Rahat Continental: A Strategy Proposal for UK Market Expansion (IB 1)

This report provides a detailed analysis of Rahat Continental's strategy for expanding its business into the UK market. It begins with an executive summary and an introduction outlining the company's goals, which include establishing an e-commerce platform to sell organic cotton wear for infants. The report covers various aspects of the strategy proposal, including market research, key business drivers, barriers to trade, ethical and cross-cultural considerations, and the viability of the proposed venture. The report also explores the e-commerce option versus other methods of expansion, international marketing aspects, and the potential impact of Brexit. The analysis includes SWOT analysis, competitor analysis, target market identification, and marketing mix strategies, such as product, distribution, promotion, and pricing strategies. The report concludes with a discussion of the key business drivers behind the company's expansion and a review of the research findings.

RUNNING HEAD: International Business 0
rahat continental
International Business

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Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................2
Strategy proposal........................................................................................................................2
The research...............................................................................................................................6
Key business drivers behind company’s expansion into the UK...........................................6
Important barriers to trade and protectionist policies.............................................................7
Ethical, social and legal issues...............................................................................................8
Cross-cultural issues...............................................................................................................9
The viability of the proposed venture........................................................................................9
The e-commerce option versus other methods of expansion.................................................9
The aspects of international marketing.................................................................................11
Impact of Brexit....................................................................................................................12
Conclusion................................................................................................................................12
References................................................................................................................................13

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Executive summary
In this report a detailed study is done on strategy proposal of Rahat Continental. In the
strategy an extensive and relevant market research is done. It includes the business drivers
behind expansion of company in UK, barriers to trade and protectionist policies which can
hamper the company. Further it defines the ethical, social and legal issues that need to
consider. It also includes the cross cultural issues need to take into account. Finally the
feasibility of Rahat Continental in the current market is described by considering the e-
commerce versus other methods of expansion. The aspects of international marketing and
potential impact of Brexit are also discussed in the last part of report.
The strategic planning of company includes developing clothing line in UK and support with
advertisement and promotion campaigns. The company also intend to focus on brand
awareness by partnership with retailers. The company also plans to differentiate itself by
making use of marketing strategies and high brand awareness.

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Introduction
Rahat continental was established in 1986 to deliver complete supply chain solutions. The
core activity of company is freight forwarding. Now the company is thinking to expand it’s
operations in UK by setting up an e-commerce platform to sell organic cotton wear for
infants (0-2 years). The company also intends to get a supplier from India who is expert in
manufacturing cotton infant wear. It is likely to make use of reputation of UK as consistency
and transparency.
Strategy proposal
The present business situation
Currently Rahat Continental offers air service. The company is committed to provide safe,
reliable and cost effective delivery of consignments. Rahat Continental is a registered agent
under IATA. It has access to all the major airlines which offers modest prices to clients. The
company is expert in moving single or complex shipments by air at any time and at any
destination (Boonekamp & Burghouwt, 2017).
Products
Now the company is planning set up an e-commerce platform in UK to sell organic cotton
wear for babies. The company wants to establish such platform with the aim of producing
quality and highly comfortable clothes for infants (Vahlne & Johanson, 2017). It is well
known that quality is a key factor in selling brand. The company also expects to sell not only
in UK but in other parts of world also. The products of company cover organic cotton wears
for infants (0-2 years). The company keeps in mind several factors like fit, comfort, price,
style, durability, softness, color, sustainability and more.
(Source: Sourcing Journal, 2014)

