MGT611: International Business Strategy Report on GWF's India Entry

This report examines the international business strategy of George Western Foods Limited (GWF), a food manufacturing company based in Australia and New Zealand. The report begins with an executive summary and introduction to international business strategy. It then provides an overview of GWF, including its structure and operations. The core of the report involves a SWOT analysis, evaluating GWF's strengths, weaknesses, opportunities, and threats, and a PESTLE analysis, assessing the political, economic, social, technological, legal, and environmental factors relevant to GWF's potential entry into the Indian market. The report utilizes the OLI framework (Ownership, Location, and Internalization) to evaluate GWF's strategic options for entering the Indian market. The report concludes by summarizing the key findings and providing recommendations. The analysis highlights the importance of adapting to the Indian market’s specific conditions and leveraging GWF’s strengths to capitalize on opportunities.

INTERNATIONAL BUSINESS
STRATEGY

Executive Summary
International business strategy is defined as the plan that can guide commercial transactions
established in different countries. It is an action plan follow up made by the private
companies rather than government, as this goal will increase the profits. The main idea of
international strategies can be the benefit through larger access to the market, economies of
scale with an idea to learn the opportunities, and the strategic and lower costing of location
advantage such as energy and labour.

Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................4
GWF (George Western Food Limited)...................................................................................................4
SWOT Analysis.......................................................................................................................................4
PESTLE Analysis......................................................................................................................................5
OLI Framework......................................................................................................................................8
Conclusion.............................................................................................................................................9
References...........................................................................................................................................11

Introduction
This report brings out a discussion on international business strategy. While evaluating this
topic, the report will discuss Pestle analysis considering five important factors such as
political factors, economic factors, social factors, technological factors, legal factors, and
environmental factors. The report has undertaken SWOT analysis that is an internal analysis,
which decides whether the company is capable enough to enter into the market. Further, the
discussion has discussed on how the company will enter into the Indian market with the help
of eclectic paradigm known as (ownership, location, and internationalisation) framework.
The main goal of this framework is to provide a greater value to as compared to other
available international and national choices for both manufacturing of goods and services
(Cision pre news wire, 2017).
GWF (George Western Food Limited)
GWF is one of the New Zealand and Australia`s largest food manufacturing unit in nearly 58
sites employing more than 6000 people. The company is a wholly subsidiary of the
Association British food plc (George Weston Foods, 2019). Which has diversified
international food and retail group while operating in sugar, agriculture, ingredients, grocery,
and retail employing nearly 100000 employees in 46 countries (Cision pre news wire, 2017).
The company is a food processing with the distribution corporate as it offers range of various
bakery products such as cakes, crackers, tortillas, donuts, and other baked products. Apart
from this, the company offers health products, pharmacy, apparel, and banking services
(George Weston Foods, 2019).
SWOT Analysis
Opportunities Threats
1. Increase in the number of middle
class
1. Increasing cost of fuel and other raw
materials

2. Scope of business has been rising
due to increasing customer
preferences on the development of
healthy and diet foods.
3. Expansion of the existing line of
product (Ahmadi, Dileepan, &
Wheatley, 2016)
2. Increasing competition with relation
to other chains (Ahmadi, Dileepan,
& Wheatley, 2016)
Strengths Weaknesses
1. The business has been structured in
New Zealand and Australia.
2. It is responsible for a range of
activities, which include
manufacturing, selling, innovating,
and distributing products.
3. It employs nearly 6500 people in 60
sites in New Zealand and Australia.
4. It is one of the strength that it
operates with large economies of
scale Ahmadi, Dileepan, &
Wheatley, 2016)
5. It engages high brand name with
some of the popular products such as
Weston Milling, KrCastlemaine,
Jasol, and Tip top Ahmadi,
Dileepan, & Wheatley, 2016)
1. Perishable nature of the home
manufactured goods, which put a
pressure on the inventory costs.
2. Increasing competition in Australia
from Tesco, Coles, and Woolworth
Management of issues related to internal
labour Ahmadi, Dileepan, & Wheatley,
2016)

PESTLE Analysis
Political conditions-
In the current era, it is seen that India has stable and strong government system. Modi
government has been undertaking a lot of important steps and measures in order to improve
food security and bring certain food reforms in the speciality foods. The government has
permitted 100 percent of FDI under the government approval routes with the purpose of
trading and other initiative such as “make in India.” E-commerce players such as Big Basket,
Amazon, and Grofers that has been applied for the approval of retailing locally produced
food items by promising the investment of $695 million. The government has been relaxing
FDI (Foreign direct investment) policies in retailing of the food products so that they can
make easy operations for top foreign retailers while investing in India. Many of the local and
global manufacturers of the gluten free items that have started selling the products with the
help of Big Basket and Amazon.
Economic conditions-
This factor includes GDP of the country, income level of country, FDI allowance in the
country, interest rates, and other economic indicators. Considered inflation rate in the year
2.24 percent in 2017-18. The country has allowed 100 percent FDI in food and other potential
investment that grew between $5-10 billion. From the time April to December in 2016 to
2017, FDI inflow rose nearly $46.40 billion near to 1 percent from 2015-2016. It has been
projected that the country`s growth 7.2 percent and it is expected to grow by 2-4 percent in
the upcoming years. It is important to know Indian consumers are quite price sensitive and
seek valuation for money. Launching the products in small packages that can help the
organisation for the fight price competition, GDP, and inflation.

