New Market Entry Strategy: Hilton Food Group in International Business

This report evaluates Hilton Food Group Plc's current international business strategy, identifying its use of a multi-domestic approach. It analyzes the advantages and disadvantages of this strategy, including its adaptability to local markets and potential for high expenses and uncertainties. The report recommends Nauru as a suitable new market for Hilton Food Group, supported by a PESTEL analysis highlighting the country's political stability, economic opportunities, social factors, technological advancements, environmental considerations, and legal framework. Furthermore, the report suggests a Greenfield Venture as the most appropriate entry mode, allowing Hilton Food Group to establish operations from the ground up without relying on existing local entities. The analysis considers practical issues and potential obstacles, emphasizing the importance of adapting to local conditions and leveraging available resources for successful market entry. Desklib offers a wealth of similar solved assignments and resources for students.

International
Business
Management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
An evaluation of the current international strategy of the organisation.......................................1
Recommendation for a suitable new market to enter...................................................................3
Recommendation for a suitable entry mode................................................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
International business refers to the trade of services, technology, capital and goods which
focus on any commercial activity or transaction across the national borders. The organization do
export and import of good and services from more than one country. This can satisfy the need
and wants of customer in market by management of an organization (Agarwal and Gupta, 2018).
This report is based on Hilton Food Group Plc which is a food packaging business. It was
established in Huntingdon, United Kingdom in the year of 1994.
This report includes the evaluation of their current international strategy for their
organization and it also consist of recommendation for suitable market for enter with supporting
reason. This report also consists of suitable entry mode to use with supporting evidence and
reasoning. Further, it also covers the necessary frameworks/tools which is relevant to this
assessment which consider the practical issues and potential obstacles. This also briefly
explained that relevant global trends which may affect International business.
MAIN BODY
An evaluation of the current international strategy of the organisation
International strategy is a business plan which is created by management of an enterprise
for run their business successfully in international market. In this, management need to analyse
the international market, resources, defining goals and understand the dynamic of market. There
many different types of international business strategy which an organization uses when planning
to expand or run their business in worldwide market (Buckley, 2019). Strategies depend upon
two factors including emphasis on low cost and efficiency as well as responding on local culture
and needs. In Hilton Food Group Plc, international business strategy is followed with the help of
which management run business process smoothly in market and they compete with competitors
effectively. The Multi- Domestic Strategy is currently adopted by management of Hilton Food
Group Plc as its international strategy. In Multi- Domestic Strategy, management focuses on
local responsiveness over global standardization and make it most localized of their different
models available. This strategy enables organisational subsidiaries of compete independently in
various domestic markets. In this strategy, management do not focus more on universal approach
or global approach (Buckley, Enderwick and Cross, 2018). The purpose of Multi- Domestic
Strategy in company is to control portfolio of local subsidiaries in order to scale up as well as
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down in the basis of performance. The evaluation in form of advantages and disadvantages of
Multi Domestic Strategy of Hilton Food Group Plc are as follows:
Advantages of Multi- Domestic Strategy
 The strategy allows management to prepare flexible and adaptable advertisements
because the firm advertise their products directly in context to customers within a given
market (Casson, and Wadeson, 2018). This help Hilton Food Group Plc have to enable
their management to prepare effective strategy for their customers which easily grab the
attention and create interest in customer mind in market.
 With Multi-Domestic Strategy, Hilton Food Group Plc is able to easily access
competitive advantages at local level by grabbing labour, shipping lanes and natural
resources at affordable prices. These all help company to run their business operation
smoothly in market and sustain for long term in market.
 This strategy of Hilton Food Group Plc, meet the expectation level of customer by
creating product according to their desire in market. The local manager of an enterprise
must know about the customer requirements then only they able to fulfil and satisfy the
customer wants.
Disadvantages of Multi- Domestic Strategy
 It is primary disadvantage of Multi- Domestic Strategy is that management have to bear
high expenses for execution of this strategy in their business operations. In case of Hilton
Group Food Plc, management have to spent high cost when they apply Multi- Domestic
Strategy for preparing the strategies for competing their competitors in market.
 In this strategy, management of Hilton Food Group Plc have to faced uncertainty because
of tailored strategies in different countries. This impact the firm, because the management
need to prepare different strategies for their different locations, so it also directly impacts
on cost of the product in the market.
 In company, the management required high skills employees for operating their activities,
which is not possible for management to have same skills in different countries (Chow
and Schoenbaum, 2020). So, that management need to prepare strategies and take their
own employees in different countries for operating their activities. Hilton Food Group Plc
faced this problem and this directly impact on business productivity level in market.
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Recommendation for a suitable new market to enter
If business want to enter in new market, then management need to prepare effective
strategy and for which they have to proper analysed the factors which must be required to enter
in market. The management need to do PESTEL analysis for the new market which help them to
identify the suitable market. The Hilton Food Group Plc choose Nauru country as the suitable for
new market in which they can start their business but before that they need to identify important
factors which may affect the business process.
