International Business Strategy: Allerton Swimwear's Singapore Venture

This report examines the international expansion strategy of Allerton Swimwear, an Australian SME, focusing on its potential entry into the Singapore market. It begins with an executive summary, introduces the company, and provides key descriptive information. The report then delves into a micro-environmental analysis of Allerton Swimwear, including its business model, current performance, and strengths, weaknesses, opportunities, and threats (SWOT). The macro-environment of Singapore is then analyzed, highlighting its attractiveness for foreign direct investment. The OLI framework (Ownership, Location, Internalization) is applied to assess the viability of the expansion, considering advantages related to ownership, location, and internalization. The report concludes that Singapore is a suitable market for Allerton Swimwear's international expansion, supported by theoretical frameworks and practical examples. The report uses MGT611 International Business Strategy course concepts to guide the analysis.

Running head: AUSTRALIAN SME
AUSTRALIAN SME
Name of the Student
Name of the University
Author Note

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Executive Summary
The business environment has become highly competitive in nature and with respect to this, it
becomes important for any firm to ensure that in order to remain competitive in the long run,
they would be required to expand their operations internationally. The report looks at the
example of Allerton Swimwear and its expansion plans to Singapore. The report follows a
systematic format which introduces the firm and conducts macro and micro environmental
analysis to understand its decision making viability.

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Table of Contents
Background......................................................................................................................................3
Key Descriptive Information...........................................................................................................3
Micro Environment......................................................................................................................4
The Macro environment..............................................................................................................5
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Background
The Small business enterprises form a crucial part of the Australian economy and almost
97% of the Australian economy comprises of the SMEs. Hence, it can be rightfully mentioned
that the SMEs are integral to Australia. This is the reason, why the government has come up with
various incentives and regimes for these businesses which shall go a long way in assisting them
to perform well (Insidesmallbusiness.com.au ,2019). The primary aim of the report is to outline
the scope of one such Australian SME which would go a long way in assisting to understand the
different Australian theories and related frameworks. The firm which has been chosen for the
report is the Allerton Swimwear. The Allerton Swimwear is an ethically aware and
environmental friendly swimwear firm where the swimwear is made of ecofriendly materials.
The company functions to support ethical manufacturing and hence, with respect to this, it aims
to ensure that it will successfully be able to creative a positive mindset regarding the swimwear
industry and the body images as well. The report will recommend an appropriate market where
the organization can invest and expand in. This will be supported by adequate theory and real
examples. The market which has been chosen for the purpose of the expansion is Singapore.
Singapore has been experiencing a major growth rate and with respect to this, it can be largely
understood that, this country would be suitable for the expansion which has been planned.
Key Descriptive Information
The particular section will be divided into two different parts. The first part will be
discussing the internal environment or the Micro environment of the firm with the help of which,
the overall performance of the firm will be understood. The second part of the report will be
discussing the Macro environment of the national market in Singapore where the firm aims to
expand.

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Micro Environment
About the firm
The Allerton Swimwear can be stated to be the independent Australian Swimwear label
which comes under the segment of Small Business enterprise (Allerton.com.au ,2019). The brand
is passionate about Ethical Manufacturing and ensures that it is successfully able to integrate
Social as well as Environmental awareness. As the firm wants to create a positive body image
regarding the swimwears, it has introduced an adjustable and functional swimwear and makes
use of regenerated Lycra whenever possible (Allerton.com.au ,2019). The firm conducts its fair
share of social responsibility as well where the firm acknowledges the Bidjigal and Gadigal
people who tend to occupy the Sydney coast and additionally the firm also acknowledges the
Torres Strait and Aboriginals as present in the society.
Current performance
Currently, the firm has received critical acclaim from various businesses for its unique
business idea and for the manner in which it deals with body image philosophy and related
aspects. The business launched at the Miami Swim Week and distributes to major retailers in the
United Kingdom, Unites States and New Zealand (Allerton.com.au ,2019). The brand has also
featured in Vogue, Russian Elle and Daily Mail UK which makes it increasingly popular
amongst the people. Various Hollywood actresses have also adorned the swimwear of the firm.
Its immensely comfortable and sustainable design makes it increasingly popular in the eyes of
the different consumers.
SMEs in Australia

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In Australia, the different SMEs, have to employee less than 200 employees. In addition
to this, the Australian SMEs comprise of 97% of the Australian businesses and are the producers
of 1/3rd of the total GDP. The entire small business industry employs 4.7 million people and
represents 90% of the goods which are exported and 60% of the service exporters
(Insidesmallbusiness.com.au ,2019).
SWOT Analysis
Strength Weakness
The primary strength of the business can be
stated to be the unique idea and the
sustainability measure of the organization.
The weakness of the business can be stated to
be that, it has certain limitations as it is a
small business and comes under the SME
category.
Opportunity Threat
The firm can expand internationally gain
popularity outside the particular country
of operation (Allerton.com.au ,2019).
The threat which is faced by the company is
that, other companies are coming up with a
similar idea about the sustainable swimwear.
The Macro environment
About Singapore
Singapore is a largely successful country and has applied all its economic efforts into
attracting the foreign direct investments with respect to the same. It has created a suitable trade
environment and ensured that it will successfully be able to make Singapore one of the easiest
countries to conduct business in (Opencompanysingapore.com ,2019). There are various tax

