BSMAN3007: International Business Expansion Strategy Report

This report provides a comprehensive analysis of Health Technology Company Limited's international business expansion strategy, focusing on entering the Australian market. It explores various entry modes, with a recommendation for a joint venture due to the cultural differences and the need for local market expertise. The report details the company's internal strengths, such as innovative products and a skilled workforce, and identifies weaknesses, including a lack of international market experience. It suggests steps to overcome these weaknesses, such as hiring local talent and conducting thorough market research. The report also discusses the next best strategy, franchising, and compares the two entry modes. Additionally, it covers the competitive landscape, scope of expansion, organizational design, financial capital requirements, and staffing policies, providing a complete overview of the firm's strategic considerations for international growth. The report also includes a PESTEL and SWOT analysis of the company, along with a discussion on the potential markets for the company.

INTERNATIONAL
BUSINESS MANAGEMENT
Contents

1
Introduction...........................................................................................................................................2
Entry mode............................................................................................................................................2
Next best strategy.................................................................................................................................4
Internal strengths of the company..........................................................................................................5
Weaknesses of the firm..........................................................................................................................6
Steps for overcoming the weakness.......................................................................................................7
Competitors in Australia........................................................................................................................8
Competitiveness in the market...............................................................................................................8
Scope of expansion................................................................................................................................8
Intended organisational design..............................................................................................................9
Financial capital requirements...............................................................................................................9
Staffing policy........................................................................................................................................9
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11

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Introduction
In today’s time many companies are searching for brining innovative products in the market
that can change the lives of the people. This makes it critical for the management to make
sure that they are using best of strategies to make their firm successful in the market. It is the
understanding of the consumer behaviour that plays a critical role in the development of the
strategies. Health Technology Company Limited has many opportunities in the Australian
market hence it needs to capitalise on their strengths work on their weaknesses to find out the
chances they have to gain success in the market (Spuler, Ancich, Savioz, & O’Suilleabhain,
2011). There are several factors that need to be analysed by the company so as to ensure that
they are doing business according to the market conditions and according to the strengths and
weaknesses of the firm. They can do their brand positioning according to this internal
analysis. The strengths and weaknesses act as base on the basis of which company can make
their strategies. The mode of entry that the firm selects plays a critical role in the
management of the business in that country as every entry strategy has its own merits and
demerits and hence making appropriate selection of entry strategy becomes critical. This
report illustrates the best possible entry strategy for the firm’s expansion. It also represents
the internal strengths and weaknesses of the firm. It also showcases the operational strategy
and corporate objectives of the cited firm.
Entry mode
There are several entry mode strategies available with the firms using which they can make
expansion in the Australian market. The selection of appropriate entry mode allows the
company to improve the way in which they are dealing with the challenges that might
confront the business in the market. Since in the assessment 1 it was found that there are
many significant threats that are confronting the business of the firm at the initial levels hence
making an appropriate choice for entry is crucial. It is the entry mode that decides the type of
strategies that they will be made by the company in the future such as the supply chain
strategies, human resource strategies etc. The types of entry mode strategies that can be
adopted by the company are exporting, licensing, franchising, Joint ventures, partnerships
and wholly owned subsidiary. The best entry mode strategy that can be used by the firm is
Joint Venture. The joint venture can be an excellent international expansion strategy.
The major reason for choosing Joint Venture as an entry mode strategy is that Australia and
China is totally different kinds of market which makes it essential for the management to

