Marshfield Bakery's International Business Strategy for US Market

This report provides an overview of Marshfield Bakery's internationalisation strategy, focusing on its potential expansion into the United States. It begins by outlining the rationale for internationalisation, including diversification, innovation, customer needs, competition, and economies of scale. A PE...Read More

INTERNATIONAL
BUSINESS
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
QUESTION 1..................................................................................................................................3
Organisational overview and reasons for internationalisation.....................................................3
Question 2........................................................................................................................................4
Country Analysis for supporting rationale-.................................................................................4
QUESTION 3..................................................................................................................................8
Internationalisation strategy for business....................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Internationalisation is defined as the approach or method of expanding business activities
from domestic and local market to international boundaries or market segment (Jafari-Sadeghi
and et.al., 2021). With several driving forces such as technological developments, economic
reasons, market needs and growth opportunities most of the organisations are seeking efforts to
push their limitations and to seek growth in international markets as well. This report will discuss
the rationale and methods by which organisations choose to enter into international markets. It
will also analyse the suitability of chosen destination for international market entry.
QUESTION 1
Organisational overview and reasons for internationalisation
Organisation:
Marshfield bakery is well known organisation in UK which produces handmade bakery
products such as biscuits, cakes, seasonal goods as well as snack bars. Its products are so tasty
and in demand that organisation has been able to expand its services across entire Europe and
other EU countries as well (Marshfield bakery, 2022). It was started as farmhouse kitchen in
1984 which now owns a huge site. To improve the customer experience, it also permits its users
to tailor the content of snack packs. With its immense success and innovative approach, it is now
planning to expand its services in international hub, initiating first mile from United States.
Rationale:
Contemporary business environment is driven by broad economic strategies. From future
perspective as well as effective functioning internationalisation has become an essential part. In
order to free from local dependence and to access broad market segments small organisations
such as Marshfield bakery are choosing ways to go internalised (Rahman and Mendy, 2019).
Further by utilising global resources and technology firms are also able to minimise their cost
and increase efficiency. Thus internationalisation is an opportunity for the firms to achieve new
miles of success. Some of the key reasons for the firms to adopt path of internationalisation are
as follows:
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Opportunities through diversification: There are services which are not available in host or
domestic country. Thus organisation used to get opportunities in such markets in which there is
huge demand for the products or services offered by client. It gives broad market segment and
growth options to firm (Kryeziu, Coşkun and Krasniqi, 2021). Operations in countries with high
demand also lead to greater profit margins for the firm. Among customers there is huge craze
and demand of foreign brands and their popularity. Thus organisations have wide platform to
serve and to gain profits.
Innovation and improved productivity: In international market firms used to undergo great
innovation and efficiency in terms of technology and business model to meet customer
expectations (Cortellazzo, Bonesso and Gerli, 2020). Exposure to new market and technology
allow small bakeries and organisations to innovate their process and business methods. Thus it
not only enhances productivity but also build a strong brand.
Customer needs: There are customers who used to relocate or travel very frequently. Thus they
are always in need of products and services which they regularly use. In order to retain such
large segment of customers it is re1quired that organisations are available in every corner of the
world. Technology has made it possible and eliminated all barriers in this context (Estrin,
Gozman and Khavul, 2018). Thus contemporary firms always have plan to satisfy and retain
their loyal customers by assuring service availability.
Survival in competition: Currently many firms are dominating international market. Thus in
order to survive from the fierce competition it has become mandatory for small businesses like
Marshfield bakery as well that they must understand international dynamic and their strong
international presence can help them in surviving the increasing rivalry (Kryeziu, Coşkun and
Krasniqi, 2021).
Economies of scale: Globally organisations have vast options for suppliers, manufacturing or
processing technology and distribution network. Thus it is very easy for the service providers
like Marshfield bakery to achieve economy of scale and to reduce their costs with increasing
demand. This is one of the reasons that organisations are choosing internationalisation context
for improving their business outcomes (Pascucci and Bartoloni, 2018).
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Question 2
Country Analysis for supporting rationale-
PESTLE Analysis- PESTLE Analysis of the USA will help to understand and identify the
country performance in political, economic, social, technological, legal and environmental
factors and helps in taking the business decisions by determining the objectives as well as
provides forecast of the business for present and future. This analysis will help Marshfield
Bakery in evaluating the performance of US country for its business expansion. This analysis
will focus on the macro-environmental factors which can affect the world’s most advanced
country (Friesendorf and Uedelhoven, 2021).
Political factors- The factors which can impact US can be such as In US, presidential democratic
system is followed and they have fair election system as well as the electorate process. The
president of this country comes under the most powerful person and president is solely
responsible for policymaking, country’s economic affairs. The country enjoys the stable climate
of political even of some challenges faced by them (Matovic, 2020). US faces much criticism in
some parts in interventionist policies. US is the country which promotes democracy all around
the world. US having stable political environment, technology as well as the advanced
infrastructure helps in being the top place for the foreign direct investment FDI. Because of this,
US has been always the first choice for Foreign Direct Investment even of many countries came
forward for FDI such as Nigeria, South Africa, Brazil and many more. Marshfield Bakery
expansion of business in US is the best choice as there is stable political system even of many
problems faced by the country.
