Challenges and Strategies for Global Business: Tesco in Vietnam

This report provides an overview of global business, focusing on the challenges and strategies involved in international market entry. The report uses Tesco, a British multinational retailer, as a case study, specifically examining its entry into the Vietnamese market. It explores the concept of global business, highlighting its importance and advantages, such as market expansion, increased competition, and cost advantages. The main body of the report delves into the managerial and operational challenges Tesco faced, including organizational communication, cultural differences, tariffs, human resource management, and technical development. Finally, the report outlines a plan for entering a new international market, including an executive summary, mission statement, resource analysis, market analysis, entry mode selection, cost-benefit analysis, and financial projections. The report concludes by summarizing the key findings and emphasizing the importance of strategic planning for successful global expansion.

Global
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Concept of global business.................................................................................................1
2. Managerial and operational challenges of international business......................................2
3. Plan for entry into a new international market...................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Globalisation is the procedure to extended of products, technology, information and job
across national borders and coutures. In the starting of 1980s there have been a large
globalisation in economic and financial activities (Aguilera and Crespi-Cladera, 2016) . Hence,
globalisation is defined in various ways from liberal, realist and heterodox orientation. As per the
point of view of global business face various types of challenges like economic, political, legal,
cultural and socio-economic differences among differences countries across the world. To better
understand concept of the report selected organisation Tesco, it is a British multinational retailer.
It is dealing into groceries and general merchandise. The company Enter into international
market of Vietnam and face different types of managerial and operational challenges of
international business. There are developing a plan for entry into a new international market.
MAIN BODY
1. Concept of global business
Global business refers as corporate or economic activity that select different places across
the countries. It is part of international trading where as global business conduct various types of
activities like factories and distribution centres across the world. There are changing
commodities over great distances goes back a very long time. It is different from international
business where sale out of products at world wide level but has facilitate at their home country.
Importance of global business
Global business have various type of benefits of different types of companies. In present
time with the help of advance technology increase international trading, sale products in foreign
market. To conduct business at global level help to business spread out their market share,
deduct costs and become more competitive. There are defined advantages of global business - Market expansion – Every company wants to dealing into different types of countries so
they expand to business activities. Tesco wants to open new stores into Vietnam so with
the help of global business they can access new markets and customers. Business Competition – International business can help to increase competition in
market. When Tesco enter into new foreign market so face off competition with already
exists business. To gain large market they promote business in effective manner and sell
products in cheaper price so it will create competition.
1

 Cost advantage – The advantage of global business to commercialism products into
different country. Tesco get benefit through international business contribute in national
economy and low labour cost due to provide employability (Amador and Cabral, 2016).
2. Managerial and operational challenges of international business
International business includes develop an effective strategy to spread out of business at
global level. Tesco has been extend their business activities at Vietnam so that time need to
structuring an appropriate organizational design and managing people in a cross cultural
environment. On the basis of these activities a business focus on these activities like behavioural,
cultural differences and political activities. Tesco has been faced various types of managerial and
operational challenges of international business.
Managerial Challenge – It is defined as one day leadership development experience in
which manager try to develop their staff members. During to development and set business face
various types of challenges.
Operational Challenge – These type of challenges related to economy and affect to
business cost and their margin. Tesco goes to expand their business in Vietnam that time face
operational challenge. There are defined managerial and operational challenges regrading to
international business - Organizational Communication – To handle team member need to communicate with
them and trace their efforts which affect to organisation. To motivate team members
required to talk effectively with employees, customers and business partners. On the basis
of foreign language need to know other country language where establish business. Tesco
face the problem in Vietnam regarding to language and management need to learn due to
communicate with staff members (Ratten, Dana and Ramadani, 2017). Culture – It define about the habits, vacation, action and consumer preferences of each
society. When apply business strategy into foreign country that time understand
characteristics of foreign countries other wise it shows bas effect. In the context of Tesco
to expand their business into Vietnam need to understand their cultural because it is
different from UK. Cultural differences may also show up in local levels for small
businesses.
2

