Connect Catering Ltd: International Business Strategy in China

This report provides an analysis of Connect Catering Services' international business strategy, focusing on their potential expansion into China. It begins with an overview of the organization and the rationale behind its decision to go international, highlighting benefits such as increased sales, profitability, economies of scale, and access to new talent. The report then discusses China as a potential market, citing its growing economy, favorable government policies, and skilled workforce. It also identifies potential barriers to entry using a PESTEL analysis, including political, economic, social, technological, environmental, and legal factors. Finally, the report evaluates different implementation approaches for the internationalization process, considering the specific target market and challenges.

International Business
Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Overview of organisation and rationale for going international.................................................3
Discussion of country and rationale behind decision..................................................................5
Types of barrier to be faced by company while expanding internationally .............................6
Evaluation of implementation approach for internationalisation process for specific target
market..........................................................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
International business described as situation in which products and service of a business
are send to cross country borders (Bhattacharyya and Verma, 2019). It provide various
opportunity to a business as it allow them to expand their marketing share, profit and sales. In
order to expand business at international level, managers of company needs to develop various
marketing opportunity. Thee strategies helps them to overcome of threats occur in path of
business and allow them to get different opportunities in market. This project report includes
study of Connect Catering Services which was UK based organisation providing catering and
food services to their customers. This report includes overview of organisation along with its
reasons for going business at international level. It discusses about country in which organisation
can expand and reason being decision of company. Additionally, it discusses about different
barriers faced by business to expand internationally. Moreover, it also discuses different
approaches for going at international level.
TASK
Overview of organisation and rationale for going international
Connect Catering Ltd:
Connecting catering services is a major company of United Kingdom which provides
effective services to many events. The company is having experience of over 100 years in
delivering fresh and delicious food to different customers (Bhattacharyya, 2020). Connecting
catering services is the major company which delivers best and effective food services to
different customers. In the era of stiff competition between many catering services the
Connecting catering services. The company has hired professional cooks who are capable
enough to make various types of dishes. Connecting catering services also delivers best and
effective services in order to maintain precise goodwill at the marketplace. This business entity
gives top priority to quality services and believes the most in increasing customer satisfaction.
Connecting catering services also delivers world class food services in major events of United
Kingdom. Company always focus on growth and expansion of the business at the marketplace by
providing standard food services to the customers.
Reason for going international:

International business refers to process of trading products, service, capital, knowledge
and capital across national borders to another countries (Rugman and Verbeke 2017). In consist
transaction of products and service between two and more countries. There are various benefits
of expanding in international market for business. Some of benefits of international business for
Connect Catering Ltd is mentioned below:
Increase sales and profitability: Expansion of business on global market place is
beneficial for business of Connect Catering Ltd as it increase overall revenue of sales by reduce
operational cost (Cha, 2020). It attract larger customers base towards business which provide
them opportunity to earn more profit. At international level, business can use different
technologies as well as internet for attracting customers and allow a small business to expand. It
provide opportunity to business to outsource which make them able to reduce cost and improve
operational efficiency of company
Economies of sales: Business wants to expand their products as their products are
accepted by different people around world. Internationalisation of an organisation provide
various benefits to Connect Catering Ltd as it allow them to get benefits of economies of scale.
In this, companies can expand which are operating more in domestic market. Business in
internationalisation create opportunity for business to differentiate their products from
competitors and can also introduce new products.
Entry in new market segment and spread of risk: Expansion of business in
international market provide opportunity for business to overcome of trade barriers in different
parts of world. Internationalisation helps Connect Catering Services to diversify business and
also allow them to ease of risk in market in different countries. Companies operating in different
countries get opportunity to further invest in innovation and also develop different variety as well
as variation of their products.
Attracting new talent: Expansion of business at international level allow companies to
access to human resource from different countries (de Sousa Jabbour, 2019). Employees who can
speak different language and accustomed to different culture are amplify to connect with
different customer base. It allow companies to develop team who has knowledge of local
marketing and allow company to exploit different resources in domestic market wit connect local
suppliers with them.

