International Management Report: Waitrose & Partners Case Study

This report delves into the realm of international management, utilizing Waitrose & Partners as a case study to illustrate key concepts and strategies. It explores the rationale behind companies becoming multinational enterprises (MNEs) and the specific considerations MNEs must address when operating in international markets. The report analyzes the importance of foreign exchange markets, examines political, economic, social, and technological variables, and discusses the balance of payments. It also assesses the factors influencing decisions to engage in international trade, the impact of cultural sensitivity, and the role of risk management. The report provides a comprehensive overview of the challenges and opportunities in international business, offering insights into market expansion, risk mitigation, and strategic planning for global operations.

INTERNATIONAL
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Question 1...................................................................................................................................1
Question 2...................................................................................................................................2
Question 3...................................................................................................................................2
Question 4...................................................................................................................................3
Question 5...................................................................................................................................4
Question 6...................................................................................................................................5
Question 7 ..................................................................................................................................6
Question 8 ..................................................................................................................................6
Question 9 ..................................................................................................................................8
Question 10.................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
International Management is the management of organisation's operation and activities
and it is used for business organisations who are conducting their activities in more than one
country. Waitrose and Partners is a Subsidiary company that aims at operating its business in
more than one country. It is British supermarket business that forms food retail division. The
present report describes about the international management in detail. Why companies choose to
become multi-national enterprises and what special factors MNE considers while doing business
in international markets and such questions are being answered in the report. The report further
explains about importance of foreign exchange markets and political, economic, social and
technological variables as well (Wright and Reese, 2015).
MAIN BODY
Question 1
a) Organisations aims at expanding its business and business activities so that it can
achieve better results and outcomes in form of increased market share, stronger customer base,
improved productivity and profitability. Business organisation can achieve better results and
outcomes by exporting their products in other countries and expanding their activities in other
country. Waitrose & Partners chooses to export their products and services to companies in some
other country so that it can gain benefits of increased economies of scale, and increased market
share and overall it will lead to increase sales and profits of company. This will allow Waitrose
& Partners company to have faster growth and development of business due to higher sales and
profits (Baker, 2016).
b) Waitrose & Partners company aims at exporting the products and services to
companies in other countries so that it can gain benefits of large economies of scale. For
example, the company has capacity for excess production capacity and therefore it is marginally
not much expensive for producing 500 units rather than 400 units. And this leads to lower down
the per unit cost for products and this may help in expanding the sales in other countries'
company.

The company who does not deal in international markets thinks and assumes that
exporting of goods and services contains risks of damaging and requires more handling and
safety during the transportation process. International trade also requires quite extensive and
potentially confusing documents such as Export License, Shipper's Export Declaration (SED),
Commercial Invoice, Bill of Lading, Consular Invoice, Certification of Origin, etc.
Question 2
a) Companies become Multi-National Enterprises because through this it can get access
to new customers and new markets. This is considered as the most obvious reason for companies
becoming Multi-national enterprises because every company aims at developing and expanding
its sales and target customers. Offshoring is becoming more popular as it helps in reducing the
cost and it refers to relocating of business activities and operations in other country. Companies
choose to become multi-national enterprises in order to exploit new growing markets for
example, Mexican economy. One of the reason companies becoming multi-national enterprise is
also that it can gain brand recognition in other country or international markets. The reason may
also include to compete with developed and larger companies in other countries (D'Aniello,
Nguyen and Piercy , 2016).
b) Yes, the decision to become Multi National Enterprise can be seen as part of
company's risk management strategy. International markets bring benefits as well as risks for
companies and impacts the business strategies as well. Risk management strategy of organisation
is a coherent approach that aims at providing a structure for identification, assessment and
manage the risks' and issues. The risk management strategy is built in process for regular updates
and assessment reviewing regarding new actions or development of business activities and
operations. Companies adopting to become MNE brings various risks and issues, therefore, it is
included in the risk management strategies. These strategies would help company to manage the
political instability, issues regarding exchange rates, assess cultural differences, etc. effectively.
Proper risk management strategies are formulated and developed by Waitrose & Partners
company so that it can effectively handle the issues and risks of international markets and
achieve great benefits (Tjosvold, 2017).
Question 3
a) The firms which operates its business in only one country does not require assessing
factors of other country as it does not greatly influence with the international environmental

