Internationalization of SMEs: Opportunities and Challenges

The assignment provides a comprehensive analysis of the internationalization of Small and Medium-sized Enterprises (SMEs). It discusses various opportunities and challenges associated with SMEs entering foreign markets, including access to new customers, resources, and knowledge. The study also highlights the importance of institutional strategies in emerging markets, such as corporate environmentalism and human resource management. Additionally, it examines the impact of globalization on international trade and economic interdependence between European countries. Overall, this study offers a detailed understanding of SMEs' internationalization processes, emphasizing the need for businesses to adapt to changing global market conditions.

RESEARCH PROJECT

TABLE OF CONTENTS
TOPIC:.............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Research Background..................................................................................................................1
Aims and Objectives...................................................................................................................1
Aims:...........................................................................................................................................1
Objectives:...................................................................................................................................1
Rationale.....................................................................................................................................2
LITERATURE REVIEW................................................................................................................2
Strategies of businesses to enter in developing market...............................................................2
Benefits of globalisation to expand business in emerging market..............................................3
Challenges which are faced by businesses to enter in emerging economies..............................4
Recommendation on easy mode of entering in developing market............................................4
REFERENCES................................................................................................................................6
RESEARCH METHODOLOGY.....................................................................................................7
DATA ANALYSIS AND INTERPRETATION.............................................................................7
RECOMMENDATION...................................................................................................................7
REFLECTION.................................................................................................................................7
CONCLUSION................................................................................................................................7

INTRODUCTION
Research Background
Globalisation is the process by which businesses or other organisation develop
international influence or start operating on an international scale. Globalisation is the spread of
products, technology, information and jobs across national borders and cultures. The world is
evolving and with it trade and businesses are undergoing a huge change. After globalisation it
has becomes easy and effective for organisation to transfer the goods and services from one
country to another (Mowforth and Munt, 2015). With the rising competition it has becomes
critical part of success for the company to enter in the international market. There are various
entry modes such as direct exporting, franchising, licensing, international joint venture, merger
and acquisition and others. Emerging market is the known as emerging economies of developing
countries which currently investing in more productive capacity. Leaders of such countries wants
to develop quality of life for their people because of which they are creating rapid industrializing
and also adopting free market or mixed economy.
In this present research, researcher will use various techniques and methods to identify
strategies employed by Retail businesses to enter in emerging market with context of Tesco.
Tesco is one of the biggest retail sector in UK and the growth of company is seen after
globalisation.
TITLE
Strategies employed by retail businesses to enter in emerging market.
RESEARCH QUESTIONS
1. What are the strategies of businesses to enter in developing market?
2. How globalisation provides benefits to expand business in emerging market?
3. What are the challenges which faced by entities for entering in emerging economies?
4. What are the ways to get easy mode of entering in emerging market?
RESEARCH OBJECTIVES AND AIMS
Aims:
“To identify strategies employed by Retail businesses to enter in emerging market with
context of Tesco”.

Objectives:
 To determine the strategies of businesses to enter in developing market
 To ascertain benefits of globalisation to expand business in emerging market
 To articulate challenges which are faced by businesses to enter in emerging economies
 To provide recommendation on easy mode of entering in developing market.
Rationale
There have been extensive researcher done on entry strategies employed by business to
enter in the global market. The reason for selecting this topic is that it is the current issue in the
business environment as businesses are thinking over to expand the business in global market.
So, researcher has gain understanding of several entry modes along with the challenges faced by
business in global market. In addition to this, academic interest of researcher is another reason
for choosing the topic as researcher has improved in writing research paper and study has also
helped in eliminating gaps for writing literature which helps in establishing career in writing
research paper with long term perspective. Further, This study has also help existing users in
order to conduct research on same line of study.
LITERATURE REVIEW
Strategies of businesses to enter in developing market.
According to the Thompson, Strickland and Gamble, (2015) there are variety of ways in
which a company can enter a foreign market. No one market entry strategy works for all global
markets. No one market entry strategy work for all international market. There are various ways
that influence the choice of entry strategies such as tariff rates, laws and legislation,
transportation and marketing cost and many others. Marquis and Raynard, (2015) said that, direct
exporting is one of the best way to enter in the global market and sell goods and services in the
market as through direct exporting company could cover larger market base and huge amount of
profit. Noe and et.al., (2017) argued that direct exporting requires more time, money and energy
for basic start of export business. After globalisation it has becomes quite easy to choose the
strategies and enter into emerging market.
As per the findings of Banerjee, (2017) licensing and franchising is another strategy of
business as it is relatively well-informed arrangements where an organization transfer the right to
use the goods and service of any other company. Whereas, franchising is one of the best way to
expand the business in the market as it is rapid expansion strategy of globalisation. Chaffey and