Discussion of country and rationale behind decision
China is a country which is also known as People's republic of China which is existed in
East Asia. It is most populous country and is emerging as marketing opportunity for foreign
countries. It has huge potential for purpose of economic growth as it offer large market share
which saves cost of company (Ekolle, 2019). With various reform and opening with outside
world. Economy of China had gain growth in market. Chinese government increasing GDP
which indicate growth in their economy. Government of this country has also given liberty to
business which also contributing in evolution of their economy. Rapid development of industry
is also taking place with advancement of technology, increasing productivity and increasing
foreign direct investment. There is increase in economic growth of country and also increase in
purchasing power of people which create opportunity for various business existed there and also
for foreign company. There are different reason for which foreign business like Connect Catering
Ltd can expand their in China. These reason for expansion of business in China is mentioned
below:
China as major trade hub: China has growing economy for international trade and also
has large size of land as well as population (Syed, 2020). Government also provide favourable
policies towards foreign companies. Different companies are understanding importance of global
market and china is an important factor if internal trade as it is focused with global business.
China as innovation landscape: China is focusing on improving business environment
for international business and also develop innovation. Technology and scientific innovation
plays an important role for promotion of economic development in China. This country is
appears as technology producer and also focusing in developing new technological innovation as
it is important for their economic growth.
China as low cost country: There is increase in working standards and minimum wages
but still China is one of cheaper producer country in compare to other developed countries in
terms of manufacturing (Reasons to do business in China, 2019). It is one of country which is
considered as world's factor as it is manufacturing power house and also producing low cost.
There are various reason like robust business ecosystem, competitive currency practices and low
taxes plays important role in Chinese market.
China symbol of work ethics: Culture of china values diligence as well as handwork
which is affected with job performance. Conducting business in China provide assurance to

business that they can get professional people which are focusing towards goal and objectives of
business. Work ethics in china ensure a good as well as organised working environment with
people who are reason to work harder for purpose of benefits of company.
Favourable government policies: Government of China is providing proactive
entrepreneur measure for both local and international organisation. These measures consist
helping young people for purpose of incubating their new ideas and providing support to
innovation and creativity (Advantages Of Doing Business In China, 2021). All these measures
make China as best country for foreign countries for expansion. With government intervention,
transportation and manufacturing industry are thriving. This country is also offering easy
taxation and investment policies which encourage international companies to expand their
business in this country.
Abundance of skilled talent: China has young people who bare both talented and
competent. Different universities there are producing skilled people which are speaking English,
Mandarin. This country has made English as a part of their curriculum in order to encourage this
language which is beneficial for purpose of International business. International business
required talented, qualified as well as English speaking people. If business require skilled
employees for purpose of successfully compete in global market.
Types of barrier to be faced by company while expanding internationally
PESTEL Analysis:
PESTEL analysis refers to a tool which is used by company for purpose of evaluation of
external environment of business. There are different factors included in this tool like political,
technological, economical, legal, social and many more (Ekolle, 2019). This analysis is also used
as an effective tool which helps in corporate strategic planning. Connect Catering Ltd is
expanding their business in China where there are various barrier existed in environment of this
country. PESTEL analysis of Connect Catering Service which create barrier for company in
China is mentioned below:
Political Factor: Political factors are those factors which are related to government
stability, interference of government, rules and regulation of government in specific country.
Political environment of UK is providing support to local business to expand internationally
which create opportunity for Connect Catering services but government of China is exposing
different rules and regulation on foreign companies and also monitoring their each and every

activities of business. Government also made various regulation for business which create
problems for business. Intellectual property rights and tax rights also create problems for
business as these are not providing support to privacy of business.
Economic Factor: Economic factors are those which are related to inflation rate, interest
rate, wages rate and many more. China has high inflation rate which create threat for business of
Connect Catering Ltd as it increase their cost of company (Fuchs, 2020). Increasing inflation rate
also increase prices of raw material and other suppliers for business which results in ultimate
increase in cost of company. It also results in decreasing purchasing power of people which does
not allow people to buy products and service of company. There is increase in prices of property
which also increase cost of company as they needs to buy property to run their business.
Social Factors: Social factors are those factors which are related to culture, values and
other demographic components. Social as well as cultural aspects plays an important role in
changes related to demographics. These factors also made changes in social trends as well as
cultural values. Literacy rate in China is around 90% as this company is focusing on education of
people and majority of people in this country are literate. There are various people living in this
country are internet user as people of China are doing online shopping. It provide opportunity for
business of Connect Catering services as they can use internet and other digital technologies for
purpose of providing products and service to customers.
Technological Factors: Technological factors are those which consist technological up-
gradation, advancement and many more which provide competitive advantage to a business.
Technology allow a business to compete with other marketing players (Hooper and Holtbrügge,
2020). Technological problem in country of China arise with development of business to
customer industry as it does not provide stable as well as safe business environment. People of
China is facing uncertainty due to avoidance of problems of online payment system. Most
accepting payment method in any country is Credit card which has low acceptance in China and
there are lack of online credit card payment system. It create threat for Connect Catering Ltd as it
people are facing issues in using there online services.
Environmental Factors: Environmental factors are those factors which are considered
pollution, weather, climate condition and others. These factors indirectly create impact on
business and as it is facing rapid growth in business. China has made various guideline for
business which aims at securing environmental standards. It increase cost of company and also

