BSMAN3007 - International Business: Just Bliss Entry Strategy Report

This report details Just Bliss's international business strategy, focusing on its expansion into the Philippines market. It evaluates various entry modes, with a recommendation for a joint venture, while also considering direct exporting. The report analyzes the reasons for potential success, including internal strengths like committed leadership and external factors such as a stable political environment and consumer preferences. It also identifies potential weaknesses, such as the current democratic leadership style, and suggests a shift to autocratic leadership initially. Operational strategies, particularly a customer-driven approach, are discussed in relation to the company's objective of successful market entry. The report covers organizational design, expansion scope, financial capital requirements, and a geocentric staffing policy. The analysis includes market data, government regulations, and consumer behavior to provide a comprehensive strategy for Just Bliss's international venture.

INTERNATIONAL BUSINESS MANAGEMENT – ASSESSMENT 2
STUDENT DETAILS
STUDENT DETAILS

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Table of Contents
Introduction................................................................................................................................2
Chosen entry mode.....................................................................................................................3
Reasons for the success of the venture.......................................................................................5
Operational strategies and the corporate objective....................................................................7
The intended organizational design...........................................................................................8
The scope for expansion within the chosen market...................................................................9
Financial capital requirement.....................................................................................................9
Staffing policy – Geocentric policy.........................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
There are various ways through which an organization can take entry into another
market such as franchising, joint ventures, licensing, partnering up, direct exporting, turnkey
solution, etc. Selected SME for this report is “Just Bliss”. Currently, it is located in the
Adelaide Hills of South Australia. Just Bliss is planning for expanding its operations in the
Philippines. For expanding the market in the selected location, it is extremely important to
choose the market area wisely. Reason behind selecting the Philippines is that the country has
the 28th-largest consumer market for the chocolate and it is estimated that the chocolate
confectionery segment generates about $60million yearly with an annual increase of 3.3%
CAGR (Santandertrade.com, 2019). Apart from this, the top 10 markets for the consumer are
United States, China, Japan, Germany, India, France, Italy, etc (Santandertrade.com, 2019).
In this report, there will be a discussion regarding the chosen entry mode in the Philippines
market. This entry mode will be selected by considering the effectiveness of the closet
contender. Apart from this, various measures will be discussed through which the weakness
of the business house can be overcome effectively and efficiently. The scope of expansion in
the Philippines market will also be incorporated in this report.

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Chosen entry mode
There are various ways through which Just Bliss can enter into the market of the
Philippines. From scholar’s experience it can be concluded that one particular market strategy
works for all organizations because every market strategy has its own implications and faults.
As direct exporting may be suitable for a specific market whereas setting up a joint venture is
suitable for another and licensing of manufacturing may be suitable for another market. Thus,
there are various internal and external factors that influence the entry-level strategy because it
includes the valuation of tariff rates, transportation cost, degree of adaptation of the product
by the targeted audience, expected rise in sales, subsidies from the government, etc (Argyres,
Silverman & Rios, 2019).
In order to enter to establish effective operations in the Philippines, Just Bliss should
take advantage of the joint venture strategy. This strategy describes that the management of
the business should form a partnership with the established market players then they both
should form the new venture. As joint venture incorporates the process of 1+1=3. This
implies that two different companies from the same industry make a contract to work together
in a particular market by creating a third company to undertake the risk with effective and
efficient measures. A joint venture normally implies the risk and profit-sharing rate at 1:1.
Just Bliss has the option to form a joint venture with other SME's that have a strong presence
in the market, for example: Serg’s chocolate, Malagos chocolate Museum, Rise chocolates,
Auro Chocolate, etc (Benzer, Charns, Hamdan & Afable, 2017).
The reason behind suggesting joint venture entry mode is that Just Bliss will have the
access to the established market and distribution network of other venture company, it will
save their efforts of creating own market with the well-defined distribution network (Fiza, Su
& Saqib, 2017). Joint venture entry mode will also enable Just Bliss to have greater access to

