International Expansion Strategy: A Report on Papdeli Entering Germany

This report examines the international expansion opportunity for Papdeli, a British medium-sized enterprise, focusing on its potential entry into the German market. It justifies Germany as a suitable location due to its encouraging culture for start-ups and its robust economy. The report delves into the challenges of internationalization, such as cultural barriers and exchange rate volatility, and proposes a network model approach for implementing the internationalization process. It covers various aspects of Papadeli's business, reasons for going international, and provides a critical evaluation of a suitable internationalization process execution approach for Papadeli's international expansion in the target market. The document also highlights the importance of understanding German culture, managing global teams, supply chain management, and talent acquisition for successful expansion.

International Business

EXECUTIVE SUMMARRY
The present report looks a the British medium sized enterprise Papdeli. The expansion
opportunity for Papdeli is covered in this report including description of reasons of
internationalization. Germany is the selected country for intentional expansion which is justified
as Germany suitable place for growth of start-up because of encouraging culture for start-up
firms. In addition to this challenges of internationalization such as cultural barriers and
exchange rate volatility are covered in this report. In addition to this network model approach to
implementation of internationalization process is provided along with disadvantages and
advantages.

Table of Contents
EXECUTIVE SUMMARRY ..........................................................................................................2
INTRODUCTION...........................................................................................................................4
Analysis and Discussion..................................................................................................................4
Overview of a business and the reason why they are going international..............................4
Country which will be recommended to the business to make entry and the reason behind the
decision...................................................................................................................................6
Discussion on various challenges that Papdeli will face during international expansion......7
Critical evaluation of suitable internationalization process execution approach for the
international expansion of Papadeli in target market ............................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
Books and Journals...............................................................................................................12

INTRODUCTION
International business refers to that in which the owner wants to make expansion in some other
country by selling their products and services. With the increase in globalisation it has been seen
that there is drastic increase in global expansion of the business. But those business which makes
the expansion in another country has to make consideration of following points which includes
acquiring, assembling, product, market and many more(Fainshmidt, 2020). If the owner of
business wants to operate their business in an easy way then it is very important that they
establish it with the help of making partnership with different countries. Government of every
country whether it is of that country in which the company is establishing its business or that in
which the business is established and now ants to make expansion helps the businesses by
providing them certain benefits. Papadeli is a store in UK which provides the delicious taste food
of Europe and of UK as well as also include nutritious delivery of dishes at home. They have
also received an award of The observer food monthly which have been made by their best
artisan. The company is situated in UK and now wants to make its expansion in Germany. This
report will cover overview of a company, in which country they are expanding, barriers which
will be faced by them, implementation approach of internationalisation approach.
Analysis and Discussion
Overview of a business and the reason why they are going international
Papadeli is the business in UK which provided best delicious food which gives the taste
of European food and not just this they also provides the nutritious food and home-made cakes.
The deli provides breads, coffee, frozen meals and many other things which are liked by
customers a lot. The cakes provides the best flavours which is unique in taste and also comes in
variety including that which will be based on the flavours of Italy. The business got the
inspiration from Italy, France and Germany and with that idea only they have started their
business in UK(Evers and Andersson, 2021). Now with the success which they achieved they
are now thinking to make an expansion in Germany which will be the best place as there they

can make new innovation in a variety of ways. Their main aim is to provide the products which
will be based on good quality food and that too in best sustainability. They are not just having
the business which includes a shop but they also does the business in providing the catering
facility and also in weddings. They are having the best flavours in food and beverages and they
also include the cakes in wedding with the special flavours (Nuruzzaman, Singh and Pattnaik,
2019). They have expanded their business in UK which started from a small shop and now they
do the business from shop to catering and also providing food in the wedding with the same
quality as in provided in their shop. They are also having the cookery school in which food
classes are provided to people who are interested in it and not just this they provide according to
the wants of the customers as to what things they want to learn and what things don't.
They now want to make the expansion of their business in another market because they
now want to earn huge profits and want to make goodwill in the products which are provided by
them. This is because starting the business in new market will help a business to earn more extra
but for that they have to create new strategies. The other is that by starting their business in
another country they will be exploring new markets and with that they will be receiving new
experience. In experience, it includes making a research on the things which will be liked by the
customer and what will be the products which will be having major demand in the market of
Germany (Fassas, Papadamou and Koulis, 2020). The other factor of starting their business in
another country is that they want to make the access of new talent and in that talent it includes
having new language skills and different education which might be fruitful for the business as
Papadeli now wants to make some difference in their products and services which they are
providing in the markets of UK. There are chances that the cost of production will be reduced
because the charges of operational cost is reduced and when the business will be making profits
then the cost will be reduced. Many companies establish their business in other market because
of the cheap labour which they might get in the other markets which will help them not in the
reduction of operational cost but there manufacturing cost will also be reduced. Papadeli is a
small company and when there will be expansion in other market then the reputation of business
will be improved.