PESTEL ANALYSIS
 Political Factors: In Nauru, the current political system is having lacks formal political
parties, which typically stand as independents. It is constitutional republic and in
international observers deemed as 2016 parliamentary election which is need to be free
and fair. This country is now at developing stage which directly impact on the new
organization who want to expand their business (Hamilton and Webster, 2018). The
government provides subsidies to their investors for developing their business successful
in the market. This very helpful for Hilton food group to expand their business in Nauru,
because of their political factors is suitable for their business operations. This also affect
the business cost as their government help management to develop their business
effectively in market. This is the best time for Hilton Food Group Plc to expand their
business in Nauru, which help management to easily run their business process smoothly
and it help organization to increased their brand image in the market.
 Economic Factors: In Nauru country, there is no mandatory minimum rate of pay
workers. There is huge unemployment rate is there which help new enter organization to
create employment opportunities in the market which improve the people living standard.
This help organization of Hilton Food Group plc that as the company can easily hire the
employees at very low wages that can help management to save their cost and easily run
their business in market. This also improve the economic conditions of Nauru and
company assist the establishment to easily sustain for long term in market. The
management use their of employees different skills in their organization which help them
to operate their activities effectively. The Economic factor is very important for
management that they have to manage the economic factors.
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 Social Factors: In this factors, here in the management of Hilton Food Group Plc
examine the demographic, lifestyle, taste and preference, etc. This allows the
management to know about the needs and want of the customers which is required by
management to fulfil in the market (Hannibal and Knight, 2018). Then, management
need to choose the products according to their customer in market. In Nauru country, the
lifestyle of citizens is changing very fast so, it is responsibility for Hilton Food Group
Plc, that they need to focus on their food packaging which are able to meet the
expectation level in market. In the company, management hire the employees of Nauru's
country then it become easy for management to know the taste and preference of
customer, so that Hilton Food Group easily satisfy the customer needs and want s in the
market.
 Technological Factors: In this factor, it influences which have a huge impact on how an
organization operates their activity which are related to the technology equipment which
is used for a suitable new market to enter with supporting evidence and reasoning within
the organization. With the help of technology, business improve their productivity level
which help to meet the demand of the market (Hult, Gonzalez-Perez and Lagerström,
2020). The technology is now become very important factors which management need to
adopt in their enterprise, the latest technology then only they able to improve their
performance level which help management to increase their performance level. In Nauru,
technology is at upgrading stage according to UK, but management can develop the
technologies which can also be used in Nauru, like AI technology, chatbots, etc. This can
easy to make awareness of customers in marketplace. If latest technology used in by
Hilton Food Group Plc, then it help to reduce the wastage and save time for production
and it help business to improve their business performance level in the market. This
become easy to meet the demand of market which help management to sell the product or
services to the customer and increased the revenue in the company. This is best market
which help Hilton Food Group to expand and run their business which make good
reputation in the market.
 Environment Factors: In environment factors there is huge impact on the organization
which is necessary for management to examine all the important factors related to the
environment which is very necessary for their production of their product (Rua, 2018) . In
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Nauru, management of Hilton Food Group Plc easily get their raw material for the
production at very low cost. This will also impact on the cost of product that price of the
product is easily affordable by the customer in market. Now, it also become
responsibility for Hilton Food Group Plc that they have to setup recycle plant so, that
management can utilised the natural resources and sustain for the long-term in market.
This also become more effective by management that they easily improve their
production in the organization. It help management to make their product available any
time for their customers in market. This is why management select Nauru country for
doing their business.
 Legal Factors: In Nauru, the legal factors for running the organization is good because it
does not include the more paper work or restriction for doing the business. This become
very easy for entrepreneur to established their new business in market. It is very
necessary for organization to follow all legal policies for operating and running their
business successfully. The management of Hilton Group Plc must be prepared according
to the Nauru government policies, so that it smoothly run their business in market
(Lundan, and Li, 2019). The Hilton Food Group Plc must have to follow all the legal
policies which is implemented by Nauru government for establishing and running new
business. Then only it is possible for management of Hilton Food Group Plc run their
business smoothly without any interference of Nauru government. This is why
organization of Hilton Food Group Plc choose Nauru place for their business in the
market.
