Report on International Business Expansion of Monsoon Accessorize

This report provides a detailed analysis of the international business environment, focusing on the potential global expansion of Monsoon Accessorize. It explores key aspects such as managing cultural differences, international trade theories including mercantilism, absolute and comparative advantage, and the impact of protectionism and government influence on trade. The report also examines cross-national cooperation and agreements, foreign direct investment, export-import strategies, and country evaluation and selection processes. Furthermore, it covers global marketing strategies, CSR, and ethical considerations vital for success in international markets. The analysis includes factors influencing business expansion, barriers to entry, and strategies to overcome them, making it a comprehensive study for businesses looking to expand internationally.

International Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
INTERNATIONAL BUSINESS ENVIRONMENT...................................................................3
MANAGING CULTURE............................................................................................................3
INTERNATIONAL TRADE THEORIES..................................................................................4
PROTECTIONISM & GOVERMENT INFLUENCE ON TRADE...........................................4
CROSS-NATIONAL COOPERATION AND AGREEMENTS................................................5
FOREIGN DIRECT INVESTMENT & COLLABORATIVE STRATEGIES..........................6
EXPORT IMPORT STRATEGIES.............................................................................................6
COUNTRY EVALUATION AND SELECTION.......................................................................7
GLOBAL MARKETING............................................................................................................7
CSR & ETHICS...........................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Globalization over the past years has increased to a great extent due to ever changing
need of business and people. Every day, the technology is changing and due to increase in
innovation and techniques, people strive for more products which can satisfy them and in order
to provide additional services to its customers, businesses have taken a route to foreign markets
to serve a large customer base and provide them with utmost comfort. Present report will discuss
the scenario of Monsoon Accessorize which deals in clothing and wants to move into global
markets. In addition to this, factors which act as a barrier will be illustrated in this study.
MAIN BODY
International business environment
As technology is progressing continuously, businesses have been thinking to expand their
area of operations. Thus, due to rapid expansion of going global, created international business
the face of present economy. International business is the combination of all transactions that is
done between various countries. To be in the international environment, Monsoon Accessorize
needs to incur a lot of cost. There are so many factors which hit the International expansion of
cited firm. These factors are like political, economic, social, technological, legal and ,
environmental. Weighing what an organization has in its pocket and understanding the
advantages and disadvantages of entering into a new market are the considerations before
making a move to international market(Oparaocha, 2015). As various tools and techniques have
been introduced in the market for expansion, as per the nature of firm, they are adopting required
techniques to move at the global level. There are certain key business drivers which help a
company to increase the probability and maintain its growth in the international markets. Some
of the key drivers which can drive a company to global markets are Strategy, Marketing,
Products and Services along with Infrastructure, Pricing and many more.
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Managing culture
Culture of any country where an organization wants to expand is an important factor in
the success of moving into global markets. A culture of a country includes its religion, language,
political and economic systems, educational level and social class. To discuss about a particular
countries Influence on businesses, these factors or elements are needed to be considered. The
above discussed elements reflect habits, attitudes as well as beliefs of society and with these
factors, effects of culture on international trade will be clear(Sandberg, 2014). Managing this
culture is as important factor as the revenue for Monsoon Accessorize is to survive in
international markets. For example: if a cited firm is moving to China and it is headquartered in
India, with the Indian culture only its expands and company looks to make profit in china with
Indian culture, this will not work for the Firm because people there loves local culture which is
Chinese.
International trade theories
There are various theories which have been given by various reputed scientists. These
international trade theories emphasizes on the patterns of international trade, their origins and the
welfare arising out of internationalization of a company in terms of profitability and for the
betterment of society in particular society(7 international Trade Theories, 2011). The theories
are:
 Mercantilism Theory : This theory says that a country’s wealth depends on the treasure
they are having. Furthermore, it says that while trading, government should have surplus
amount of fund by maximizing the exports and minimizing imports.
 Absolute Advantage: Theory given by Adam Smith in 1776 says that country with the
capability of producing more products without incurring additional input than other
nation should produce products where it is more convenient and efficient for them.
 Comparative Advantage: This theory has extended free trade argument and conveyed
that efficiently utilizing the resources will lead to increase in productivity. Here, David
Ricardo has suggested to import even if the country is more efficient in producing
products.
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Other international trade theories which were given by different scientist are Factor
Proportions Trade, International Product Cycle, New Trade Theory and National Competitive
Advantage Theory.
