JNB512: International Trade Report - Market Entry Strategies

This report analyzes international trade, focusing on market entry strategies and business expansion. It begins with an introduction to international business and various entry modes, emphasizing the importance of selecting the most suitable option for maximizing profits. The main body explores the joint venture option for a company like Wesfarmers, detailing its impact on organizational structure, functions, processes, products, services, competencies, and resources. It also discusses senior management's role in addressing related issues. The report then reflects on a market entry plan, highlighting the need for thorough research and analysis of market conditions. Furthermore, it examines the opportunities and risks for an Australian high-tech medical equipment company expanding into Manounya, considering factors like literacy rates, government support, and the rising population. The report concludes by summarizing key findings and insights, providing a comprehensive overview of international trade concepts and practical applications, including the importance of research and management skills.

International Trade

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Suitable international entry option and their impact upon organisational factors.......................3
Reflection on market entry plan..................................................................................................5
The opportunity and involve risk for Australian high-tech medical equipment company in
expanding its business to Manounya...........................................................................................6
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Introduction
Every company aims to expand their business internationally to gain more profit and to
get more popularized. There are many entry modes for a company like export, franchising,
piggybacking, joint venture and many others. Companies are required to compare all entry
modes and identify which one will suit their business best to maximise their earnings (Schwens
and et. al., 2018). Here, they are required to analyse some pros and cons of each entry mode and
then opt that international entry mode strategy which has more advantages then their drawbacks
on business. Wesfarmers Limited is founded in 1914 and it is headquartered in Perth, Western
Australia. It is operating in retail, fertilizer, chemical and industrial and safety products. The
following report covers international entry system and their impacts upon organisational
structure, resources, and many others and how the manager will manage all factors for efficiency
of company. It also covers reflection on strategic global market plan and their learning.
Main Body
Suitable international entry option and their impact upon organisational factors
Every country aims to expand their market and grow well in their sector. Wesfarmers is
the company which provide its farming and industrial tools in 3-4 countries and they are required
to expand their market in more countries.
Hence, they can adopt Joint Venture option as an international entry option. Here,
two or more companies come together to form a single company and sell their products and
services to other countries. Wesfarmers company are recommended to form a joint venture with
those companies only who are popular in their country and have more customers. This will help
them to grow faster. Therefore, investigation is required and it is compulsory that they will invest
more in their marketing department and research and development department to analyse
marketing conditions and requirements of different countries and wherever they found scope for
their business they must plan to form joint venture with other famous companies in market after
proper research (Schellenberg, Harker and Jafari, 2018). When two companies come together to
jointly owned a business then it is called joint venture. Here two companies of different countries
come together for the benefits of using each other’s resources and to analysing market conditions
of both countries. This also helps to reduce the overall cost of internationalization of business.

Both companies who formed joint venture must provide a new management team which cover
the managerial employed skills from both companies. They can plan to expand their company’s
functioning in UK market. They can form joint venture with UK Company who deals in same
products. Impact of joint venture with UK based company in their market impacts Wesfarmers
by following ways-
Impact on organisational structure- Joint venture is formed with the agreement of
both companies who come together to form a single aimed business (Surdu, Mellahi and
Glaister, 2018). Hence, organisational structure get impacted by this because organisational
structure will be selected by both company’s owners and whichever the structure they found to
be best suited for the new formed organisation in UK market will be opted. Here, the reporting
system, supervision and many things changes. At mutual understandings they decide that who
will report to whom and what is the work of employees to meet their objectives. Overall
organisational structure get changed due to new formation and entering the new market.
Impact on functions and processes- organisational functions and processes get
impacted same as organisational structure. Functions and process of doing business is set by both
companies who come together to form joint venture. It is essential to follow UK laws and
regulations in context of working in this country because here, there are many strict rules are
made related to business functioning and processes. But Wesfarmers Company may share their
point of view of their older functions and business processes with other partnered company to
influence that their working process is easy and should be opted for benefit.
Impact upon product and services- There is no impact of joint venture on product and
services because the main aim of choosing international entry mode is to sell their same product
and services in other countries (Blackburne and Buckley, 2019). Here, Wesfarmers Company
may opt same characteristics of their products to sell in UK and other countries. The only
difference which will be seen after internationalization is in prices of these products and services.
Prices will be set according to the purchasing power of customers in those countries where they
expand. It is essential for the company to maintain good quality of their product in new country
because customers of UK and other countries are having habit to live standard life and they
supposed to use qualitative products. Hence, quality of their tools, fertilizers and chemicals
should be maintained properly.

