JB-Hi-Fi: International Market Expansion Report - India vs UK

This report provides a comparative analysis of India and the United Kingdom as potential markets for JB Hi-Fi's international expansion. It examines various factors, including political systems, economic indicators (GDP, exports, and market capitalization), social aspects (population demographics, social expectations, and cultural considerations), legal frameworks (corruption, property rights, and tax administration), and environmental factors. The analysis highlights the strengths and weaknesses of each country, considering corruption levels, economic growth, and social dynamics. The report aims to assist JB Hi-Fi in making an informed decision regarding investment, ultimately recommending the country that offers superior revenue potential and benefits for the company. The report also includes figures and tables to support the analysis, providing a comprehensive overview of the key considerations for international market entry.

Running head: GLOBALISATION
JB-Hi-Fi
Globalisation
7/16/2019

GLOBALISATION 1
Table of Contents
Introduction................................................................................................................................2
Overview of JB-Hi-Fi............................................................................................................2
Background of India...............................................................................................................3
Background of United Kingdom............................................................................................3
Political system......................................................................................................................3
Economic Factors...............................................................................................................5
Social Factor...........................................................................................................................8
Legal Factor...............................................................................................................................9
Environmental Factor-.....................................................................................................12
Recommendation......................................................................................................................12
Conclusion................................................................................................................................13
Reference..................................................................................................................................14
Table of Figures
Figure 1: Level of corruption in India........................................................................................5
Figure 2: Level of corruption in US...........................................................................................5
Figure 3: GDP of India...............................................................................................................6
Figure 4: GDP of US..................................................................................................................7
Figure 5: India’s Forecast: GDP:PPP FROM 1980 TO 2024....................................................7
Figure 6: Indicators of UK economy.........................................................................................8

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Introduction
Globalisation is all about interconnectedness of businesses and people all over the world that
eventually results in global, economic, political, and cultural integration. It is also said as the
capability to transfer and communicate very easily with people globally for conducting the
business at international level (Kuepper, 2019). Many economists have agreed that
Globalisation offer benefit to the individual markets all over the world, by converting
economies more competitive, efficient, limiting conflicts, and increasing capital (Steger,
2010). The intent of this paper is to present a descriptive paper related to expanding business
in the global market for gaining the benefits of Globalisation. In order to present this, the
report is providing the brief analysis of the two countries that are India and United Kingdom
and their detailed comparative analysis to identify which country can provide superior
revenue and benefits to JB Hi-Fi Company, which is planning to spread its footprints in
global market. The criteria that have been selected for presenting the comparative analysis of
both the countries are political, economic, legal, social, and environmental forces that hold
power to influence the operations of the business in the international market. In the end, the
report is providing the suggestion for JB Hi-Fi Company regarding the investment in the
profitable country, which can provide increased benefits to the business.
Overview of JB-Hi-Fi
JB Hi-Fi is the Australian retailer and the publically listed business that is famous in
the market for selling consumer goods. The key locations where JB Hi-Fi Company operates
its business are New Zealand and Australia and headquarter is located in the Melbourne. JB
Hi-Fi is ranked at 57th position out of 2000 companies of the Australian region. Maximum of
the company’s income is generated from other store-based retailing in the industry of

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Australia. In the year 2018, the total revenue of the company was $6,855,400,000 including
sales (JB Hi-Fi, 2019).
Background of India
India is one country that has occupied the larger portion of the South Asia. It is
comprised of 29 states and all of them have considerable level of control over their own
issues and matters. New Delhi is the capital of India. The Indian economy is said to be the
mixed economy. It is considered as the seventh largest economy of the world in terms of
GDP (Know India, 2019).
Background of United Kingdom
The United Kingdom is comprised of group of islands of Europe’s northwest coast.
United Kingdom is also referred as U.K. It is one of the unique nations as it is made up of
four countries that are Scotland, Northern Ireland, Wales, and England. In addition to this, the
Great Britain is made up of Scotland, Wales, and England. The UK economy is very advance
and also considered as the world’s fifth-largest economy in terms of nominal GDP (Molcan,
2019).
Political system
India
The Indian politics follow the structure of the constitution of the country. India is considered
as the central parliamentary democratic nation, which allows the President of country to
acquire the position of head of the republic and Indian Prime Minister the head of the
government. Dual political system is followed in the country, which is also considered as
double government. India is considered among the world’s most powerful nations. The
country owns the world’s largest democracy and has stable political structure. Democratic

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will of the citizens is given major priority and respect by the political parties. This tolerating
political culture supports in maintaining a stable political environment, which is very much,
need for attracting FDI in the country. However, sporadic political conflict is very common in
the country.
UK
United Kingdom follows the multi-party system as its political system. Political stability is
considered as one of the strength of the country, but Brexit movement has resulted in raising
number of uncertainties and political debates (Wheeler, Seddon & Morris, 2019). Many of
the predictors confidently says that Brexit will result in creating a chaos inconceivable, on the
other side, some of the predicators trust that it will result in increasing the growth
opportunities for the nation.
Comparativeness
The central concern in the country is corruption. It negatively influences the political
environment and business that operates in the country, which is one of the challenges for the
economic growth of the nation. Whereas, UK heads have been highly tricked by the
economic and political Brexit. UK has been becoming more corrupt. EU reviews in 2018
addressed serious weaknesses in system for upholding top governmental officials. This
review states that the system is on the basis of self-regulation and damage of reputation.