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The Vision statement
The vision of the company is to establish a clothing line which will not only be accepted in
UK, but in other parts of world also.
The mission statement
The mission of the company is setup a clothing line which will make available wide range of
organic cotton clothes for infants (Cho & Han, 2015). A clothing line which can compete
with international clothing lines like Pact, Kate Quinn Organics, Mini Mioche L’ovedbaby,
Penguin Organics and Hanna Andersson.
Marketing goals
The marketing goals of Rahat Continental are closely related to it’s mission statement. It aims
to establish a clothing line which is to make a clothing label that can efficiently compete with
the international brands (Picciotto, 2017). The company has also set out the goals to be
achieved:
 Generate a total sale of 3, 56,850 £ at the end of first year launch.
 Generate a total sale of 7, 13,700 £ at the second year after launch.
 Make ensure that the clothes are sold worldwide.
 Manage to open new clothing line in other states of UK.
The company wants to achieve from market efforts:
 Compete with other organic baby clothing lines in UK and in other nations.
 Build a sustainable business which can grow in the economy of UK.
Marketing budget
The ultimate goal of the company is to establish a clothing line like the well established
companies in UK, Under the Nile, From Babies With Love, Little Green Radicals and
Penguin organics at the global level which means the company is supposed to spend more on
marketing the clothing line. So, Rahat Continental has set a budget of 35,685 £ for marketing
it’s products. Further the company also plans to increase budget 10-15% of the annual
income towards marketing.
Core competencies
Rahat Continental can use it’s core competencies to achieve sustainable competitive
advantage in which company provide different value than competitors. The company can
develop core competencies in:

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Offer good product quality which is easily recognizable among customers.
Create a sense of community among consumers.
Develop a reputation among retailers by delivering products on schedule.
Situation analysis
The market environment for Rahat Continental can overwhelm opportunities. It can easily
face challenges as; the company has already brand identification. SWOT analysis of company
in UK:
Strength: UK is the largest economy in Europe and is adaptable to a wide range of trading
platforms. The country has good relations with both importers and exporters. Rahat
Continental can enter as a joint venture to expand it’s business. The country receives plenty
of Foreign Direct Investment (FDI) from other countries so Rahat Continental has numerous
advantage of setting up business in UK. The country has also political stability as well (Bull,
et.al. 2016).
Weakness: The country has high cost of labor which results in high investment to the
companies. There is poor level of innovation. There is also income disparity between poor
and wealthy individuals. The rate of inflation is also rising in the country which creates
obstacle for setting up a new company.
Opportunities: UK has high population which encourages companies to produce more. The
country also has open door policy for the foreign businesses which attracts Rahat Continental
to set up business in country. The economic easing policies are helpful in doing business
(Wiedersheim-Paul &Johanson, 2017).
Threats: The changes in the regulatory environment as parliament get dominance can create
threat for the company. There are various competitors in the market such as Pact, Kate Quinn
Organics, Penguin Organics, Hanna Andersson and more. Increase in tax rates and economic
downturn are equally harmful for the company (Santos & Laczniak, 2015).
Competitors
The retail sale industries sell organic baby wear about £3 billion annually. Pact, Kate Quinn
Organics, Mini Mioche L’ovedbaby, Penguin Organics and Hanna Andersson are the
competitors which offer the same products. Rahat Continental can be positive for several
reasons. First, the consumers are focusing on cotton wear for their babies due to comfort.

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Second, the cotton wears are cost effective and consumers look for such clothes without
overspending. Third, the cotton wears are gaining more importance in economy and people
are willing to spend more on such clothes. The clothing of Rahat Continental is tentative to
be the highest quality cotton. Finally the company is also going to offer wears at moderate
prices.
The company also initiated and conducted survey which reveals that more than 50%
consumers prefer to purchase more cotton wear for their babies. The trend towards organic
cotton clothes is also growing as a result people purchase more of such clothes (Penrose,
2017.).
The target market
The target market for Rahat Continental is infants of 0-2 years. The supportive target
audience will be their parents because the sales can only be increased by targeting parents.
The company aims to provide comfort and stylish clothes for infants. The active consumers
represent a demographic group of well-educated parents and raised families. The household
income generally ranges from £60,000 to £120,000 annually. There are some customers who
are status oriented despite that they are highly concerned for prices (Ryding, Vignali, Carey
& Wu, 2015).
The marketing Mix
Rahat Continental can use this marketing mix:
Product Strategy: The Rahat Continental intends to offer high quality products from tee shirts
to rompers. Over the next five years, the company also plans to expand it’s product line and
plans to include customized clothing items. The customers will be able to choose logo and
slogans by themselves. This strategy can be helpful in keeping the concept fresh. The second
company can expand it’s product line is by offering light weight luggage back for mother of
new born babies. It can be made available in two sizes, tote bags and daypack. These can be
made available in trendy colours and in nursery prints. In addition, the company can bear the
logo of company (Huang & Sarigöllü, 2014).
Distribution strategy: Rahat Continental can market through regional and local shops. The
company can obtain information from different geographic areas about the overall industry.
In the coming years the company can expand it’s distribution system to retail shops
throughout the nation. The company can also plan to expand online sales. The company
intends to monitor and maintain relationship with the members of distribution channels.
Promotional strategy: the company can communicate in a variety of ways by internet, mails
and in person. The promotional efforts of company focuses on differentiate it’s products from