Ellis-Chadwick, (2019) argued that, franchising is rapid expansion but it includes very larger
initial cost to invest in the business and the risk are always certain in this strategy as if business
will not able to achieve success in the market or not able to continue than all the investment will
be in heavy loss.
As per the views of Marquis and Raynard, (2015) joint venture and partnership are also
one of the wonderful strategy to enter into emerging market. Organization used to enter in the
emerging market by doing joint venture business and partnership. In both these entry modes,
profit, loss and risk are shared among partners. For example, Tesco has joint venture business
with Dunnhumby in China.
Impact of Globalisation on Tesco
According to the ------------, The globalisation strategies of Tesco and its successful foray
into the South Korean market. Tesco is one the largest retailers in the world, Tesco's initial
experiences with globalisation were not successful. However, afterwards Tesco started localising
its stores and products as per the needs and preferences of the consumers in global markets. In
the year 1999, Tesco has entered South Korea by forming a joint venture with a well established
local retailer - Samsung. The joint venture helped Tesco acquire an in-depth knowledge of the
market and also helped it acquires the best store locations. --------------- said that, Tesco began
operating in the country under the well established 'Home Plus' banner. Tesco localised its stores
according to the preferences of the Korean consumers and brought some of its global best
practices into the country. The company's operations grew rapidly in South Korea and it emerged
as the second largest retailer in the country.
Benefits of globalisation to expand business in emerging market.
As per the views of Noe and et.al., (2017) emerging counties are the economies which are
emerging developing nations that present a visible opportunity to business. Globalisation has
made the transfer of goods, technologies, services, labour very easier that has generated many
opportunities for businesses to expand the business in the another country. Surugiu and Surugiu,
(2015) said that after globalisation India and China are considered as one of the biggest emerging
markets. IT is because there are ample of opportunities available for the businesses like
technological advancement, cheap labour access to capital and many others. Anand, (2015)
stated that, globalisation has drastically changed the competitive marketplace as it has raises the

productivity of emerging market. In addition to this, globalisation has made it very easier for the
organisations to begin the business and start competing in the market.
As per the Gugler, (2017) technological advancement is also one of the biggest advantage
of globalisation to expand the business in emerging market. As globalisation has lead to transfer
of technologies from one place to another or from nation to nation. For example, china is one of
the fastest growing technology in the world. So, organisation seems a great advantage for the
company to gain the advantage of technology and improve the productivity and profitability of
the company.
Challenges which are faced by businesses to enter in emerging economies.
As per the Marquis and Raynard, (2016) it is true that when companies enter into
emerging market, they faced various dissimilarities political, economic, cultural and legal
environment. Organisations have to first understand the all these macro environmental factors
before start getting business in emerging market. Organisations have to hire experts to track the
impacts as well as to understand these factors. Meyer and Peng, (2016) said that, inadequate
corporate governance, lack of enforcement of intellectual property right and corruption are the
most common challenges faced by the organisations in emerging market. In addition to this, it is
also fact that management and leadership practices in home country will be suitable or work in
the another country. So it is very important to analyse and understand the management practices
suitable in emerging countries.
Hamann and et.al., (2017) stressed that developing business operation at global level is
important for any firm to expand their business and earn significant profits. But to conduct
successful business managers must have to carefully understand target market in emerging
economies. Thus, it is another challenging that organisation faced when start operating in
emerging market. In emerging market because of several investments, customers are highly
demanding so it is very challenging for organisation to understand the needs and expectations of
customers. Wilson and Wilson, (2017) stated that, rising value of currency and cost are another
factor that will squeeze the profitability of the company. Organisations have to deal with this
challenge also in order to achieve the greatest strength of the company in emerging market.
Recommendation on easy mode of entering in developing market.
As per the Hollender and et.al., (2017) direct exporting is one of the easy mode of
entering in developing market as it the rapid expansion strategy to enter in the developing market

