International Business Report: Phoenix Industries & Project Qatar

This report, prepared for the London School of Commerce Colombo Campus, evaluates the international business strategy of Phoenix Industries, a Sri Lankan plastic manufacturer. The report focuses on the potential entry into the Qatar market, analyzing product suitability (plastic furniture), conducting a host country analysis considering PESTLE factors, and assessing the competitive landscape. It identifies potential barriers to internationalization, including domestic and host country challenges, and analyzes cultural differences using Hofstede's model. The report recommends a joint venture as the preferred market entry strategy, supported by detailed strategies concerning internationalization, location, staffing, and marketing. The report also highlights the company's core competencies and provides recommendations for achieving business objectives in the international market. The report is a comprehensive consultant's report that provides key learning points and valid points to be considered for international business.

LONDON SCHOOL OF COMMERCE
COLOMBO CAMPUS SRI LANKA
MBA FOR EXECUTIVES
MODULE ASSIGNMENT:
International Business
Student Name : Janaka Perera
Student Registration No. : 0170APAP0314
Module Lecturer : Mr. Anand Walser
Module Tutor : Ms. Apsara Hewage
Date Submitted : 24th March, 2015
Total Word Count : 4,068 Words

Assignment on International Business
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EXECUTIVE SUMMARY
The foundation of this report was to assess the product portfolio of Phoenix and closely evaluate the adequacy
of the chosen product line for an internationalization project. The author has evaluated the possible products
and has selected plastic furniture as the most appropriate line of products for international business strategies.
The host country evaluation was also completed considering the availability of raw materials and labor
component where the State of Qatar was the preferred choice.
The report evaluated the market analysis of the host country where all internal factors were analyzed for
conditional and competitiveness. The information received was used to determine the possible market entry
strategy. Also the barriers Phoenix may encounter both in home and host countries which might create
barriers were analyzed for possible counter strategies to be formulated.
Culture is another important factor for international business and this area was also analyzed using known
culture theories for both countries as this could be important for a smooth operation also knowledge in this
area will be beneficial for strategizing against possible culture related impacts.
The main section of this report is the final business strategies where business entry process is at the pinnacle.
Considering all revealed information, the Joint Venture was selected as the entry mode of choice supported by
business strategies concerning internationalization, location, staffing and marketing which clearly defines
do’s and don’ts of international business plans for Project Qatar.
International Business is a fascinating subject with many interesting factors to be considered before even
finalizing the business strategies. Therefore completing this consultant’s report successfully has given the
author key learning points where he has enjoyed thoroughly while using all the knowledge gained to churn out
a very successful report with valid points to be considered.

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TABLE OF CONTENTS
Number & Title Page
Executive Summary…………………………………………..………………………………. 02
Table of Contents……………………………………………..……………………………… 03
List of Tables…………………………………………………..…………………………....... 06
List of Figures…………………………………………………..…………………................... 07
List of Abbreviations……………………………………………..………………………........ 08
1.0 Introduction……………………………………………………………………………….. 09
1.1 Plastic Industry Overview ……………………………………………………………… 09
1.2 Background of “Phoenix” ……………………………………………………………… 09
1.2.1 Company Vision ………………………………………………………………….. 09
1.2.2 Company Values ………………………………………………………………….. 10
1.2.3 Range of Operation ……………………………………………………………….. 10
1.2.4 Products from Phoenix ……………………………………………………………. 11
1.2.5 Company Core Competencies ……………………………………………………. 12
1.3 Scope of Report ………………………………………………………………………… 12
1.4 Objectives ……………………………………………………………………………… 12
1.5 Methodology …………………………………………………………………………… 13
2.0 Products for Internationalization …………………………………………………………… 13
2.1 Project Qatar – Preferred Products ……………………………………………………… 13
2.2 Product Performance ……………………………………………………………………. 14
3.0 Target Market Analysis ……………………………………………………………………. 14
3.1 Host Country Analysis …………………………………………………………………. 14
3.2 Qatar – PESTLE Factors ……………………………………………………………….. 16
3.3 Qatar - National Competitive Analysis …………………………………………………. 17
4.0 Barriers for Internationalization …………………………………………………………… 18
4.1 Domestic Barriers ……………………………………………………………………… 18
4.1.1 Limited Access to Finance ………………………………………………………… 18
4.1.2 Regulatory Barriers ………………………………………………………………… 18
4.2 Host Country Barriers …………………………………………………………………... 18
4.2.1 Difficulty Sourcing Local Partners ………………………………………………… 19