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competitors. The company can rely on personal contact with retailers for establishing
products in their stores. The sale representatives can be appointed to visit store to offer
training on the features of products for the retailers.
Pricing strategy: The products should be priced to keep competition in mind. Rahat
Continental is not concerned about keeping high prices, nor is trying to keep low prices by
selling high quantity of products. The customized clothes can help in increasing profits as the
company can over charge for such clothes (Bahadir, Bharadwaj & Srivastava, 2015).
The research
Key business drivers behind company’s expansion into the UK
The key business drivers behind expansion of company in UK can be assumed as:
Low tax rate for foreign investors:
The taxation system is most of the complicated factors for the global expansion of
companies. The taxation system of UK is pretty simple when it is compared to other foreign
markets. The corporate tax in country was 50% in 1980 and is continuously decreasing from
then. It reached to 28% in 2008. Currently the corporation tax is 20%. It is the lowest in G20
(the world’s largest 20 economies). Value Added Tax (VAT) is paid on the goods and
services supplied in UK. So, when the products will be supplied by Rahat Continental in UK
than VAT will be charged at the rate of 20%.
Infrastructure development:
UK has strong infrastructure which is helpful for Rahat Continental to grow business. The
country has made investment of £120 billion to improve transportation system of country.
The country has already largest air transport system, second largest ports industry and most
improved rail network in Europe. The country has also initiated seven year investment
programme to make improvement in road. The rail projects of country includes, cross rail and
high speed 2.
Registering business in UK:
For setting up business in UK, the company is required to register with Companies House.
There are regulations for the names of business. It takes £20 and about 24 hours to register
with Companies House.
Skills and recruitment:

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The country has workforce over 30 million people. UK expects growth of labour supply in
the next 15 years. The country has flexible labour market with strong skills. It has also
designed regulations to protect employees. As per the labour law, companies can hire staff
according to their need. The labour cost of country is the most competitive and lower than
other countries. It is helped by the contribution of low employer social security (Clougherty,
Kim, Skousen & Szücs, 2017).
Entrepreneurs
UK takes initiative for the persons who want to set up business. The entrepreneurs are
supported by entrepreneur programmes. These programmes are global entrepreneur
programme and Sirius programme. These both programmes are helpful in start-up business or
ideas (Hong, Wang & Kafouros, 2015).
Important barriers to trade and protectionist policies
The trade protectionist policies are used to limit imports and promote exports. It can be done
by putting up barriers to trade.
Imbalanced restrictions:
The foreign companies face imbalanced restrictions while the companies of UK are offered
financial advantages. As a result the consumers end up paying higher prices for the products
that do not worth their costs.
Limits consumer access:
Due to several restrictions on foreign and non-domestic companies the access of consumers
towards such products become limited. However the unique products and services are
provided by the foreign companies (Egan & Guimarães, 2017).
Consumers pay more with protectionism:
The protectionism leads to market distortion and loss of allocative efficiency. The tariffs
increase the price for consumers and isolates unproductive sector from the genuine
competition. The foreign producers are penalised and encourages an inefficient allocation of
resources both domestically and globally. The trade protectionist policies affect export
subsidies and damages output, investment and earnings of the foreign company which relies
on exporting primary and manufactured goods for the growth. As a result, the foreign
companies such as Rahat Continental are penalised and inefficient allocation of resources is
encouraged.
Less protection to foreign companies:

