International Business Environment and Subway's Australian Market

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THE INTERNATIONAL MANAGER
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
International business environment.............................................................................................4
Global and international challenges faced by an organization....................................................4
Opportunities for the manager in international market................................................................5
Challenges faced by the manager of Subway in Australian market............................................8
Opportunities available for the managers of Subway..................................................................8
Recommendations or solutions for the challenges......................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Globalization is the process where the interaction and integration of companies, people, countries
and governments takes place. Taking into account globalization, the process is a complex one
and is it very difficult for an organization to operate in other countries with their rules and
regulations (Wright, 2016). Same as internationalization, where the organizations or enterprises
get too much involved in the international market and it explains about the designing of the
project in such a way that it should meet the requirement of the particular market.
Both globalization and internationalization are very much important for the organization to
achieve their target and operate in the global market but in the same way, the company has to
face many challenges as well to get succeeded in that market which might open some
opportunities for the company as well.
Once a company can handle and tackle the challenges it is also able to make the organization
successful in that particular market and it will create certain opportunities for the company as
well.
The essay is based on the global challenges and opportunities for a manager who has to face
while operating in the international market, there will be certain challenges for Subway to
operate in the Australian market, but with the opportunities, the company would have been able
to handle the challenges.
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MAIN BODY
International business environment
The international business environment is the environment which includes the multidimensional
aspects of an environment with political risks, legal issues and difference in culture and risks of
trade and tariff and technological advancement (Savrul et al., 2014). The international business
environment involves the languages, religions, customs, values and many more things which an
organization has to follow for making it big in the international business.
Subway is a private American brand which has the restaurant franchises whose primary product
and object are to sell the sandwiches and salads (Savrul et al., 2014). It was established by Fred
DeLuca in the year 1965. This brand is one of the fastest-growing brands in the world, which
owns up to forty-two thousand restaurants in almost a hundred countries. It is the single largest
restaurant chains in the world. Most of the restaurants of Subway are located in the United
Kingdom.
Global and international challenges faced by an organization
According to ST Cavusgil et al., (2014), Global or international challenges are the challenges
which an entrepreneur, as well as the manager who is operating at international, has to face while
making and running a business in an international level (Marano et al., 2017). There are several
challenges a company faces while going international, some of the challenges are as follows:
Cultural differences and communication difficulty
WR Scott et al., (2011), stated that whenever a business is operating at an international level the
manager as well the business has to face the cultural differences in the company. Operating the
business in another country requires having an understanding of the local language and culture of
the country. The business practices which are accepted in the USA don't need to be followed in
other countries as well. This issue is faced by the local workers of the company as well when
they are not able to understand the gesture and language of the manager (Marano et al., 2017).
Currency issues
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This is the greatest challenge a company can face while operating in an international market. The
companies have to face the legal issues of currency and exchange rates for a particular country.
While operating overseas, the company, as well as the manager, needs to understand the rate of
the conversion rate to make the transactions effective and efficient (Gillespie, 2015). With the
mistake in the calculation or slight difference in the exchange rate, can destroy the companies
goodwill in a particular country.
Foreign Laws and regulations
Every country has different laws and regulations related to the business as well as the citizen. It
is must for a manager to be informative about the legal aspects and lawful concept of the
particular country where the business has been operated. R Anderson (2013), stated that the tax
and tariffs on international trade, government control, health and safety standards etc. have to be
taken care. The legal aspect of the country where the business has been operated must
appropriately researched and communicated each and finding and expectation of the people and
government of the country (Li and Voege, 2017). The manager has to be aware of the changes in
the laws and the legal aspect of the country.
Political risks
This is one of the challenges of going global or in the international market. The political
instability and uncertainty of the political environment of a particular country affect the business
in that particular country. Li and Voege, (2017), said that if the policies of the country are
undefined and the business practices are corrupted and inappropriate then it brings the challenges
for the companies which are being operated in that country. The challenges will appear in the
form of changes in regulations, policies and interest rates due to change in the political parties in
a particular country (Bélanger et al., 2019).
Opportunities for the manager in the international market
D Grewal (2011) has pointed out that Internationalizations and globalization have a bigger
perspective in the way of getting success. The companies which are operating in the international
market have to face some problems and issues while running their business in that particular
market, but there are certain opportunities the company and the manager get when they operate
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in the global market (Iyer et al., 2015). The opportunities which are available for the manager to
expand and run their business are as follows:
Competitive advantage
One of the opportunities the companies gain through entering the international market is a
competitive advantage for the company with other competitors. International access of the
companies will always help the companies to gain access to new technologies and markets to
defend the competitors and make goodwill of the company in those particular markets (Rosado-
Serrano and Paul, 2018).
Exporting and importing
RC Hoffman et al., (2012), Said that exporting and importing is one of the opportunities business
organizations can take into account for going international. The companies can make or produce
the goods in the home country and transport it to the various countries or bringing the produced
goods from another country to the native country. These transactions come under the export and
import procedure (Rosado-Serrano and Paul, 2018).
Licensing’s
Licensing is the other method and opportunity for a company to make an international presence
of the company in the country (Rosado-Serrano and Paul, 2018). With this, the company allows
the right of the patent to another company on behalf of one country.
Franchising opportunity
According to V Baena (2012), this is the vital business opportunity a company will have ever.
With the help of this, a company gets the chance to enter to various international markets and
gives a chance to open and grow the business and brand of the company in different countries
and companies as well. With this method, the brand provides the companies with their name and
allows them to work on behalf of the company (Qureshi et al., 2016).