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resources that includes specialized staff, finance, technology, etc. Apart from this, a joint
venture with another business house will also help Just Bliss to direct their operations as per
the government regulations. For example: Republic Act 7042 and Foreign Investments Act of
1991 is considered landmark legislation because it liberalized the entry of foreign
investments into the country. By forming the joint venture, the business house can know
about the internal faults of this act because other established businesses can tell Just Bliss
about the actual realities of government support and FDI policies in the country (Dheensa, et.
al., 2017).
Apart from this, Just Bliss can also utilize the applications of direct exporting. This
method can effectively help the business house in understanding the actual perspective of the
Philippines market with low risk. As, under direct exporting Just Bliss needs to tie up with
over 10 to 12 chocolate stores in the Philippines. After that Just Bliss needs to place their
specific product such as chocolate balls, pastries, choco cake, etc to see and observe the
response of the targeted audience. Direct exporting incorporates the least cost and very low
risk and it will drive measure benefit that the business house will get the report about the
degree of effectiveness of their product from the perspective of the targeted consumer (Gallo,
Antolin-Lopez & Montiel, 2018).
The great possible advantage of a direct exporting entry strategy for the Just Bliss is
that it will help the management of the Just Bliss to have better knowledge for the market
with the least cost and low risk. This strategy will also enable the business house to intensive
cultivate the market by increasing its export volume if its product is getting a positive
response by the targeted audience. Apart from this, one of the biggest advantages of direct
exporting is that only specific middlemen are appointed in the distribution of goods. This
creates a short channel which discourages the profit percentage taken up by the middlemen.
Thus, it does not increase the price of the product and consumers can avail products at a low

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cost (Miller & Weinberg, 2017). Moreover, the import of chocolate products in the
Philippines was volatile between 2010 to 2014, in 2010 it was at the peak with 5,810 tons that
implies import of $24.2 million but in 2014 it was at the lowest with 3,670 tons that implies
import of $15million (Santandertrade.com, 2019). Thus, it is observed that there is always
effective demand and supply for the chocolate in the Philippines due to the positive response
of the consumer from ages. Now, Just Bliss needs to take effective and efficient entry in the
market by following all the rules and regulations that are marked in the Republic Act 7042
and Foreign Investments Act of 1991 (Miller & Weinberg, 2017).
Reasons for the success of the venture
The success of the entry-level strategy of the Just Bliss depends upon many factors
that rise from the internal or external force. It can be said that internal forces of the business
house are effective because leaders of Just Bliss are committed, disciplined, optimistic and
passionate about their business. Currently, Just Bliss is operating in the Australian market and
they are getting a positive response from the past many years through their targeted audience.
Apart from this, the Australian chocolate market stood at $2.9billion in 2017 and it is
expected that the chocolate market will go upto $4.3 Billion by 2023 (Santandertrade.com,
2019). These figures are shared to indicate that the business house has the dual opportunity to
grow in the Australian market in the upcoming years as well as in the market of the
Philippines. Moreover, it is expected that through internal parameters this business is
completely secure in terms of resources, knowledge, leadership and financial resources. The
management of the Just Bliss has their eyes wide open on the ever-changing taste of the
consumers and they are experienced about the preferences of the consumers. Thus, it can be
said that the internal factors of the Just Bliss are ready to put their feet in the market of the
Philippines (Statista.com, 2019).