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The government provides more protection to domestic companies and builds corporate
contentment which gives a business pleasant safety in the situation of strong foreign
competition. However the foreign companies do not have the necessary sources to survive
(Gaul, 2016).
Revenge reaction:
The protectionist policies can cause revenge reaction from UK. It ruins the vital relationship
between the countries. For instance, the deteriorating relationship between two countries can
put boundaries on the foreign country for exporting or doing business in the UK economy.
No subsidies and loans:
The UK government provides loan and subsidies to the domestic companies which are not
able to compete against foreign companies. Such actions detain the market by giving more
benefits to the domestic companies than the foreign companies. It causes penalties to foreign
business. The trade protectionist policies initiate steps towards anti-globalization (Demir &
Sepli, 2017).
Ethical, social and legal issues
Rahat Continental can face many issues at the time of expansion in UK market. These issues
should be avoided on high priority to avoid any conflict. The use of internet material,
gatherings, processing and supply are some ethical, social and legal issues which can be faced
at the time of expansion. The online business of company is a reflection of how ethical
standards are applied because ethics have an immense effect on the business (McGoldrick,
Gruber, Schlegelmilch & Newholm, 2015). It affects the profitability of company as a result
the brand image of company is affected for the long time.
The company can face issues in operations. There are some activities of business which can
be considered immoral such as working conditions, environmental impacts, and wages.
Sometimes it happens that the company cannot adhere to the contractual conditions. The
company influences society by the way of advertising. The company can face ethical and
social responsibilities to use marketing power. The major legal and ethical issues can faced
with property issues. The trade secret protection method is helpful in protecting ownership of
any idea and keeping ideas as secret. There is also concern of using any copyright material on
website. There are many issues which can be found in ecommerce websites such as e-
commerce, tariffs, privacy, international copyright and many more.

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Cross-cultural issues
There are some cross-cultural issues which can be faced by Rahat Continental in UK.
Inadequate trust: The Rahat Continental will be new for the UK economy. In such a scenario
it is not easy to develop trust for the local customers. The consumers rely more on the local
companies than outside companies due to trust issues (De Mooij, 2015). It takes time to attain
trust of customers. It is the quality of product, reasonable price and best service which can
develop trust and can bring customers back.
Perception: UK is a developed country. The people from UK economy consider that the
products of developing country like India are inferior. In such a scenario the company can
face rejection from local customers. It takes time to prove product quality and change
perception of consumers.
Inaccurate biases: Biases is a vital issue in business world because the international trade
depends upon interaction of employees from different culture and regions (López‐Duarte,
Vidal‐Suárez & González‐Díaz, 2016). It is also assumed that Japanese make decisions in
group while Indians do not deliver on time are biases of cross cultural. Such biases form
cross cultural issues.
Different ethical standards: Rahat Continental can face fundamental ethical issues such as
trust and integrity. It hugely contributes to the functioning and success of company. The
diversity in the workplace creates difference in character, strength and efficiency. The
governance and compliance also creates complexity for the success of company.
The viability of the proposed venture
The e-commerce option versus other methods of expansion
There are various e-commerce options in UK such as
Mobile commerce:
The customers make use of mobile at every point of purchase. The mobile shopping
experience has improved as searches for merchandise, price comparisons, ordering and
paying to continue intensely rise. UK has the highest mobile spending and mobile penetration
rate. It represents incredible opportunity for m-commerce (Turban, et. al. 2018).
Social commerce:
A huge number of people use social networks like Facebook and Instagram. The popularity
has also increased due to bloggers and YouTube personalities, who help to promote products

