Bachelor of Arts in Business Entrepreneurship: Airdri Expansion Report

This report analyzes Airdri Company's market expansion strategy, focusing on its move from the London area to the USA to grow its business. The report includes an introduction highlighting the benefits of market expansion and identifies the company's operational area. It then presents a literature review discussing the importance of market analysis and the challenges of entering new markets. The data collection and analysis section incorporates situational analysis, including a TOWS matrix and VRIO model, to assess internal and external factors. External market analysis is conducted using PESTLE analysis. The report also addresses risk analysis and proposes a growth strategy. The document concludes with a summary of findings and references. The report aims to determine the role of market expansion in business and the issues Airdri may face during its expansion into the USA, offering valuable insights into business growth strategies.

Student-Led Seminar Report on:
The Entrepreneur Project ( 2019-2020)
Title:
Market expansion out of the London area to other regions by Airdri
Company to grow and develop its business.
Submitted in partial fulfilment of the requirements for
the award of the degree of
Bachelor of Arts
In
Business Entrepreneurship ( Top-up)
Module:MKT 4007 AS1
Presented by: Tutor:

Contents
INTRODUCTION...........................................................................................................................1
ORGANISATION AREA INDETIFICATION..............................................................................1
LITERATURE REVIEW................................................................................................................2
DATA COLLECTION AND ANAYSIS........................................................................................2
Situational analysis.....................................................................................................................3
External market analysis.............................................................................................................3
Risk analysis...............................................................................................................................8
GROWTH STRATEGY PROPOSAL.............................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Market expansion is an effective strategy that help company in improving their
performance in new market place. As, it provide huge opportunities to business in expanding
operational activities to attain higher growth. This type of strategy used when company wants to
enter into new market that support them in capturing larger market share from its competitors. In
this regard, company also includes who new customers are so that firm can easily engage them
towards the specific brand image (Salemink, Strijker and Bosworth, 2017). Mainly, market
expansion is refers to the business growth strategy in which company adopt a new market place.
For attaining competitive success in new market, organisation responsible for investigating
potential market and at the same time also take stock of their capabilities and assets. With the
assistance of this, company can easily meet new and potential customers and provide them
quality services as per their needs and wants. By this, organisation can increase their market
share and also established its positive brand image in new market place. This will provide
opportunities to influence or invite more and more customers towards its services that assist in
increasing profitability level at competitive market place. In relation this, there are various tools
and techniques such as SWOT analysis, PESTLE analysis, VIRO analysis and many more could
be used by company to analysis internal and external environment wherein business wants to
expand their operational activities. In addition to this, growth strategy proposal is also mentioned
in this report that assist in improving the chances of attaining competitive advantage from its
competitors at market place.
ORGANISATION AREA INDETIFICATION
Current report is based in the market expansion of Airdri company to grow their business
at new market place. Airdri is a small and medium size business organisation that operate their
business UK for generating larger profitability level. Mainly, organisation selling dryers and air
purifiers in market in order to increase their revenue. The main purpose of this company is
provide high quality products and services to its customers as per their needs and wants in
London. In order to enhance their organisational growth company also expand their business in
different regions so that large number of customers get easily attracted or influenced towards its
services. This will directly contributes in improving the chances of capturing larger market share
from its rivals and also sustain in market for longer period of time. Mainly, company wants to
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expand their operational activities in new market i.e. USA because it provide huge opportunities
to improving their brand image into new area. Before expanding their business in new market
area, it is important for company to analysis both internal and external environment as it help in
determining the areas and resources that can be beneficial for company in enhancing their
positive image in market place.
LITERATURE REVIEW
According to Kotabe and Kothari, (2016), As per current scenario, most of small and
medium companies have plans to expand and grow their business in another area wherein they
can easily increase their sales and profitability level. Thus, it is significant for business to
effectively analysis the market and new business environment wherein company can be able to
attain higher success and growth. At the time expanding and entering into new market, company
often face various unique challenges that can be put negative impact over the performance level
of business at market place. In addition to this, turning a small business into a big one is not be
an easy task so that it is critical to effectively analyse all the strategies and tools for entering into
new market area. For attaining the same, there are some important analytical framework that
could be used by the business at the time of expanding their operational activities such as
situational analysis, external market analysis, Risk analysis and growth strategy. All these can be
effective in successfully evaluating all the necessary area in which firm can expand their
business. This will contributes in providing opportunities to develop their positive competitive
image by capturing larger market share from its competitors at new marker area i.e. USA.
DATA COLLECTION AND ANAYSIS
It is important for each and every business organisation to analyse internal and external
environment before entering into new market or area. This can be provide various growth
opportunities to expand their market share. Thus, it is significant for firm whose expand their
operations into new market analyse all the area wherein they can operate (Virtanen, Björk and
Sjöström, 2017). For attaining the same, there are various analysis that could be effective for
company in analysing both internal and external business environment.
Research aim:
To investigate the importance of market expansion for business to attaining emerging
opportunity in new market. A study on Airdri
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Research objectives:
 To determine the role of market expansion in context to business organization.