factors. The company only needs to focus on analysing the own country's factor such as, social,
cultural, economic, political, legal and technological. Waitrose & Partners company aims at
developing its business in international markets and becoming a Multi National Enterprise,
therefore it analyses the factors which are important for international business.
Culture: Waitrose & Partners company needs to consider the cultural differences as it
determines the success and growth of business organisation (5 Factors You Must Consider While
Your Company is Entering to a New Market, 2019). The products and services offered in other
countries must provide value to customers and also meet their needs, demands and wants.
Legal and regulatory frameworks: Company needs to properly analyse the rules and
regulations impacting the country it is going to operate its business in. It may include: labour and
employment regulations and laws, procedure of investment and business, dispute resolution,
corporate organisations practices and restrictions or laws on export or import, custom law,
currency repatriation and trademark requirements (Brewster and.et.al, 2016). it is important
because the regulations and legal frameworks of a country will bring great impacts and
influences on the company.
Foreign government considerations: Organisation also needs to focus on stability and authority
of local government while reviewing options of overseas and consider the factors such as,
Currency exchange rates, access for required materials and resources, government assistance
programmes, laws regarding immigration and employment, policies of protection for business
and options for communication and transportation.
Business strategies: The Waitrose company needs to formulate its business strategies in a way
that it effectively responds to the adversity, challenges and opportunities of international
markets. It needs to consider various factors such as: market trends, economic feasibility,
financial patters for cost, market forecast and market's personality. Organisation also needs to
take a financial feasibility for determining that the decision for becoming multinational
enterprise makes financial sense or not.
Resources and capabilities of business: Waitrose also needs to conduct an audit for its
capabilities and resources before going global and entering in new markets. The company needs
to ensure that it have clear competitive advantage in the other countries. Company needs to
possess reliable partners, product portfolio, advanced technology, knowledge and various other
relevant parameters so that it can gain benefits in the international markets. This is important as

the resource audit will help organisation to effectively formulate the business strategies and
policies for international transactions.
Question 4
a) “Balance of Payment” refers to a statement that summarises all the transactions which
are made between individuals and organisations of one country with other countries' individual
and organisations. It is prepared in a defined time period, such as in a year or quarterly.
International manager needs to be strongly aware regarding balance of payment of country
whom it is doing business with. It has components such as financial account, current account and
capital account. The international manager of Waitrose company assesses the balance of
payment of country it is planning to do business with as it tells whether country save enough for
paying for its imports or not. The deficit in accounts shows that country imports more products,
services and capital as compared to its exports. And due to this country can become net
consumer rather than producer in a long run. And Waitrose cannot grow and develop in this
situation where country goes into debt for consumption rather than investing in future growth
(Oruade ,2016)
International manager of Waitrose needs to invest and develop its business in country
having a surplus in its balance of payment statement. As this helps in boosting economic growth
of a country and it also has excess savings. And in the long run, country can become dependent
for export driven development and growth which can provide benefit to companies operating in
the country as well.
b) The foreign exchange markets or forex markets act as the backbone for international
trades and also for global investing. This is critical for supporting the exports and imports, that
are necessary for gaining access regarding resources and creating additional demand for products
and services. Multi-national enterprises make use of forex markets in order to determine the
foreign investment value. The company needs to have the resources and ability for trading in
different currencies and countries otherwise its prospects will be limited and it will also impact
the global economic growth. The forex markets are important for MNEs as it provides credit
regarding international trades (Lovelock and Patterson, 2015).

Question 5
a) The Waitrose organisation needs to consider various factors while deciding whether to
engage or not in international trade. Following are given some variables or factors that needs to
be considered:
Political: This factor greatly affects the business activities and operations and it includes
intervention by government. Company needs to properly assess and analyse the following factors
when deciding
 tax policies of country
 labour laws
 consumer protection law
 restrictions regarding tariff and trade
Economical: Company needs to effectively analyse the economic condition of country
with whom it is doing business with (The Role of PEST Analysis in Bolstering International
Business, 2019). the economic factors that needs to be considered by Waitrose and Partners
while deciding whether to engage in international trade or not are:
 economic growth of country
 inflation situation
 interest rates in country
 buying power of customers in target markets.
Social: This variable is related to demographic and culture aspects of individuals or
society of international markets. The Waitrose and Partners needs to consider the various factors
such as:
 age distribution
 safety awareness
 population rate of country
 career attributes of people
 culture or trend followed
 taste and preferences of customers
 education level of target customers