decreasing profit of business. This country aims at developing products which are protecting
environment. Connect Catering Ltd is one of organisation in this country needs to work for
environment protection for developing good image in minds of consumer which increase their
cost.
Legal Factors: Legal Factors are those factors which are related to laws and regulation
which create negative impact on business (Kindl and Casais, 2019). Laws of Chin is creating
impact on growth of business and this country has banned social media platform like Facebook,
Whatsapp, YouTube. There are various labour laws which are existed in China providing
opportunity for business.
There are some other barrier faced by company while providing their products and
service in China. These barrier which create problems for business of Connect Catering Services
are mentioned below:
Natural barriers: Natural barriers are those barriers which are related to cultural and
physical aspects. Language and distance are also a natural barrier which is faced by business in a
specific country. These barriers create threat for business in international market and does not
allow business to smooth functioning.
Traffic Barriers: Traffic includes tax imposed by a specific country on various good
imported from different country (Kerridge, and Simpson, 2019). It increase cost of products and
service and total cost of business. Increasing cost also results in decrease profitability level of a
company and does not allow them to compete in market on basis of price.
Competitors: There is increasing competitors in international market which are
providing same products and service to their customers, in order to overcome of competition,
business needs to adopt various strategy, offering differentiation. Competitors are providing
same prices and adopt strategy to attract competitors. these are also monitoring activity of
business in market and take advantage of wrong move of business. These competitors are
decreasing marketing share and profitability of business.
Evaluation of implementation approach for internationalisation process for specific target market
With selling of products and service to another countries, business can introduce their
products in huge market. It provide them opportunity to increase their sales and profit along with
benefits of increasing recognition of brand. Some of approaches which can be adopted by
Connect Catering Ltd to enter in international market are as follows:

Exporting: Exporting refers to direct sales of products and service to another country. It
is one of method which allow business to enter into foreign market at lower risk. It is also one of
cost effective method in which business does not needs to invest for purpose of production
facilities (McAdam, Bititci and Galbraith, 2017). In this, goods and service which are produced
in home country for purpose of selling it in foreign countries. But increasing cost of
transportation also results in increasing cost of exports. Majority of cost involved in this process
needs to involved in marketing expenses. There are four parties to be involved in this process
like business, transporter, government, and transport provider.
Licensing: Licensing is a business model in which licensor grants right to licensee to use
intellectual property, brand a well as proaction of products of company to licensee. Licensee
company needs to made huge capital investment for purpose of commencement of operation.
There are various advantage of this model like licensee bears all development cost along with
risk associated with launching of foreign operation. It provide benefits to Connect Catering Ltd
for utilisation of distribution network of Licensee for purpose of entering into new market. It also
provide benefits to licensor for taking advantage of expertise as well as skills of licensee.
Franchising: Franchising refers to form of marketing as well as distribution in which
Franchisor grants right to an individual for selling products and service for using business.
Franchisee are those who gets permission from franchisor for sing their brands, trademark under
some specific guidelines (Ozkan, 2020). It is a partnership agreement between franchisor and
franchisee for specific period of time. This method provide various benefits to Connect Catering
Ltd as it reduce risk of business on franchisor and also provide opportunity to expand their
marketing share. It also provide benefits to franchisor for providing recognition for brand name
as well as trademark.
Joint Venture: Joint venture refers to a commercial agreement among two or more
parties who agree with cooperate with attainment of particular objectives. It covers different
range of business arrangements which includes different degree of integration. There are
different reason for for which business reason require partner in joint venture like it provide
opportunity to expand business, growing return on existing products, developing new products. It
also provide them advantage of specialised expertise like technical, financial, employees and
marketing related. This methods is beneficial for Connect Catering Services as it allow them to
benefits of knowledge of local and foreign market which provide them opportunity to share cost.

