Sainsbury's: International Expansion and Market Entry Strategy

This report examines Sainsbury's potential international expansion, focusing on entering the Singapore market. It outlines the rationale behind Sainsbury's decision to go international, including diversifying business, responding to Brexit, achieving economies of scale, beating competition, and improving profit margins. The report recommends Singapore as the target market due to its robust economy, attractive tax system, ease of incorporation, and productive workforce. A PESTLE analysis supports this recommendation, evaluating political, economic, social, technological, legal, and environmental factors. The report also evaluates a relevant internationalization strategy, emphasizing segmentation, targeting, and positioning using the STP model, and discusses entry methods. It concludes with recommendations for managing marketing, operations, and human resources effectively in the new market. Desklib is a platform where students can find similar assignments and study resources.

International Business

Executive summary
Internation business is the sale and purchase of products in foreign market. There are
different strategies that are available and helps the business organisation to expand their
operations. This report has discussion related to the new market and the reason for entering the
market. Along with that, the best foreign market entry strategies are mentioned in the report. In
the end the use of effective marketing, operations and human resource management of the
company is mentioned.

Table of Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Provide a brief overview of your organisation and the rationale for going international...........4
Critically discuss which country you would recommend them to enter and the rationale behind
the decision..................................................................................................................................5
An appropriate country analysis needs to be conducted to support the rationale. .....................6
Critically evaluate a relevant strategy for the internationalisation process for the specified
target market................................................................................................................................8
Entry method...............................................................................................................................9
Recommendations.....................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES:.............................................................................................................................13
Books and Journals...................................................................................................................13

INTRODUCTION
International business can be defined as trade of goods, service, technology, capital at a
global scale. It involves the cross-border transactions of goods and services between two or more
countries. It is an opportunity for business organisation to enhance its operations and capture the
international market (Christofi and et.al., 2021). There is need of conducting proper research so
that the goals can be attained properly. This report is based on Sainsbury's. It is second largest
chain of supermarkets in UK. The business organisation is planning to enhance its operations and
capture the global market. The report includes discussion related to the company and the reasons
they are planning to go international. The analysis related to the country the business
organisation is planning to expand the business is done. Afterwards, there is discussion related to
internationalisation process that will benefit the company. The process of internationalisation
being adopted by the company in order to cater the needs of specific target market is part of this
report. The different strategies to expand the operations are mentioned. At the end, there is
evaluation related to the ways in which company can manage its marketing, operations and
human resources in proper manner.
MAIN BODY
Provide a brief overview of your organisation and the rationale for going international.
Sainsbury's is a supermarket chain in UK that was founded in 1869. The business
organisation is operating effectively since 153 years and have their headquarters in London,
England. There are around 180,000 employees who are given employment opportunity by
Sainsbury's. The company focuses on needs and wants of the customers that help them to carry
on their operations smoothly. The company is serving the market properly and now they are
planning to expand their operations in international market. The reason for going international in
regard to Sainsbury's is as follows:
Diversifying the Business: By expanding internationally the business organisation is
able to expand their business properly. The demand of the products also enhance a they enter the
international market. The risks also gets diversified as and when the company enhance their
operations (Kahiya, 2020). In relation to Sainsbury's they are willing to serve more customers
and enhance sales of the company. The company wants to use their full potential and enter the
international markets.

Brexit: It is the withdrawal of the United Kingdom from the European Union.
Sainsbury's have understood that there is need of enhancing their operations so that they are able
to reach more customers. There is need of expanding the business in order to enhance their sales
and profitability of Sainsbury's. This will help them to carry on the operations in proper manner
and earn more revenue.
Economies of Scale: The business organisation is able to attain advantage of economies
of scale by expansion of business. They firm is able to enhance their operations and carry on the
manufacturing process at large scale. Sainsbury's is also willing to enhance their operations and
so that they will get advantage of economies of scale.
Beat the competition: Each and every business organisation wants to gain edge over the
competitors. There is need to work in such a manner and develop such strategies that assist the
firm to attain competitive advantage (Verbeke, Coeurderoy and Matt, 2018). There is huge
competition faced by Sainsbury's in the market of UK. By grabbing the new market with good
brand image, Sainsbury's will be able to gain edge. The company must also work on providing
offers and discounts at the time of entry so that they are able to grab the requirement of
customers in the global market.
Improving profit margins: It is one of the common reason that is used by the business
organisation to enhance their operations. The business organisation wants to earn more profits by
distributing their products in global market. It is one of the reason that is being used by
Sainsbury's in order to enhance their profitability position. The company will provide high
quality products in international market so that they are able to satisfy the requirement of
customers. This will impact the profitability position of the company in positive manner.
Critically discuss which country you would recommend them to enter and the rationale behind
the decision.
Sainsbury's is planning to enter the Asian market and start their operations in Singapore.
The market of Singapore is accelerating and it attracts the business organisations to start their
operations. The rationale behind choosing the market of Sainsbury's are as follows:
A robust economy: The place focuses on well developed free market economy. The
economy of the country is enhancing and that is beneficial for Sainsbury to grab the opportunity.
There is no external public debt faced by the company. They are using the financial resources in