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Now, the second most important reason behind the success of Just Bliss lies in the
political, economic and consumer preference segment of the Philippines. As, the Philippines
have a stable political environment because they have a Presidential system, the
Parliamentary Republic with Unitary states. This implies that the political system is well-
organized and stable. Thus, it can be expected that the management of the business house will
not face any adverse challenges due to the political system of the Philippines. Although, the
management can surely expect support from the government in terms of getting effective
subsidies. Due to an effective and positive political government system, the FDI in the
Philippines flows at the $8.7 billion in 2019 from $6.46 billion in 2018. Thus, it can expect
that the political factor of the company will also act positively in the favour of the Just bliss
(Burgos, 2019).
The stability of the economic factor of the country can be judge through the country’s
increasing GDP growth. At the time of the global recession in 2008, the country has a strong
economic environment which has a very low effect on its economic operations. Apart from
this, from the perspective of economic growth, the major concern of the Just Bliss is to
obtaining the skilled workforce. For this, it is extremely important to look at the literacy ratio
of the country. The figures of 2015 show that the country has a high literacy rate of 98.18%
which implies that there is the skilled workforce and management of the business can expect
positive flow and support in their operations because of the skilled workforce implications
(Industry.gov.ph, 2019).
Apart from this, the last concern factor of the external force lies in consumer
preferences. This is an important factor because in order to make the brand successful then it
is necessary that the product should be liked by the targeted audience. If a product is not able
to receive a positive response from the targeted audience then the business will not able to
conduct its operations effectively (Neilson, Pritchard, Fold & Dwiartama, 2018). Thus, the

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business should make or design the chocolates as per the taste and preference of the
consumer of the Philippines. The taste and preference of the consumer depend upon the
flavour choice, price considerations, style of packaging, methods to fascinate the interest of
the consumer, etc. Although it is expected that if Just Bliss has chosen a Joint Venture
strategy for establishing their feet their they will receive the details prospects about the actual
taste and preference of the consumer in the market of the Philippines (Neubert, Hunter &
Tolentino, 2016).
Apart from this, it is estimated that the current leadership style of the Just Bliss may
create hindrance in their success. As of now, they are successfully implementing the
democratic leadership style while handling their Australian business. Under a democratic
leadership style, the workforce of Just Bliss is allowed to make a decision as per their own
expertise and this strategy in the Australian market is delivering positive results because the
workforce knows the method to handle the operations effectively well (Noble, 2017). Now, if
management continues this leadership style in the Philippines market also then it creates a
major success barrier for them. Thus, in order to overcome this weakness, they should alter
their leadership style to autocratic instead of democratic. The applications of the autocratic
leadership style will enable the management to provide guidance to their workforce for
implementing the operations. Due to autocratic leadership, the management has the sole right
to make decisions, later on, if management wants then they can change their leadership style
but initially, they should adopt an autocratic leadership style in order to overcome their weak
points (Noe, Hollenbeck, Gerhart & Wright, 2017).
Operational strategies and the corporate objective
Operational strategies are the methods that can utilize by the Just Bliss to accomplish
their corporate objective. Just Bliss has the objective to make an effective entry in the

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chocolate industry of the Philippines. There are 5 operational strategies described for the
SME’s. Among them, a Customer-driven strategy is the best for Just Bliss to achieve its
corporate objective. This operational strategy governs that the management of the Just Bliss
should include a customer-driven approach to meet with the needs and desires of their
targeted audience (Scaringella & Burtschell, 2017). In order to develop a customer-driven
approach, the company pays close attention to the changing environment parameters of the
Philippines. By evaluating the environment, the company can gain the advantage of new
opportunities and this operational strategy will also act as an effective way of providing early
warning signals to the management (Roos, 2018).
The intended organizational design
The intended organizational design should we form in consideration of the operating
efficiency and effectiveness. The chosen intended organizational design for Just Bliss is the
global function. There are many potential benefits of intended organizational design such as it
can deliver increased efficiency, higher profits, provide a safer working environment for the
human resource of the company, motivated workforce, it also offers greater preparedness for
future challenges, etc (Sitar & Škerlavaj, 2018). Moreover, if there are any flaws in the
organizational design of Just Bliss then it incorporates serious problems such as lack of
coordination, inconsistent quality of work, ineffective problem-solving skills, reputational
damage, below target business results, etc (Sitar & Škerlavaj, 2018).
The global function design of the intended organizational design for Just Bliss
describes that there should be global design calls for a firm to create departments or divisions
that have responsibility for common organizational functions such as financial function,
marketing function, human resource function, etc. All these global functions of the
organizational design will enable effective operations and can contribute effectively to the