Technological: The Waitrose needs to effectively analyse the affecting and impacting
factors while planning for international trade in order to gain effective and efficient benefits.
Company needs to adapt to change going in technological trends, such as:
 improved and advanced machinery being implemented in target markets
 efficient techniques and technologies used in country
 latest and updated software used in companies of other country
 automation in business activities in companies of other country.
Question 6
a) The ignorance of certain customers will affect the Waitrose as it is new company in
new location and also customers does not have faith in the new companies quality. For these
Waitrose has to deliver the proper quality of the product so that customer attract towards the
brand and also provide various offer and discount to the customers so that Waitrose will generate
maximum profit.
b) Cultural sensitivity training programmes helps in teaching and guiding Waitrose
company to effectively working with different cultures as it is important in international trade.
The training programs provides with in-depth cultural awareness and also understanding about
the impacts of cultural differences. The important elements of cultural sensitivity training
programs for MNE are -
Raising cultural Awareness – Training sensitivity can help organisation to raise cultural
awareness and treat every employees equally.
Changing behaviour – The second importance of sensitive training is that to check the
connection with the co-worker, client and the customers is positive or not. It helps to ensure that
all employees understand the cultural behaviour that is what is appropriate and what is not.
Making better result – the third importance of sensitive training is that it helps the
organisation to make decision in the better and effective way. If the qualified person is not
offered for the job for their accent or gender not because of their ability then it will affect the
organisation but through cultural sensitivity it helps the organisation to appoint qualified person
(Gilpin, 2016).
Improve communication skills – If there is a lack of cultural sensitivity then it will
directly impact the ability to communicate effectively with different groups. By the help of
cultural training employees will understand the cross culture communication.

Question 7
a)
cost sheet
for the month March 2019 (10000 unit )
Total £ Cost per unit £
Raw material consumed 50000 5
Sales and distribution 15000 1.5
Direct wages 12000 1.2
Prime cost 77000 5.13
Work overhead :
1500 machine hours @£5
7500 0.75
Work cost 84500 8.45
Office overhead 20%of work
cost
16900 1.69
Total cost 101400 10.14
Interpretation – the above is the cost sheet of Waitrose for the month march 2019 in which raw
material, sales and distribution, and direct wages combine to get the prime cost and further work
overhead combine to get work cost, work overhead is 20%of work cost and by adding both it
will get total cost.
It is beneficial to minimise the cost for wait rose as it help wait rose to work in the cost effective
way. And also work in the budget and by the help of international outsourcing of some of its
production helps the company as where the resources value is less than it will beneficial for the
company as it will require less cost.
Question 8
a) Screening steps that wait rose will follow an international market are -
International market objective – The first step of international market objective is to
help to ascertain the export marketing objective of the organisation and also need to analyse the
best suited to achieve the international objective.

Parameter for selection – The second step is evaluating the different parameter of the
market and this parameter are firms resources, international environment , market situation ,
different type of policies and also culture of the location .
Preliminary Screening – Preliminary screening is most important for an organisation in
which it eliminates the market which are not potential. In these the size and the political
conditions are commonly used (Deresky ,2017).
Short listing of markets- As preliminary screening eliminate the market which is not up
to the mark. But there are many factors which are not eliminated after the preliminary screening
then they are further screened by the help of more information by the help of short-listing.
Evaluation and selection – The next step is evaluation and selection in which it helps to
evaluate and select on the bases of cost effectiveness and feasibility study and also they are
ranked on the basis of attractiveness .
Test marketing – This is the most important step in which the market is launched on the smaller
bases and if it receives the positive feedback then the organisation will launch the product but if
it receives the negative feedback then the firm will improve the product .
Commercial production – Once the product is tested the next step is commercial
production in which company goes ahead with mass production .
b) 4 P' s of marketing apply to Waitrose -
Market elements Waitrose
PRODUCT Waitrose is the subsidiary company and British
supermarket business in form of food retail
division. It provides unparalleled range of
services . The retail store provide various
services as apart from their marketing mix. It
supplies groceries, wine and also variety of
foods services.
PRICE Waitrose believe in fair pricing method. It
provides high quality prices in low price and
this strategy attract the customers towards the
brand. Waitrose has price monitoring team

