and delivered to another country. In such case there are two different types of
exporting goods that are direct and indirect. In direct exporting, a company capitalize economy
of scale in-terms of production that is in home country by establishing proper system for
functioning of exports and focusing on producing quality goods and services. Similarly, indirect
exporting is concerned with export intermediaries which is based on domestic level which has
no control over goods and services in foreign marketplace (Piekkari, Welch and Welch, 2014).
This process can assist in accelerated marketing accessibility in providing goods and services at
the marketplace of china. Thus, fruit & veg company can easily expand its business operations
in order to fulfil needs of customer's after proper market research and analysis of customers’
needs and preferences.
Joint venture: Joint venture is one of the best entry modes for expansion of business at
international level which can be adopted by companies for entering into new marketplace. It
refers to joining of hands, sharing ownership and management with other company. This
process can be utilised by two or more organisation for accomplishing their common goals and
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objectives (Verbeke, 2013). Herein, the common objectives can be risk and reward sharing
point, joint product development, foreign entry, sharing technology and conforming with
governmental regulation. In context of, Fruit & veg company can adopt this entry mode for
expansion as it would provide benefits in having strategic and competitive advantage such as
best utilisation of resources in an effective manner. Moreover, they can adopt various advance
tools and technologies in order to remain competitive in marketplace (Shenkar, Luo and Chi,
2014). This expansion method for expansion of business in China is Joint venture can only be
successful when the organisations which want to expand their business in the market of china of
UHT milk of Fruit & Veg Co. as the country follows specific culture in the country. The
government of china allows that company to conduct its business operations and expand their
business when there is profit in favour of them. They go for joint venture for those companies
which helps in their economic development and generate profits for the employees of that nation
or economy and also leads to increase their gross national income.
Apart from this there are different modes of expansion which can be adopted by Fruit and
Veg. Company which involves mergers, strategic alliance, collaborations and acquisitions and
many more. Thus, after the analysis the Fruit and Veg company can adopt technique of Joint
venture which will assist in proper expansion of business at international level for
accomplishment of goals and objectives within specified period.
CONCLUSION
From the above discussion, it has been concluded that an organisation should follow and
examine proper rules and regulation in expansion of foreign marketplace. In today’s context,
Chinese market is fast growing market in the world which has huge number of population, low
cost of labour. For entering into foreign market, it is very important to do PESTLE analysis so
that various factors can be known for better outcome with both negative and positive aspects.
While conducting business operations, various trade barriers can be recovered which need to be
resolved properly within proper span of time. Moreover, the concept of corporate Social
Responsibility should be applied to all types of organisation which will further assist in value
creation, reputation and developing customers loyalty towards the business organisations. Thus,
for the expansion of business operations in the cut throat competition the business organisations
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can adopt various modes of expansion which includes exporting, joint venture, organisation can
expand their business in competitive market.
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REFERENCES
Books and Journals
Beamish, P., 2013. Multinational joint ventures in developing countries (RLE International
Business). Routledge.
Brohé, A., Eyre, N. and Howarth, N., 2012. Carbon markets: an international business guide.
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Clarke, J. E., Tamaschke, R. and Liesch, P. W., 2013. International experience in international
business research: A conceptualization and exploration of key themes. International
Journal of Management Reviews. 15(3). pp.265-279.
Cuervo-Cazurra, A., 2016. Corruption in international business. Journal of World
Business.51(1). pp.35-49.
Dunning, J. H., 2013. International production and the multinational Enterprise (RLE
international business). Routledge.
Folsom, R. H., and et. al., 2012. International business transactions: a problem-oriented
coursebook. ThomsonReuters.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Jenkins, R., 2013. Transnational Corporations and Uneven Development (RLE International
Business): The Internationalization of Capital and the Third World. Routledge.
Killing, P., 2013. Strategies for joint venture success (RLE International Business). Routledge.
Majaro, S., 2013. International Marketing (RLE International Business): A Strategic Approach
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Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Picciotto, S. and Mayne, R. eds., 2016. Regulating international business: beyond liberalization.
Springer.
Picciotto, S., 2017. Rights, responsibilities and regulation of international business. In
Globalization and International Investment (pp. 177-198). Routledge.
Piekkari, R., Welch, D. and Welch, L.S., 2014. Language in international business: The
multilingual reality of global business expansion. Edward Elgar Publishing.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
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