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success of the business house. Apart from this, the success of their organizational design with
global function lies in the parameter that they should establish effective coordination between
their Australian department with Philippines department (Yeniyurt & Carnovale, 2017).
The scope for expansion within the chosen market
The is a huge scope of expansion in the chosen market because the Philippine
chocolate industry has gained ground in many years and the views of the researchers describe
that it is like the momentum which will not stop (Sparrow, Brewster & Chung, 2016). In
2019, Philippines chocolate maker Dalareich Food Products and Auro Chocolate won the
prestigious gold award by the London Based Academy of Chocolate. This shows that
Philippines chocolate is liking not only by the residents but also by the whole world. Such
type of recognizing has caught the attention of the world and it also shows there is a huge
opportunity for expansion in the chosen area (Gallo, Antolin-Lopez & Montiel, 2018). The
condition is that Just Bliss has to follow the quality standards and they should make a capable
product that will able to fulfilling the expectations of the targeted audience effectively and
efficiently. It is expected that till June, 2020 Just Bliss will successfully establish its
operations in the market and if things they fulfilling the expectations of the customer then it
can be expected that they will able to obtain 1.2% of that market share by the year 2021 with
3 times increased revenue (Santandertrade.com, 2019).
Financial capital requirement
Just Bliss required $500,000 to establish its business overseas. Their capital
distribution will be done among trade licensing, registration fee, import-export IEC code,
locations (either rented premises or owned), packaging supplies, developing product line as
per the requirement of the consumers, research, etc. Apart from this, the company kept the
$50,000 reserve fund as an emergency fund in case of any mishappening. Moreover, it is

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expected that the company can estimate the ROI of 25% per annum or more. They need to
choose their fund allocation very wisely in order to conduct maintain an effective flow of
cash (Statista.com, 2019).
Staffing policy – Geocentric policy
While making human resource policies for the internal business, the HR manager of
Just Bliss needs to determine where or when to expatriation. The management of the Just
Bliss has the top three methods to design their policies, these methods are geocentric,
geocentric, geocentric. The chosen method is the geocentric policy. The geocentric policy
approach is chosen because it is extremely important to hire skilled and highly experienced
workers for conducting the operations. Although this will increase the cost of workers
because Just Bliss has to offer more amount of remuneration to their skilled and experienced
workers (Argyres, Silverman & Rios, 2019). The reason for selecting a geocentric policy is
that skilled and experienced workers are well aware of the taste and preference of the targeted
audiences. In this way, when Just Bliss will make better chocolate then they will gain a
competitive advantage, this will enhance their profitability and they will acquire more and
more market share (Fiza, Su & Saqib, 2017). Thus, it is suggested to incorporate the
geocentric policy. Thus, the geocentric policy is best suited for Just Bliss and human resource
management should take a decision for employing people as per the parameters of the
geocentric policy. By utilizing geocentric policy, will also increase the firm's cultural
knowledge and skilled employees will also produce the best products as per the taste and
preference of the targeted audience. The reason for the success of this venture is also
described in this report. Philippines ' chocolate market is growing but still, the success of any
venture depends upon many factors. Majorly it depends upon internal or external
environment (Neilson, Pritchard, Fold & Dwiartama, 2018).

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Conclusion
It is concluded that Just Bliss have two option to make the entry-level strategies in
the market of the Philippines. Two entry-level strategies are discussed in this report: Joint
Venture and Direct Exporting. However, it is suggested that they should incorporate the Joint
Venture strategy to set up their operations in the Philippines market. Apart from this, it is also
discussed that the human resource management of Just Bliss should direct human resource
policies through the applications of geocentric policy. Under the operational strategy section,
it is described that Just Bliss should force on customer-driven strategy because this will help
the business in gaining a major advantage over other competitors. Apart from this, Just Bliss
will get support from the government for setting up its business in the country. It is also
mentioned in this report that in the past few years the number of FDI's is increased in the
Philippines which implies support from the government.

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