Impact upon competencies and resources- They may get impacted in forming Joint
venture with other company because many times companies uses the resources of that country
there they entered their business. Wesfarmers may hire new employees in case they enter UK
market and also try to found suppliers of UK country only to make their business frequent in
doing any work. Sometimes they uses skills and talents of both companies who come together to
form joint venture. For example in case Wesfarmers Company form joint venture with other UK
based company then they will use the employees and their skills of both companies combine for
the success of their joint venture formation.
Senior management activities to handle all issues-
For maintaining organisational structure senior management will make sure that which
structure will best suit at international level and make their employees understand the advantage
of new organisational structure so that their employees will become familiar before adopting the
new structure (Lin and Ho, 2019). In is also essential to maintain culture at organisation to
maintain positivity and good working environment at company. This can be done by providing
good facilities and having good relations between management teams and employees. For setting
the prices senior management must make sure some factors like purchasing power of their
population, cost incurred in producing goods at new places and many things then they will set
new prices including their profit margin. For resource and competencies management, the senior
management employees must provide training to their employees for using new resources,
technologies and many others so that they will develop their knowledge and skills of using
appropriate use of available resources for the benefit of their organisation.
Reflection on market entry plan
From the above information I have learned that there are many entry options of a
company in another country but companies chooses that option only which best suits to them and
their business functioning. Here, I have described the joint venture entry mode for the company
Wesfarmers who produce goods related to agriculture and industrial tools. In this assignment I
supposed to mention few factors which will get impacted by adopting global entry mode by the
company. These factors are organisational structure, products and services, resources and few
more (Girdzijauskaite and et. al., 2019). Hence, it is important that all the impact get be managed
by the manager whenever they arrive for the efficiency of company. The main thing which I
have learned from this assignment is that a good level of investigation and research is required

by that company who plans to enter their business in new market. It is essential for that business
to investigate properly that what are the marketing conditions and trends in that country,
purchasing power of population, requirement and importance of their products and services in
those country where they plan and many other investigations are required. Here, I learned few
skills like decision making skill by deciding the appropriate mode of entry and the best time for
international entry. With the help of this assignment I also learned to analyse the impacts and
causes of new changes upon business like if business is going to enter the new market then it is
sure that many factors impact them. This assignment helps me to analyse few factors and their
impacts upon business when the business adopt new changes. While conducting this assignment
I supposed to read and gain knowledge about more than 6-7 international entry modes. Hence,
this will help me to analyse other options too in case one entry mode does not fit the situation. I
have gained knowledge of international entry modes, international business, factors affecting
during expansion of business, how to manage all things effectively and many more.
Here, I also learned some managerial skills like motivating employees, managing organisational
issues as soon as possible for organisational benefits, decision making and many more.
According to me, I think manager must consult with their employees before taking any decision
on international growth because sometimes employees have some great and useful ideas which
must be heard by management. Here, I learned that how managers manage each issues and
problem effectively. Managers make sure that their employees will not face any issue regarding
international expansion of company (Liu and Kang, 2020). Hence, managers try to convince their
employees and told them to cooperate with company for the benefit.
The opportunity and involve risk for Australian high-tech medical equipment company in
expanding its business to Manounya
Since, it has been recognised that Manounya is one of the rising or emergent economy Asia
as they have a multitude of population about 80 million along with this, within the last few
decades the industrial infrastructure is also developed which is capable in offering wide range of
the product to the customer. Alfex Laser Healthcare is Australian based high tech medical
equipment manufacturer which is at present planning for expanding its business into Manounya
as the government of Manounya has the ability and they have strengthen the business
infrastructure and transform the industry into a full automated high-tech company on their long
term strategies (Yanina and et. al., 2021). This is done to increase the investment which allows

the transformation and for the attraction of the foreign investment. Therefore, following are the
various opportunities along with the associated risk in such an exertion.
Opportunity
 One of the core advantage of expansion to there is that the literacy rate is far high which
is subsequently a great drive force for accessing to a skilled labour which are readily
available for the company new offices.
 The government of Manounya has long term strategic goal in the development of the
business infrastructure and planning for transferring many industry into a high tech based
which is another good attractive option available to Alfex Laser Healthcare (Bolin and et.
al., 2021). Hence, the infrastructure for the production corporate is developed with strong
rate hence there is no requirement to invest more in building a high tech infrastructure.
 Moreover, the population of Manounya is rising on fast pace so, in another direction the
growing population symbolise to grab a greater customer base.
 Moreover, the medical equipment are the essential items, hence as the rise of the
demands of the equipment increases there is more revenue to be earned.
 The population of Manounya are most often are open up in buying the diverse product in
the last few decades.
 Since, the economy of Manounya is developing hence there is large section of middle
class which offer great opportunity to capture this masses with the cost focus pricing
strategy to compete with the local competitor.
Risk
 One of the core risk is the huge start-up capital which is require for the business process
which means there require higher advertising expanses in order to grab the market.
 The cultural diversity is another kind of risk as the high diversity at the workplace can be
a cause of conflict at the workplace.
 There is also need to handle the specified ethnic, community norms and the culture of the
various stakeholder of the business in order to satisfy their interim need at the same time
(Sandoval and Rank, 2021).
 Moreover, for a skilled employee there require to offer high wages based on their
professionalism level and the experience which is at the first stage very difficult as
company are investing heavenly in the advertisement programme at this phase.