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ensure that there is a partnership between the Companies that already has experience in the
Australian market. The joint venture needs to be done with the firms that belongs to care
industry or are related to patient care solution (Chung & Tung, 2013). Since Australia is a
developing medical destination and has a large scope for the products that are from care
industry. This has brought many new players in the market. Due to this there is a greater
chance that brand positioning can be done in an appropriate manner that too with greater
focus. Since this product will have differentiated value attached with it hence the chances of
success in the market increases.
Since this company does not have experience of business in the international markets hence it
is possible that the company can lose a quite a lot of money which they want to invest in the
new markets. The inexperience also results in poor utilisation of resources which is again an
essential aspect in the modern day business. This is also true in terms of marketing. Since the
behaviour and the culture of the country play a significant role in success of the marketing
hence such joint ventures can be an effective strategy for the company. It is also to be
understood that there is cultural differences between the Australia and China which can make
it difficult for the company to get adapted into it. A lot of time of the Health Technology
Company Limited gets wasted in such understanding the consumer behaviour. It is also
difficult for the companies to hire employees from different cultural backgrounds. In this case
taking the help of the partners can be an excellent option for the company.
On the other side of the coin it is critical for the management to make sure that there is
cultural alignment between both the firms. From recruitment and selection to improving the
supply chain it is critical for the management to make sure that they are dealing with the
changes in the market environment in an appropriate manner. Since the political and
economic turbulences are increasing in different parts of the world hence it will have impact
on the operations of the company. In this regards it is critical that this company gets support
of some other company as the combined resources will allow the firm to gain better position
in the market (Tung & Chung, 2010). This will also reduce the risks that are posed to the
business and will have impact on the way organisation is performing.
The smart watch is a product that gives home care to the people. This makes it critical for the
management to ensure that they have a support of the care or medical institutions. This makes
it easier for the Health Technology Company Limited to make enhancements in their product
and also gets help in terms of medical assistance. For the firms that are the part of the nursing

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and care business also wants products that can help them in giving Tele-care hence such
products can be highly useful and companies will love to go into partnerships.
Next best strategy
The next best strategy that can be used in this regards is franchising. This is an effective entry
mode strategy that can be used by the organisation. This is an effective strategy because it
will reduce the company’s headache to establish them in the market. Since the franchise
holder will be from Australia itself hence they will not have to face challenges related to the
cultural understanding.
Comparison between Franchising and Joint Venture
Criteria Franchising Joint Venture
Self-determination Lower level of self-
determination
Higher level of self-
determination
Risk Lesser Risk Higher risk
Development Partners needs to be focused
towards specialising in that
area
Company with which joint
venture will be needs to be in
better position within the
market.
Length Franchise can last long It depends on the time till
when they want to continue
with the venture.
Advantages of franchising
 It offers the independence of small business ownership.
 Cost effective expansion strategy
 Marketing support
Disadvantages of franchising
 Lesser control.
 Regulations and legal affairs have to be managed appropriately.
Advantages of Joint venture

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 Risk is divided.
 Knowledge is enhanced.
Disadvantages of Joint Venture
 Since organisational culture differs hence coordination problem can arise.
 Flexibility can be restricted.
Internal strengths of the company
There are several core competencies of the company that can allow them to gain success in
the market. The internal strength of the company includes:
 Highly innovative product can help the company to achieve higher sales. The
innovation in the product has made it unique especially when compared with bigger
competitors like the electronic consumer products manufacturing firms which have
already made a mark in the industry.
 This company has a highly skilled workforce which is highly advanced in the research
and development activities. This makes it possible for the company to make
innovations at regular intervals of time. This firm has also developed a training and
development program that enables them to make their employees more capable than
their rival employees.
 Big support from the investors from their home country will allow them to make
easier financial managements even in the Australia. This is highly crucial in the time
when the financial condition of the world is not good.
 This company also has a strong and fast supply chain network that will allow the
company to deliver their products in different markets. For doing effective business in
Australia this supply chain can be extremely essential and can ensure that there is
timely delivery of their products in the market.
 Strength of the company also includes firm’s strong decision making body. They are
known for making quick adjustments to the situations and make contingent decisions
that improve the position of the firm in the market. There are many experienced
officials that are the part of the decision making body of the company hence they are
able to achieve fast operational management.