 To evaluate the issues Airdri can face at the time of doing market expansion in USA.
Research questions:
 What is the role of market expansion in context to business organization?
 What are the major issues Airdri can face at the time of doing market expansion in USA?
LITERATURE REVIEW
Role of market expansion in context to business organization
According to Madura, (2020), When company wants to attain certain level of success that
firm may start to think about the benefits of expanding their business in new market. This can be
contributing in inviting new customers towards its services. Along with this, it also provides
opportunity to add new customers that may assist in increasing profitability level of company at
market place. With the assistance of this, company can build strong customer base through which
company can established its competitive image at new market area. Apart from this, market
expansion also provides benefit of enhanced economy scale. As, vendors and suppliers are much
incentivized in order to provide discounts to company in generating huge profitability at market
place.
Issues Airdri can face at the time of doing market expansion in USA
According to Keegan, (2017), entering into new market is not an easy task for business as
it creates carious issues that can put negative impact over the overall performance of company at
market place. This is the reason that business required proper plan, system and resources for
successfully operating their business in new market place. In relation to this, change in market
trends and customers wants sis major issues that create adverse impact over the expand of
business in new market place. Political and legal environment is also a major issue that company
could face at the time of expanding their business. Therefore, it is important for company to
analyse market environment before expanding. This can be assist in providing assistance in
improving their organizational growth at competitive market place.
Situational analysis
Situational analysis is a set of approaches used to evaluate internal and external factors in
an organisation. It enables businesses to use market research to determine expected growth,
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identify all new buyers, assess their competitors and determine the current situation of the
company. Situational analysis" helps to establish a context for explaining the context in which
the strategy is being implemented. It establishes a unified point of comparison for preparation
and priority activities. For this, Airdri use some appropriate tools to analyse internal factors that
affect the expansion of business at USA market place.
TWOS matrix:
The TOWS Matrix can be described as a structure for evaluating, creating, comparing
and eventually deciding on marketing strategies. TOWS is determined to be a different variant of
SWOT analysis that is one of the business tools. However, both are differentiated because of
their varied arrangements concerning words. Eventually, SWOT analysis is done firstly and later
on, it is followed by TOWS Matrix. With regards to this assignment TOWS matrix is done on
the company named “Airdri”
INTERNAL FACTOR
EXTERNAL FACTOR
Strengths (S)
 Strong Brand
Image
 Airdri’s financial
performance is
very strong as
compared to other
rival companies.
 Airdri has an
innovative
portfolio of varied
products.
 The company has
established itself
as a strong brand
with effective
marketing
capabilities.
Weaknesses (W)
 Deals in only hand
dryers and air
sanitizers.
 The company is
overdependent on
the market of the
United Kingdom.
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Opportunities (O)
 For establishing
itself in the US,
Airdri has the
opportunity of
growing its
business
through
acquisition.
 Advance
technology will
help the
company in
increasing its
distribution
network across
the United
States.
Strengths/Opportunities
(SO)
 Airdri has come
up as a strong
brand and it is
doing explicitly
well. Therefore,
low-cost options
in some of the
products will help
the company in
expanding its
business in the
United States.
 With the initial
increase in sales
and profitability,
the company will
overcome the
losses because of
the fluctuation in
the currency in
different markets.
Weaknesses/Opportunities
(WO)
 Airdri’s
collaboration with e-
commerce and other
small companies
will help the
organization in
growing relatively
fast.
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Threats (T)
 Establishing
and running the
business can be
difficult as they
have to follow
numerous legal
and regulatory
norms.
 Competitive
environment.
 Oscillation in
foreign
currency and its
exchange of
rates.
Strengths/Threats (ST)
 In order to
eliminate the
threat i.e.
competitive
pressure, Airdri
must use various
marketing
strategies and
must implement
new innovative
products. This
will help them in
attracting
customers.
Weaknesses/Threats (WT)
 Airdrie is highly
dominating in the
United Kingdom
thus, by reducing its
dependency in the
UK, the company
can improve its
brand image in other
parts of the world,
for example, the
United States.
VRIO model
RESOURCES VALUABLE RARE INIMITABLE ORGANISED
Technology ✔ ✖ ✖ ✖
Marketing ✔ ✔ ✖ ✖
Human resource ✔ ✔ ✔ ✔
Brand Image ✔ ✔ ✔ ✔
As per mentioned table it is analysed that company has valuable resources such as
technology, marketing, human resource and brand image. These sources provide assistance to
company in expanding their business activities at global level. In addition to this, Airdri also
have unique marketing strategies, skilled human resources and popular brand image. With the
assistance of this, company can compete their rivals at new market place. When talk about
inimitable resources company has talented and unique brand image that can be possible to copied
by others. This can be effective in making company image more unique and competitive as
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compare to its competitors. On the other side, Airdri has organised human resources and brand
image by which competitive edge from rivals can be easily attain. By this analysis, company
have opportunity to expand their business in another location i.e. USA because of its advance
technology, unique marketing activities, skilled and valuable human resource and competitive
brand image. With the assistance of this, company can easily sustain in competitive market for
longer period of time.
