International Business Expansion of JCB

This report analyzes the global expansion strategy of JCB, a leading manufacturer of construction and agricultural machinery. It begins with an introduction to international business and its challenges. A SWOT analysis identifies JCB's strengths (wide product range, strong brand), weaknesses (limited market share, competition), opportunities (warehouse expansion, joint ventures), and threats (high raw material costs, competition, economic downturns). A PEST analysis examines political, economic, socio-cultural, and technological factors influencing JCB's expansion. The report critically evaluates JCB's current global strategy, focusing on exporting and strategic alliances. It suggests a strategic alliance with a company like General Electric as a way to expand into new markets. The report also discusses the Uppsala model for internationalization, outlining stages from sporadic export to foreign production. Finally, it recommends using the Ansoff matrix to guide JCB's future expansion, suggesting market penetration, market development, product development, and diversification strategies.

International Business

EXECUTIVE SUMMARY
A global expansion mainly involves an export and import of products or services by most
of the companies which is of prior importance for successfully heading towards the competitive
business environment. International business enables the firm to globally expand their services
with a prior consent of diversifying its goods and products. The below report is in similar context
to define the expansion of JCB company with a need base determination of considering its varied
requisite approaches followed by a prompt strategic plan.

TABLE OF CONTENTS
INRODUCTION..............................................................................................................................1
Factors to be considered by JCB for globally expanding their business................................2
Critically evaluating the global strategy of JCB.....................................................................5
INTERNATIONALISATION.........................................................................................................7
RECOMMENDATIONS.................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INRODUCTION
International business is a term which is mostly used by the firm's in regard to specify
their external transaction of goods and services. It thus comprises all sort of merchandise
exchange among two or more countries, regions and even nations by working beyond their legal
and political limitations. It includes both public and private transactions with a prior consent of
their governmental bodies and together of the region where they are running their expansion
operations. A global expansion mainly involves an export and import of products or services by
most of the companies which is of prior importance for successfully heading towards the
competitive business environment (Ambos and Håkanson, 2014). However, it is an equivalent
challenging task for the firm where it also needs to face numerous and varied challenges or
issues in enlarging their business into some uncharted arena. It is due to a fact in which they are
supposed to cogently work outside their own domestic area for prosperously achieving the
desired result of attaining a recognisable position in an unknown area. Therefore, it is largely
recommended to the firm's for working with a prominent approach of primarily mapping the area
where they are planning to expand their business operations (Tucker, 2011).
It can be therefore done by promptly studying their prevailing market condition and
strategies. It will further signify their ongoing action plan of successfully running their business
activities into that particular area. The provisioned company will then together be able to
determine their recent trends and demands that are too likeable by their clients and customers.
Accordingly, the provisioned firm will be also be able to build their individual strategic plans of
expansion by using a differentiated approach of their own (Child, Faulkner and Tallman, 2005).
The present report is in similar context to identify an exact need and importance of globally
expanding one's business with a prior obligation of facing varied challenges by together finding
suitable resolutions for overcoming them. In this report, J.C. Bamford Excavators Limited (JCB)
has been taken into consideration for planning its varied strategies to globally expand its
business. It also reflects the need base recommendation of overcoming various barriers that it
could face at the phase of expansion. JCB is a private firm with a global coverage of over 150
countries where it is notably known for building equipments for varied purpose of construction
and agriculture, etc. It thereby produces over 300 varieties of machineries in around 22 factories
of its own (Eshun Jr, 2009).

Factors to be considered by JCB for globally expanding their business
JCB is a leading manufacturing firm for constructing machineries which also provides
certain financial assistance in major parts of UK. However, it has a huge portfolio of its
production services which is widely spread into some major continents across Europe, Asia,
Africa and America. It not only build construction and agriculture equipments, but together
offers products for serving some other purposes of recycling waste, generating power and to
several defence services as well (Loura, 2014). It therefore has a huge variety of products like
utility vehicles, vibratory compactors, generators, excavators, tractors and wheeled loaders, etc.
It also fabricates its own design of development by considering all requisite measures of safety
and as per the specified need of its client. It together provides leasing facility to its customers
with an assured insurance of the products that include a varied range of services of liability
insurance. It involves both long term and short term plant and motor feet insurance with a
broking service of hired out plant and bespoke insurance (Figge and et. al., 2012).
By working at such high level of services, JCB still believes in its innovative approach of
building products. It is therefore strongly determinant towards a positive scope of enlarging its
services by rendering its specialized products almost into every corner of the world. For similar
aspect, it is provisioning for an international business to prosperously prevail outside its own
domiciliary area. However, it therefore showcases a specific requisition of priorly studying an
exact ongoing scenario at its expanded area (Fainshmidt, White III, and Cangioni, 2014). For this
purpose, it is crucially essential for the firm to identify certain varied factors in terms of
identifying its own strengths and weakness to rectify or modify the specific determination.