Diversification
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This is one of the methods through which businesses expand their assets with intend to protect
the bottom line of the company for the unseen events (Qureshi et al., 2016). Companies with
different markets can utilize international markets to introduce their products and services to the
markets, which may help the company to maintain their revenue as well as the goodwill of the
company.
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Challenges faced by the manager of Subway in the Australian market
Subway is an American brand which has been established in the year 1965; it has almost 42
restaurants all over the world and 122 restaurants in Australia. The company is popular for
having the fastest growth in the chains of a restaurant all over the worlds. The challenges which
the company is facing for surviving in the Australian market are as follows:
The Marano et al., (2017) Said that The Company is an American based company, which has
been operating in Australia as well, there is a huge difference between the cultures of both the
countries and also they have different tastes and preferences and different food habits (Savrul et
al., 2014). The Australian people were afraid of eating meat in their food in sandwiches due to
which it was difficult for the company to make the things according to the customers of
Australia. Savrul et al., (2014), added to it that Subways was ready to sell their restaurants in
Australia due to the huge losses in the company and decrease in the sale of the restaurants.
Gillespie, (2015) stated the other problem or challenge which the company faced was legal
regulations and political uncertainty in the country (Bélanger et al., 2019). There were certain
changes have been occurred in the policies of the country in political aspect and foreign trade
laws for foreign companies due to which the restaurants in the country were unable to operate
efficiently and the survival was very difficult for the Subway restaurants.
Opportunities available for the managers of Subway
Subway is the well-known chain of restaurants in the world, but still, there are certain
opportunities for subway through which it can still grab the Australian market and it has already
acquired the market with some methods and they are as follows:
The company can use the opportunity of licensing and franchising for the restaurants with
another party by giving trademark and patent to the party to run the business or restaurant of
Subway under their umbrella (Qureshi et al., 2016). This will be the best opportunity for the
Subway because sue to this they will be able to have the local staff who can help them to
understand the mindset of Australian people about food and beverages. This will help the
company to achieve competitive advantage and gain more profits and earn goodwill for the
company (Baena, 2018).
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The company can also develop itself in the Australian market with proper research and
development of the market, with analysis of the market structure and trends in the market.
Recommendations or solutions for the challenges
According to Fernie and Sparks (2018), when there are problems and challenges, then there are
solutions as well for the issues. The company is facing the cultural issues with the customers as
well as with the staff members due to change in languages of both company as well as staff, the
difference in food taste and preferences of the customers and communication issue with staff
members (Baena, 2018). Adding to this WR Scott et al., (2017), the company must have a local
staff and manager to communicate with the staff as well as the customer to listen to them and
understand the needs as well as issues. With this policy, the company will be able to manage the
customers and staff easily and they can fulfil the demand and queries of the company (Caprar et
al., 2015).
The legal issues and political problems are the never-ending issues in every country; the
Australian government has imposed some extra charges on the restaurants due to food waste or
any other reasons (Reiche et al., 2016). According to J Binder (2016), the company has to make
a different committee with international rules and regulation, which will be responsible to take
care for the legal and political changes in the particular country’s policies regarding the
international business and global marketing. The committee has to make sure about the changes
and inform the manager about that, so that manager will be able to take some corrective steps or
make strategies to handle those changes, so that it may not affect the company’s revenue and
sales (Reiche et al., 2016)s.
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CONCLUSION
According to the essay, it is clear that there are various issues an organization or company has to
face while operating in the international market. Every company which is operating in the
international market or expanding the business at the international market has to face the
problems. These problems have been discussed in the essay in brief. The essay is all about the
challenges and opportunities faced by subway in the international market of the Australian
market. There certain issues, which subways have gone through and accepted those challenges
and overcome them. The company even has got many opportunities through which it can
rebound its branch in the Australian market.
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REFERENCES
Baena, V., 2018. International franchise presence and intensity level: profile of franchisors
operating abroad. Management Research Review, 41(2), pp.202-224.
Bélanger, J., Edwards, P.K. and Haiven, L. eds., 2019. Workplace industrial relations and the
global challenge. Cornell University Press.
Caprara, D.V., Devinney, T.M., Kirkman, B.L. and Caligiuri, P., 2015. Conceptualizing and
measuring culture in international business and management: From challenges to potential
solutions.
Gillespie, K., 2015. Global marketing. Routledge.
Iyer, G.R., Grewal, D., Javalgi, R. and Radulovich, L., 2015. Franchise Expansion into
International Markets: The Role of Entrepreneurial Orientation and Knowledge Resources.
In Cultural Perspectives in a Global Marketplace (pp. 120-121). Springer, Cham.
Li, Y. and Voege, T., 2017. Mobility as a service (MaaS): challenges of Implementation and
Policy Required. Journal of transportation technologies, 7(02), pp.95-106.
Marano, V., Tallman, S.B. and Teegen, H., 2017. The Sharing Economy and the Challenges of
Internationalization. In Academy of Management Proceedings (Vol. 2017, No. 1, p. 10442).
Briarcliff Manor, NY 10510: Academy of Management.
Qureshi, J.A., Farooqui, S.J. and Qureshi, M.A., 2016. Johnny Rockets Pakistan’s Strategic
Mistakes and Opportunity in a Growing Market. International Journal of Experiential Learning
& Case Studies, 1(2), pp.29-50.
Reiche, B.S., Stahl, G.K., Mendenhall, M.E. and Oddou, G.R. eds., 2016. Readings and cases in
international human resource management. Taylor & Francis.
Rosado-Serrano, A. and Paul, J., 2018. A new conceptual model for international
franchising. International Journal of Hospitality Management, 75, pp.179-188.
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Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences, 150, pp.35-45.
Wright, S., 2016. Language policy and language planning: From nationalism to globalisation.
Springer.
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