International Business Strategy: Sainsbury's Expansion to Sweden

This report provides an overview of international business, focusing on Sainsbury's potential expansion into Sweden. It discusses the rationale for internationalization, including increasing capital, acquiring new client bases, gaining a competitive advantage, and cost savings. The report suggests Sweden as a target market due to its strong client base, high expenditure power, and supportive environment for foreign investments. It also examines potential obstructions such as language barriers, cultural differences, political and legal hindrances, and sociological barriers. The report concludes by evaluating relevant execution approaches for international operations in the specific target market, emphasizing the importance of adapting to local conditions and consumer preferences. Desklib offers a platform for students to access similar solved assignments and past papers.

INTERNATIONAL
BUSINESS
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Table of Contents
Executive summary .........................................................................................................................3
......................................................................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Analysis and discussion...................................................................................................................4
Brief overview of the selected organization and the rationale for going international-.........4
Obstructions that will be faced as the administration expands at international level.............6
Examine and evaluate a relevant execution approach for the international operation for the
specific target market.............................................................................................................7
Conclusion.......................................................................................................................................9
Reference ......................................................................................................................................10
Books and journals ..............................................................................................................10
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Executive summary
This report discusses the concept of international business. The business organizations are
indulged in international business in order to expand the businesses in the other countries to
create a customer base in those countries. This particular involvement helps in the overall growth
of the business and to increase the profit maximisation of the company. For the report, a
particular company has been chosen which wants to expand its business activities at the global
level. In furtherance, it involves certain suggestions in terms of the expansion of the
organization. It also addresses the barriers which creates hindrance in the implementation of the
different approaches in the company.
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INTRODUCTION
The term international business defines the reciprocation of the various commercial
activity in the global market or at the international level along with the trading of goods
and services across the national boundaries. The process of globalization plays an
important role in terms of global business. The business organizations are required to
acknowledge certain specific components so as to enhance the growth and sustainable
of the company. When the companies use undergo the process of expansion, there are
various barriers which comes in their way to create hindrances. The report has opted for
Salisbury company. The company wants to expand its business in the overseas in order
to increase the customer base(Abd Aziz, et.al, 2020). The company was constituted in
the year 1869 by John James Salisbury. Moreover, the report will also evaluate the
rationale behind carrying the business at the international level and also examine
various issues and challenges which a company can face at the time of the process of
expansion. It encompasses the method of execution for the process of
internationalization of the desired market of the company.
MAIN BODY
Analysis and discussion
Brief overview of the selected organization and the rationale for going
international-
The business organization named Sainsbury is the second largest supermarket chain in
the United Kingdom. The company was established in the year 1969. The company posses the
certification from B Corporation. And along with this, the business organization is enjoying the
14th position in the international economy of the supermarket industry all over the world. The
company is the primary entity dealing in supplying the materials for the supermarket. The
company deals with the best quality products and offering the services to the customers with
utmost care. This particular process helps in building a strong image of the company in the
market which will provide assistance in increasing the number of customers in the market. The
company also lays emphasis on sharing the views and opinions in order to motivate the other
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people. This ensures the profitability of the company in the present market system(Aguilera and
Grøgaard, 2019).
That is why the business organization wants to expand its business globally which will going to
increase the revenues, handling the competitors in the market and to work in an efficient manner.
There are various reasons in order to increase the commercial activities at the international level,
they are-
 Increasing the capital- The companies entering into the global economy are more
concerned for increasing the profitability and the revenue generation of the organization.
Dealing in the international market will provide an opportunity to enhance the growth
and development of the company. The growth will helps in the further expansion of the
business in other different countries. It paves the way for building a new consumer base
in the different states. The international market will also provide open market to the
respective companies.
 New client base- In order to acquire a good position in the international market, the
company are required to create new customer base by acknowledging the demand of the
consumers of that particular country. It helps in initiating the new services or the products
in the market. Because the customers use to give their feedbacks on the existing supply of
goods and services and in the furtherance of the views and opinions of the clients, the
company make certain modifications in their supplies.
 Acquiring competitive advantage- When the business is started operating in the global
market, then the organization comes face to face with the competitors at the international
level. And the company which succeeds in entering the international market, will surely
be going to compete with the other companies who are already established in that market
at the global level. This will increase the efficiency of the company which results in
fighting the combative base. It will sharp the competitive edge of the company which in
the end leads to its growth in the open market.
 Cost saving- Entering into the international market reduces the cost of production of the
company. This will leads towards the saving of capital. Many business organizations are
taking this benefit by increasing the scope of the business activities across the border.
From the above discussion, it is clear that these elements helps the companies to perform the
commercial operations in the international market which will helps in the growth and
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development, expanding the business, lower the cost of production, acquiring new customers,
creating goodwill in the market, etc. It will also result in increasing the profit margins of the
company in order to increase the revenue generation of the business(Expósito Langa, et.al,
2021).