proper manner. They are using natural resources in optimum manner and will benefit of
Sainsbury's as they will be able to use the resources in effective manner.
Attractive tax systems: They have world’s simplest and most rational tax system. This
attracts the new business organisation to start the business. The new business organisation are
attracted by the taxation system of the place (Lundan, 2018). Sainbury's has considered this point
in order to start their business operations in Singapore. If there will be high taxes then the
profitability position of the company also diminishes. Every company wants to earn high revenue
so that they are able to carry on their operations properly and get good returns.
Ease of incorporation and operation: Singapore has bureaucracy-free and most
efficient regulatory frameworks in the world. The business organisation is able to carry on their
operations in efficient manner because of the political structure of the place. It makes the
operations of the business organisation effective and they do not face problems. Sainsbury's finds
it as an opportunity as they want to operate in effective manner by using the available resources
properly.
Productive workforce: There is effective education system in Singapore and the
students are prepared on global comparative standards. This helps the people to work effectively
at the time of jobs as well. The employees of Singapore of highly skilled and have power of
taking effective business decisions (Muhammad, Khurram and Muhammad, 2018). In this
regard, Sainsbury's will be able to attain the advantage of skilled workforce that will enhance the
productivity of the company. This will impact the profitability position of the company.
An appropriate country analysis needs to be conducted to support the rationale.
PESTLE analysis will be used to conduct the analysis of country. It will help to know
about all the external factors that have impact on the business firms operating in Singapore. All
the important factors such as political, legal, economic, environmental, and social are considered
to carry on the analysing. PESTLE analysis in relation to the market of Singapore is as follows:
Political Factors: It includes tax policy, tariffs, trade restrictions and all the government
policies and factors that can affect the business. The political risk in Singapore is low and that is
beneficial point for the business organisations who are planning to operate there (Verbeke and
Yuan, 2021). The political stability at Singapore will help, Sainsbury's to operate smoothly. They
will assure that they follow all the policies of the nation. There is need of checking the political
condition of the place at the time entering the market properly.

Economic Factors: This factors includes wage rates, inflation, cost of living and these
factors have direct affect on the business growth. These factors affect their sales, revenue, profits
of the company. The economy of Singapore is vibrant free market economy and is developing at
a good rate. The per capita income of individuals is high in Singapore. Also, it is a corruption
free place that is one of the important point that will help the business organisations to operate
there. The new business opportunities are welcomed in Singapore and this will Sainsbury's to
carry on their operation effectively. The company will provide employment in the nation and is
beneficial for the country as well as people living there.
Social factors: It refers to fulfilling the social needs of the consumers. Due to the fast
speed of life, people like to buy products in bulk quantity and in one go. The needs and wants of
the customers keeps on changing (Buckley and Casson, 2019). In Asia, the traditions and
customs are given more value. The business organisations must change their advertising and
promotional strategy and must focus on families in order to attract them. Sainsbury's must work
on enhancing customer relations as it will be beneficial for the company. By taking care of the
society, a company is able to operate effectively and enhance its operations.
Technological factors: Production techniques, information and communication
resources, marketing etc. comes under the technological factors. Trends have been changing at a
fast pace. Internet plays a major role in advancement of Singapore. There is use of digitalisation
and that enhances the use of E-commerce platforms in the market. It will enhance the
opportunities for Sainsbury's to carry on the operations properly.
Legal factors: This can be defined as the government policies, laws and legislations
which can directly affects the operations of the company. There are transparent and market
favourable laws in Singapore. This attracts the new businesses to start their operations at the
place. It is necessary to follow e-commerce laws, intellectual property laws, employment laws so
that they are able to carry on the operations properly.
Environmental factors: This factor means achieving the company goal and targets
without harming the environment. It means carrying out the operations of the company in a
sustainable way (Tien, Phu and Chi, 2019). Pollution from the vehicles is one of the major
problem being observed in Singapore. There is need of getting more attentive towards the
environmental policy and reduce the wastage of resources. The use of resources in optimum
manner will help the business organisation to carry on the operations properly. Sainsbury's need

