HI2011 International Business: Kmart Global Expansion Report

This report examines Kmart's potential expansion into the United Kingdom and India, employing a PESTLE framework to analyze the external environments of both countries. It assesses the geo-political situations and trade and business policies of each nation to determine the more suitable location for Kmart's expansion plans. The analysis considers political, economic, social, technological, legal, and environmental factors, concluding that India presents a more favorable environment for Kmart due to its strong economic growth, large consumer base, and supportive foreign trade policies, despite the risks associated with corruption and environmental challenges. The report also highlights the opportunities and risks Kmart may encounter in both markets.

Running head: GLOBAL BUSINESS MANAGEMENT
GLOBAL BUSINESS MANAGEMENT
Name of the Student
Name of the University
Author Note

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Executive Summary
The report is based on the study related to the ways by which an organization can
aim at expanding its operations to a different country. The organization which has
been selected for this analysis is Kmart and the two countries that have been
considered are the United Kingdom and India. The external environment of both the
countries have been studied by using PESTLE framework. The geo-political situation
of the countries has also been analysed in the report. The analysis of trade and
business related policies have been helpful in the selection of the appropriate
country for expansion. The conclusion has stated that India is more suitable for the
expansion plans which have been made by Kmart.

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Table of Contents
About Kmart.......................................................................................................3
Identification of countries where Kmart can enter.............................................3
Study related to environment of countries.........................................................4
Macro-environmental analysis of India..............................................................4
Geo-political analysis of India............................................................................5
Analysis of trade and business based policies in India.....................................5
Opportunities and risks that can be faced by Kmart in India.............................6
Macro environmental analysis of United Kingdom............................................6
Geo-political analysis of United Kingdom..........................................................7
Analysis of the business and trade based polices of United Kingdom..............7
Opportunities and risks that can be faced by Kmart in United Kingdom...........8
Conclusion.........................................................................................................8
References.........................................................................................................9

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About Kmart
Kmart Australia Limited is a multinational retail based organization which
operates a chain of retail based stores in the country. The stores thereby follow the
low price based format and the company is owned by an organization named
Wesfarmers. The organization operates more than 200 stores all over New Zealand
and Australia. The head office of Kmart is located in Melbourne and the company
was established in the year 1969. Kmart Australia was mainly developed with the
help of a joint venture between two organizations named Coy Limited and G.J. Coles
(Kmart.com.au, 2018). The stores of Kmart were thereby developed in Australia from
the year 1968. The organization had further been able to show huge amounts of
growth in the retail industry of Australia with the help of its stores and operations.
The expansion process of Kmart to New Zealand had taken place in the year 1988.
The report will be based on the analysis of the ways by which the company
can expand its operations in another country. The two countries which have been
taken into consideration for this analysis are India and the United Kingdom. The
countries have been selected based on their geographic position. The India has
been selected from Asia and the United Kingdom has been selected from Europe.
The external factors which will be able to affect the operations of the company in one
of the countries will be analysed in the report.
Identification of countries where Kmart can enter
The countries have been selected for the expansion based operations of
Kmart are related to the way by which they are able to provide opportunities to the
company in order to grow its operations in an effective manner. The revenues which
have been provided by the company will be affected by the external environment in a
huge manner. The stability of the environment will be able to play a major role in the
ways by which the company is able to operate and increase its profits in an effective
manner. The two countries will be analysed with the help of proper implementation of
PESTLE framework (Adekola and Sergi 2016). The geo-political environment of the
countries will be analysed in the report and the trade policies will also be discussed
in the analysis.

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Study related to environment of countries
Macro-environmental analysis of India
The PESTLE framework is able to provide a view of the macro environment in
which organizations can operate easily in India. The analysis will be able to provide
an effective view of the environment in which the company is planning to start its
operations.
Political factors – The effective position which has been developed by India
in the world is an important part of the political situation of the country. Political
environment which has been developed in the country is mainly considered to be
highly stable in nature. Democratic will is thereby depicted by the people in the
country which is able to develop a different culture altogether. The political climate of
India is also stable and tolerance levels have been developed in an effective
manner. However, the country has been facing major issues based on the corruption
related activities of the politicians (Alden and Aran 2016).
Economic factors – India has been able to develop an effective GDP of 2.4
trillion Dollars and this has provided the country with 7th position in the entire world
based on economic capabilities. The expected growth of the country in the coming
years is around 7%. The current rate based on corporate taxes in the country is 30%
and the country has been able to gain the top position in the operations of different
industries. The economy of India is considered to be quite strong in nature and this
will be able to provide effective levels of support to Kmart (Beamish and Lupton
2016).
Social factors – The huge number of consumers who are present in the
Indian market can act as a huge advantage for the profitability levels of Kmart. The
expansion plans of Kmart will be facilitated effectively with the help of support which
is provided by the consumer base present in the country. The 1.2 billion people of
the country can be considered to be potential customers of Kmart. The availability of
cheap labour is also considered an important factor which can affect the ways by
which Kmart can reduce the costs of production in the country and in turn increase
its revenues (Bortoluzzi et al. 2018).