Discuss which country would you suggest them to enter and the justification behind the decision-
For the expansion of the company in the market of the other country, it is being suggested to the
selected business organization to choose Sweden in order to scale its business activities in the
market of the respective country. As it will help in augmenting the required consumer support
which enhances the sales returns in order to earn the profitability for the company. The chosen
country that is Sweden holds a strong client base which is necessary for any business
organization as the consumers posses high expenditure power. The living standard of the citizens
of Sweden is harmonised and fair. It would ultimately help in the functioning of the business in a
effective manner. Because the country owns a positive environment for commercial to and fro.
The authorities of the selected country is supportive and holds a welcoming nature towards
foreign investments and business operations. It provides all type of assistance which is required
by the newly established firms. The average income of the country is among one of the highest
measured per capita income. The business organizations can get connected with number of
consumers because the population of the country is 9000000, which makes an easy way for the
companies to build their positive image among the customers of Sweden(Guercini and Milanesi,
2020.
This particular country is having highly skilled workers and employees with the advance
technological developments. The business organization is being recommended to initiate their
business activities in Stockholm, which the capital city of Sweden. Besides this, there are various
existing companies in the market of Sweden which gives a cut throat competition to the newly
established foreign companies. Sainsbury is operating a supermarket chain which is an already
established brand and is able to attract the customers on the basis of that. It is also providing top
quality products in its superstore. The highly talented labour force of Sweden will assist in
achieving the desired goal of the company. It would be beneficial for the company that it would
be able to hire such brilliant and hard working workforce, as the locals of the particular place
understands the likes and dislikes of the customers. Through this, the company can make new
ground-breaking strategies which will going to provide a fruitful result in the end.
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Trading specifically in Sweden, will be proved as one of the best decisions for the company from
each and every aspect (Martins, et.al, 2021).
Obstructions that will be faced as the administration expands at international level.
The company faces a lot of problems while expanding its business at a larger scale in the
international market. Moreover, the company also faces a lot of issues in the international
market. The organisation also needs the good managerial skills in order to sustain in the
international market. These problems directly impacts the organisational profit and loss. Hence,
these difficulties must be solved by the management in all the conditions. Some of these barriers
are discussed below as follows-
 Barrier of language- The linguistic barrier relates to the use of the language in the
international market. The companies in the domestic market can use the local language
while doing business in the market. This is because in the case of domestic market there
is no misinterpretation of information between the seller and the buyer as they both
understand the local language. But the problem arises when the language of the seller and
the customer is different while doing the business(Kadede, et.al , 2021) .
 Differences based on culture- The culture also plays an important role in the market. The
product that are produced by the company is created on the basis of market demand of
that particular product. Moreover, the culture also plays vital role in designing the
product. Further more, any product that is not culturally accepted cannot be sustained in
the market because that people would not buy that product. The new business can only
be able to develop if it recognises that cultural needs of the customers in the prescribed
market.
 Political hindrances- there are various political matters that highly impacts the business of
an organisation. Moreover, the political relations also effect the business. Moreover, the
selected company has to follow the various laws that are created by the parliament of the
nation. In addition to this, if the companies does not follow the policies of the country,
then the government can restrict the operations of the company. It can moreover penalise
the business for doing such an act (Lozano Torró, et.al, 2020).
 Legal hindrances- The legal hindrances are related to the law of the country. It explains
about that there lies the different laws for the different countries. Moreover, when the
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companies has to work at the international level, it has to follow all the rules and
regulations at national as well as the international level. These laws are to mandatory for
all the companies which makes it difficult to the companies to operate smoothly in the
market while achieving its goals and objectives.
 Sociological barriers- There are also various barriers that are related to the society for any
business organisation in the international market. Moreover, the company also has to
keep in minds the needs of the society according to which he must produce in the market.
The mindset of the society plays an important role in the developing the business
organisation. So, different countries has different type of society. Hence, the business
must plan according to it.
More over, at the time period when the leadership or managers and other worker of the
administration are not able to verbalize in the local communication language of the new market
region than it can yield the result and discontent among the user base of the organisation which
will result to low good will. Hence, this will act as the chief barrier and content for the
administration at the time of aspect elaboration which they require to master)(Rahman, and
Mendy, 2018).
Examine and evaluate a relevant execution approach for the international operation for the
specific target market.
There can be different execution performing that can be utilized at the time of unfinished
operations in the worldwide market area. There are various elements that are influencing the
operation of the business at the time of scaling. These approaches need to be enforced by the
director are the leaders of the administration. There can be various execution acting that can be
utilized at the time of unfinished the action in the global activity area (Sharma, et.al, 2020).
There are various elements that are powerfulness the operation of the enterprise at the time of
measure. These formulation need to be enforced by the trainer are the leaders of the
administration and in add-on to it few of the know-how in which the respective structure gang
scale their transaction in the market. In addition to this, the few of the method acting in which the
single organization association scale their trading operations in the market arena of Sweden are
represented below as follows-
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 Direct investment- The direct investment provides a way to enhance the capability of
increasing the profits of the business in the international market. Moreover, the company
also requires to focus more on the direct investment in the international market. This
would also aid in fixing the operations of the company in the market. The direct
investment can also be termed as the conduction of the operations in different countries
of the world. Moreover, it also focuses on the intellectual property of the company.