 Tariff and export fees – Most of the companies have different type of tariff or fee which
is applied by companies to carry out goods into their country. Tesco need to analysis of
tariffs to other countries which can help to develop financial plan. Human Resource – To spread out of business activities at global level that time company
need to work force in other countries for operating business activities. That time need to
recruit people and hire new team members which is important for further investment.
Tesco face the problem in Vietnam due to open stores and set business need to send few
members from existing team.
 Technical Development – In different type of countries adopt various type of technology
and differences among the technical development and facility of markets. When Tesco
open new stores so as a safety purpose they are focusing to apply advance technology. It
can help to keep safe their products but some time it is not available into Vietnam
(Mendenhall And et.al,2017).
3. Plan for entry into a new international market
To enter into international market every business prepare effective plan which can help to
analysis market actives and on the basis of trends develop strategies in effective manner. Tesco is
retail sector company which is dealing into groceries and general merchandise. It is expand to
their business into Vietnam and open new stores. There are developing plan to enter into
international market: Executive Summary – As per the plan of Tesco wants to enter into global market and
open new retailing stores in Vietnam. In order to expand their business, they have to
develop effective market strategies where consist of Porter's five model, SWOT Analysis
and PEST analysis to the formulate of spread out in business success as well as growth. Mission Statement – The mission of Tesco to open new stores in Vietnam and they
believes in Vietnam. Every person need to basic things to survive into their life and
prefer to specific products. Resources – There are several assets, raw material which is important to be followed by
business in such a way that will handle expanding in effective way. They need to
sufficient resources for spread out business activities for achieve daily basis activity. Market Analysis – To open store in new market firstly need to analysis market activities
of that country and know position of already existing business. There are required to
3

understand trends, technology, political and economical factor which influence to
operation of business (Burke and Clark, 2016) . Select mode of entry – There are several ways to enter into international market that is
based on the size and type of the company. Most of the company select partnership with
existing distributor who is already conduct business activities in same sector. Tesco
contact to other company which is relate to retail industry and promote to their business
at the market of Vietnam. There are identify of level of competition, perception of
customer regarding to stores. It can help to prepare marketing strategy. Cost and benefit analysis – Tesco in retailing sector in Vietnam decide to perform into
market in appropriate manner. There are analysing the needs and wants regarding to
basic things and which type product they mostly prefer that will help to store in
warehouse. Financial Projection – To expand business there is required to Tesco set budget which
can help to conduct business operations.
 Source of funding – Fund is very important part for any business because it can help to
spread out of business activities due to enter into international market. The company
show their plan in front of different types of investors and try to influence for their plan.
They contact to bank and financial institution for loan and present their plan (Cumming
and Zahra, 2016).
CONCLUSION
As per the above discussion it has been concluded that the term of globalisation mainly
used to develop a consolidation of global economy which is marked by free trade. Global
business is important to expand business at international level and it can help to spread out
business activities in effective manner. Tesco wants to enter into Vietnam and open stores for
this understand managerial and operational challenges which become barrier so Tesco focus on
this and prepare effective plan. It is helping to enter into market in effective manner.
4

REFERENCES
Books and Journal
Aguilera, R. V. and Crespi-Cladera, R., 2016. Global corporate governance: On the relevance of
firms’ ownership structure. Journal of World Business. 51(1). pp.50-57.
Amador, J. and Cabral, S., 2016. Global value chains: A survey of drivers and measures. Journal
of Economic Surveys. 30(2). pp.278-301.
Ratten, V., Dana, L. P. and Ramadani, V., 2017. Internationalisation of family business groups in
transition economies. International Journal of Entrepreneurship and Small Business.
30(4). pp.509-525.
Mendenhall, M.E. And et.al,2017. Global leadership: Research, practice, and development.
Routledge.
Burke, J. J. and Clark, C. E., 2016. The business case for integrated reporting: Insights from
leading practitioners, regulators, and academics. Business Horizons. 59(3). pp.273-283.
Cumming, D. J. and Zahra, S. A., 2016. International business and entrepreneurship implications
of Brexit. British Journal of Management. 27(4). pp.687-692.
5