Thence, a SWOT analysis in such case would be a perfect example which will together specify
its several major opportunities and threats that could relatively affect its business. A SWOT
analysis therefore comprises its four major constituents of defining the company's strengths,
weaknesses, opportunities and threats (Budgens, 2015. ).
It is much of an internal analysis for the cited firm with a brief investigation upon its
competitors and their varied competent approaches. It further helps the firm to effectually beat
those certain upcoming challenges by primarily creating a to the point report on it. Below
mentioned is the SWOT analysis of JCB- Strengths- The biggest strength of JCB is its wide range of products which serves a
variety of industries like construction, agriculture and many more. Its huge brand name is
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another advantage with a strong geographical presence in both developed and developing
countries like UK, North America and Germany, etcetera with its own factories and a
high recalling customer service. It therefore has a broad network of dealers with a global
availability of its services (Hohenthal, Johanson and Johanson, 2014). Weakness- A major disadvantage to JCB is its limited market shares due to its less
diversified business. It also has many numbers of competitor like Caterpillar, Komatsu
and Ingersoll- Rand which has a widespread of their business networks. Another is the
recently held crisis in eurozone which has tremendously affected its efficiency of
carrying the operational work (Franchising, 2015). Opportunities- The latest opportunity for the cited firm could be an enlargement of its
warehouses to serve more number of customers which will together raise their quality of
service by broadening the scope of services. Another is its latest invention of loader with
a backhoe facility in it, which is already rising its profit by an increasing demand from
the customers. Along with it, JCB can also opt for a joint venture service which will
gradually higher its shares into the market (Knežević and Wach, 2014).
 Threats- Lastly is its suffering due to high price of raw materials which automatically
higher its operational cost. Due to which, it also leads the cited firm to raise the prices of
its own products which also creates a negative impact on its customers. Next is its major
number of potent competitors who are already playing their leading roles into their
respective arenas which is relatively similar to the procedures of JCB with an equivalent
strategic approach of widening their networks. Followed by it, there is a lowering scope
of real estate sector in Europe that may hamper or stagnant its products and equipments
for the constructional purposes of eurozone (Joint venture, 2016.).
On similar framework of expanding business activities, an external analysis is duly
important for the firm's to effectively study various intrinsic and extrinsic environmental factors
that could directly hinder into its scope of progression. For related purpose, one can make an
effectual utilization of a PEST analysis model which mainly aims at demonstrating its four major
constraints. It promptly investigates into the prevailing aspects of political, economical, socio
cultural and technological factors of the firm which an utmost importance of timely recognising
these elements (Levene and Conversi, 2014). It will further help the firm to prominently include
it into their own strategic plan of expansion. PEST analysis is of great support to the firm for
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working with a long term perspective of successfully running the business activities outside one's
own domiciliary area. Such analysis widely focuses upon a macro analysis of the cited firm and
its requisite structure with a proper acknowledging power of understanding the complexities and
upcoming challenges to its business. Below mentioned PEST analysis for JCB is as follows- Political- These are certain legal and political factors which slightly differs from one
country to another. It mainly defines a requisite tax rate and labour costs for the cited
firm to accordingly work into that particular region by matching the relevant scenario. It
also reflects some restricted governmental rules and regulations of a region where JCB is
strictly recommended adhering by it. However, certain unstable decisions by the
government sometime shatters the long term planning of the firm. Thence, it is much
advisable to the cited firm to hold a significant position at that particular situation by
together adapting a dynamic nature of accepting change (Mackinlay, 2013). Some major
political factors also consider the CSR activities of firms where the cited firm too
maintains a sustainable approach of working with a great respect towards its surrounding
environment. Economical- It is somehow related to the political and legal factors of a country where an
unstable political factor duly hinders the economic decisions of a firm. It thus refers to
certain major economic growth indicators like the employment rate of a country. An
altering inflation rate that directly affects the demand and supply of goods in JCB by
reducing the power of buyers to purchase its commodities. Exchange rates that duly
hinders the import and export expenses by affecting the overall trading operation of the
cited firm (Maertens, Colen and Swinnen, 2011). Lastly the interest rate which mostly
and directly hampers the development and growth of the company by influencing its
expansion activity. Socio Culture- It is another foremost aspect of considering the demographic segmentation
of customers which duly reflect their preferences. It is the most assertive approach where
the firm becomes enough competent to build their product as per the choice of their
consumers (Global environment, 2016.). However, it is also recommended to JCB for
carrying a predetermined study of analysing the prevailing domestic market which will
also help them to effectual build their products by significantly following the latest
ongoing trends of that market. A prior study will thereby help the cited firm to
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profoundly understand the existing needs and desires of their consumers by which they
could also use a distinguished approach of their own (Meyer and Thein, 2014). For
example, price consideration is also a relative approach which will duly signify the
interest of their service users by reflecting it into the income of the cited firm.