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 Highly advanced technologies are used both in the operations within the firm, the
product itself. Use of highly advanced technologies allows the company to gain
significant competitive advantage over the rival products.
 Since the cost of development is less hence this firm is able to bring this watch at
lower prices hence will be able to bring the products at lower cost which can give this
firm a competitive advantage over the rivals.
Weaknesses of the firm
Apart from the strengths this company has certain weaknesses on which this firm will have to
work. Some of the weaknesses of the firm include:
 This firm lacks in terms of the experience in the market. Since the competition in the
industry is on the higher side hence it makes it essential for the firm to enhance the
product quality so that they can out stand other company’s products as it is the only
way in which they can be a bigger firm in the industry. Inexperience also lies in terms
of the management of the relations with other partners. This is because they do not
have experience about managing the Joint ventures.
 In terms of product diversification, this company needs to invest a lot more. The
digital world for care business is big and in this environment there is an enhancement
in the way an organisation is dealing with others i.e. providing customers with
multiple options is necessary for the growth of the company.
 This company is a fresher in the industry hence there is larger chance that they will
face challenges in making their name in the market. Due to this, Health Technology
Company Limited will have to invest a larger sum of money on the marketing
activities. Since this company has lesser amount of resources hence it is critical that
this company invests more on the digital technologies (Hatch, Winefield, Christie &
Lievaart, 2011).
 This firm also has a poor organisational framework as well as structure which might
create problems in the future strategy making and situational handling capacity of the
firm. In the time when there is communicational gap within the organisation, due to
difference in culture might have impact on the communication that is being used
within the organisation.

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Steps for overcoming the weakness
It is possible that this company can convert their weakness into the strength. This is also
critical for achieving success in the market and also for achieving strategic success over the
rivals. Some of the steps that can be taken by the company are:
 This company needs to hire more talents from the local market of Australia. This will
help the company in overcoming the cultural gap which could have been the problem
for the company since they do not have experience in the market. This weakness can
also be dealt by doing research of the Australian market especially in terms of
consumer behaviour. This is critical for the success of the firm.
 This company also needs to find local investors so as to ensure that they do not have
to face the situation like limited resources. Since the value of the Australian business
is higher than Chinese Yuan hence more investment will be required which cannot be
done only with the help of Chinese investors (Homsombat, Lei & Fu, 2014).
 Since this company also lacks experience in terms of managing the partnerships hence
it is critical that employees of the firm present at every level of the organisational
structure is given the cross cultural training. This will allow the company to manage
their operations even in the new nation.
 This company also needs to redesign their organisational structure. By restructuring
the organisation they will be able to make a smooth flow of information. In this
restructuring process there must be use of organisational theories related to diversity
so as to place experienced candidates at the top of the management levels.
 Since this company had to compete with bigger players such as Apple that too when
they are fresher in the market hence they will have to invest in making consumer
experience as their priority. This can again be done by the firm with the help of local
partners. The selection of partners must be made using the skills that firm has in the
market (Parker, Walker & Hegarty, 2010). This partner should have a good
distribution network in the market so as to reach deeper in the market and should help
Health Technology Company Limited in doing their experiments.
 Company needs to understand the major nursing related challenges in the market and
on the basis of this only they need to design their new products so that they do not fail
in accomplishing the goals they have made to enter into the market.

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Competitors in Australia
The competition in the market of Australia is high and there are several competitors in the
market of Australia. This includes companies like Sony, Apple, Samsung, Fitbit etc. The
pricing of these products are on the higher side when compared with Health Technology
Company Limited’s smart watch. The larger part of the market is captured by the Apple (de
Leeuw & Leahy, 2011). This is because Australia is economically advanced country and at
the same time the purchasing power of the people is also on the higher side. Due to this
people are also attracted towards the product quality and lesser focus is on the cost of the
products.
Competitiveness in the market
The product that this firm is offering in the market is innovative but they will have to ensure
that they are able to provide the value for which they will have to improve the quality of the
product. Since bigger brand names like Apple and Samsung exist in the market hence this
firm will have to make sure that they are able to improve their research and development
facilities. In order to improve its competitiveness it is critical that management looks at the
digital marketing so that they can make their mark in the industry (Kumar, Gaur & Pattnaik,
2012). Since companies like Fitbit, Samsung and Apple have made good business in other
product segments as well hence has created faith in the minds of the people. In this regards
this company will have to ensure that they launch other health related products as well so as
to gain competitive advantage over the rivals.
Scope of expansion
There are large amount of people within Australia that is facing challenges related to heart
disease. There is also a significant increase in the numbers of patients that need 24 hours care
especially in terms of basic care needs such as heart rate. Other than this there is increase in
the numbers of people that are becoming health conscious and wants continuous updates on
their health. Since the products that are offered by other companies are of higher cost hence
the scope of expansion for this company and its products is higher (Yanotti & Dungey, 2014).
On the other Australia has a highly developed villages as well hence the company’s operation
will not only be the product that is limited to the urban location rather the company can make
expansion in the other areas of the Australia also. The scope of expansion of the products in
the market is also higher in terms of the fact that this product of the company acts as an