to work ion environment friendly manner and reduce pollution so that they are able to operate
effectively.
Critically evaluate a relevant strategy for the internationalisation process for the specified target
market
The first and foremost step is to select the target customers. The company must know
about the customers who they want to serve in order to operate smoothly. The use STP model
will help the business organisation to target the right set of customers.
Segmentation: It can be defined as the process of dividing the overall population in small
groups (Witt, 2019). There are certain basis of segmentation such demographic, geographic,
behavioural and psygographic segmentation. The company must select best among them so that
they are able to achieve success.
Targeting: It is the process of selecting the target group of customers. Sainsbury's will
target family of middle to high income group. It will help them to use all the promotional
activities in the regard on target customers.
Positioning: It can be defined as the process of setting the image of the products and
services of the company in the mind of customers. Sainsbury's will position themselves as a
quality product brand that is customer centric.
Relevant strategy for the internationalisation
International strategy: The business organisations that are using international strategy
are not concerned about costs nor adapting to the local cultural conditions (Cavusgil and et.al.,
2020). They sell their products in the international market with little or no changes in the
products.
Multi-Domestic Strategy: Under this strategy, the company does not focus on cost but
focuses on local requirements of the market. The product of the company are changed according
to preferences of the customers.
Global strategy: The strategy works to provide the products at low cost and better
efficiency. It is opposite to the multi-domestic strategy stated above.
Transnational Strategy: Under this strategy, firm is between multi-domestic strategy
and global strategy (Sharma and et.al., 2020). The company focuses on lowering the cost of
product and at the same time taking care of the needs and wants of the local customers. This

strategy will be used by Sainsbury's in order to establish their operations in Singapore. It will
help the company to satisfy the customers and enhance sales.
Entry method
Exporting:
It means the direct sale of goods or services in the another countries. This is the best way
to entering into the new market and expand the business globally. This is also cost-effective
method as the goods that will be sent to the foreign market are being produced in the home
country. So there is no need of investment in the production department in foreign market. The
main cost that incur on the exporting business is of transportation, because it is the vital part of
the exporting business as through transportation the goods can be sent only.
Licensing:
Licensing can be defined as a company authorizes another company to uses it's property.
It is a temporary license which gives access to the owner company's property which includes
copyright, trademark, patent, technology, brand name etc . The firm that give permission to
another firm to use its intangible assets is the licensor and the firm to whom the license is issued
is the licensee (Szkudlarek and et.al., 2020). Licensing does not need any huge investment but it
can provide a huge return on investment. There is a risk component too as if the licensee fails to
operate the business successfully then it directly affects the business of the licensor.
Franchising:
Franchising is a form of marketing and distribution in which the owner of a business (the
franchisor) grants the right to an individual or group of individuals (the franchisee) to run the
business, selling a product or providing a service by using the franchisor's business model. It also
allows the franchisee to use the franchisor's branding, trademark, and all the identified marks
which the franchisor is using. Usually, the rules to carry out the operations of the franchisee
business are very strict as there are specific guidelines that should be followed in the business.
Franchising business can give much advantages to the business as there is no need of brand
recognition because they are already well-known business with huge customer base. There is a
very less chance of failure as there is assurance of brand image that the franchise has made
before.
Joint Venture:

A joint venture is a business which is created by two or more parties. This type of
business is mainly start to access a new market and to gain scale in the business by combining
the assets. In this type of business both the parties shared equal ownership, returns and risks.
There are several benefits to this type of venture as it allows the business to get the local
knowledge of a foreign market. But sometimes this type of business faces issue of distribution of
profits which causes internal conflicts within the business.
Foreign direct investment:
A foreign direct investment is purchase of an interest in a company by an investor or a
company located outside of it's country. This investment means to acquire a stake in a foreign
business. This type of investment requires a lot of capital to cover the costs such as premises,
technology, staff (Srivastava, Singh and Dhir, 2020). FDI can be done either by a establishing a
new venture or by acquiring a share in the company. Sainsbury's will use this strategy to enter
the foreign market. It will help them to operate independently and effectively.
Other areas
Marketing: It is the process of persuading the buyers in order to enhance the sales of the
company. It is necessary for Sainsbury's to use right marketing strategies so that they are able to
capture the market of Singapore. They will use digital marketing to reach more and more
customers. At the same time, the use of buy one get one free will also attract the customers and
help to engage them towards the business organisation effectively (Nambisan, Zahra and Luo,
2019). The cost of the product will also be low in the starting so that they are able to reach more
and more customers.
Managing operations: There is key role of operations in success of the enterprise. There
is need of managing the process by using latest tools and techniques so that production of
company is enhanced. Sainbury's will used latest technology and effective employee handling
techniques so that they are able to manage the operations cross border. They will use the
principles of total quality management in order to provide best quality to the customers.
Human resource management: The company will hire skilled and talented employees
who can carry on the work properly. By providing proper training to the employees the company
is able to enhance their skills. The employees are known as human resource of the company and
are considered as asset for the business (Buckley, Enderwick and Cross, eds., 2018). By taking
care of the employees, a company is able to carry on their operations effectively. Sainsbury will

also provide reward and recognition to the employees as it helps them to operate effectively. This
will help to enhance the overall performance of the business entity.
Recommendations
 The company must understand the culture of the place at the time of expanding the
business. It help them to alter the products and services according to the needs of
customers.
 There is need to choose best entry strategy at the time of entering foreign market in order
to capture the foreign market.

CONCLUSION
From the above report, it is concluded that international business is trade across the
borders. There is need of carrying proper research so that right expansion strategy can be adopted
by the company. There is discussion related to the market in which the business organisation will
enhance the operations and the reason for choosing the same is mentioned. The evaluation of the
external environment of the country is done with help of PESTLE analysis. It is important to
check the best market entry strategies for success of the enterprise. There is evaluation related to
marketing, HR and operating strategy of the business organisation in the end of this report.

REFERENCES:
Books and Journals
Buckley, P. and Casson, M., 2019. Decision-making in international business. Journal of
International Business Studies, 50(8), pp.1424-1439.
Buckley, P. J., Enderwick, P. and Cross, A.R. eds., 2018. International business. Oxford
University Press.
Cavusgil and et.al., 2020. Risk in international business and its mitigation. Journal of World
Business, 55(2), p.101078.
Christofi and et.al., 2021. Agility and flexibility in international business research: A
comprehensive review and future research directions. Journal of World Business, 56(3),
p.101194.
Kahiya, E. T., 2020. Context in international business: Entrepreneurial internationalization from
a distant small open economy. International Business Review, 29(1), p.101621.
Lundan, S. M., 2018. From the editor: Engaging international business scholars with public
policy issues. Journal of International Business Policy, 1(1), pp.1-11.
Muhammad, U., Khurram, S. and Muhammad, S., 2018. International Business. PSU Research
Review.
Nambisan, S., Zahra, S. A. and Luo, Y., 2019. Global platforms and ecosystems: Implications for
international business theories. Journal of International Business Studies, 50(9),
pp.1464-1486.
Sharma and et.al., 2020. Managing uncertainty during a global pandemic: An international
business perspective. Journal of business research, 116, pp.188-192.
Srivastava, S., Singh, S. and Dhir, S., 2020. Culture and International business research: A
review and research agenda. International Business Review, 29(4), p.101709.
Szkudlarek and et.al., 2020. Communication and culture in international business–Moving the
field forward. Journal of World Business, 55(6), p.101126.
Tien, N.H., Phu, P.P. and Chi, D.T.P., 2019. The role of international marketing in international
business strategy. International Journal of Research in Marketing Management and
Sales, 1(2), pp.134-138.
Verbeke, A. and Yuan, W., 2021. A few implications of the COVID-19 pandemic for
international business strategy research. Journal of Management Studies, 58(2), pp.597-
601.
Verbeke, A., Coeurderoy, R. and Matt, T., 2018. The future of international business research on
corporate globalization that never was…. Journal of International Business Studies,
49(9), pp.1101-1112.
Witt, M. A., 2019. De-globalization: Theories, predictions, and opportunities for international
business research. Journal of International Business Studies, 50(7), pp.1053-1077.