International Expansion Strategy for Sizzling Chicken Chain

This report analyzes the international expansion strategy of "Sizzling Chicken," a Canada-based fast-food chain, into Australia, India, and Pakistan. It examines the socio-economic and political environments of each country, including economic stability, cultural nuances, and legal frameworks. The report assesses potential profitability based on existing fast-food industry trends and competitive pressures from established brands like KFC and McDonald's. It also considers relevant factors such as consumer preferences and market dynamics. The analysis ranks the countries based on ease of doing business and constructs a general strategy for successful expansion, including optimal organizational structure and business functions. Ultimately, the report provides a comprehensive overview to guide Sizzling Chicken's international market entry, considering the unique challenges and opportunities in each target country.

Running head: INTERNATIONAL TRADE
International trade
Name of the student
Name of the university
Author Note

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Table of Contents
Introduction:..................................................................................................................2
Environmental factors:..................................................................................................2
Relevant factors:...........................................................................................................7
General Strategy:........................................................................................................10
Conclusion:.................................................................................................................13
References:................................................................................................................14
Appendix:....................................................................................................................17

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Introduction:
“Sizzling Chicken” is a Canada based business chain, containing 14 fast food
restaurants all over the country. The primary product of this restaurant is charcoal
grilled chicken though it also serves other fast food items to their Canadian
customers (refer to appendix, figure 1). This fast food chain, possessing its own
brand value in Canada, intends to expand their business internationally, in the next 5
years (refer to appendix, figure 2). Hence, the “Sizzling Chicken” has selected three
countries, which are, Australia, India and Pakistan. However, before taking any
expansionary strategies, the concerned company needs to analyze some
environmental factors, for instance, socio-economical and political factors, which in
turn can help this concerned company to sustain and to earn profits in international
markets (Rosado-Serrano, Dikova, and Paul). The concerned company has intended
to expand its brand value by offering fresh and juicy chicken items, especially
charcoal grill chicken through fast service. Moreover, the company has focused
chiefly on money value and based on this, has constructed their cost structure.
Hence, in this report, the “Sizzling Chicken” has intended to analyze those socio-
economic and political conditions of these three countries. After this analysis, based
on some other relevant factors like potential profitability and competitive nature, the
report has tried to compare those countries to rank them according to ease of doing
business (Aydin and Parker). Moreover, the company, through this report, has
constructed a general strategy that can further help this concerned company to
expand its business. In addition to this, the report is going to provide an optimal
organizational structure along with some affective business functions to its
expansionary business strategy. At the end, a suitable conclusion is provided to
cover the entire discussion.
Environmental factors:
Economic environment:
Australia:
Australia, with the help of its mixed economic market structure, has become a
wealthy nation while its national income has increased significantly from various

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sectors, for instances, telecommunication, manufacturing and banking sectors while
the mining sector has contributed large amount to the country’s national income.
Australia has possessed higher level of gross domestic product (GDP) per capita
along with lower poverty rate compare to other countries. In 2013, based on average
wealth, Australia has ranked second worldwide after Switzerland (Bettini and Head).
By analyzing the trend of Australia’s GDP it can be stated the country h has
experienced a stable economic condition and after 2015, this condition has
increased (refer to Appendix, figure 3). On the other side, the Australia’s inflation rate
has decreased since 2008 and after 2015, it has remained at a stable position, which
in turn can represent a positive economic condition (refer to Appendix figure 4).
Hence, from these two macroeconomic factors, it can be stated that the country has
positive business environment.
India:
India, with its emerging economy, has possessed a significant position in the
international market. The country has operated its business activities under mixed
economic structure, which in turn can help it to earn higher level of national income.
After analyzing India’s GDP trend, it can be said that the specified country has
earned a higher and stable national income, which in turn has helped the country to
obtain sixth largest economy all over the world (refer to Appendix, figure 5) (Gaur
and Jasmin). The inflation rate of India has decreasing significantly since 2010,
which has influenced the economic condition of this country positively (refer to
Appendix, figure 6).
Hence, India also has offered positive business environment for any business
organizations.
Pakistan:
In 2013, Pakistan has experienced some instable situations, for instances,
unbalanced economic conditions regarding electrical energy generation and rail
transportation (Razzaq et al). However, irrespective of those consequences, the
country’s national income has sharply increased, which in turn has helped Pakistan
to develop further (refer to Appendix, figure 7). On the other side, the inflation rate of
Pakistan has decreased remarkably (refer to Appendix, figure 8).