Economic Factors- The next element of the PESTLE analysis is the economic environment of
the US. This country is the largest in the terms of economy as nominal GDP because the big
companies like McDonalds’s, Microsoft, and Apple are leading and growing in this country only.
However, as there is rapid change in the global economic landscape it has become challenges for
US. This country will come on 3rd position by 2050 in the context of GDP by purchasing the
power parity. The unemployment has been eliminated much and the income level are also
improved. The global lockdowns due to the pandemic has also affected the economy level of
their country but instead of this they again brought the economy to the correct level. The labour
in US is not cheap as compared to china, Mexico etc. The labours hired in US organisations are
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outsources from different countries. By analysing the economy of the US, Marshfield Bakery can
expand its business in this country as they are top in economy level.
Social Factors- US is the third most country in the terms of population. It has much aging
populations which can create the problems in the country. The education system in US is among
the top in the world so because of this the people are more health conscious. The unhealthy and
excessive consumption of fast foods has increased the obesity and illness in the country. By
analysing the social factor in US Marshfield Bakery must ensure the healthy food providing to
the customers which does not have any negative impact on the health of the people in the
country.
Technological factors- The next most important element of this analysis is technological factors.
US uses highly advanced technology as they are must fascinated towards the technology.
Companies like Apple, Microsoft, Google, Facebook and many more have brought the highly
advanced technological needs of the country as well as around the world. And adopting the
advanced technology made these organisations as the global leaders of their fields. This country
stays at top in adapting the latest technology in various fields. The technological change is very
dynamic in this country but this country also faces challenges by other countries like China,
South Korea, and Japan etc. US is the best country for expanding business of Marshfield Bakery
as it is highly growing country in the world.
Environmental Factors- US has much diverse climate, wildlife and terms of geography as well.
The million tourists are attracted towards this country because of factors like attractive natural
views, beautiful little towns and the vibrant cities. Canada, Mexico, Japan, United Kingdom are
the countries which helps in coming of the tourists in US. The US faces the toughest and difficult
situation in terms of weather as compared to other countries. There occurs many disaster which
causes disruptions in everyday lives of the people. As much visitors are attracted towards the
country which will help Marshfield Bakery in earning more revenue at these times.
Legal Factors- The legal structure of the US is much better as every state has its own
government and legal schemes. Factors like new anti-cartel laws, laws for unfair competition,
and regulations for the protection of consumer rights can affect the country. Businesses operating
in every states works under the regulatory environment. The country has the equal value for the
nationals as well as for foreigners. This country has strong legal system for protection of
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Intellectual Property Rights. Marshfield Bakery expanding its business in US will be beneficial
as the legal structure of this country is well.
PORTER’S five forces analysis-
PORTER’S five forces is the model which helps in analysing the competitive environment of the
company (Carraher,2018). The main purpose of using these five forces is for identifying the five
forces of competition and helps in determining the weaknesses and strengths of the industry. It is
generally used to understand the structure of the company. The porter’s five forces are-
Competition in the industry- The first force refers to the ability to undercut the company and the
number of their competitors. The power of the company depends on the number of the
competitors and on the products and services the company is offering that is the larger the
number of competitors with the number of equal products or services they offers, lesser the
power of the company. The customers or buyers are more attracted to that company which offers
better prices or lower prices than other company in the market. Marshfield Bakery has to ensure
about the prices and the products it would be offering to the customers for surviving in the
competitive market. It will be profitable as it is providing
New entrant into the industry- Power of company also get affected by the new entrants into the
market. The competitors which takes less time and costs to enter in the market, the more position
of the company gets weakened. The industry which has much strong barriers for entering the
market then it would be ideal to the exiting companies as it will help them to charge high prices.
Marshfield Bakery must ensure about the technology and innovative products so that no other
company can easily enter into the market.
Threat of substitute products- This are the products or services which can be replaced by other
companies. Companies having same products are not much profitable as customers can switch to
other companies easily. The companies which are producing different products and services
which have no close substitutes are more profitable business and grows very fast. Factors such as
quality of substitute products, price of these products, competition’s profits and many more.
Marshfield Bakery for growing in USA must offer unique products and services to the customers
which does not have close substitutes.
Bargaining power of buyers- This forces shows that how change in prices affects the buying
decisions of the consumers and their ability of bargaining that is of lower prices. When the prices
of substitute products is high and the number of consumer is small then the buyers have greater
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power of bargaining. This will lead to low prices and profits of the company may decline.
Factors that can affect the power of the buyers can be the number of the consumers, buyer’s
willingness to pay for the product, quantity of the product. Marshfield Bakery does not have to
comprise in the profits if they will offer unique products to the consumers.
Bargaining power of supplier’s- This factor considers how easily companies reduce the quality
of the products as well as increases the prices of the products. If the suppliers are less for some
products then they usually charges more prices from the company. Marshfield Bakery may face
this problem of suppliers but having more number of suppliers they can switch to the low costs
supplier.