Foreign Direct investment: It is purchase of share of company by another company or
investor from outside country (Rehman and Anwar, 2019). This term is used to describe business
decision for purpose of acquiring substantial stake in foreign business in order to buy or expand
operation in new place. It is not used for purpose of describing stock investment in foreign
country. It provide various benefits to business of Connect Catering Ltd. It provide benefits of
easy international trade, economic development, tax incentives and many more.
CONCLUSION
From above mentioned project report, it can be concluded that international business
strategy is one business is adopted by business at international level. There are various reason for
which a business expand at international level. These reasons includes increasing profit, sales
and marketing share, attract new talent towards business. Business can expand their business in
any country based on their economic growth, demand of products in country and also purchasing
power of people. Another reason for selecting a country includes government stability, work
ethics, skills of labour, innovation, technological advancement and many more. There are various
barriers occur in business which create threat for them. These barriers occur related to legal,
political, environmental, economical, social, technological factors. It is important for managers
of company to identify these factor on timely basis to overcome of impact of these factors. There
are various approaches to be adopted by business to expand their business at international level.
These approaches includes franchising, licensing, exporting, joint ventures and many more.

REFERENCES
Books and Journals
Bhattacharyya, S.S. and Verma, S., 2019. The intellectual core and structure of international
business strategies (IBS): A co-citation analysis. Review of International Business and
Strategy.
Bhattacharyya, S.S., 2020. International business strategy: development of an integrated
framework and typology. Review of International Business and Strategy.
Cha, H., 2020. A paradigm shift in the global strategy of MNEs towards business ecosystems: A
research agenda for new theory development. Journal of International
Management, 26(3), p.100755.
de Sousa Jabbour, A.B.L., 2019. Going in circles: new business models for efficiency and
value. Journal of Business Strategy.
Ekolle, Y., 2019. EVALUATION OF CORPORATE SOCIAL RESPONSIBILITY'S
COMMUNICATION IN INTERNAL BUSINESS STRATEGY. In Весенние дни
науки ВШЭМ (pp. 67-70).
Ekolle, Y., 2019. EVALUATION OF CORPORATE SOCIAL RESPONSIBILITY'S
COMMUNICATION IN INTERNAL BUSINESS STRATEGY. In Весенние дни
науки ВШЭМ (pp. 67-70).
Fuchs, M., 2020. MNCs’ open international strategy–local dynamics: transfer of German
“vocational education and training” to emerging economies. critical perspectives on
international business.
Hooper, A. and Holtbrügge, D., 2020. Blockchain technology in international business: changing
the agenda for global governance. Review of International Business and Strategy.
Kerridge, C. and Simpson, C., 2019, May. A multipronged approach to improving the
performance of international students on a business strategy module. In CABS Learning
Teaching and Student Experience conference 2019: Track/theme# 6. Outside of the box
education.
Kindl, E.M. and Casais, B., 2019. Motivations and perceived opportunities for partnerships
among international business consultancy firms. Review of International Business and
Strategy.
McAdam, R., Bititci, U. and Galbraith, B., 2017. Technology alignment and business strategy: A
performance measurement and dynamic capability perspective. International Journal of
Production Research, 55(23), pp.7168-7186.
Ozkan, K.S., 2020. International market exit by firms: Misalignment of strategy with the foreign
market risk environment. International Business Review, 29(6), p.101741.
Rehman, A.U. and Anwar, M., 2019. Mediating role of enterprise risk management practices
between business strategy and SME performance. Small Enterprise Research, 26(2),
pp.207-227.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Syed, R.F., 2020. Ethical business strategy between east and west: an analysis of minimum wage
policy in the garment global supply chain industry of Bangladesh. Asian Journal of
Business Ethics, 9(2), pp.241-255.
Online

Advantages Of Doing Business In China, 2021. [Online]. Available through:
<https://www.xinergy.global/why-do-business-in-china/>
Reasons to do business in China, 2019. [Online]. Available through: <https://www.e-
zigurat.com/innovation-school/blog/starting-business-china/>