External market analysis
External analysis is refers to the important aspect which help in examine the industry
environment. Mainly, it is consider as an objective assessment of changing market wherein
business operates their activities. Any kind of changes in external market may directly affect
over the company because it is totally uncontrollable and also dynamic in nature (Schaltegger,
Lüdeke-Freund and Hansen, 2016). In relation to this, Airdri operate their commercial activities
in London and at the same time also planning to expanding their business in new market i.e.
USA with the aim of improving their market share by capturing larger market share from its
competitors.
PESTLE analysis
It is consider as an important framework of macro environmental factor that used to
analysis as well as monitor all the external factors that have profound impact over the
organizational performance. Mainly, it is an important tool that useful when company start their
business and also entering into new and foreign market. It provide clear understanding of
situation of market to business so that expansion can be successfully done. This is the reason that
Airdri use Pestle analysis as a tool to analyse the external market of USA:
 Political: It is one of the important factor for business at the time of expanding as it
provide various rules and legislations that must be followed by company for operating
their business successfully (Chaffey, 2019). In this context, USA has a strong democratic
setup and also have a effective rule of law. As, USA market is effective for Airdri in
expanding their business because the political environment is stable in nature and also
have advanced infrastructure and technologies. This can be beneficial for company in
sustaining in market place for longer period of time.
 Economical: This type of factor have direct impact over the company's long term
prospects in market as it affect how business set their product prices to offer their
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services in market place. In USA, its economic system is well developed in which Airdri
can operate their business successfully and at the same time also improve their
competitive brand image.
 Social: USA is most developed country but it also face the issue of aging population
which can increase the tax rates. This can be put adverse impact over the business at the
time of expansion. In addition to this, people are generally health conscious and prefer to
eat healthy and quality products. Thus, it is important for company analyse demand of
customers before providing them services. This can be contributes in improving the
possibilities of attaining higher satisfaction level.
 Technological: USA is a global leader in technology and also have long-standing
fascination for technology. Along with this, USA has been at the forefront for adopting as
well as applying advancement of technologies within the wide variety of fields. Use of
technologies may have changed the way to things in undertaking business activities
(Parker, Van Alstyne and Choudary, 2016). This is beneficial for Airdri in expanding
their business as they also use new and advancement of technologies within the
operational activities. This will assist in improvising the possibilities of attaining success
in market place.
 Legal: Each and every nation have their own government that includes specific laws and
regulation that must be followed by company to operate their business. In this regard,
USA has its own government structure and legal scheme. Therefore, operating its
business in specified legal structure is important for Airdri while expanding its business
in new country. As USA also provide a strong legal structure in which company can
easily protect intellectual property rights and enhance their competitive image.
 Environmental: It is also important for company in maintaining eco-friendly environment
at the time of operating into new market place (Tidd and Bessant, 2018). In this, USA has
as extremely diverse geography, climate and wildlife. Moreover, USA also faces some of
toughest weather conditions in the world. Thus, it is important for Airdri to analyse the
same and operate their business accordingly. This can be beneficial in improving their
positive brand image at market place.
Porter's five forces
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In a competitive environment, it is refers to the appropriate frameworks that used to
analyse competition of business within the market place. With the use of this model, company
can easily analyse the competition level within the new market. This can be beneficial for
increasing the long term profitability and at the same time also established its competitive image.
This type of model used by Airdri to analysis the competitive market. As it includes five forces
such as:
 Competition in the industry: This factor is based over the number of competitors operate
in market place. In USA market, large number of competitors along with equivalent
products and services that they offer in market. This is the reason that this face includes
high power so that Airdri needs to serve unique and high quality of products in market in
order to compete their competitors. This can be beneficial for improving the performance
level of company at competitive market by increasing its sales and profitability.
 Potential of New Entrants Into an Industry: In market place, there are number of
companies are entering into new market for generating larger profitability. As it directly
affect the overall performance for Airdri and also can be reduce its brand image. In this,
new entrants into an industry has high power that can be reduce the demand of Airdri
products. This is the reason that company offer their quality products at lower cost so that
large number of customers get attracted towards its services (Kotabe and Helsen, 2020).
 Power of suppliers: In market place, company is totally depend over the suppliers as it
also impact over the profitability level business. As suppliers has more power and also
can be able to dive up input cost and push for other advantage. In this regards, there are
number of suppliers and have moderate power to supply raw materials. As there are huge
option in-front of Airdri to buy raw materials from suppliers. Company buy material
from suppliers who give materials at lower cost (Battistella and et. al., 2017). This can be
effective in increasing profitability level at competitive market place.
 Power of customers: In market place, customers have ability to drive prices lower within
the company as it is also affected by how many buyers are there. As customers has high
power to drive the cost in which buyer can easily switch to another business who serve
services at a low cost. In order to invite larger number of buyers, Airdri offer high quality
services at lower cost. This can be contributes in improving the chances of profitability
level at new market place.
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