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4.2.2 Acquiring Property ………………………………………………………………… 19
4.2.3 Work Time Practices ……………………………………………………………… 19
4.2.4 Labor Practices ……………………………………………………………………. 19
4.2.5 Documentation Issues ……………………………………………………………… 19
4.2.6 Driving License Requirements ……………………………………………………. 19
4.2.7 HR Management Issues …………………………………………………………… 20
5.0 Analysis of Cultural Differences ………………………………………………………….. 20
5.1 Hofstede Cultural Analysis Model ……………………………………………………… 20
5.2 Impacts of Cultural Difference …………………………………………………………... 21
5.2.1 Mediation and Settlements ………………………………………………………… 21
5.2.2 Personal Style ……………………………………………………………………... 22
5.2.3 Communication …………………………………………………………………… 22
5.2.4 Decision Making …………………………………………………………………. 22
5.2.5 Compassion towards Time ………………………………………………………. 22
5.2.6 Risk Assessment …………………………………………………………………. 23
5.2.7 Emotionalism …………………………………………………………………….. 23
6.0 Business Entry Strategy …………………………………………………………………… 23
6.1 Justifications for Business Entry Strategy ……………………………………………… 24
6.1.1 Access to Resources ……………………………………………………………… 24
6.1.2 Ease of Access ……………………………………………………………………. 24
6.1.3 Sharing Risks, Costs & Control …………………………………………………… 24
6.2 International Business Strategy ………………………………………………………… 24
6.2.1 Competitive Advantage …………………………………………………………… 25
6.2.2 De-Centralized Operation …………………………………………………………. 25
6.2.3 Independence ……………………………………………………………………… 25
6.2.4 Local Sourcing …………………………………………………………………… 25
6.2.5 Innovation …………………………………………………………………………. 26
6.2.6 Management Style ………………………………………………………………… 26
6.3 Location Strategy ………………………………………………………………………. 26
6.3.1 Facilities ………………………………………………………………………….. 26
6.3.2 Labor ………………………………………………………………………………. 26
6.3.3 Business Logistics …………………………………………………………………. 27

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6.3.4 Infrastructure ……………………………………………………………………… 27
6.3.5 Target Consumers …………………………………………………………………. 28
6.3.6 Suppliers ………………………………………………………………………….. 28
6.4 Staffing Strategies ……………………………………………………………………… 28
6.4.1 Employment Procedure ………………………………………………………….. 28
6.5 Marketing Strategy …………………………………………………………………….. 29
Conclusion……...……………………………………………………………………….…….. 31
References………………………………………………………………………………….…. 32
Bibliography…………………………………………………………………………………… 34

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LIST OF TABLES
Number& Title Page
1.1: Phoenix Management Team ………………………………………………………………. 10
1.2: Core Competencies of Phoenix ……………………………………………………………. 13
3.1: Furniture Imports by Qatar ………………………………………………………………… 15
3.2: Qatar – PESTLE Factors …………………………………………………………………... 16
3.3: Qatar – National Competitive Analysis ……………………………………………………. 17
5.1: Cultural Analysis – Sri Lanka vs. Qatar …………………………………………………… 21
6.1: Project Qatar – Marketing Strategies ……………………………………………………… 29

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LIST OF FIGURES
Number & Title Page
1.1: World Plastic Demand Distribution by polymer …………………………………………… 09
1.2: Core Values of Phoenix ……………………………………………………………………. 10
1.3: Countries that products from Phoenix are exported to ……………………………………. 11
1.4: Products from Phoenix …………………………………………………………………… 11
2.1: Phoenix furniture product mix ……………………………………………………………. 13
2.2: Market Share of Plastic Furniture – Sri Lanka …………………………………………… 14
5.1: Hofstede Model Cultural Analysis – Sri Lanka vs. Qatar ………………………………... 20
6.1: Popular Operating Models for Market Entry ……………………………………………… 23
6.2: Internationalization Strategies ……………………………………………………………… 25
6.3: The Marketing Mix ……………………………………………………………………….. 30