Country which will be recommended to the business to make entry and the reason behind the
decision
Papadeli is a store which provides the best flavour of Europe and they have got this
inspiration from Italy, France and Spain. The country in which they must expand their business
is Germany because it is a very attractive market for those individual who wants to make
expansion of their business(Ioulianou, Leiblein and Trigeorgis, 2021). If comparing them with
the economy then it is the largest economy in Europe and has been ranked as the fourth in terms
of economy. Companies if not make the consideration on global recession and eurozone crisis
then it is the best place where investment can be made by the companies. Comparing them with
the trading economy then it is considered to be the world's largest which offers the business a
secure and highly protective political and economic framework. Papadeli must expand its
business in Germany because this country is considered to be the most innovative country in
terms of making any innovation and when any new business will start their business in this
country then they will also make innovation in either the products or in business strategy.
Government of Germany is also committed in terms of providing the research which can be in
terms of providing support in the form of giving funds or any other thing. The country is the
most important consumer market which has a population of about 82.4 million and is known for
its second biggest importer and third largest exporter. Papadeli if starts its business in this
country and if the business gets successful then they will get the opportunity of making export of
their products.
The other reason by which Papadeli can start its business in Germany is that they have
prosperous economy which means the GDP of Germany is amazing where owners of the
business can make the establishment(Tasheva and Nielsen, 2020). If Papadeli will start their
business in Germany then they will be receiving skilled workforce and when the skilled
workforce will be employed in the business it gives huge advantage to the success. It is because
people are likely to understand the things in a more faster and in better way and there are chances
that they will be providing unique ideas to the company. The start-up culture in Germany is also
very good so Papadeli has to work in such an effective manner which will help them to make the
work culture better. It is an obvious fact that every business who wants to start their business in
another country will be focusing on the work culture and the products which will be liked by
customers. The Papadeli will be making innovative products and services for sure because when

they will see innovation in the country then with that they will be developing new ideas helping
them as to how the products and services has to be provided to people in the market and in what
ways. The government and legal system of the country is also strong which will help the
business in gaining benefits and incentives which will be provided by them to the business. Thus,
it can be said that opening the business with the taste and flavours of Europe and also the taste
which will be according to the demands of consumers stays in Germany(Bjorvatn and Wald,
2019). After all they have to work according to the practice and culture of Germany and it is
important that the business needs to maintain their other things which will be in accordance with
the requirements of consumer market.
Discussion on various challenges that Papdeli will face during international expansion
The process of international expansion is highly complicates and business firms have to
deal with various challenges in order to successfully expand in foreign regions. Some of the
challenges which will affect internationalization of Papadeli in Germany are provided below: Cross-cultural challenges: One of the primary challenges related to internationalization
are cultural differences which play an important role in shaping consumer perception
about the brand as well as employee satisfaction in foreign regions (Bartosik-Purgat and
Jankowska, 2020). Germany is pragmatic society and UK in comparison is more
normative society. This depicts the stark cultural differences between UK and Germany
as individuals in Germany believe that truth depends on the specific siltation while
individuals in UK believe in absolute truth and maintaining long standing traditions. IT is
important for business firms to manage cross cultural differences while dealing with
employees and consumers in foreign markets in order to gain success. Papadeli needs to
understand factors unique to German culture and identify similarities between UK and
German culture in order to ensure smooth functioning of their company in Germany. Managing global teams: Communicating and co-ordinating with global teams in order to
ensure smooth functioning of the enterprise is essential to maintain control and direct
foreign subsidiaries in suitable direction (Budi and Hadi, 2021). This is one of the
complicated aspects of internationalization as managing global teams requires creation of
effective communication channels which not only facilitate smooth flow of information
but also play a role in creating sense of community among global and domestic
workforce of the company.