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Figure 1: Level of corruption in India
(Source: trading economics, 2019)
Figure 2: Level of corruption in US
(Source: trading economics, 2019)
Economic Factors
India

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India is and developing nation with open market economy but traced by autarkic policies.
Economic liberalisation evaluates privatisation, industrial deregulation, reduced control on
the international trade. Exports- For 2018, Indian exports were $303 billion and it is expected
to reach to $325 billion by 2019 till March. Capitalisation- Six lakh crore in against to 17.6
lakh crore for the private banks.
UK
UK has been leading trader power and the financial centre. It is the largest economy among
the European countries after Germany. The government has reduced growth of social welfare
programs, and reduced public ownership. UK has extensive coal, oil resources, and at the
same time, natural gas are declining, as UK is the net importer of energy. Exports- 44 percent
of goods and services out of £616 billion of UK`s total exports. Capitalisation- The market
capitalisation is nearly equivalent to 340.5 billion from privatisation.
Comparative analysis of India and UK
Figure 3: GDP of India
(Source: trading economics, 2019)

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GDP- Growth rate is estimated through 7.6 percent in 2019.
Figure 4: GDP of US
(Source: trading economics, 2019)
Figure 5: India’s Forecast: GDP:PPP FROM 1980 TO 2024
(Source: CEIC, 2019)
Indicators of UK economy

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Figure 6: Indicators of UK economy
(Source: Tutor2U)
Social Factor
India
India has capitalised its great largest educated English speaking public in order to become
one of the IT services, services based on outsourcing business, and software workers.
Socially, India`s medium growth is quite positive because of its huge younger population,
investment rates, healthy savings, and paced integration in the global economy.
UK
Social expectations of technological factors has often been overlooked at early stage. For the
tidal developers, group of stakeholders often delay stop projects. Brexit have real risks to
UK`s capability in order to reduce corruption. UK has a huge customer base. As per Office

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statistics, the population of UK is nearly 65.5 million in 2016. The population of UK has
been expected to increase by 74 million in 2039.
Comparison
India faces long-term challenges such as corruption, poverty, inadequate discrimination
against women, and inefficient enforcement of intellectual property rights. On the other hand,
the population has been getting older. In 2016, 18 percent of people are above 65. The culture
of the organisations is to cater the need of the older population. UK`s social environment has
been influenced by social class. The population is multicultural and companies often develop
huge variety of products in order to cater the needs of the different religion.
Legal Factor
India
Dealings with the land`s administration, organisations are exposed to higher risk of
corruption. Every third organisation anticipates paying bribes while obtaining construction
permits. Private property is quite safe and government in operation respects it. This action is
generally applicable to the metropolitan cities and in other urban areas. Burdensome land and
red tape land acquisition regulation continuing to have and investment impediments.
Especially, when it comes to land acquisition. It comes to the land acquisition and state
owned organisations do not actually face any of the hassles as the private corporates (GAN
INTEGRITY, 2019). The government can easily to procure the compulsory land. It is quite
difficult while relating it to obtain construction services that vary in several jurisdiction in
India.
UK

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while seeing at the UK`s land administration, there is moderate level of risk in relation to
corruption. Organisations often express confidence in relation to the government`s abilities
while preventing the property rights at the same time. Organisations often report that bribery
that would never occur in obtaining building permissions. It is seen that as compared one-
fourth Britons perceive several officials by issuing the building permits that remains to be
corrupt as none of the respondents indicate asking for a bribe (GAN INTEGRITY, 2019).
Corruption cases include building the development arising at the local level. Money
laundering within the property market has remain an emerging issue. Secret offshore
organisations have laundered money by purchasing property in UK while rendering UK
property market safe for the corrupt money (GAN INTEGRITY, 2019). Domestic legislation
consider exemplary while guaranteeing the beneficial ownership while maintaining the
transparency in the UK organisation. Ownership in secret organisations in UK overseas
territories is the main obstacle to invest money laundering.
Comparison
While obtaining a permission for construction needs 42 processes, whereas in Delhi the
average is very close to 29 (GAN INTEGRITY, 2019). India`s performance is quite close to
the regional average. The registration of any property takes near to 47 days (Trading
economics, 2019a).
Corruption presents low to moderate risk to the organisations while dealing with the Indian
tax administration. Very little organisations actually identify tax administration, as it is low to
moderate in India. The business operators rank tax administration amongst the relative
competitive advantage. Irregular payments are often exchanged with the tax officials during
meetings (GAN INTEGRITY, 2019).

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Nearly more than 35000 property titles in London has been held by the organisations in
British overseas territories and other crown dependencies. Estimation is near to GBP 4.2
billion in all he real estate assets as held by UK corporates where activities representing huge
risk of money laundering (GAN INTEGRITY, 2019).
Corruption during the tax administration presenting low level of risk of corruption, which tax
payments are quite uncommon (Trading economics, 2019b). British tax system has remain
transparent and the foreign owned organisations have been owned taxes from the local
organisations. The house of common public account committee has already critical of
governance of the Majesty’s custom services and revenue. The committee have
communicated the concerns where HMRC might not have ready and processed for the
custom declaration that can expect fivefold Brexit-2019. The difference and the VAT gap
between the tax, which is estimated to be owned and amount is to be collected. This will
reach over 22 billion Euro that has represented 1088 percent gap (GAN INTEGRITY, 2019).
Some of more detailed information-
Legal factors of UK- Organisation often is aware of income Act and also the Corporation
Act abiding to any tax deduction payment system which might constitute criminal offense
that includes foreign bribery. It is always less consuming on an average basis to compare with
all the OCED nations.
It is important to understand that UK deals with low level of corruption with UK`s effective
administration. Organisations often express satisfaction where the time assumption and its
effective clearance process is uncommon. Organisation often-express corruption that is not
considered a major issue for exporting and importing. An evaluation of the organised crime.
UK has found that smuggling of some of the illegal materials can facilitate by the corruption
at the port case.