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incentives as well as exemptions for the foreign investors with respect to which the country aims
to ensure that the different members are successfully able to attract a high number of
investments. The Singapore can also be stated to be the eighth largest city in the world which is a
recipient of the FDI and in a similar way can be stated to be a third amongst the Asian countries.
The next section will be making use of the OLI Framework to estimate whether the investment
opportunity in the country will be useful or not (Opencompanysingapore.com ,2019).
OLI Framework
When deciding upon whether the investment into a country will be viable or not, the
business can make a decision using the most popular tool which is available for the decision
making regarding the investment in the country of Singapore (Forsgren & Johanson ,2014). The
different companies tend to perform well because they are motivated to invest into the different
firm aspects. Firstly, according to the theory, the firm looks out for strategic resources like the
financial and technological resources or the human resources which they can make use of. In
certain other cases, the firm may also make use of the new customer base in order to attract the
right kind of audience (Verbeke, 2013). Moreover, certain companies may also look out to
expand in order to improve the overall efficiency at the workplace.
To a firm like Allerton Swimwear, there are certain number of entry mode strategies
which are available and can be chosen by the firm in order to ensure that it is successfully able to
have its own pros as well as the cons (Dunning, 2013). However, certain strategies which are
made use of the firm like the licensing strategy, the franchising strategy, strategic alliance and a
joint venture. Moreover, some business enterprises may also choose to expand, using a green
field strategy. The foreign direct investment may be considered to be a good way to expand the
operations of the firm by making use of the OLI paradigm (Killing, 2013). The OLI is also

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known as the Ownership, Location and the internalization advantage and the eclectic paradigm
and talks about the different advantages which a company can face in case they want to gain an
advantage in the long run.
Figure 1: The OLI Framework
(Source: Casson, 2013).
1. Ownership advantage
The first advantage which is elaborated for the Allerton Swimwear is the ownership
advantage. If the firm plans to expand in Singapore, ownership will assist the firm in
gaining an edge over the other organizations undertaking similar business and hence, they
can set the pricing and quality along with other business decisions on their own (Casson,
2013). Hence Allerton Swimwear needs to ask itself the advantage of owning its own
business with a greater reputation. As the business laws for Singapore are comparatively
simpler, the firm can go for the same.

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2. Location advantage
Secondly, another advantage which is discussed upon is the location advantage.
This means that the location of the new business is required to be such that it serves as an
advantage to the Allerton Swimwear (Beamish, 2013). The business can either plan to
settle in some popular city for cheap labor and raw material or settle in some less popular
city to ensure long term success. The porter’s diamond model serves as a great tool which
may assist any business in going a long way and deciding upon the advantages they aim
to exploit and settle accordingly (Bartlett, Doz & Hedlund, 2013). Moreover, the location
also decides the revenue of the firm in the long run.
3. Internalization advantage
Lastly, the firm Allerton Swimwear also needs to look at the internalization
advantage in Singapore and check whether the value chain activity will be suitable for the
firm or not. As the external sourcing is cheaper, many firms opt for it, however, as the
firm is looking out for a greater advantage, choosing the lesser advantage shall be better
for the firm (Cavusgil et al., 2014). However, in case the firm feels that its resources and
expertise are inadequate, it may get into the joint venture.
Conclusion
Therefore, from the above analysis, it can be understood that the firm Allerton
Swimwear, which is a small business as present in Australia can expand its horizons and plan to
expand its operations in different countries like Singapore. The report outlined the overall
background of the firm which was followed by an internal analysis of the firm, the analysis of
Singapore as a suitable country and the analysis of the macro environment. The theory which has

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been used to support the overall expansion plan and strategy is the OLI framework. The
framework has been made use of with respect to the firm and has been supported by practical
examples. Hence, for the firm, Singapore would be a good choice to expand their business.

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References
Allerton.com.au (2019). About Allerton Swimwear. [online]. Available at:
https://allerton.com.au/pages/about-allerton-swimwear-new (Retrieved on: 21 Mar.
2019).
Allerton.com.au (2019). About Allerton Swimwear. [online]. Available at:
https://allerton.com.au/(Retrieved on: 21 Mar. 2019).
Bartlett, C. A., Doz, Y., & Hedlund, G. (2013). Managing the Global Firm (RLE International
Business). Routledge.
Beamish, P. (2013). Multinational joint ventures in developing countries (RLE International
Business). Routledge.
Casson, M. (2013). The Growth of International Business (RLE International Business).
Routledge.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L.
(2014). International business. Pearson Australia.
Dunning, J. H. (2013). International production and the multinational Enterprise (RLE
international business). Routledge.
Forsgren, M., & Johanson, J. (2014). Managing networks in international business. Routledge.
Insidesmallbusiness.com.au (2019). Australia small business. [online]. Available at:
https://insidesmallbusiness.com.au/planning-management/australias-top-50-small-
business-leaders-2018 (Retrieved on: 21 Mar. 2019).

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Killing, P. (2013). Strategies for joint venture success (RLE International Business). Routledge.
Opencompanysingapore.com (2019). Singapore. [online]. Available
at:https://www.opencompanysingapore.com/why-is-singapore-attractive-for-foreign-
investors (Retrieved on: 21 Mar. 2019).
Verbeke, A. (2013). International business strategy. Cambridge University Press.