which continuously monitor the pricing of the
competitor. This strategy helps the firm to
attract the number of customers (Deresky and
Christopher, 2015.).
PROMOTION Waitrose adopts very innovative strategies for
promoting the products and services. Waitrose
also offer discount to the customers. And also
have many followers on you tube and
Instagram also company promote its product
by giving innovative advertisement which
attract the customers .
PLACE Waitrose uses multi-channel and also has wide
distribution channel . And also have strong
control on online marketing. Also they have
release smart phone application. Waitrose is
the six largest retailer of groceries in the UK
and also provide 52 countries and have 352
locations .
Question 9
a) Waitrose has to accept each country operation and also the tax law of each country as
system of taxation vary of country to country . Taxes may be levied on various measures of
income including various parameter such as net income, gross margin etc. company has to obey
the tax duty of the country and follow the duties in the proper manner . UK Some countries use
two system of taxation such territorial system and residence based system . Only local income is
taxed in residence based system. Also, some countries follow double taxation treaties. And also
for that it is compulsory to take advice of cross border to minimise the tax. Before setting the
business it requires full study on the taxation aspect of the business.

Question 10
a) The first condition is that if waitrose operate in the market and it found that the
international market being challenge by a new low price competitor and it will affect the
Waitrose revenue because its competitor are selling the product in extremity low price . Then
wait-rose will improve the quality of the product to attract the customers and also give various
innovative advertisement which will help the wait-rose to attract the wide range of the customers
and also since it is new company in that particular location chosen organisation will provide
different discount and offers so that it will give tough competition to the competitor and also
focus on improving the quality of its products.
Second condition is that government of the country in which wait-rose is operating prevent
the foreign nationals in his head office then it will impact the company to the large extent
because it requires the professional employees but as the rules of the government wait-rose will
give special training to the worker so that they work in extra ordinary way. But it will impact on
the market strategy and production strategies of the business (Deresky and Christopher, 2015).
CONCLUSION
International management need to be familiar with various business regulations and
ability for carrying out transactions which may involve different currencies. Also, it has
concluded that companies become multinational enterprise to get access with new market and
also every company has desired to expand and diversify its business. Also, it has mention the
factor that MNE consider operating the business internationally and also it has conclude the
importance of foreign exchange market in MNE . And also it has identified the various factor
and to be consider for operating the business. Further it has concluded the various ways on which
company can attract the customers and also in this report it has explained the importance of
cultural sensitivity and also the step of the screening and the four P'S that is applied to an MNE
and also concluded the ways and guideline for an MNE to be accepted in each country in which
it operates.

REFERENCES
Books And Journal
Baker, M. J., 2016. What is marketing?. In The Marketing Book(pp. 25-42). Routledge.
Brewster and.et.al, 2016. International human resource management. Kogan Page Publishers.
D'Aniello, C., Nguyen, H. N. and Piercy, F. P., 2016. Cultural sensitivity as an MFT common
factor. The American Journal of Family Therapy. 44(5).pp.234-244.
Deresky, H. and Christopher, E., 2015. International management: Managing cultural diversity.
Pearson Higher Education AU.
Deresky, H., 2017. International management: Managing across borders and cultures. Pearson
Education India.
Gilpin, R., 2016. The political economy of international relations. Princeton University Press.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Oruade, K., 2016. Taxation of Expatriates and Foreign Companies in Nigeria. Tax Law Journal
of Nigeria, published by AETA and coordinated by WTS Adebiyi & Associates.
Tjosvold, D., 2017. Cross-cultural management: foundations and future. Routledge.
Wright, G. W. and Reese, R. J., 2015. Strengthening cultural sensitivity in mental health
counseling for deaf clients. Journal of Multicultural Counseling and Development. 43(4).
pp.275-287.
Online
5 Factors You Must Consider While Your Company is Entering to a New Market. 2019.
[Online]. Available through: <http://www.yourarticlelibrary.com/business/5-factors-you-
must-consider-while-your-company-is-entering-to-a-new-market/13162>
The Role of PEST Analysis in Bolstering International Business. 2019. [Online]. Available
through: <https://pestleanalysis.com/>