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This can affect economic condition of Pakistan positively and also can influence
business sectors of this country positively.
Cultural environment:
Australia:
Australia has been influenced strongly by the popular culture of America,
especially in the context of cinema and television. Asian countries have also
influenced Australian culture significantly. Hence, cuisine of this country has
influenced greatly by both western and eastern countries. Most of the Australian
people like to consume fast foods in their fast life (Bettini and Head). Hence,
Australia has huge demand on those foods while they mostly prefer chicken items
(refer to Appendix, figure 9). However, at present, the trend of consuming fast food is
decreasing, as people are becoming more health conscious.
India:
India has the most diversified culture, with huge number of population. In
different states, people prefer different food habits, which are mostly influenced by
geographical differences. Those traditional and regional foods are chiefly based on
rice, pearl millet and wheat flour and so on. Indian people mainly prefer spicy foods
and export spices to other developed countries as well.
Pakistan:
The culture of Pakistan consists of various ethnic groups, for instance, the
Pothwaris, Sindhis, Kashmiris and Baloch and so on. Moreover, its neighbor
countries have also greatly influenced Pakistani cultures in the form of literature,
music and cuisine. There culinary art are chiefly influenced by cuisines of India,
Afghanistan and some countries of Middle East (Razzaq et al). In different parts of
the country, people prefer different types of foods, for instance, in Punjab and Sindh,
people mostly like spicy foods while in Baluchistan boiled and steamed one are
preferred. Amalgamation of international recipes can be found in urban areas though
they prefer to add their own specific local ingredients within those recipes.

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Legal and political environment:
Australia:
Australian government has implemented some laws, for instance, legislations
based on gender and disability discrimination and wage increment, which have
influenced the country’s business sectors by affecting the cost structure and market
demand of any product (Bettini and Head). The legal system of Australia has chiefly
depended upon some fundamental rules related to justice, law and independence of
judiciary. According to the federal system of government, the country has divided its
power between the state and the federal government. With affective law and judicial
enforcement system, Australia has become one of the significant markets for various
multi-national companies, worldwide.
Political environment of Australia is almost stable along with its open and
progressive nature, which can further attract foreign investors to invest in this
country. The government of this democratic country has greatly influenced the
economic activities related to international trade by implementing tariffs to protect its
domestic industries. However, in some specific cities like New South Wales and
Sydney of Australia, the government has implemented favorable tax structure that
can help any business organization, positively. According to the political stability
index, based on the World Bank data, Australia has ranked 32
(TheGlobalEconomy.com). Based on those data, it can be summarized that the
political condition of this country has remained almost stable since 2011 (refer to
Appendix figure 10).
India:
India has some rules and regulations that need to be followed by any
business organization. For different business activities, the government has
implemented different lows, for instance, before staring any business related to
foods, the concerned company needs to follow some food and safety laws to assure
about its product qualities (Gaur and Jasmin). Moreover, to protect the self-interest
of domestic industries, the government of India has imposed various legal
restrictions on multinational companies to control their business activities.

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This democratic country of Asia has affected significantly by several political
factors, for instance, different and opposite ideologies of each political parties, self-
interests of politicians and changing governmental policies based on ruling parties.
Those factors have significant influence on the country’s business sectors. Instead of
facing some political instability due to internal and external factors, like conflict with
opponent parties as well as with neighbor countries, India has tried to maintain a
good position in international market trough trade. According to the World Bank
report, India’s rank regarding the political stability index is 166
(TheGlobalEconomy.com). From this, it can be said informed the country has faced
political instability since 1996 though after 2015, this condition has improved
moderately (refer to Appendix, figure 11).
Pakistan:
Pakistan has experienced weak legal position and to prevent this, the
government of this country needs to implement new rules and regulations (Razzaq et
al). Moreover, corruptions can be seen in some big cities, which in turn can
adversely affect the business environment of this country.
This democratic country, along with weak legal systems, has also
experienced instable political environment, which in turn has negatively affected the
business sectors of this country. Consequently, Pakistan has ranked 191 based on
the political stability index of the World Bank (TheGlobalEconomy.com). This implies
that the legal and political environment has negative impacts on the business sectors
of this concerned countries (refer to Appendix figure 12).
Hence, from above discussion it can be stated that each country has its own
economical, cultural and political conditions for which the owners of Sizzling Chicken
need to take different expansionary strategies. Being a developed country, the
economical condition of both Australia and Canada is almost same, for instance, per
capita income of these two countries have remained at $ 45970 and $ 43420 in 2016
based on purchasing power parity (PPP). Hence, Australia has possessed a better
position compare to Canada, which in turn has helped the concerned company to
apply similar business strategy by keeping similar price level and cost structure. On
the other side, India and Pakistan are referred as developing countries where
purchasing power of an individual is very low compare to Canada. In 2016, per

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capita income of India has remained at $ 6490 while for Pakistan it has $ 5580 PPP
(data.worldbank.org). Thus, the company needs to change its price level and cost
structure by applying different expansionary strategy. Thus, Sizzling Chicken has
advantages to expand its business in Australia while for India and Pakistan it can
face some challenges.
Relevant factors:
Potential Profitability
Potential profitability can be described efficiently by analyzing the revenue
pattern of other fast food companies like KFC and McDonalds. In Australia,
consumers are becoming more health conscious for which those fast food
companies are introducing new food items with lower fat, sugar along with less
carbohydrate (Aydin and Parker). This changing pattern of consumers has
influenced other fast food industries to operate their business within this country. In
India, this fast food industry has also expanded rapidly as people prefer to consumer
those items more in their daily life. At the third and fourth quarter of the 2016
financial year, the sales trend of KFC India has increased significantly and has
remained at a higher position (refer to Appendix figure 13) (Online.kfc.co.in).
However, Pakistan is experiencing the fastest growing fast food industry market,
worldwide (refer Appendix, figure 14). Hence, many fast food companies like Pizza
Hut has intended to increase the number of their stores within this country,
significantly.
Hence, based on that profitability pattern of other related companies, it can be
said that every country has positive business environments to start a fast food
industry though for Pakistan, this possibility is comparatively high.
Competitive Pressure:
In Australia, some fast food companies have operated their business
successfully. Those companies are Oporto, Zambrero, Pizza Hut, Red Rooster,
Domino’s and KFC and so on (refer to Appendix figure 15). India also has some fast
food franchises that have grown their business significantly, for instance, KFC,
Domino’s Starbucks, Burger King and so on (refer to Appendix figure 16). Some