 Technological- These are some major factors that defines the productivity of the cited
firm by together deciding the competencies of the firm. It is therefore important for JCB
to always be updated towards the latest technical advancement which is highly residing
into people mind by reflecting their interest level. This factor however dictates for a
continuous developmental activities by researching into the recent innovatory methods.
Using the latest technique will therefore decease the chances of failure by attracting a
major number of interested parties towards its innovative servicing approach (Patel and
et. al., 2014).
Critically evaluating the global strategy of JCB
The above carried approach of considering a thorough analysis for JCB by using different
models largely assisted the firm to built a cognitive strategic plan of making expansion. Such
analysis aids the firm to be comprehensive about some major internal and external factors that
can duly determine its growth or failure. It therefore gives an overview of the overall orientation
of JCB by effectively forecasting both its current and future position. It thus evaluated the
prevailing business environment of the cited firm by encouraging it to implement certain requite
future plans into a strategic way (Peng, 2010). In terms of expansion, it does provides the cited
firm to interpret the market economy of its expanded area with a reality check of its ambiguity
and performances. It is basically showcased as a mechanism of creating a scheme with constant
success in future by eliminating any sort of failure. It thence enabled JCB to identify its major
threats and opportunities by promptly learning to adapt the recent ongoing market trends for
globally entering into a new market at an international level.
The foremost strategy of JCB is its innovative strength with a prior obligation of serving
the clients by promptly recognising their varied needs and demand. Another constituent is its
pricing and distribution policy which is equivalently considerable for its each kind of clients and
customers by duly satisfying them all. Sustainability is yet another constraint that largely impress
most of its followers where it is effectually liable towards protecting the environment. However,
exporting is the principle key for JCB to enter into a new market. According to the chief
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developmental officer, Mr David Bell, JCB is highly known for its unique selling point due to
which it is successfully and tremendously acquiring the markets of UK (Peterson, Arregle and
Martin, 2012). The current statistics has given a prior recognition as the top producer of
constructional equipments with 75% of export from its UK manufacturing depot where it
together employees over 9000 people. However, it should pioneer towards a next level of
strategic alliance to now acquire a global expansion into the international markets.
A strategic alliance is basically a bond among two parties where they together agrees to
merge their resource for sharing purpose. It is therefore a mutual understanding between the
firms where they mutually consent to utilize each others resources for a specific purpose of
enhancing their services for the related clients. The strategic alliance is however a temporary
method with a less involvement of the firms (Schaffer, Agusti and Dhooge, 2014). It means that
they can anytime discontinue their combined services by priorly notifying one another. It also
requires involving the due concerns of their customers who are duly associated with their
services. Strategic alliance is thus a crucial element for entering into a new market with a pure
focus on making expansion. However, it is undoubtedly a very significant approach which could
led JCB to a new height of success by relatively developing more advantageousness
opportunities for the cited firm to aptly beat its competitors.
An apt strategic alliance is based upon five major elements of consideration which
defines the provisioning firm to critically examine its stated objectives, to aim with a dissimilar
competent approach with a strong origin of competitive advantage, to finely examine the existing
threats into the new market with a prime focus of blocking those constituents by continuing with
a strategic approach to mitigate the arising or upcoming business risks. In similar regard, JCB
can duly alliance with the General Electric (GE) firm of UK which mainly deals in electronic
products (Peng, 2012). It is a fine option for JCB to bond with GE in regard to associatively
serve their customers. GE too targets at opting an innovative approach of serving its clients and
customers with a fine number of engineers at their workplace. It is currently employing over
18000 employees with a prominent aim of creating apt engineers and scientists for their future
communities.
Another strategy of JCB of exporting its products and services is equally beneficial in
numerous ways. It thoroughly increases its profits by rising the sales along with less dependency
on a single market of the firm. It also expands the business by making greater production of
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goods which then automatically raises the economies of sale with a better margin of profit.
However, the cited firm in such scenario is duly liable to make prominent research to develop its
applied budget in a cost effective method (Porter, 2008). It also enhances the domestic capability
of the firm by gaining more number of market shares and a diversified formulation of work. It
duly encourages the firm to gain newer experiences of acquiring huge knowledge by together
expanding the life cycle of their products. However, it is a bit challenging approach where the
cited firm has to bear certain extra cost of promoting and allocating their products with a
financial risk of collecting the payments with a proper documentation of export license, etc with
a prior data about the market.