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attribute to the mobile phones and provides facilities like 360 degree Rotation for the photo
taking.
It is also to be understood that people in Australian people are becoming gym conscious and
are also becoming conscious for the exercising activities. For these people it can be an
excellent product. In the time when the Australian market’s growths have also slowed down,
people are also looking at their pockets to save money from buying products at lower cost
(Harris & Spickett, 2011).
Intended organisational design
The organisational design that this company can follow is global product. This is because the
technology that is being used in the organisation is of global standards. In the age of intense
globalisation it is even essential that company sells products that are global products.
In terms of organisational structure they can follow the matrix organisational structure. This
type of structure is essential for improving the leadership qualities at the base levels. This will
also ensure that companies have important people sitting at the important positions. This is
necessary for gaining competitive advantage over the rivals (Edwards, 2010). Since two
companies will work in partnerships hence it is necessary that firm has a reporting structure
where everything will be reported to the senior officials so as to ensure that there is no
communication gap between the people that are working together.
Financial capital requirements
Australian Dollar has higher value than Chinese Yuan hence the cost of investments will be
higher. There will be higher capital requirement (Caulfield, 2013). For this company will
have to ready with. In order to overcome this challenge company can take loans from the
banks especially for setting up their research unit in Australia and for setting up their shops.
Capital requirements will also be higher in the marketing and hence they need to take the
support of their partner so as to ensure that the marketing investments are done in the right
direction and hence maximum Return on Investments is achieved.
Staffing policy
At the top level of the management company needs to adopt the geocentric. This is because
the product design of the company is global product and the competition that is faced by the

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company is also the global competition. In this regards it is essential that firm do not look at
any specific culture since the product’s appeal is beyond any cultures hence staffing policy
will also need to be like this. In the middle level and the ground level this company needs to
choose polycentric policy to staffing so that most of the staffs that is recruited by the
company is from the Australia itself (Meredith & Dyster, 2012). However it is essential that
diversity gets maintained at every level of the organisational structure.
Conclusion
From the above based report it can be concluded that Health Technology Company Limited is
an emerging firm and they are planning to expand their business in the new markets. The
strength of the company includes having highly innovative products, fast supply chain, strong
financial support from their home country while the weaknesses include lesser experience in
the global market, lesser product diversification etc. Redesigning organisational structure to
make it a matrix type structure, adding more Australian investors, using digital marketing
could help the firm in overcoming their weaknesses. Higher amount finances will be
required. There is a higher scope for the expansion within Australia as the people’s behaviour
is changing towards being more health conscious.

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References
Caulfield, J. (2013). Blood supply management: experience and recommendations from
Australia. ISBT Science Series, 8(1), 41-45.
Chung, H. F., & Tung, R. L. (2013). Immigrant social networks and foreign entry: Australia
and New Zealand firms in the European Union and Greater China. International
Business Review, 22(1), 18-31.
de Leeuw, E., & Leahy, M. (Eds.). (2011). Democratizing health: Consumer groups in the
policy process. Edward Elgar Publishing.
Edwards, J. (2010). Australia after the global financial crisis. Australian Journal of
International Affairs, 64(3), 359-371.
Harris, P., & Spickett, J. (2011). Health impact assessment in Australia: a review and
directions for progress. Environmental Impact Assessment Review, 31(4), 425-432.
Hatch, P. H., Winefield, H. R., Christie, B. A., & Lievaart, J. J. (2011). Workplace stress,
mental health, and burnout of veterinarians in Australia. Australian veterinary
journal, 89(11), 460-468.
Homsombat, W., Lei, Z., & Fu, X. (2014). Competitive effects of the airlines-within-airlines
strategy–Pricing and route entry patterns. Transportation Research Part E: Logistics
and Transportation Review, 63, 1-16.
Kumar, V., Gaur, A. S., & Pattnaik, C. (2012). Product diversification and international
expansion of business groups. Management International Review, 52(2), 175-192.
Meredith, D., & Dyster, B. (2012). Australia in the global economy: continuity and change.
Cambridge University Press.