International Management: Analysis of Woolworths' Expansion Plan in Russia

This report analyses the expansion plan of Woolworths, a retail organization in Australia and New Zealand, to expand its operations in Russia. It suggests a joint venture as the mode of entry and provides recommendations for international strategy, multinational structure, leadership and motivation of cross-cultural teams, HR management, and marketing strategies.

Running head: INTERNATIONAL MANAGEMENT
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Name of the Student
Name of the University
Author Note

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1. Executive Summary
The report is built on the analysis of the expansion based plans which have been developed
by an organization. The organization which has been taken into consideration for this analysis
is Woolworths which is a huge retail organization that operates in Australia and New
Zealand. The organization has planned to expand its international operations in Russia. The
external or the macro-environmental factors of Russia are taken into consideration for this
analysis. The effects of these factors on the policies of Woolworths will thereby be quite
high. The mode of market entry of the organization is considered to be an important part of
the analysis in the report. The entry which has been suggested for entry of Woolworths is
joint venture with a local organization.
Further, the report is also able to suggest the international strategy which can be implemented
by the company and multinational structure which can be developed. The strategies and
methods implemented for the leadership and motivation development among the
multicultural teams have also been discussed in the report. The human resource management
based recommendations and marketing strategies that can be implemented by Woolworths
have been analysed in the report in a detailed manner. The report has thereby been concluded
by stating the international expansion of Woolworths in Russia will be profitable and
effective for the company in order to increase the levels of its presence in a huge manner.

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Table of Contents
3. Introduction to report, background of the company...................................................3
4. Summary of the macro environmental issues relevant to the country.......................3
5. Recommendations based on the entry with justifications..........................................4
6. International strategy for the company......................................................................5
7. Multinational structure for the company....................................................................5
8. Strategies and methods used for the leadership and motivation of the cross cultural
teams..........................................................................................................................................6
9. HR recommendations.................................................................................................9
10. Marketing based considerations.............................................................................10
11. Conclusion..............................................................................................................10
12. References..............................................................................................................11

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3. Introduction to report, background of the company
The report will be based on the analysis of the ways by which a global organization
can plan to enter the market of a new country with the help of effective market entry based
strategy. The company that has been considered for the analysis is Woolworths which
currently has its operations in Australia and New Zealand. The organization is planning to
further expand its market and operations with the help of proper international market entry.
The recommendations that will be made in the report will be based on the most appropriate
mode of the entry of Woolworths in a completely new market area (Doz, 2017). The
processes that can be used by the company in order to manage the cross-cultural teams are
also considered to be important factors that need to be considered in the report.
Woolworths has acquired the position of one of the largest supermarket based chains
in Australia. The organization mainly operates more than 900 stores all over the country.
Woolworths relies on its 115,000 members in order to provide the best services to the
customers in Australia. The company has been working closely with the Australian farmers
and growers in order to offer the best quality of products to the consumers. The collaboration
of Woolworths with the farmers and growers has been able to provide the company with a
position of the fresh food people of Australia (Woolworthsgroup.com.au., 2018).
4. Summary of the macro environmental issues relevant to the country
As discussed by Buckley and Ghauri (2015), the macro environment of Russia is
affected by different factors which include, the political and the legal environment of the
country. The political changes which have been taking place in Russia have been able to play
a key part in the ways by which different organizations that operate in the country are
affected. The foreign relationship based strategy that has been developed by the government
of Russia has provided major chances to the global organizations. The development of
technology is also supported by the government and this is able to ensure the growth which
has been showed by the economy.
As argued by Angwin and Meadows (2015), the relationship which is shared by
Russia with the other countries has also proved to be effective and supportive for the global
organizations. The legal conditions of the country on the other hand have changed in order to
follow the capitalist regime developed in Russia. The economic freedom based index of
Russia has been ranked at the 107th position and the growth of Russian economy has been
reduced due to the transitions which have taken place. The cultural aspects of Russia are