Protectionism and government influence on trade
Moving into the global markets, firms need to have a look on the restrictions regarding
trade of country that a company is planning to move into. This trade protectionism is applied by
the governments to keep unlawful or hazardous products out of nation. Trade protectionism is a
policy of restriction of imports of foreign goods into country(Trade protectionism,2017). This
has been done by government to improve the BOT (balance of trade) within nation. They want to
increase the exports of country. There are different types of trade barriers which is divided into
two categories that are Non-Economic and Economic barriers.
 Licenses: In this system, authority issues permits for doing trade in foreign markets. This
may take some forms and procedures to have a license to set a business at their desired
locations. Monsoon Accessorize needs to complete all required formalities to enter into
the global markets.
 Import Deposits: Import deposits are charged from importer who must pay to bank the
amount which may be or may be not equal to the cost of goods that are
imported(Hernández and Nieto, 2015). This may affect the trade in a negative way and
so, it is necessary for the cited firm to look upon this factor and then start its business in
the country.
 Standards: Standards are usually imposed on factors like labeling and testing of products
in order to sell the domestic products. Monsoon Accessorize has to maintain standards set
by the said government in order to establish its venture in new market for longer duration.
 Tariff: Tariff is a tax on some imported goods. Through Tariff, price of goods which are
imported are raised. It makes the product more expensive and people tend to buy low rate
products.
 Quotas: It is a limitation on a particular type of good which is imported into the
country(Ahammad and et.al, 2016). Also, through it, governments try to protect the
domestic business from foreign competition.
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Cross-national cooperation and agreements
These are the kind of statement which give some of the nations who are the parties to
agreements preference over the others to trade in respective regions from member countries. In
this, associations are setup between two or more countries and decisions are taken on trade
between nations. Here are some of the type of agreements and corporations which are present in
the world:
 Economic Integration: An agreement between the country in relation to political and
monetary matters in which preference is given to the members who are part of
associations. It facilitates free flow of products, capital, remove tariff and non-tariff
barriers(Disch, 2016). Economic Integration has 3 approaches that is, global combination,
bilateral consolidation and regional segregation. Being in the United Kingdom, Monsoon
Accessorize has the advantage of being doing business globally with its member
countries.
 General Agreement on Tariff & Trade (GATT): It is the body comprising of 23
nations whose aim is to conduct free flow of trade between countries by reducing
different trade protectionism. Main purpose of GATT was to reduce the tariffs and
abolish quotas. This can give benefit to Monsoon Accessorize that can help in
establishing its business in other nations.
 World Trade Organization (WTO): World trade organization was found in the year
1995 for two purposes, i.e., to facilitate free and open trade system between member
countries and act as authority to make decisions on any disputes arising from trade. WTO
has higher number of member countries in the world.
Foreign direct investment and collaborative strategies
Mostly, companies operating globally would prefer exporting to other markets. In these
proceedings, organization may occupy direct investment in other countries or get into markets
through several collaborative strategies such as joint ventures and alliances(Castellani, Jimenez
and Zanfei, 2013). Collaborative strategies allow firms like Monsoon Accessorize to spread both
assets and risk the countries by entering into agreements with a mixture of possible partners.
Main purpose of collaborative arrangements is to reduce costs, get specialized in the
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competencies, avoiding competition, gain knowledge and gain location specific possession as
well as overcome restrictions, diversify geographically, etc.
EXPORT IMPORT STRATEGIES
These are the strategies through which it is possible for two different countries to
exchange their commodities or products. In order to facilitate international transactions these are
the two strategies which is commonly used by different countries.
 Exporting: Through this strategy a firm sell its products to the customers those who are
residents of other country. Selling a product to different country is called as
exporting(Martin, 2013). There are different type of exporters: Regular, Occasional, Non-
exporter, etc. Exporting is done mainly for 3 purposes: Profitability, Productivity,
Diversification. There are two approaches of Exporting: Direct and Indirect. For
Monsoon Accessorize Exporting is the one option through which they can enter into
global markets.
 Importing: It is just an opposite of Exporting which means that buying the goods or
products from different nation is called Importing(Wu and Voss, 2015). There are
different type of importers: Input optimizes, opportunistic, arbitrageurs, etc. Importing is
done mainly for 5 purposes: Global rivalry, diversification, top management outlook,
local unavailability and specialization of labor. For Monsoon Accessorize Importing is
the one option through which they can enter into global markets.
