International Management Report: Officeworks' Sri Lanka Expansion Plan

This report provides a comprehensive analysis of Officeworks' potential expansion into the Sri Lankan market. It begins with an introduction outlining the context of the expansion and the importance of market research. A situational analysis is conducted, including a PESTLE analysis to evaluate the political, economic, social, technological, and legal factors influencing the business environment in Sri Lanka. The report then delves into market analysis, examining market characteristics, segmentation, target market, and competitive landscape. Organizational assets and skills, including the company's strengths, are assessed, followed by a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The report concludes with a summary of findings and recommendations for Officeworks' market entry strategy into Sri Lanka, emphasizing the favorable conditions for business expansion while acknowledging potential challenges. The analysis considers various aspects of international management, providing a detailed overview of the company's potential in the Sri Lankan market.

Running Head: INTERNATIONAL MANAGEMENT 1
International Management of Officeworks

INTERNATIONAL MANAGEMENT 2
Table of Contents
Introduction......................................................................................................................................3
Situational Analysis.........................................................................................................................3
Business Environment (PESTLE Analysis).................................................................................3
Political Factors........................................................................................................................3
Economic Factors.....................................................................................................................4
Social Factors...........................................................................................................................4
Technological Factors..............................................................................................................4
Legal Factors............................................................................................................................5
Market Analysis...............................................................................................................................5
Market Characteristics.................................................................................................................5
Market Segmentation...................................................................................................................5
Target Market and Customer Characteristics...............................................................................6
Competitive Analysis.......................................................................................................................6
Organizational Assets and Skills.....................................................................................................6
SWOT Analysis...............................................................................................................................8
Strengths.......................................................................................................................................8
Weaknesses..................................................................................................................................8
Opportunities................................................................................................................................8
Threats..........................................................................................................................................9
Conclusion.......................................................................................................................................9

INTERNATIONAL MANAGEMENT 3
Introduction
Expanding the business in new markets includes a great a market research with
determining the target customers. The organizations need to understand the market and consider
different factors of market. They have to plan a market entry strategy for offering products and
services to a new country. The organization that is taken into consideration for this report is
Officeworks. Officeworks is a chain of office supplies and stationary products in Australia that is
operated by Wesfarmers Limited. The organization is analyzing the market of Sri Lanka, where
it is planning to enter in. This report includes different marketing aspects, like; situational
analysis, market analysis, organizational assets and skills analysis and SWOT analysis of
Officeworks entering into Sri Lanka. As Sri Lanka is known as a fast growing middle income
nation and now it is one of the fastest growing economies in the world, so it can be beneficial for
Officeworks to expand business in Sri Lanka.
Situational Analysis
Business Environment (PESTLE Analysis)
It is very important that a company looks at new country’s business environment before starting
its business operations and marketing activities. The organization needs to consider its external
environment, which can affect its business operations and growth in new market. PESTLE
analysis is one of the major tools that can be used to analyze different factors in environment.
These factors are political factors, economic factors, social factors, technological factors, legal
factors and environmental factors (Ambos & Håkanson, 2014).
Political Factors
Sri Lanka is a democratic nation with semi-presidential political system, in which the
constitution is changed by its two-third of population. By looking at this, it can be stated that Sri
Lanka is communist democratic nation, where the public have their own selections to spend
money on products. It is favorable for Officeworks, it expands its business Sri Lanka. The people
are free to use the products of Officeworks. The company is offering the products at