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divided into various parts which include, folk dancing, arts, cinema, politics, animation and
ballet.
5. Recommendations based on the entry with justifications
According to Azmeh and Nadvi (2014), the economic and political analysis of Russia
has been able to depict that the growth of the economy is quite slow due to implementation of
market capitalist regime. The control of government over the market has also been able to
slow down the growth based on entry of different organizations. The political conditions of
the country are also not quite stable in nature and have been able to affect the operations of
different organizations. The development of policies and procedures which will be
implemented in the operations in Russia are also heavily dependent on the government of the
country. The high rates of corruption in the country have been able to affect the methods by
which Woolworths operates in the industry. The legal considerations which need to be made
by Woolworths in its operations in Russia are able to affect its operations in a huge way.
As argued by Bamiatzi et al. (2016), the most appropriate mode of entry for the
organization in Russia is joint venture with an organization that already operates in the
country. The merger of the operations of Woolworths with a Russian organization will play a
key part in the ways by which the firm can manage different issues which take place due to
the political and legal factors. The major objectives of Woolworths that will be fulfilled by
entering the market with the help of joint venture include, reward or risk sharing, market
entry, joint development of products and sharing of technology. The alliance will prove to be
highly favourable for the ways by which Woolworths aims at developing the operations in
Russia. Woolworths will be able to analyse the market and choice of consumers easily with
the help of joining its operations with a local organization.
According to Barrales‐Molina, Martínez‐López and Gázquez‐Abad (2014), the
partner organization of Woolworths will play a key part in the effective growth of regulations
and policies which can be implemented by the operations of the company in Russia. The most
important advantage which will be provided to Woolworths by the joint venture based
organization is based on the development of resources in the new market area. The joint
venture related agreement can be made by the company for a short term or long term basis.
The short term agreement will enable Woolworths to operate solely after it is successful in
understanding the market in an appropriate manner. This will play a key part in the methods
by which Woolworths is able to develop its position in the country in an effective manner.

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6. International strategy for the company
According to Coviello (2015), the international strategy that will be implemented by
Woolworths in the retail industry of Russia will be able to play a major role in the operations
of the company. The strategy needs to be implemented in such a manner which can depict the
local choices and demands of the customers. The main aim of the company behind the
development of an international strategy which includes local choices is providing tough
competition to the local companies which offer similar products and services. Woolworths
will however maintain the focus which it has always provided to the customers. The
orientation of the company towards the customers is thereby considered to be an important
part of the international growth based strategy.
As argued by Cuervo-Cazurra et al. (2016), the service which is provided by the
company to customers is an significant factor which affects its operations in the new area of
the market. The international strategy therefore needs to depict the local needs and culture
which is followed by people in the country. The procurement of fresh products has proved to
be a major success factor of Woolworths in the ways by which it plans to operate in the
industry. The organization will thereby need to include this factor within the international
strategy that will be implemented in Russia. The development of an effective supply chain is
considered to be a major part of the international strategy implemented by Woolworths. The
organization thereby needs to develop an effective supply chain in order to offer the products
to customers in the most effective manner.
7. Multinational structure for the company
According to Dai et al. (2014), the development of a multinational structure is able to
play a main part in the ways by which organizations are able to operate in different global
locations. The global organizations thereby need to develop the structure in such a manner
which is able to facilitate different operations effectively. Global organizations need to adjust
to the different external factors which are able to affect the operations and levels of
profitability as well. Woolworths will thereby need to develop the organizational structure in
such a manner which will deepen the involvement of the company in that particular area. The
reporting based structures of the company will be quite different in the global locations as
compared to the local areas.
As discussed by Dant and Grünhagen (2014), the growth of an organization is able to
affect the structure which is developed in the global areas. The structure which has been