Further more, the company also gets benefits from the international market through the
direct investment. It is also required that the company must use the innovative marketing
techniques in order to mitigate the global level organisation. It must also focus on
improving the position of the new stake holders of the company.
 Opposite internationalism- This is the process of reversing the internationalism. This
supports the international organisation to enter into the market. It also includes various
elements in order to exploit it in the market. It also helps in providing the intellectual
property to the company in the international market. This would also enable about the
elements that effects the growth of the company globally or locally in the market.
This report also explains about the management in the organisation of Sweden. There
also lies various operations that is to be held in the Sweden. Moreover, the market of the Sweden
is famous for the expansion of the business in its market. Further more, the above discussion
explains that the direct investment can help in increasing the operation and production of the
business in other countries also. It would also help the business in enhancing the sales and the
profitability of the business organisation(Srivastava, et.al, 2020). Moreover, the company would
also enhance its customer base by the use of the direct investment in the co9mpany. Moreover,
the company can localised its product in the international market by the aid of the direct
investment. In addition t this, the company would also retain its intellectual property in the
market in which it is operating.
There are also various drawbacks and demerits of the foreign direct investments is that it
relate risk of high investing finance in the organisation. Moreover, as there can be increased level
of expenditure in relation to the challenger as being the outsider of the organisation. Respective
organization engross utilise it as well as their leadership need to paradigm on the challenges as
well as issues at the instance of scaling the transaction of the business concern and selling the
merchandise as well as services in the brand-new market region. It will aid them in achieve more
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user base as well as sales receipts which will lead to increased goodwill in the marketplace. This
gives the result in right location of the organizations as well as employment and its major
observation on the intellectual property of the organisation(Szkudlarek, et.al, 2020). This also
assist in observation the activity of marketing as well as attempt on sale by the institution. So in
this method of globalisation approach a establishment must have to focusing on their extra
stakeholders and put more attempt on the method of marketing in order to extenuate there any
type of situation by the planetary organizations(Witt, 2019).
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Conclusion
The above report concludes about the global business that is to be operated at the
international level by the multinational companies. This report also concludes about the ways
through which the customers can be enhanced for the specified company. It also explains about
the ways through which the company can enhance its profits in the international market. The
company is focused on increasing the clientele in order to hike the business operations in the
other countries. Further, it is levelling up the trading activities in the market of Sweden which
would enhance the capability to stand in the global market against the competitors. This will
ensure the long term sustainability in the market of the chosen country. And the business
organization requires to remove the obstacles from their ways in terms of increasing the
productivity and the profitability in an efficient and effective manner.
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Reference
Books and journals
Abd Aziz, N.A., et.al , 2020. The Barriers Of International Expansion: A Study On Education
And Learning Centre Franchisors. Systematic Reviews in Pharmacy, 11(5), pp.888-895.
Aguilera, R.V. and Grøgaard, B., 2019. The dubious role of institutions in international business:
A road forward. Journal of International Business Studies, 50(1), pp.20-35.
Expósito-Langa, M., et.al ., 2021. Overcoming geographical barriers to international presence.
The case of the emerging Romanian Tuscany wine cluster. European Planning
Studies, 29(5), pp.923-941.
Guercini, S. and Milanesi, M., 2020. Heuristics in international business: a systematic literature
review and directions for future research. Journal of International Management, 26(4),
p.100782.
Kadede, E.A.,et.al , 2021. LANGUAGE RELATED BARRIERS IN INTERNATIONAL BUSINESS.
Lozano-Torró, A., et.al , 2020. Competitive advantages and barriers in international construction:
An origin-host market approach. Journal of Civil Engineering and Management, 26(5),
pp.475-489.
Martins, R., et.al , 2021. Analysing stimuli and barriers, failure and resilience in companies’
internationalization: a systematic and bibliometric review. Review of International
Business and Strategy.
Rahman, M. and Mendy, J., 2018. Evaluating people-related resilience and non-resilience
barriers of SMEs’ internationalisation: A developing country perspective. International
Journal of Organizational Analysis.
Sharma, P., et.al , 2020. Managing uncertainty during a global pandemic: An international
business perspective. Journal of business research, 116, pp.188-192.
Srivastava, S., et.al , 2020. Culture and International business research: A review and research
agenda. International Business Review, 29(4), p.101709.
Szkudlarek, B., et.al , 2020. Communication and culture in international business–Moving the
field forward. Journal of World Business, 55(6), p.101126.
Witt, M.A., 2019. De-globalization: Theories, predictions, and opportunities for international
business research. Journal of International Business Studies, 50(7), pp.1053-1077.
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