as compare to others. Direct exporting is the best way to maximise the profitability of the
business. But the fact is that direct exporting is successful if the selected market is readily
accessible as well as have same rules and regulations along with the custom of company's nation.
It is very important for the business to select the best suitable strategy when star begin business
in the international market because it directly affect the investment and convert it into loss as
well as reputation of the company. Boellis and et.al., (2017) said that, Joint venture is another
ease mode of entering in emerging market as organisation can do business by contracting to
another company sharing profit and loss equally. Organisation could acquire better resources by
such as technology, staff, tools, machineries etc.
RESEARCH METHODOLOGY
Research Philosophy
Research Philosophy is a broad topic as it discuss the topic deeply. Research philosophy
is the belief about the way in which data should be gathered, analysed and used. Positivism and
Interpretivism are two main types of research philosophy. The data collected and study carried
out in positive philosophy is highly structured and large sample size and it is basically suitable
for quantitative research. On the other hand, Interpretivism philosophy are those that small in
sample as well as the researcher deeply study the insight of the research and it will help Tesco to
enter into emerging market. However, researcher has conducted its study by using Interpretivism
philosophy because the sample size is small and this philosophy is the best suitable for
qualitative research.
Research Approach
Research approach are the plan and procedure to collect, analyse and interpret the data in
a systematic manner. Inductive and Deductive are mainly two types of research approach.
Inductive approach are those that undertake particular issues and draws generic conclusions from
the ones observations which have been made by scholar. Whereas, Deductive approach are those
that begins with generic issue and examines the opportunities to attain a coherent conclusion.
However, scholar has conducted its study by following the inductive approach as scholar has use
probabilities to study the situation and get different options to solve the issues and reach
conclusion in a systematic manner.

Research Strategies:
Research Strategies is the step by step action that gives direction ton the efforts and
thoughts of researcher. There are mainly five types of strategies which are experiment, survey.
Case study, action research, grounded theories, ethnography and archival research. In this
research, researcher has conducted survey to collect the data.
Research Choice
Research methods are the tools to carried out the research in a systematic and logical
manner. It is scientific process to collect, compilation, analysis and interpretation of data for
solving specific research issues or questions. However, there are mainly two type of research
methods which are qualitative and quantitative. Qualitative methods are those when researcher
gain a knowledge of underlying motives, reviews and causative as well as it also presents the
overview of issues or problems. This method is mostly used when sample is not so huge. On the
other hand, the methods by which the cause and effect relationship is established by using
numerical and figures are called as quantitative methods. This method is used for generative
statistics or data from huge population. In this present research, researcher has used qualitative
research because with the help of this researcher discover the tendencies in notion and belief as
well as evaluate the problems deeply.
Sampling
Sampling is another most important part of research as it is the small part of the huge
population. It is because of lack of resources and time, researcher is not able to collect the data
from hug population. There are mainly two types of sampling, Probabilistic and Non-
Probabilistic sampling. Probabilistic sampling means when researcher select the sample from
large populace using the concept of chance and possibility. Whereas, non-probabilistic is the
technique when researcher select the sample that is based completely on subjective opinion of
the scholar in place of random selection. However, this present research is conducted by using
non-probabilistic sampling in which respondent are selected randomly. Researcher has selected
senior manager of Tesco.
Techniques and Procedures
Primary and Secondary are two methods by which researcher select the to collect the data
for its entire research study. When the information is collected for the first time with the efforts

of researcher and it is fresh data because it is not used by anyone is called as data collected
through primary methods. Whereas, when the information is not collected from first time and it
is based on past information is called as secondary methods. However, this present research
study is conducted by using primary and secondary both methods. Questionnaire has been
prepared for collected Primary information and secondary information are used in writing
literature review.
Data Analysis is the technique to scrutinize, clan, remould and transfer the data with the
intention generating useful data and reaching to coherent conclusion. Qualitative and
Quantitative are two methods that is used for data analysis. Qualitative methods are those when
researcher do not use any numerical or quantified figures and understand the data is very deep
manner that aids in providing useful information. On the other hand, the data which is analysed
through numerical, or statistical figures are called as quantitative analysis such as SPSS.
Spreadsheet etc. In this present research, researcher has conducted its study through qualitative
methods and information has presented through tables, charts and graphs on the basis of themes.
Ethical Consideration
This another most important part of the study as it is standard, ethics and norms that is
used to maintain the viability and reliability of the research. In this present researcher, researcher
has abided the following ethics which are as follows-
 Informed consent and participant are allowed to leave the survey when they need and all
are adults.
 Data storage and security, both during and after the research (including transfer, sharing,
encryption, protection).
 Disclosures/ limits to confidentiality
 Sensitive topics are ignored like caste, religion and race.