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implemented by Woolworths is hierarchical in nature and the reporting system is followed in
the company. The non-executive directors of the company and the chairman report to the
CEO of Woolworths. The general managers of different departments and the directors also
report to the CEO of the company. Woolworths can implement the same structure in its
operations in Russia. The hierarchical structure will be followed in an effective manner with
the help of focus on the different groups of customers.
The management can provide different positions to the heads of various departments
which will be helpful in the proper maintenance of operations. The local involvement can be
increased by Woolworths with the help of proper development of the structure of the
company. The management can also include local employees within the organization so that
they are able to understand the needs and demands of the consumers in the country. The
international division of the organization will be developed in order to maintain the
operations of Woolworths (Doz, 2017).
8. Strategies and methods used for the leadership and motivation of the cross cultural
teams
As discussed by Hitt (2016), Woolworths is an Australian organization which is
planning to expand its operations in Russia. The management of cross-cultural teams is
considered to be a major part of the proper development of operations of global
organizations. The levels of trust which have been developed within the employees in the
organizations are affected in a huge manner by the cultural differences. The development and
creation of trust is quite difficult for the management of global organizations. The
management thereby has to face effective levels of challenges while operating in the
multicultural teams.
According to Holmes Jr et al. (2018), The challenges that will be faced by the
company based on proper management of the teams can be solved with the help of proper
communication. The management of Woolworths can thereby take the following steps in
order to maintain the multicultural members of the team.
The members of the team need to make efforts in order to know each other
and learn their journey effectively as well. The employees need to be provided
with effective levels of encouragement in order to use the knowledge and
skills. The multicultural teams consist of individuals who possess unique skills
which can prove to be beneficial for the members.

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The management of the company can take different steps in order to
understand the employees and their needs in an effective manner. The
members need to be provided with effective levels of opportunities so that
they are able to show their individual talents (Hotho, Lyles & Easterby‐Smith,
2015).
The structure of the cross cultural team needs to be developed in order to
ensure the success of the organization. Woolworths needs to aim at providing
an effective direction to the team so that the members are able to access the
information and resources effectively. The diversity levels within the
organization are thereby able to affect the ways by which decisions will be
made in Woolworths.
The management and members of the team need to understand the differences
which exist between the cultures which are followed by them. The best
method which can be applied in order to solve the issues based on
miscommunication are based on proper implementation of self-service based
software by Woolworths. The members of the cross cultural team are able to
know each other with the help of this software (Jannesson, Nilsson & Rapp,
2016).
The management of the organization needs to develop clear rules and
regulations and further maintain them as well. The team leader in Woolworths
has the major responsibility of developing clear and effective norms that will
be implemented in different operations. Woolworths is known in the
Australian retail industry for managing the levels diversity within the
organization in an effective manner. The company will thereby be successful
in managing the multicultural teams in an effective way (Laufs & Schwens,
2014).
The proper development of personal bonds within the employees will also be
able to play a key part in the management of the members. The individual
levels of connections will be able to bring high levels of collaboration among
the employees. The collaboration based levels will be able to affect the wats
by which the decisions are taken within the organization.
The management and leader of the multicultural teams need to solve the
conflicts and issues which can take place within the organization. The
different levels of conflicts that can thereby take place within the multicultural

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members are able to affect the operations in a huge manner (Leonidou et al.,
2017).
According to Mainela, Puhakka and Servais (2014), the cross cultural management
and development of effective teams will thereby be able to play a key part in the ways by
which the firm operates in the industry. The cross cultural team will be able to provide major
levels of benefits to the organization based on the ways by which different challenges can be
faced by the company. The cultural differences between the two countries namely, Australia
and Russia are quite evident and these differences can affect the ways by which Woolworths
manages the teams.
As discussed by Morschett, Schramm-Klein and Zentes (2015), the levels of
motivation which are provided to the multicultural teams are able to play a major in the
operations of international organizations. The process of motivating these employees who
belong to different cultures is quite challenging in nature. The management of Woolworths
can thereby implement some effective motivation based techniques which will be able to play
a major role in developing common traits. The different techniques which can be
implemented by the company in order to maintain the operations of multicultural teams are as
follows,
The proper definition of the culture and analysing many other differences
including the race, colour and sex is an important technique. The employees
will be able to understand the wants and demands of the customers in an
effective manner (Zander, McDougall-Covin & Rose, 2015).
The management can also conduct a survey in order to learn the different
preferences of the employees based on their work based styles. The ways by
which the managers and supervisors are able to provide their feedback based
on different aspects of the organization. The proper survey of opinions of the
employees is also considered to be an effective technique of providing
effective motivation (Nuruzzaman & Singh, 2017).
Woolworths needs to utilize different talents of the multicultural workforce in
order to motivate them to provide their best levels of performance. The
employees thereby need to provide their suggestions based on the levels of
their comfort (Zander, McDougall-Covin & Rose, 2015).