COUNTRY EVALUATION AND SELECTION
Evaluating a country on the basis of its resource generation, income level, capabilities to
deliver, kind of people, their perceptions, etc. is to be done by the organizations who wants to
move into global markets. For Monsoon Accessorize to move to foreign markets they need to
identify two or more potential markets where they want to expand to and then make a
comparative study on them on the basis of these factors and come out with the better producing,
profiting, less cost incur ration nation.
GLOBAL MARKETING
Global marketing is bigger in terms of its meanings. Marketing of products is in the
global context is as crucial as putting a thread into a needle(Minbaeva and et.al, 2014). Setting
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up a campaign that will run all over the world is a huge task, A firm needs to think of different
perceptions of different customers in various locations where companies presence is. what if at 3
places campaign becomes successful but at the other locations it will be a flop show? So, in order
to establish global marketing campaign certain measures and precaution has to be undertaken to
successfully initiate and get benefited from that campaigns. Talking about Monsoon Accessorize
they should not build any global marketing campaign because kind of business they have they
need to understand the local people well to get growth.
CSR & ETHICS
When a organization plans to move into the new markets, company will find it several
times that legality and ethical framework of different countries are different in nature.
Administration of Monsoon Accessorize needs to address those issues accordingly in order to get
success in the expanding countries. Some of the issues that needs to be taken care of are:
 Employment: Even when a company have qualified with all the legal matters
organization needs to think on the hiring of the people to work for them and needs to
make decisions on the pay levels for them(Sharma, Melin and Nordqvist, 2014). By this
way Monsoon Accessorize will be able to manage its operations well and staff members
will be able to make connection with the required audience significantly.
 Pollution: Many foreign countries have environmental laws that makes companies to
work ethically and not discharge the harmful products into the environment. In case of
Monsoon Accessorize they don't generate any harmful products so they did not want to
worry about this issue, But should keep in mind for the future purposes.
 Human Rights: Most basic and sensitive issue which comes with expanding to foreign
markets is human rights improvements. Based on your presence that supports or serve as
catalyst for human rights. Some human rights may include freedom of speech, freedom of
movement, etc.
CONCLUSION
Based on this report, it has been concluded that while moving into international market
there are lot of factors that needs to be kept in mind for success and growth of the business. As
per this report Monsoon Accessorize who wants to move into global markets needs to focus on
various factors which are: government policies of the respective country firm is moving in, Also
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things like social issues, cultural preferences needs to be considered and finally firm has to make
decisions on the methods through which they are going to make their presence in global markets.
Company needs to focus on the evaluation of countries and social responsibility.
REFERENCES
Books and Journals
Ahammad, M.F. and et.al, 2016. Knowledge transfer and cross-border acquisition performance:
The impact of cultural distance and employee retention. International Business
Review, 25(1), pp.66-75.
Castellani, D., Jimenez, A. and Zanfei, A., 2013. How remote are R&D labs? Distance factors
and international innovative activities. Journal of International Business Studies,
44(7), pp.649-675.
Disch, L., 2016. Representation. In The Oxford Handbook of Feminist Theory.
Hernández, V. and Nieto, M.J., 2015. The effect of the magnitude and direction of institutional
distance on the choice of international entry modes. Journal of World Business, 50(1),
pp.122-132.
Martin, X., 2013. Solving theoretical and empirical conundrums in international strategy
research: Linking foreign entry mode choices and performance. Journal of
International Business Studies, 44(1), pp.28-41.
Minbaeva, D. and et.al, 2014. MNC knowledge transfer, subsidiary absorptive capacity and
HRM. Journal of International Business Studies, 45(1), pp.38-51.
Oparaocha, G.O., 2015. SMEs and international entrepreneurship: An institutional network
perspective. International Business Review, 24(5), pp.861-873.
Sandberg, S., 2014. Experiential knowledge antecedents of the SME network node configuration
in emerging market business networks. International Business Review, 23(1), pp.20-
29.
Sharma, P., Melin, L. and Nordqvist, M., 2014. Introduction: Scope, evolution and future of
family business studies.
Wu, A. and Voss, H., 2015. When does absorptive capacity matter for international performance
of firms? Evidence from China. International Business Review, 24(2), pp.344-351.
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Online
7 international Trade Theories, 2011[Online] Available through:
<http://robinsontechnology.com/blog/2011/01/23/7-international-trade-theories/>.
[Accessed on 16thFebruary 2017].
Trade protectionism, 2017[Online] Available through:
<http://www.economicsonline.co.uk/Global_economics/Trade_protectionism.html>.
[Accessed on 16thFebruary 2017].
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