INTERNATIONAL MANAGEMENT 4
comparatively lower prices, so it will be better to expand its business in Sri Lanka (Anderson,
Narus & Narayandas, 2009).
Economic Factors
Currently, Sri Lanka is a middle income level nation and one of the fastest growing economies in
the world. As per the figures of IMF, the Gross Domestic Product (GDP) of Sri Lanka is
increasing consistently with which it offers an opportunity to organizations to enter in the market
and get returns. By expanding business in Sri Lanka, Officeworks can increase its returns on
investment and business revenues. Officeworks can have the benefits in developing country as
the firm can have opportunity to capture the industry from expansion and it also assists the
Officeworks in increasing its market coverage (Bull et al, 2016).
Social Factors
Social factors in Sri Lanka have affected the retail sector in different aspects. The country has a
population of more than 20 million people and it is far ahead than its neighboring countries in
achieving human development objectives. The country is considering the factors, which are
responsible for social development of people. The literacy rate in the country is very high, i.e.
92.5%, so Officeworks can get more skilled labor force for its stores. The company can have
more benefits by selling school supplies in the country, as the country is very much focused on
education and literacy rate. Changing perceptions and consciousness of public can increase sales
of Officeworks International (Hill, 2008).
Technological Factors
Apart from the natural and human resources, which are available in the country, the
technological factors in market may affect attractiveness and brand image in Sri Lanka retail
industry. The country has more than 2 million internet users in the year 2011.
Telecommunication industry is growing very fast, so Officework should sell its products online
with the similar prices as its stores. However, the company can deliver the products by booking
order on telephone. The company can use some innovative processes to increase its customer
base. Thus, technology can support Officeworks organization in expanding its business in Sri
Lanka (Wesfarmers Limited, 2011).

INTERNATIONAL MANAGEMENT 5
Legal Factors
The laws in Sri Lanka are very complicated, so it can create a barrier to entry for Officeworks.
Due to this, the organization is not able to carry its trade processes freely. These complications in
laws and authorities can resist the growth of Officeworks by abandoning it to pursue the
transactions without taking permission. In addition, the country does not have strict labor laws
and rules that can generate issues to the companies (Hollensen, 2015).
Market Analysis
As Officeworks is planning to expand its business operations to Sri Lanka, so it needs to analyze
various marketing aspect on the country. As it can be seen that market of Sri Lanka is considered
as one of the best industry that comes in top 20 markets, which offers consumers goods to the
customers. This country has a considerable GDP, due to this the country attracts many developed
organizations to expand business in its market and carry business processes in the country.
Market Characteristics
In this process, Officeworks will determine the prices, which are placed by the customers on the
services that they offer. The company will decide the prices according to the B2B, retail demand,
payment plans and promotional sales (Hill, 2008).
The organization will use different and effective distribution channels for promoting the products
in Sri Lanka. It will start the sale of products in the beginning of school year. It will offer the
discounts at the beginning of school session and at the end of financial year. The media channels,
which it can use, are Television, Radio, Internet, Social networking sites, Billboards, flyers etc.
Market Segmentation
The company is categorizing the market in smaller parts of consumers with same needs and
wants. Officeworks runs its business in the international market of stationary and office supplies.
It is more than a stationary store and specifically it is focused on office supplies. For targeting
the market, the company is implementing multiple segment specialization strategy, through
which it is targeting diverse market (Wesfarmers Limited, 2011).

INTERNATIONAL MANAGEMENT 6
Target Market and Customer Characteristics
While targeting the market, the company is considering the demographic characteristics.
Officeworks has a different range of target audiences. It is focusing on both the genders. Along
with this, the major target audience for the company may be business administration, engineers
and office workers. Though, it is offering a wide range of products, so it can target children for
school supplies. Officeworks International is focusing on the young families, which possess
higher purchasing power (Hollensen, 2015).
Competitive Analysis
There are so many competitors in Australian retail and stationary markets, which are posing
threat to Officeworks Organization. In Australia, the major competitors of Officeworks are, such
as; Bunnings Warehouse, Mothercare, Toys “R” Us.
As the company is planning to enter into Sri Lanka, so the organization may have intense
competition in the new market. The biggest competitor in the industry is Ceylon Pencil Co. Pvt.
Ltd. Other potential competitors are like; Atlas Sri Lanka, Eco Stationary, Rasaga Trading Ltd
etc. Although, Officeworks have a good brand reputation in other countries, so it can get better
position in Sri Lanka also (Morschett, Schramm-Klein & Zentes, 2015).
Yes, Officeworks may have the threat of substitutes in the industry. The substitutes of the
stationary stores are super markets and hypermarkets. The people can buy these products from
departmental stores and other stores.
Organizational Assets and Skills
Officeworks possesses various assets and skills, which are contributing it in gaining effective
competitive advantage against its competitors in the current market (Landrum, Gardner & Boje,
2014). The company is a major retailer and supplier of office products and solutions for
education, business and home. Currently, this organization has various stores and business
channel that provides the customers three modes of shopping. i.e. online, in store and via phone.
It has a large customer base in the perspective industry.