Researcher has chosen first layer of this research as it is the best way to collect the data as
well as maintain the reliability and viability of the research.
DATA ANALYSIS AND INTERPRETATION
QUESTIONNAIRE
Name of Company:
Designation of Respondents:
Name:
Age:
Gender:
Illustration 1: Research Onion

1. Do you know about the term globalisation?
 Yes
 May Be
2. Rank one of the benefits to operate in emerging market economy.
 Less-than-avaerage per capital income
 Rapid growth
 High market volatility
 Less mature capital markets
3. According to you what are the main challenges to operate in emerging global market?
 Market volatility
 its dependence on commodity exports
 Corruption with failure of economic progress
 none of the above
4. According to you which is the best emerging market for your country to expand business?
 India
 China
 Brazil
 None of the above
5. What entry modes you think the best for expansion in emerging market for Tesco?
 Direct Exporting
 Franchising
 Merger & Acquisition
 Joint Venture
6. Do you agree that globalisation is the factor which leads business in achieving growth and
opportunities?
 Strongly agree
 agree
 Neutral
 Strongly disagree
 disagree
7. What are the challenges your organisation faced while competing in global market?

 Cultural nuance
 Political marketing
 Mastering marketing
 High competition
8. Are you interested in providing suggestion to operate in emerging market economics or not?
 If yes ---------
 If no ------
Theme 1: Maximum Managers knows the term globalisation.
PARTICULARS SENIOR MANAGERS
Yes 18
May be 5
Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that maximum managers know the term globalisation as 18 have marked ticked on
yes. They said that they have learned and practically experienced the advantages and
disadvantage of glocalisation in the business environment. On the other hand, there were only 5
seniors managers who were confused and do not have authentic answer.

Theme 2: Rapid growth is the one of the benefit to operate in emerging market economy.
PARTICULARS SENIOR MANAGERS
Less-than-avaerage per capital income 5
Rapid growth 11
High market volatility 4
Less mature capital markets 5
Yes May be
0
2
4
6
8
10
12
14
16
18
SENIOR MANAGERS
Less-than-avaerage per
capital income
Rapid growth
High market volatility
Less mature capital markets

Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that rapid growth is one the first ranked in terms of benefits of operating business in
emerging economy as supported by 11 respondents. They said that emerging market provide
ample of opportunities to business to grow and develop the business. There were 5 respondents
who said that organisation could get less than average per capital income operating in the
emerging market. Additionally, there were 5 respondent who stated that operating business in
emerging market provided high volatility that is beneficial for the organisation.
Theme 3: Corruption with failure of economic progress is the main challenge to operate in
emerging market.
PARTICULARS SENIOR MANAGERS
Market volatility 5
its dependence on commodity exports 6
Corruption with failure of economic progress 11
none of the above 3
Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that the main challenge that organisation faced by operating in emerging market is
corruption with failure of economic progress. They said that, corruption trickle down the effect
0
4
8
12
SENIOR MANAGERS

that raises the crime in that area and it also affects the business reputation. On the other hand,
there were 6 respondents who said that dependence on commodity exports is another challenges
that organisation as faced operating in emerging market as all things are not readily available in
the market. In addition to this, 5 managers said that market volatility is the main challenge faced
by organisation in emerging market.
Theme 4: China is the best emerging market to expand the business.
PARTICULARS SENIOR MANAGERS
India 10
China 12
Brazil 3
None of the above 0
Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that China is one of the best emerging market to expand the business as has the strong
financial, services sector and about one billion consumers. As per the support of secondary
information, China is likely will see more growth and innovation because of privatization as well
as global investors will have more access to securities top get exposure to China. Whereas, there
were 10 respondents who were supporting India for business expansion as they said India is a
fasted growing economy in the world. As per the secondary information, the FDI has reached
India
China
Brazil
None of the above
0 2 4 6 8 10 12
SENIOR MANAGERS

amount to $10 billion mark because of increasing demand of foreign investors. Rest 3 were
supporting Brazil.
Theme 5: Direct Exporting is the best entry mode for business expansion.
PARTICULARS SENIOR MANAGERS
Direct Exporting 8
Franchising 7
Merger & Acquisition 5
Joint Venture 5
Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that Direct exporting is the best entry mode for the business expansion in emerging
market. They said that business can grow and expand rapidly through direct exporting as they
said the expansion of business is very fast through direct exporting. As per the secondary review,
direct exporting company could cover larger market base and huge amount of profit. There were
7 managers who were selecting Franchising is the best entry mode for business expansion. They
said that risk of business failure is reduced by franchising. 10 managers were agreed ion merger
and acquisition and joint venture as the best entry mode.
Direct Exporting
Franchising
Merger & Acquisition
Joint Venture
0% 20% 40% 60% 80% 100%
SENIOR MANAGERS