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Technological factors – The technological capabilities that have been
developed by the country in an effective manner are able to provide effective
opportunities of the improvement of organizational processes of Kmart. The
development in technologies is thereby considered to be an important part of
improvement of the processes which has been used by Kmart. The acceptance of e-
commerce activities in India is also considered to be an important part of the
improvement process of Kmart (Andersson et al. 2016).
Legal factors – The legal condition of the country is thereby an important for
the purpose of supporting the activities of Kmart in an effective manner. The policies
which have been developed by the company are affected by the ways by the legal
factors of the country. The scope of operations of Kmart is also affected by the levels
of foreign investments which are made in the country are effective for the proper
entry of Kmart in the retail industry (Brannen, Piekkari and Tietze 2017).
Environmental factors – The progress which has been made by India based
on the development of huge number of industries has affected the environmental
condition of the country in an adverse manner. India has thereby started facing huge
number of challenges based on air pollution, water pollution, floods and resource
depletion. The environmental factors thereby need to be considered by the company
in order to set up its operations in the country effectively. Kmart needs to develop the
organizational processes in such a manner which will play a major role in its
expansion in the country (Buckley 2014).
Geo-political analysis of India
The position which has been developed by India in comparison to the
neighbouring countries has been an important part of the geo political situation of the
country. India has been able to maintain the position among the neighbouring
countries with the help of effective strategies that have been implemented on a
periodic basis. India has also been able to increase its global influence with the help
of extensive natural resources and attractiveness of the market. The aim which the
country has based on increasing its geopolitical reach is important for the effective
operations of Kmart in India (Cuervo-Cazurra 2016).

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Analysis of trade and business based policies in India
The business and foreign trade based policies which have been developed by
the Ministry of Commerce of India are able to facilitate the entry of new
organizations. The other ministries that are based on proper development of these
laws mainly include, agriculture based, finance and textile ministry. The trade
environment which has been developed in the country is thereby effective for the
proper and profitable operations of Kmart in the industry. Kmart will thereby be able
to operate in an effective manner with the help of helpful foreign policies in the
country (Davis 2014).
Opportunities and risks that can be faced by Kmart in India
The opportunities which are thereby provided by the India for operations of
Kmart are based on the trade policies and the environment based on business that is
provided. The organization is also able to increase its revenues in an effective
manner due to the huge customer base in the country.
The risks which can be faced by Kmart in the Indian market are based on the
high levels of corruption in the political environment. The situation of the environment
is thereby considered to be a huge risk for the proper operations of Kmart in the
country.
Macro environmental analysis of United Kingdom
Political factors – The political environment which has been developed in the
United Kingdom has further depicted the stability of politics. The country is further
considered to be a major part of the political operations which have been conducted
in the European Union. Many issues and debates which have taken place after the
implementation of Brexit in the country has been able to play a major role in affecting
the entire political situation. These factors need to be considered by Kmart in order
to continue its operations effectively (Denicolai et al. 2016).
Economic factors – UK has acquired fourth biggest position in the world
based on its economic size. The recession related factors have thereby affected the
country in a negative manner. This has further been able to affect the ways by which
organizations are able to operate in an effective manner. The unstable economic

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condition of UK after the implementation of Brexit thereby needs to be considered by
Kmart before it plans to start the operations (Dimitratos et al. 2016).
Social factors – UK possesses a huge consumer based market that has
been able to develop its unique position in the industry. The rise in population of the
country has played a key role in improving the size of the consumer market. This is a
factor that can affect the operations of company in a positive manner. The rise which
has been seen in the population of the country can also be considered to be an
important factor which will facilitate the entry of Kmart in an effective manner
(Forsgren and Johanson 2014).
Technological factors – The technology based sector of the country has
also been able to depict growth in the current business environment in the United
Kingdom. Kmart thereby needs to implement the new technologies which are
available in the industry in order to improve the operations in an effective manner.
Legal factors – The effective legal condition of the country will play a major
role in the proper operations of Kmart in United Kingdom. The effective policies
which have been implemented by the government will affect the procedures that will
be developed by Kmart (Fainshmidt, White and Cangioni 2014).
Environmental factors – The increase in industrialization and different
economic activities have played a major role in the ways by which the environment is
affected in a huge manner. The country has thereby faced many challenges based
on the environmental operations and challenges which have been faced by the
weather based conditions.
Geo-political analysis of United Kingdom
The exit related activities of the United Kingdom from the EU has been able to
affect the geopolitical situation of the country. The alliance that had thereby been
made between the countries was a major part of the position which had been held by
the country. The trade policies of the country have thereby gone through huge
number of changes due to this issue. Kmart will thereby be affected in an adverse
manner due to the changes which have taken place in the situation (Kolk 2016).

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Analysis of the business and trade based polices of United Kingdom
The trade based policies that have been developed in the United Kingdom
cam play a major role in facilitating the operations of Kmart. Although the policies
have gone through huge amounts of change, issues can still occur in trade policies.
Opportunities and risks that can be faced by Kmart in United Kingdom
The technological environment of United Kingdom is able to provide huge
number of opportunities for the effective operations of Kmart. The population level is
also an important factor which acts in a positive manner.
The risks which are faced by the country are thereby based on instability
which has taken place in the country due to implementation of Brexit in the
operations. The revenues and profitability of the company will thereby be affected in
a negative manner by the lack of proper trade policies (Forsgren and Johanson
2014).
Conclusion
The analysis in the report can be concluded by stating that India will prove to
be a better choice for the operations of Kmart. The emerging country is able to
provide huge number of growth based opportunities for the operations of Kmart. The
company will thereby be able to gain profits and expand its operations in a profitable
manner with the help of opportunities provided by the country and its policies as well.

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References
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perspective. Routledge.
Alden, C. and Aran, A., 2016. Foreign policy analysis: new approaches. Routledge.
Andersson, U., Dasí, À., Mudambi, R. and Pedersen, T., 2016. Technology,
innovation and knowledge: The importance of ideas and international
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Beamish, P.W. and Lupton, N.C., 2016. Cooperative strategies in international
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Bortoluzzi, G., Kadic-Maglajlic, S., Arslanagic-Kalajdzic, M. and Balboni, B., 2018.
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