Recommendation for a suitable entry mode
The management of an organization use the entry mode for expand their business in new
market. The management to entering in a new market with agreement and another foreign or
local organization for their distribution of their work. This entry mode of Greenfield Venture
allows organization to reach foreign market without associated risk that come with other entry
modes. This is recommend that Hilton food Group Plc can choose the Greenfield Venture for
entering in the new market for doing the business in Nauru country. This can allow business to
run their business setup easily in the new market. Greenfield Venture is the strategy to enter into
the new market of foreign country by directing its facilities from beginning. Without taking any
help from other organisations which already exist in the market, Hilton Food Group Plc enters in
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a new market (McHenry and Welch, 2018). According to greenfield venture, a firm set up a full
new base of operations when they enter in new market. It provides maximum control over the
organisation and in most of the cases it is expensive and complex. It has a high level of control
over brand-image, manufacturing, sale of product and services, business operations and staffing
of the company. Greenfield Venture have approach for development of services and create
system which can adapt the new environment in their organization. This is very effective way for
the Hilton food Group Plc, that they can developed their business in new market to run their
business process smoothly in the market place and adopt the environment of new market in the
corporation (Saarenpää, 2018). It helps management to continue to use some legacy components
of their business which help to developed their business in new market with same activities. It
involves the similar in traditional upgrade in their business environment because it helps to
update the software, some data transformation and some changes in business process according
to the new market. It helps in providing jobs for the society of people through the greenfield
venture is taking place and bypass the trade restrictions. It provides authority over foreign direct
investment to their investors, which includes setting up a marketing strategy and liberation in
setting prices of the product and services. It avoids the requirement for intermediaries and also
can get tax break. The investors of greenfield organisation have a full control over the
functioning of enterprise in many ways that they do not have in already existing local firm (Sinha
and Chowdhury, 2021). In Hilton Food Plc, greenfield venture can have a positive effect as the
company can open subsidiary in another country. This investment entitles in an easy and
effective changes to the foreign market. According to the economic policies of the country,
organisation can also get advantages from government tax incentives focuses on fascinating
foreign investment. Depending on the country's economic policies, companies can also profit
from government tax incentives aimed at attracting for Depending on the country's economic
policies, companies can also profit from government tax incentives aimed at attracting foreign
investment. Depending on the country's economic policies, companies can also profit from
government tax incentives aimed at attracting foreign investment.
This Greenfield Venture have benefits for the management, if they adopt this entry mode for
doing and setup their business in new country. The management may have high control over
their business when management do operation in their business activity. This help Hilton Food
Group that they have full controlled over their all business activities which is performed in the
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organization. This also enables the management to maintain the high level of quality control in
their manufacturing and sale of the products or services. Hilton Food Group Plc also need to
maintain the quality of their manufacturing products which help them to satisfy the needs and
wants of the customer in new market. It helps management to creates and control the brand
image of their enterprise which help management to increase the sale of product and services. It
helps the management of Hilton Food Group Plc that they need to creates and maintain their
brand image in the market which help customer to trust on the product and it became easy for
customer to sale the product s in the new market. When organization enter in the new market
then it can creates a job opportunity for the new country and it can improve the living standard of
people. This can help to improve the economic condition of the new country and management
can generate profits. If Hilton Food Group Plc enter in new market then they can give job to the
unemployment person job in their society which can help to improve the financial condition of
the people and it can directly impact on the economic condition of the country in positive way
(Wang and Larimo, 2020). It may very less trade restriction when management for doing import
or export of their business for doing the international business. If Hilton Food Group Plc, enter in
new market with Greenfield Venture then they may have to very less custom formalities for
doing export and import for doing the international business. It can also facilitates the tailoring of
advertising and marketing efforts for their local market environment and it can help the Hilton
Food Group Plc, which can make the formation of partnerships with native business which can
increased the market penetration in new market. This can help investors to avoid entirely the cost
of using their intermediaries like lenders or other investors. This can depend upon the Nauru's
economic policies, companies which can also get profit from government tax incentives and it
may used to aimed for attracting foreign investment. There some importance of Greenfield
Venture which management need to take care when they enter in the new market for establishing
their business. In this entry mode it can allows the investors to may have full control over foreign
direct investment which can help management of Hilton Food Group Plc to developed and setup
their business in Nauru country directly and have full control on their every business activity. In
this management may have authority and freedom in setting their prices and established a own
market strategy in the new market and there is no restriction for management for doing this
activity (Zucchella, 2021). This help Hilton Food Group Plc to established their market strategies
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then management may have rights to set their own price of their product or services according to
their new market for preparing marketing strategy.
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CONCLUSION
It is concluded from this report that management need to prepare effective business
strategy for running their company smoothly in the market. This help management to examine
the competition level of the market which help business to grow and sustain for long term in
market. This is very necessary for management to prepare right strategies for the organization so
that they able to compete their competitors in market. If management want to expand their
business in new market, then they have to proper examine all the necessary factors which impact
the business process. Then only management select and choose the place which suitable with the
business which is good for the management. This help management to run their business process
smoothly in the market without any interference of government. The management apply
PESTEL analysis in their organization to examine the new market of different country. Then,
now management need to decide which entry mode they have to choose to entry in new market
which help them to expansion of their business in new marketplace. This is why it is necessary
for management to choose appropriate entry mode for expanding their business. The
management choose Greenfield Venture for entering in the new market of Nauru for establishing
their business.
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REFERENCES
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firms. Emerald Group Publishing.
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University Press.
Casson, M. and Wadeson, N., 2018. The economic theory of international business: A supply
chain perspective. In The Multinational Enterprise. Edward Elgar Publishing.
Chow, D. C. and Schoenbaum, T. J., 2020. International business transactions: problems, cases,
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Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
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technologies and the location of international business. International Business
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Rua, O. L., 2018. From intangible resources to export performance: exploring the mediating
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Sinha, D. and Chowdhury, S. R., 2021. Blockchain-based smart contract for international
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