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of company. Facebook is continue to upgrade it’s shopping tab and has designed service
exclusively for small business enterprises. It promotes easy to buy functionality. The brands
can insert external links in the posts put by them on Instagram.
Omni channel retailing:
Omni channel retailing is a multichannel approach which seeks to provide customers a
seamless shopping experience (Ailawadi & Farris, 2017). The customer can shop from any
shopping channel whether it is in-store, in app or online. According to the report of Centre for
Retail Search, the online sales accounted for 10.7% of total retail sales in 2014 (Ecommerce
News Europe, 2017).
Location for business:
Rahat Continental can easily get a commercial premise on rent in most of the areas of
country. Some business activities are restricted for the allocation of areas and require special
approval. It is also easy to build premise. According to the report of World Bank, it is easy to
obtain construction permits and planning permission in UK.
Other methods of expansion
Joint venture:
Rahat continental can acquire or invest in an existing business in UK which operates in the
target market. Joint venture can be helpful for Rahat Continental as existing company can
provide information about culture, language and legislation of the country (Monios &
Bergqvist, 2015).
Exporting:
Rahat Continental can take direct order from the customers of UK and can ship them to the
destination. The company can expanse it’s business from the home country without setting up
in UK (Love, Roper & Zhou, 2016).
Franchise:
Rahat Continental can make expansion in UK by making use of franchise. The company can
sale it’s franchise to any dealer of UK. That dealer get the right of using brand, it’s process,
techniques and right to sell products and services (Dada, Watson & Kirby, 2015).
Selling via overseas agents:
A contract can be made with agency or distributors. They can buy stock from the company
and meet local demand. The customers are owned by the agencies (Love & Roper, 2015).
The distributors keep a margin.

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The suitable options of expansion for Rahat Continental are other methods that are joint
venture, exporting, franchise or selling via agents. The e-commerce options can be risky for
the company because it is already not established in the home country as it carries on the air
freight service in the home country. So, the manufacturing of organic cotton wear is
comparatively new for the company. Other methods of expansion can provide better results to
company. The established companies can better guide to the company about the economy and
trends of UK.
The aspects of international marketing
There are various aspects which should be considered before entering in the international
market:
Research:
The research should be made before planning to launch product in the international market.
There are various details which should be properly investigated such as cost and labelling of
product. In the case of Rahat Continental it can consider various aspects like trend of baby
cotton wear, range and the competitors leading in the market (Samiee, Chabowski & Hult,
2015).
Product localisation:
The information should be collected on the packaging of products such as label language,
type of packing are sold in the targeted market. An appropriate choice should be made for the
colour and output size (Brito, et. al. 2015).
Communication:
The communication is required to be made to produce according to the need of local market.
The marketing communication should be tailored time on time.
Inbound marketing:
The inbound marketing considers that when the buyers need information they can get it by
using internet. They do not need to visit online brochures or websites. The company can
make use of Google as it keeps the fresh and high quality content (Royo-Vela & Hünermund,
2016). The regular additions are made on it.
Outbound marketing:
The outbound marketing is a set of various tools such as emails and messages. It can be used
to broadcast message in the target market. The internationalisation of business can provide

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higher return on investments by making use of outbound marketing (Bleoju, Capatina,
Rancati & Lesca, 2016).
Impact of Brexit
UK is considered as one of the best countries to start up a business. But the effects of Brexit
could bring change in this consideration. The campaigners of Brexit have optimistic
predictions for Britain but there is no trade prevailing between UK and EU. The organisations
were affected which used to import raw material from Germany. Since, there is no trade
between UK and EU the local manufactures were affected. If we talk about Rahat
Continental, the company intends to set up business in UK. There will be no impact of Brexit
because the company will either import raw material from home country or it will direct sell
products manufactured and produced in India.
Conclusion
In the above report, the strategy proposal for Rahat Continental is prepared by undertaking
extensive and relevant market research. The report has defined the business drivers which can
be held responsible for the expansion of company in UK. The barriers to trade and
protectionist policies are also discussed which can obstruct the company. Various issues have
been taken into account such as ethical, social, legal and cross cultural issues. Finally the
feasibility of company of the company is judged by taking into account methods of
expansion, aspects of international marketing and potential impact of Brexit. The company
can freely and smoothly conduct it’s business of organic cotton wear in UK as there will be
no impact of Brexit on company.

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