Social factors-
It is seen that the economy is still ruled by farming community and rural society, which
dominates the Indian society. Decisions will allow 100 percent FDI in terms of marketing
(locally manufactured food products) was crucial as food and farm worth nearly INR 92651
crore may get wasted because of low level of manufacturing and inefficient infrastructure for
the scientific storage. The company has the chance to launch gluten free foods, which is
composed of herbs. Consumers have started focused on health concerns such as companies
have been targeting segment by launching bakery products (McRobert, Hill, Smale, Hay, &
Windt, 2018).
Increase in nuclear families and employees that has led to increase in consumption of the
processed canned and other frozen foods. Change in the lifestyle and increasing spending on
snacks and gluten free bakery items. Functional and processed foods claim to avail many
health benefits and it is important to demand processed food. Indians crave for the taste buds
including red chilli, mint, other herbs, and black pepper. The country is the largest producer
of milk and the second largest grower of wheat, fruit, vegetable, and rice but at the same
time, the processing level is nearly 10 percent.
Technological factors-
Due to increase in the use of social media platform, companies are able to consumer
interaction and the attitudes. Effective technological techniques can lead to reduction in costs,
innovation, and improving the quality. Innovative manufacturing techniques, manufacturing
of flours, bran and starches created from the alternative products that can help in
enhancement of appearance and taste . Implication of innovation includes coconuts, legumes,
amaranth, almonds, sorghum, and quinoa. Technological innovation are needed in the
packaging of gluten free goods that are perishable and they have less shelf life as compared to

the imported brands. Nutrition innovation with the help of fortified flours with the use of pea
protein that can be highly helpful in increasing the consumer base.
Legal factors-
The government of India has set many of the rules, policies, and regulations under the FSSAI
for the importing and the production of gluten free food in order to ensure quality of products
and the safety of the consumers.
Environmental factors-
In relation to the noise and air pollution, India has remained one of the most polluted and
populated country. High temperature, greenhouse effect, and global warming impact in India
has reduced shelf life of the products. Raw materials for the gluten free products is available
with huge level of arsenic because of soil pollution and water (Radulovich, Javalgi, &
Scherer, 2018). The Indian Government will have to work hard while controlling the
pollution and maintaining the health of the soil. Good nature can lead to the production of
healthy food. Sikkim is recognised as one of the organic state in India as the demand of the
organic gluten free food that has been at the highest trending in the market where efforts are
made to cover more area of under the organic gluten free-food cultivation for corn, rice,
millets, quinoa, and amaranth (Radulovich, Javalgi, & Scherer, 2018).
OLI Framework
For the beneficial framework and setting up a business, there are many advantages-
Ownership advantages-
This is a consideration “ownership advantages” including proprietary data and other various
ownership rights of the organisation. This consists of patent rights, trademark, branding,
copyright with the use of management and other internally availed skills. These skills are

intangible. For example- reputation for reliability while considering George Weston Foods
Limited expansion. The company has its establishment in New Zealand and Australia with 60
sites (McRobert, Hill, Smale, Hay, & Windt, 2018).
Location advantage-
Thinking of expanding it from New Zealand and Australia, the company thinks of expanding
it India. India has open legal system for FDI entries but it is important to attain a certain
patent rights, trademark, copyrights, and branding (Fuad, & Akbar, 2018). The company can
make use of natural resources through mobilisation that may require partnership agreements
with an idea for the foreign investor in the location, as it will be utilised to the full advantage
(Fuad, & Akbar, 2018).
International advantage- it is important as well as better for the company in order to produce
product in house with the collaboration by associating it with a Joint venture among all the
given options such as exporting, licensing, franchising, strategic alliance and it is starting
from the scratch with a Greenfield investment (Lake, 2018). It is seen that the company has
three advantages while successfully engaging with FDI (Lake, 2018).

Conclusion
From the above discussion, it is quite visible that company`s internal competitive advantage
is capable enough in entering in India. OLI framework is a holistic approach in order to
examine the entire relationships and other interactions of the variety of items of the business.
A business can be cost effective option when maintaining the quality while using this
framework in order to evaluate the scenario that finally exhibits potential.

References
Ahmadi, M., Dileepan, P., & Wheatley, K. K. (2016). A SWOT analysis of big data. Journal
of Education for Business, 91(5), 289-294.
Chittoor, R., Kale, P., & Puranam, P. (2015). Business groups in developing capital markets:
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1296.
Cision pre news wire, (2017). Bakery Industry in India (Bread, Biscuits and Other Products)
Present & Future Prospects, Market Size, Statistics, Trends, SWOT Analysis and
Forecasts (Upto 2017). Retrieved from:
https://www.prnewswire.com/news-releases/bakery-industry-in-india-bread-biscuits-
and-other-products-present--future-prospects-market-size-statistics-trends-swot-
analysis-and-forecasts-upto-2017-250144621.html
Fuad, M., & Akbar, M. (2018). International new ventures and firm performance: evidence
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George Weston Foods, (2019). Who We Are. Retrieved from: http://www.gwf.com.au/who-
we-are/index.html
Lake, D. A. (2018). Power, protection, and free trade: International sources of US
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McRobert, C. J., Hill, J. C., Smale, T., Hay, E. M., & van der Windt, D. A. (2018). A multi-
modal recruitment strategy using social media and internet-mediated methods to
recruit a multidisciplinary, international sample of clinicians to an online research
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Radulovich, L., Javalgi, R. R. G., & Scherer, R. F. (2018). Intangible resources influencing
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