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LIST OF ABBREVIATIONS
BOD - Board of Directors
CAPEX - Capital Expenditure
CEO - Chief Executive Officer
FIFA - Fédération Internationale de Football Association
FY - Financial Year
GCC - Gulf Corporation Countries
JIT - Just-in-Time
JV - Joint Venture
MSA&L - Ministry of Social Affairs and Labor
OPEC - Organization of Petroleum Exporting Countries
OPEX - Operating Expenditure
PE - Polyethylene
PET - Polyethylene Terephthalate (thermoplastic polymer resin)
Phoenix - Phoenix Industries Limited
PP - Polypropylene
PS-EPS - Polystyrene / Expanded Polystyrene
PVC - Polyvinyl Chloride
QEWC - Qatar Electricity & Water Company
Sq./ft. - Square Feet
SWOT - Strengths, Weaknesses, Opportunities & Threats analysis
UNIDO - United Nations Industrial Development Organization
YoY - Year on Year

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1.0 INTRODUCTION
1.1 PLASTIC INDUSTRY OVERVIEW
Global demand for plastics has shown a significant growth and in 2013, the global production reached
nearly 300 Million metric tons with China being one of the main producers.
Plastics are being used in different products and can replace glass, metal and wood and can be used in
thousands of different industries.
Figure 1.1: World Plastic Demand Distribution by polymer
(Source: ICIS Consulting)
Sri Lankan plastic industry currently is 50 years old and technologically sophisticated. As per research
done by UNIDO, annual Sri Lankan consumption of plastics is 180,000 metric tons with an annual
growth of 10-12% with 900+ industries, making it one of the most competitive industries.
1.2 BACKGROUND OF “PHOENIX”
Founded in 1976, Phoenix Industries Ltd. (herein known as Phoenix) was the pioneer organization in
Sri Lanka and South East Asian region for plastic injection molding. Company, the foremost and
biggest plastic producer in Sri Lanka with a modern manufacturing plant with machinery for injection
& blow molding and mechanized PET product line with products ranging from household plastic wear,
furniture, bottles, plastic packaging etc. (Phoenix, 2015)
1.2.1 COMPANY VISION
“Name for Plastic” depicts that Phoenix’s objective is to be the primary brand for plastic products
in Sri Lanka.

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1.2.2 COMPANY VALUES
Figure 1.2: Core Values of Phoenix
(Source: Phoenix, 2015)
1.2.3 RANGE OF OPERATION
Currently Phoenix is managed by a Board of Directors assisted by a capable Management Team
consisting of the following positions:
Table 1.1: Phoenix Management Team
(Source: Phoenix, 2015)
Phoenix currently has many products being the most preferred in their respective industries. The quality of
products offered and robust management culture has enabled the company to achieve this enviable position.

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Phoenix has experience in international markets their products having success internationally already with
many being exported to foreign countries. Phoenix strategy in attaining international success is by assuring
international expectations by offering high quality products.
Figure 1.4: Countries that Products from Phoenix are exported to
(Source: Phoenix, 2015)
1.2.4 PRODUCTS FROM PHOENIX
Phoenix has introduced several products during 2013/14 in consumer and household sector.
Furniture and Household sectors have shown significant growth of 60% during this period when
company growth was 48% which was very encouraging. Below illustration highlight the range of
products currently representing Phoenix.
Figure 1.3: Products from Phoenix
(Source: Phoenix, 2015)

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1.2.5 COMPANY CORE COMPETENCIES
Phoenix holds an array of core competencies where the competitive market requirements are met to
exceed all customer expectations.
Table 1.2: Core Competencies of Phoenix
(Source: Phoenix, 2015)
1.3 SCOPE OF REPORT
 Evaluate selected products to successfully enter international business arena.
 Assess Qatar marketing conditions and Phoenix’s ability to compete in such conditions.
 Strategies to be adopted by Phoenix enabling growth, brand value, revenue and profitability.
1.4 OBJECTIVES
 To review the adequacy of the product and host country analysis to evaluate the efficacy.
 Recommendations to attain business objectives and effectiveness in international markets.
 Offer Phoenix with internationalization strategies in preparation for international entry.