Theme 6: Globalisation is the factor which leads business in achieving growth and
opportunities.
PARTICULARS SENIOR MANAGERS
Strongly Agree 9
Agree 4
Neutral 2
Strongly Disagree 7
Disagree 3
Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that globalisation is the factor which leads business in achieving growth and
opportunities as 9 were strongly agreed. They said the movement of goods and services are only
possible after globalisation. As per the secondary information, emerging counties are the
economies which are emerging developing nations that present a visible opportunity to business.
Globalisation has made the transfer of goods, technologies, services, labour very easier that has
generated many opportunities for businesses to expand the business in the another country. On
Strongly Agree
Agree
Neutral
Strongly Disagree
Disagree

the other hand, there were 7 were strongly disagreed as they said that globalisation has lead to
corruption in the businesses.
Theme 7: High competition and Cultural nuance are the challenges faced by Tesco in
global market.
PARTICULARS SENIOR MANAGERS
Cultural nuance 8
Political marketing 5
Mastering marketing 4
High competition 8
Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that high competition and cultural nuance are the challenges faced by Tesco in global
market as they said that company have to understand the culture of that country to raise the
market share by providing the goods according to there belief and expectations. Further, it has
also raised the competition in the market place that results in decreasing the priced of goods.
Theme 8: Maximum managers are interested in providing suggestions to Tesco.
PARTICULARS SENIOR MANAGERS
Cultural nuance
Political marketing
Mastering marketing
High competition

If yes --------- 17
If no--------- 6
Interpretation: The above survey conducted via questionnaire and it has reach to the
conclusion that maxim manager were interested in providing recommendations to Tesco and they
all have recommanded direct exporting and joint venture. They feel that Tesco can lead the
market by selecting these entry modes. As per the support of literature review, direct exporting is
one of the easy mode of entering in developing market as it the rapid expansion strategy to enter
in the developing market as compare to others as well as through joint venture Tesco could
acquire better resources by such as technology, staff, tools, machineries etc.
RECOMMENDATION
From the above research, researcher has founded the recommendations for Tesco on easy
mode of entering in developing market are as follows-
The best option for Tesco for easy mode of entry is to enter through direct exporting.
Direct exporting is the best way to maximise the profitability of the business as well as it is
fasted mode of expansion in the emerging market.
Furthermore, researcher also suggested that Franchising is another best option for Tesco
to expand the business in emerging market as the capital requirements is also less as franchisor
If yes --------- If no---------
0
2
4
6
8
10
12
14
16
18
SENIOR MANAGERS

provide the capital to open the outlet. The growth and development of business is also very fasts
in franchising option because the risk is limited.
Other than that, researcher also recommend that, Tesco should take advised from experts
for selecting the best suitable option to take effective entry in the emerging market. So that, the
risk of failure of business is also reduced to the great extent.
Scholar also suggested that Tesco could also hire experts so that they get help in
accessing the external environment of the country and other challenges that they might be faced
doing business in global business.
REFLECTION
From the above research, I have god excellent opportunities to analyse various issues and
problems which organisation are facing after globalisation. I have learned the deep understand of
globalisation and various entry modes which businesses used to enter in the global market or
emerging market. I have prepared the proposal and that was also a good experience for me.
After getting approval from my tutor I have decided to complete my remaining research on the
topic. The research work starts from, aims and objectives to reaching conclusion was fantastic
experience for me. I have found the most interesting task is data analyse and interpretation as I
have came to know the deep insight about the topic be taking the views and opinions of
managers of Tesco. In addition to this, collecting information from secondary sources are also
another one of the best option experience I have gained understanding and knowledge about the
entry modes and there pros and cons. Further, I have also understood about the globalisation and
its benefits in the expansion of the company. On the other hand, the most challenging part of this
research is to select the best suitable research methods because the entire research study is
depended on the selection of methodologies. But with the proper guidance and help of my tutor I
have selected the most appropriate strategy. Finally, I would like to conclude that this project
have made me more optimistic and will help me to carry out my projects in future more
effectively.
CONCLUSION
From the above research, it has been concluded that globalisation has provided great
opportunities and benefits to organisations to expand and growth of the market. Globalisation has
open the door or boundaries for the business that allows the business to establish the global
presence in the world. The report also comes to the conclusion that direct exporting is one of the

easy mode of entering in developing market as it the rapid expansion strategy to enter in the
developing market as compare to others. Direct exporting is the best way to maximise the
profitability of the business. In addition to this, study also summarised the outcomes of the study
that through joint venture is another best entry mode for organisation to expand the business as
company could acquire better resources by such as technology, staff, tools machineries etc.

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