A strategic alliance is also considered as an advantageousness formulation but with
varied challenges that are promptly needed to be dealt by both the involved firms. It gives the
access of introducing supplementary goods and services, however it should not lose its own
capability and focus from its specialisation. Another is a clear opportunity to expand into the new
markets with an increased brand name and more number of recognition to the associated firms. It
together doubles the opportunity of the firms by enhancing their identity to target a broad range
of prospected customers into a cost effective method that duly states no requirement of investing
an extra fund or capital into the business (Lindell and Karagozoglu, 2001). Lastly it also gives a
newer access of customer base with an equivalent response by them which directly reflects onto
its profits and revenues by rising its sales and shares into that market. However, it is a bit
challenging task where the firms need to choose a potential partner to alliance their business into
a successful way. It thus requires them to hold a trustworthy work environment with an honest
approach of operating together.
INTERNATIONALISATION
Business in the global market is the complex task to be functioned. It is influenced by the
slew of factors that both act as the catalyst or obstacles in the growth and development of an
organisation catering to bring internationalisation in its operations (Peng, 2012). In that respect
the selected organisation adopts the structured and systematic approach to enter in the foreign
market. It enables it to establish its prominent position on global scale and sustain its presence
for longer duration of time. In that regard it adopts the Uppsala model to bring is product in
foreign market. It is the set of activities which is processed in a series in a particular manner. It
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includes sporadic export, export via independent representative, establishment of foreign sales
subsidiary and lastly foreign production.
Sporadic Export: Sporadic export is the strategic approach which is adopted by the organisation
to enter foreign market at the initial stage. It the process which starts with the acquisition of
knowledge and information about the market scenario that includes trends among consumption,
competition level existing, the key competitors and the competency level. JCB with the aim to
attain maximum profitability export its products at irregular intervals when there are favourable
conditions prevailing in global market (Porter, 2008). In this it is able to minimize risk of failure.
Further, avoiding the export activities during the economic downturn enables the selected
organisation JCB to minimize the loss and sustain longer.
Export via independent representative: When JCB starts exporting its products such as
machinery and equipments fulfilling various purposes in agriculture, industries and other sectors
at the early stage starts with selling it as the independent representative. It refers to the process of
selling the product directly to the customers with no intermediaries in between both the parties.
In this way JCB is able to rationalize the costs of products as well as operation and keep it
affordable for customers.
Foreign sales subsidiary: It refers to the establishment of the functional unit in another country.
Adopting this method JCB opens an office at another country where it conducts selling of its
products rest all are performed at its headquarter.
Foreign Production/ Manufacturing: The final stage of establishment is the inception of
production at foreign land (Lindell and Karagozoglu, 2001). Gradually with the process of
becoming more familiar with the scenario of the global market, JCB has been able to establish
fully on the foreign land. In this process along with the selling of products in foreign land, JCB
starts its manufacturing to reduce the cost incurred on various number of other operations such as
transport and other related.
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RECOMMENDATIONS
From the above study it has been found that while entering in the foreign market, the
process adopted by JCB is the amalgamation of both the inhibitors and the promoters. Promoters
refer to the factors that boosts the growth and development of organisation such as operational
excellence, capable employees and others on the other hand there are inhibitors such as lack of
market research, lack of technological advancements (Tucker, 2011). In that regard it is
imperative for an organisation to enhance the promoters and rectify the inhibitors to bring
development on global platform.
Further, along with the above measures adopting certain strategic measures will enhance
the profitability and growth of organisation in the systematic manner. Such as adopting Ansoff
matrix will provide the desired results. It is the set of four activities among which inculcating the
suitable option enable the organisation to have its global presence. It includes market
penetration, market development, product development and diversification.
Market penetration refers to the process of increasing existing offerings in existing
markets. JCB can adopt this measure through introducing its products with the vertical
integration with the organisation offering the similar products. In this way JCB will be able to
increase its customer base and create better corporate image (Eshun, 2009).
Market development refers to the process of expansion of the market domain in the
another market area such as in another geographical location. In this strategy JCP will be able to
expand its operations in another country or continent. At present JCB does not have market in
the continent Africa. Hence, beginning its operations in Africa with less competition will be help
in deriving the desired benefits and goals.
Product development is the strategy in which an organisation caters to introduce the new
product in the existing market. In that respect JCB can expand its sales and profit margins with
the introduction of the new product such as any equipment for the agricultural use in the existing
market with expand the range of customers from the existing ones (Figge and et. al, 2012).
Diversification is the strategy in which organisation caters to expand the customer base
through the introduction of new product in new market.
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CONCLUSION
The above report is in regard to effectively deal with the arising competition in today's
business scenario. Especially where the firm is planning to expand its business at an international
level by entering into several new markets. It thereby carried a prospective formulation to
demonstrate the market strategy of JCB with a newer concept of utilizing certain effective
models to dignify its exact market position. Lastly, the report carried a profound
recommendation to the cited firm with a prior consent of enhancing its products and services
outside its domiciliary arena.
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