 Supply chain management: International supply chain management is complex process
which introduces various financial and ethical issues for business firms. In order to
conduct business operations responsibly, enterprises have to crate sustainable supply
chain and ensure that every member of global supply chain does not participate in labour
rights violation. In addition to this ensuring every supply chain activity is completed in
timely manner to offer consumers services and products quickly as in another complex
element of global supply chain management. These issues arise in front of enterprises
because of internationalization. Papdeli is only located in UK and needs to develop
effective supply management strategies in order to handle complex issues which arise
because of creation of global supply chain such as risks of labour exploitation. Talent Acquisition: This is one of the most important challenges which needs to be
resolved in order to imitate international expansion of business firms. Attracting skilled
employees in for land requires high employer brand recognition. Business firms who do
not have international brand recognition are not able to attract most talented employees in
their organization (Chang, Fiondella and Yeh, 2019). It is important for business firms to
resolve this challenge as it is contingent to their success. Papadeli needs to promote their
employer brand in Germany in to recruit highly skilled employees at every position in the
company. This will help the firm increase consumer satisfaction and build brand image
through consumer advocacy. New market competition: This challenge of internationalization puts pressure on new
business firms entering the market as they not only have to compete with existing firms
in the market but also face the threat of new entrants. This challenge can lead to failure of
the company as consumers do not switch brands to purchase the services of products
offered by new entrant. Intense marketing efforts and consumer relationship management
can help Papadeli face this challenge and gain beneficial position in Germany. Tariffs and exchange rate volatility: Changing tariff laws and fluctuations in exchange
rate affect financial performance of business firms and are major barrier to successful
internationalization. Fluctuations in exchange rate affects the way in which invoices are
issued in foreign markets and this also creates the risk of gaining less money than
expected because of sudden change in exchange rates (Eray, 2020). In addition to this
changes in tariff regulations impact the supply chain of business firms and affect cost and

sale of their products in foreign markets. Papadeli needs to take steps to reduce risk
associated with volatile exchange rates and understand tariff regulations in Germany in
order to gain profitability and survive in the market for long time period.
 Political Instability: This challenge can not be predicted accurately not controlled by
business firms but it has major impact on profitable expansion of business firms on
foreign lands. The political environment of a country is guided by many variables and
any of these variables can create political instability in the country affecting growth
potential of foreign as well as domestic firms. Papdeli is expanding in Germany which
has politically stable environment. However, there are various factors which such as
Refugee crisis in Germany which can lead to political instability in the country and
failure of Papadeli during global expansion. Papadeli needs to continuously monitor
political environment of Germany and consider political changes during formulation of
business strategy in order take preventive measures for political risk.
Critical evaluation of suitable internationalization process execution approach for the
international expansion of Papadeli in target market
The network model of internationalization provides the network approach in the view of
markets of networks. This model views the industrial system as composition of firms engaged in
production, distribution and usage of goods and services and describes it as network of
relationship between business firms (Giudici and Rolbina, 2018). This models depicts the ways
in which distribution, operations and market competitors impact the scale of internationalization
from the pint of view of individual companies and corporate groups. Relations between business
firms are the determining factor in the network approach. Three types or relations between
organizations are provides in this model with the function of each relation type being determined
on the basis of source of influence while the relations indicate the target of said influence. The
first type of relation includes relations between domestic company and its partners which move
towards a foreign business network with the objective of international expansion. The second
type of relations includes which may be formed are included. These relations act as an
intermediary in the processes of reaching internationalization objective and have an impact on
parties which are able to derive benefits from cooperation with the organization aiming for
internationalization. The last type of relation is directed towards setting network of relation with
the domestic partners of the company (MaGuo and et. al., 2019). The efforts described in the