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The development of cross-departmental focus based groups can prove to be a
major technique based on motivating the employees effectively. The different
departments will thereby be provided with various responsibilities which are
required to be fulfilled by them (Raghunath & Rose, 2017).
As discussed by Rugman and Verbeke (2017), the leadership of different multicultural
teams will play a key part in the operations of the company. The most important part of the
leadership quality which needs to be possessed by the leader of these teams is
transformational leadership. The transformational leaders are able to manage the teams in an
effective manner with the help of proper communication levels and sharing the vision of the
company. The development of a common vision is thereby able to play a main role in the
methods by which the firm is able to operate in the industry. The multicultural teams in
Woolworths will thereby be managed by the transformational leaders effectively which can
further help in the proper management of the multicultural teams within the company.
9. HR recommendations
The international human resource management of the organizations are able to play a
key part in the operations of multinational corporations in modern business environment. The
IHRM based functions are thereby based on different activities which include, staffing
policies, selection, recruitment, motivation, remuneration, development and training,
performance appraisals, foreign assignments and industrial relations. The development of the
technologies including computer based technology, telecommunication and lower costs are
major factors which affect the organizations which operate on a global basis (Shenkar, Luo &
Chi, 2014).
The human resource management based activities that will be performed by
Woolworths in the new area of its operations are based on different factors that include,
division of the products, global division of the area and the global matrix structure. The HRM
based policies which were used by Woolworths in the operations in Australia can be
transferred to its operations in Russia. The various policies thereby include, the physical
layouts, the leadership style and motivation, entitlements of the holidays and the quality
circles (Solberg, 2017). The different staffing based methods that are used by the global
organizations include, geocentric, polycentric, ethnocentric and regiocentric. The process
which will be used by Woolworths will be the geocentric approach, where the company will
be able to hire the suitable employees without considering their nationality. Woolworths will

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thereby implement this strategy in order to hire the suitable employees in different positions
with the help of proper recruitment based strategies (Trigeorgis & Reuer, 2017).
10. Marketing based considerations
According to Wang et al. (2014), the marketing based strategies that have been used
by Woolworths are based on the dynamic business based environment. The changes which
have thereby taken place within the external business based environment are able to affect the
marketing strategies of Woolworths. The marketing based strategy of Woolworths has been
able to provide highest levels of importance to the customers. The marketing based strategy
of Woolworths which can be implemented in the retail industry of Russia will also be based
on the customers and their needs and demands.
As discussed by Yan and Luo (2016), the organization will offer different discounts
with the help of its website and apps in order to attract the customers towards the products
that are offered to them. Woolworths will also use the feedback which is provided by the
customers in order to achieve the highest levels of services which can be offered to them. The
growth of Woolworths is also based on the methods by which the firm is able to satisfy the
huge base of customers in an effective way. Woolworths will provide high levels of
importance to the customer first strategy and the fresh products which are offered to the
customers. These factors will thereby be highlighted effectively within the marketing
operations that are conducted by the company within the retail industry.
11. Conclusion
The report can be concluded by stating that the operations of Woolworths within the
retail industry of Russia will be supported by the human resource functions of the company
and the strategies related to marketing which are implemented. The external environment
based factors in Russia are able to affect the policies and regulations are able to affect the
operations of Woolworths in a huge manner. The entry mode that will be used by
Woolworths is based on a joint venture with a local organization. This process will play a key
part in the methods by which the firm can establish its operations in the industry with the help
of joint venture. The levels of investment made by the company for entering the Russian
market will be quite low due to joint venture. The international strategy of Woolworths is
also suitable for the company to expand its operations in the retail industry of Australia. The
human resource functions will also be able to a main part in the development of effective
operations of the company in Russian retail based industry. The marketing activities of

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Woolworths will also play a major role in the ways by which the company can expand its
operations in the industry with the help of its proper processes.

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