 Since, there is high level of industry rivalry which is great challenge to face competition
with some existing local medical equipment manufacture.
 There are certain licensing and other paper formality associated when dealing in the
medical equipment production segment in order to commence business with proper
regulation and rules which is quite not easy until there is strong free trade policy and the
nation trade alliances.
Step by step process for the expansion of the business
 The office is always looking for employees who are adequately trained to meet its current
and future staff needs.
 The business community in the region, which is as important to development as it is, does
not need to invest in infrastructure and, moreover, should only use the most enthusiastic
of them.
 These are the people who buy the company's products, as they are small, and the
recycling rate, which is beneficial to the company, because it gives them great growth
potential.
 Medical equipment can be important, which means that commercial and business profits
are linked to demand.
 In many cases, population growth means expanding customer base and attracting
competitors.
 Faced with similar challenges from other domestic medical device manufacturers, Aflex
Laser Healthcare Company actually competes equally with their competitor.
 As it would expect from an employee, his salary is very high, and what matters is the
level of his training (Ren and et. al., 2021).
 Due to the high level of professional education and training, it can be said that all
employees know what their basic rights are, there is an increase in employee benefits,
benefits, pensions and security.
 Understanding and overcoming broad, racial, cultural and social norms, individuals,
companies, stakeholders and employees
 Because of high initial cost of the project will increase the advertising costs of exactly the
market photography.

Conclusion
Therefore, from the above carried out study it has been summarised that international
trade is a kind of business expansion business strategy which is used to focus on the expanding
the business operations across the borders. Moreover, it has been identified that there are
numerous entry modes for a company like export, franchising, piggybacking, joint venture and
many others. Therefore, it is advised that organisation should require to compare all entry modes
and identify which one will suit their business best to maximise their earnings. Moreover, it has
found that there are various factor which impact the business expansion which are commonly the
organisational structure, resources and competencies, product and service production pattern and
the organisational functions and processes. Even so, when expanding into the foreign market it
has been concluded that there is required to identify the market entry opportunity along with the
probable risk associates as the entry barrier and obstacle.

References
Books and Journals
Blackburne, G.D. and Buckley, P.J., 2019. The international business incubator as a foreign
market entry mode. Long Range Planning. 52(1). pp.32-50.
Bolin, W., and et. al., 2021. Family Control and Cross-Regional Expansion: Empirical Evidence
from Listed Companies. Foreign Economics & Management, 43(04), pp.85-110.
Girdzijauskaite, E. and et. al., 2019. International branch campuses as an entry mode to the
foreign education market. Administrative Sciences. 9(2). p.44.
Lin, F.J. and Ho, C.W., 2019. The knowledge of entry mode decision for small and medium
enterprises. Journal of innovation & knowledge. 4(1). pp.32-37.
Liu, Y. and Kang, Y., 2020. Adapt to the wild: the effect of dynamic capabilities on international
entry mode. International Studies of Management & Organization. 50(1). pp.74-90.
Ren, S., and et. al., 2021. The micro-foundation of ambidextrous opportunity identification in
international expansion. International Business Review, 30(1), p.101764.
Sandoval, C.A. and Rank, O.N., 2021. Managers’ intentions to pursue export expansion an
entrepreneurial cognition perspective. Journal of Entrepreneurship in Emerging
Economies.
Schellenberg, M., Harker, M.J. and Jafari, A., 2018. International market entry mode–a
systematic literature review. Journal of Strategic Marketing. 26(7). pp.601-627.
Schwens, C. and et. al., 2018. Limits to international entry mode learning in SMEs. Journal of
International Business Studies. 49(7). pp.809-831.
Surdu, I., Mellahi, K. and Glaister, K., 2018. Emerging market multinationals’ international
equity-based entry mode strategies. International Marketing Review.
Yanina, O., and et. al., 2021. Formation and Implementation of a ‘Digital Single Market’Concept
in the Context of Digital Economy Expansion. Global Business Review,
p.09721509211010028.