INTERNATIONAL MANAGEMENT 7
As per the figures of 2016, the revenues of company are 1.9 billion and total assets of the
company are 1.4 billion. The market value of the company is measured between $1.14 billion
and $1.52 billion.
The organization possesses effective technological capabilities and resources. It offers a variety
of in-store printing services for the needs of business, school and home. Company is producing
the sustainable paper sources. It has partnered with the Australian Paper to produce the papers
and other products. The organization has created a production team, which is actively engaged in
processes. The company has developed good relationships with its suppliers, who supply it raw
materials (Officeworks International, 2017).
It is encouraging the people and suppliers to increase the use of post-consumer recycled fiber and
material in production of paper.
Officeworks is implementing an automated delivery system by new technology to offer
consistent delivery of products. With this, the organization has selected PageUp’s Unified
knowledge management system.
Officeworks is supporting the proactive organizational culture and engaging its people, who are
very passionate about working for this organization. The organizational philosophy of

INTERNATIONAL MANAGEMENT 8
Officeworks is “support for life”. It is aligning the knowledge management strategies and
performance of employees to the overall strategic of company (Deresky, 2017). At the
organization, use of technology and technical skills is very important to maintain sustainable
competitive advantage.
This internal analysis shows that the company has sufficient skills and assets to get competitive
advantage over its potential competitors.
SWOT Analysis
Strengths
 Officeworks have more than 150 stores in all the states of Australia and more than 6000
employees
 Bulk purchase of office supplies provides it an advantage over price.
 Free delivery of products in major cities
 Fun activities at stores for engaging the children
 Solid online presence
 Officeworks offers the products on rent too (Hollensen, 2015).
Weaknesses
 At the stores of Officeworks, the furniture is not different and it is generic
 Geographic positioning is the major reason behind limitations
 Small business units
Opportunities
 It can have more focus on school stationary supplies
 This organization can provide some unique and designer furniture for home and office
use
 It can expand its business in nearby countries like; Sri Lanka, Southeast Asia and New
Zealand etc.
 Expansion of children section will attract their mothers to buy the products from
Officeworks.

INTERNATIONAL MANAGEMENT 9
Threats
 It has competition from hypermarkets and supermarkets , which provide same products
 Competition from local retailers
 Departmental stores with same pricing
 The products sold at Officeworks store are available at lower prices at their factory outlet
and websites of organization (Landrum, Gardner & Boje, 2014).
Conclusion
Thus, Officeworks organization can expand its business in Sri Lanka successfully. Almost all the
factors of external environment are favorable for the organization. Legal factors may create the
barriers to entry in new market. The company has effective skills and assets to deal with its
existing and potential competitors. It has an intense competition in both the industries, i.e.
Australia and Sri Lanka. In this way, it will be beneficial for company to expand its business in
Sri Lanka.

INTERNATIONAL MANAGEMENT 10
References
Ambos, B., & Håkanson, L. (2014). The concept of distance in international management
research. Journal of International Management, 20(1), 1-7.
Anderson, J. C., Narus, J. A., & Narayandas, D. (2009). Business market management:
Understanding, creating, and delivering value. Pearson Prentice Hall.
Bull, J. W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C. & Carter-
Silk, E. (2016). Strengths, weaknesses, opportunities and threats: A SWOT analysis of the
ecosystem services framework. Ecosystem services, 17, 99-111.
Deresky, H. (2017). International management: Managing across borders and cultures. Pearson
Education India.
Hill, C. (2008). International business: Competing in the global market place. Strategic
Direction, 24(9).
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Landrum, N. E., Gardner, C., & Boje, D. M. (2014). An integral foundation for international
strategic management. Humanistic Perspectives on International Business and Management,
120-133.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management.
Springer.
Officeworks International. (2017). Introducing Officeworks. Retrieved from
http://www.officeworks.lk/About-Officeworks-international.html.
Wesfarmers Limited. (2011). Officeworks cuts ties with papermaker. Retrieved from
http://www.theaustralian.com.au/business/latest/officeworks-cuts-ties-with-papermaker/news-
story/bdbd533cd48fb73bec283a8cc84d6190