QUESTION 3
Internationalisation strategy for business
For achieving success in US market as well Marshfield bakery must adopt following
strategies of entry into international market.
Entry methods to foreign market: The possible choices for market entry methods for Marshfield
bakery are below:
Licensing: Being a food industry direct selling of product via exporting is not a good choice for
the bakery. Thus organisation can seek other popular option of exporting (Głodowska,
Maciejewski and Wach, 2019). With licensing method Marshfield bakery can permit any of US
based company to use intangible assets of bakery such as its trademark, techniques or patents.
Against this the licensee will provide some fee. One of the benefit of using this entry method is
that it gives high investment return with small capital for investment (Yayla and et.al., 2018).
However, with this approach decline in product quality can emerge as big threat for the
reputation of licensor. Thus this option seems less suitable for the Marshfield bakery.
Joint venture: With this strategy Marshfield bakery can join hands with any other dominating
organisation of US. The joint venture will be of great help for the organisation to establish its
dominance in new market. With local helping hand in management bakery will be able to
understand the needs and preferences of local customers. The key benefit this method is that it is
highly competent in terms of technology and result in optimum use of resources (Metsola and
et.al., 2020). With good partner organisation can gain better understanding of foreign market and
its business trends. Though it can be costly for the firm and in long term conflict management
can emerge as greater issue.
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Franchising: With this entry mode Marshfield bakery offers independent business leaders of US
market a right to operate its franchise. The franchisee can use the business format, technology
and even strategies of Marshfield bakery. Contrary to the licensing method, franchisee provide
and follow similar product, packaging and technology strategy used by other firm. Thus this
entry method can serve as best way to share risk with other foreign semi-independent business
service provide with less secure way of protecting trade secret. However, the success method of
this approach greatly depends upon decision taken by franchise (Kuria, 2018).
With above evaluation it can be concluded that for Marshfield bakery either joint venture
or franchising must be more suitable choices. Thus it must proceed with these options to enter
into foreign market.
Funding sources: In order to expand globally Marshfield bakery will use its own capital.
Organisation has been able to maintain good profit across its EU network. Thus it will have
sufficient capital to meet its expansion goals (Mendy and Rahman, 2019). However, for raising
more funds organisation can use its equity or brand value to attract angel investors who will help
in its growth.
Resource management: For successful internationalisation it is essential that organisation must
properly use its resources in firm. In US organisation will be able to have highly talented human
resource as well as high tech manufacturing facilities and technology. It will facilitate the
operations of Marshfield bakery to achieve scale of economy. In order to maintain
standardisation in process and product, organisation must ensure that it must employ necessary
training module for its staff members so that good quality services can be deliver to both
domestic and international clients (Nambisan, Zahra and Luo, 2019).
Operations:
To make the operations smooth and of high quality Marshfield bakery will get advance
technology in US market. Instead of outsourcing raw materials organisation must try to search
and contract suppliers in US only so that its operational cost is reduced and it can achieve desired
level of productivity (Dąbrowska and Fandrejewska, 2020). US market already have some huge
and successful brands in food industry. Thus competition with such brands as well as keeping
trade secrets protected will be considered as important challenge for the firm. Organisation can
overcome these challenges by exploring most suitable supply and distribution network along
with the good quality of equipment or sources.
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Marketing in international market:
In international market Marshfield bakery may experience challenges in terms of
attracting customers. Though it’s a popular brand in EU but customers in United States may be
unaware of it. Thus organisation will have to pay good focus on product marketing and local
demand of customers (Salvi, 2021). To innovate the services Marshfield bakery must also bring
some customisation in its products which can suit the cultural and social environment of US
market. For the foreign players marketing play significant role because most of the target
audience may not be aware of brand. In such situations either organisations must already have
strong international presence or they can align with some local brands to get brand recognition.
In the given scenario Marshfield bakery has good brand value in EU region but still there is need
to conduct appropriate market research so that organisation can determine its value. On the basis
of value observed it can choose strategic alliance with local brands for creating brand awareness
and popularity (Watson IV and et.al., 2018).
CONCLUSION
From the above report it can be concluded that there are many entry modes for entering into the
international business by Marshfield Bakery in USA. It has discussed about the reasons for the
internationalisation as well as PESTLE analysis of USA to understand and evaluate the factors of
the country which can impact the working of the organisation. Along with this, it also considered
the strategies of internationalisation.
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REFERENCES
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of Internationalisation of Service Enterprises. Acta Scientiarum Polonorum.
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Germany (pp. 11-17). Springer, Cham.
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Business. ConScienS, p.96.
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understanding of human and technology barriers: Applying effective HRM processes
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Salvi, R.M., 2021. Corporate diplomacy: A stakeholder management strategy for sustainable
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Watson IV, G.F. and et.al., 2018. International market entry strategies: Relational, digital, and
hybrid approaches. Journal of International Marketing. 26(1). pp.30-60.
Yayla, S. and et.al., 2018. The role of market orientation, relational capital, and
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Online
Marshfield bakery, 2022. [Online]. Accessed through < https://www.swmas.co.uk/success-
stories/marshfield-bakery >
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