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well-known fastfood chains in Pakistan are KFC, Pizza Hut, McDonald’s, Hardee’s
and Fri-Chicks so on (Christian and Gereffi). Hence, it can easily be observed that
KFC, McDonland’s and other well-known and old companies have already increased
their customer base in those countries.
Hence, in each country, Sizzling Chicken is going face competitive pressure and this
can be a disadvantage for this company.
Pressure for local customization:
The food habits among Australia, India and Pakistan differ with each other,
based on geographical position along with climate and religion. Moreover, due to
variation in standard of living and purchasing power parity, people of different
countries have their own preferences. Based on those factors, the KFC of has
offered different items of foods (Kfc.com.au). For instance, in Australia the company
has officered the Parmy while in India, they offer foods along with rice for making a
perfect meal for Indian citizens. In Pakistan, the company has offered family size
combo pack and provide new items during their festivals (refer to Appendix figure
17,18 and 19).
Hence, the company has pressure for making local customization of foods,
which can help the company to expand its business by understanding the food habits
of their customers.
Costs reduction opportunities:
Internet is widely used in each country from where people gather their
required information. Moreover, newspapers and television have important role as
well. Hence, to expand business, the company can use those media for advertising
their products, which my decrease their promotional costs and can help to earn
popularity within short period o times (Nordin et al.). Moreover, by recruiting local
people, the company can reduce their cost structure in India and Pakistan, as the
value of their currencies is very low compare to the dollar. The company also can
use local ingredients like spices and chicken at comparatively cheaper prices.
Hence, in each country, the company has advantages to reduce the cost
pattern.

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Risks:
Risks can be occurred from various external and internal factors, for
instances, socio-economic and political factors, natural factors or tastes and
preferences customers. Unstable political condition of both India and Pakistan can
generate risks for any business organization. Moreover, the GDP growth trend of
both Australia and India has decreased since 2012, while inflation rate of these two
countries has increased since 2015 (data.worldbank.org). These two
macroeconomical factors can adversely affect the company to earn revenue. On the
other side, present economical condition of Pakistan has generated a positive
business environment for a company. Hence, each country has possessed some
risks that the company can overcome by applying appropriate business strategies.
However, by considering all environmental factors, it can be stated that the
company can face risks mostly in Pakistan compare to India and less risks in
Australia.
Country rank:
After analyzing those environmental and relative factors of each country, the
trend regarding the ease of doing business can also be discussed. With the help of
this trend, the company can rank these three countries from most attractive to least
one (TheGlobalEconomy.com). According to this index, Australia has ranked 14,
while for India and Pakistan these ranks are 100 and 147, respectively. Moreover,
the company can easily apply expansion strategy to Australia, as the environmental
conditions of both countries are almost similar. On the other hand, for India and
Pakistan, the company needs to apply different strategy based on price, product and
cost as the economical condition of these two countries are weak compare to that of
Canada. Thus, most attractive country is Australia then India and at the end,
Pakistan.

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General Strategy:
Timeline for Australia:
Category 1st year 2nd year 3rd year 4th year 5th year
Initial
Preparation
including
market
analysis

Outline
business
plan
including
expansion
strategy
 
Sales and
Profit
objectives  
Pricing
strategy  
Sales plan
  
Timeline for India:
Category 1st year 2nd year 3rd year 4th year 5th year
Initial
Preparation
including
market
analysis

Outline
business
plan
including
expansion
strategy
 
Sales and
Profit
objectives   

11INTERNATIONAL TRADE
Pricing
strategy  
Sales plan
   
Timeline for Pakistan:
Category 1st year 2nd year 3rd year 4th year 5th year
Initial
Preparation
including
market
analysis
 
Outline
business
plan
including
expansion
strategy
  
Sales and
Profit
objectives  
Pricing
strategy   
Sales plan
   
India:
In India, Sizzling Chicken does not need to change any food items from their
menu. Indian people prefer both vegetable items as well as non-vegetable ones.
However, the company needs to reduce its price strategy, as purchasing power
parity of a person is low compare to Canada. Hence, to earn revenue, the company
needs to reduce their price level so that most of the Indian can afford. Distribution
and branding are two important strategies that Sizzling Chicken needs to follow
carefully as the country has all other fast food companies. Hence, to compete under