model help in creation of different supporting pillars during the start of internationalization
process. The implementation of this approach plays an important role in reducing the risk of
internationalization and influencing the increase of internationalization rate. The primary
advantages and disadvantages of the network model of internationalization are covered below;
Advantages:
 This model provides description of a global network in which business firms provide
mutual support to each other for success of internationalization strategy. This approach
can increase the speed of internationalization and lead to success of business firms in
foreign lands (Hawksley, 2018).
 One of the primary advantages of this approach is that membership of specific group
motivates participation of other organization which helps business firms create
collaborative network and successfully implement the internationalization process.
Disadvantages;
 There are limited means through which business firms can imitate international
cooperation. This reduces the effectiveness of the network model as the central idea of
this model is based around building cooperation between different parties involves in
internationalization.
 The network model provides a view of internationalization in which the business firm is
dependent on other organizations to successful expansion foreign market. High level of
reliance on different enterprises and lack of individual effort are a major disadvantage of
this model (Hilmersson and et. al., 2017).
 This model is centred around the idea of cooperation. The primary factor which impacts
cooperation between different firms is conflicting interests of enterprises which can lead
to failure of business firms in their internationalization efforts. This is another primary
disadvantage of this model as it does not look at various factors which hamper global
cooperation between business firms.

CONCLUSION
From the above report it is determined that international expansion of business firms is
complicated process which involves looking into various elements to gain success. Selection of
appropriate country is essential for successful international expansion. Business firms need to
have rational for selecting the specific market for international expansion. Different reasons
promote international expansion of business firms which includes gaining assess to new talent
and cheap labour. Several challenges of internationalization are political instability, tariffs and
exchange rate volatility new market competition talent acquisition supply chain management
managing global teams and cross-cultural challenges. In addition to this the network model
provides effective approach to implementation of internationalization process which can be
applied by business firms.

REFERENCES
Books and Journals
Bjorvatn, T. and Wald, A., 2019. Complexity as a driver of media choice: A comparative study
of domestic and international teams. International Journal of Business Communication,
p.2329488419874367.
Evers, N. and Andersson, S., 2021. Predictive and effectual decision-making in high-tech
international new ventures–A matter of sequential ambidexterity. International Business
Review. 30(1). p.101655.
Fainshmidt, S., 2020. Foreign Subsidiary Stakeholder Orientation and FsQCA: A Commentary.
In Research Methods in International Business (pp. 321-328). Palgrave Macmillan,
Cham.
Fassas, A.P., Papadamou, S. and Koulis, A., 2020. Price discovery in bitcoin futures. Research in
International Business and Finance. 52. p.101116.
Ioulianou, S.P., Leiblein, M.J. and Trigeorgis, L., 2021. Multinationality, portfolio
diversification, and asymmetric MNE performance: The moderating role of real options
awareness. Journal of International Business Studies. 52(3). pp.388-408.
Nuruzzaman, N., Singh, D. and Pattnaik, C., 2019. Competing to be innovative: Foreign
competition and imitative innovation of emerging economy firms. International
Business Review. 28(5). p.101490.
Tasheva, S. and Nielsen, B.B., 2020. The role of global dynamic managerial capability in the
pursuit of international strategy and superior performance. Journal of International
Business Studies, pp.1-20.
Bartosik-Purgat, M. and Jankowska, B., 2020. Exploiting e-commerce trends for international
market expansion: the perspective of Polish fashion firms. European Journal of
International Management, 14(6). pp.1049-1069.
Budi, R. F. S. and Hadi, S. P., 2021. Majority-Dominant-Mixed Strategy Game Theory Model
for Deregulated Generation Expansion Planning Problem. International Journal on
Electrical Engineering and Informatics, 13(1). pp.107-131.
Chang, P. C., Fiondella, L. and Yeh, C. T., 2019. Achieving yield confidence in a flow shop with
single rework station via capacity expansion and process improvement. Journal of the
Chinese Institute of Engineers, 42(6). pp.488-497.
Eray, C., 2020. Multinational Banks and Foreign Expansion Decisions. Springer Nature.
Giudici, A. and Rolbina, M., 2018. Pankaj Ghemawat's Distance Still Matters: The Hard Reality
of Global Expansion. Macat Library.
Guo and et. al., 2019. Off‐design performance and operation strategy of expansion process in
compressed air energy systems. International Journal of Energy Research, 43(1).
pp.475-490.
Hawksley, H., 2018. Asian waters: The struggle over the South China Sea and the strategy of
Chinese expansion. Abrams.
Hilmersson and et. al., 2017. Time, temporality, and internationalization: The relationship
among point in time of, time to, and speed of international expansion. Journal of
International Marketing, 25(1). pp.22-45.

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