The main definitions in the report are:
Tassal Company is planning to expand its business to new market such as New Zealand. In order to achieve this they have to consider all the external factors which can affect the growth and development. It can be legal, political, cultural or economical. These factors have impacts on the business expansion strategy. Different methods should be adopted by them to reduce their influence on their expansion. This report is based on secondary sources of data which will help the researcher to gain insights about all the elements which play an important role in international market. Furthermore, their impact will also be studied and their strategies to cope up with it are also investigated.
International expansion is a strategy to enter new markets so as to increase the market opportunities and for diversifications of the business. It allows the business to improve their reach and increase their customer base. High demand, growth potential and availability of resources have encouraged many companies to resort to international expansion. But it is essential for the business to understand the needs and preferences of the people. They cannot use generalized strategy for all regions. They have to carry out research and make sure that they comply with the legislations of the country. Apart from this, there are many factors which affect the expansion strategy of the organization. Tassal Company has to ensure that they carry out extensive research and formulate the strategies according to it.
The literature review chapter contains important factors which affect the expansion strategy, their impacts on the business and methods adopted to avoid it.
Target market has to be chosen before taking the decision to expand the market. It is an important decision because expansion of business requires huge funds and long term commitment. According to Silberston, 2016, “There are two factors which have to be considered: potential income growth and the connectivity” (Silberston, 2016). Neighboring countries allows the company to manage operations easily. But Arjona, Faia & Ottaviano, 2017 disagree “International expansion strategy is dependent on company’s relations and adaptability as per the environment” (Arjona, Faia & Ottaviano, 2017). But they face difficulties in communication due to language barriers and cultural diversity. It can become an obstacle during dealing with supplier or customers. Furthermore, there are cultural differences and practices. As per Luo, & Tung, 2007 “Entrepreneurs should use cross cultural researches to identify the needs of the domestic people” (Luo, & Tung, 2007). Expansion of business to neighboring countries would be much more beneficial due to similar preferences and behaviors. But it will force the organization to overlook potential target market for the business. There can chances of differences in clusters such has Sweden, Denmark and Norway. International expansion may face difficulties due to change in legislations and regulations in other countries. Puffer, McCarthy, Jaeger & Dunlap, 2013 suggest that “Companies should navigate through the procedures and regulations which may require them adopt special reporting requirements” (Puffer, McCarthy, Jaeger & Dunlap, 2013). Those companies which are working in the restricted industry may face more trouble in getting licenses and approvals from the government. Moreover, the will face obstacles due to involvement of local authorities and community members. All these factors have to be taken into account by the management. Similarly, the level of competition has to be assessed and appropriate marketing entry strategies should be developed. Bello, Radulovich, Javalgi, & Taylor, 2016 believes that” High level of competition restricts the growth opportunities of a company” (Bello, Radulovich, Javalgi, & Taylor, 2016). They find it difficult to compete with the dominant local competitors. On the other hand, Gaur, Kumar & Singh, 2014 states that “Competition in international market increases the ability, efficiency and productivity of the firm” (Gaur, Kumar & Singh, 2014). They tend to perform better in limited resources and budget to survive in the market. Apart from this, many countries favor their domestic produces and local companies. It causes problems for the foreign business because they do not get enough support similar to local companies. Not only the support of the government is required but their stability is also essential. Circumstances such as wars, political unrest, terrorism etc can have huge impact on the business. Many researchers have found negative impact on business at the time of war in Libya. Similarly, political unrest in Egypt has increased the risk of businesses to lose their customers. As per Williams, Colovic & Zhu, 2016 , “International expansion strategy should focus on economic factors which can have huge impacts on the profits” (Williams, Colovic & Zhu, 2016). Economic factors include demand and supply, interest rate fluctuations, credit availability, exchange rates, economic policy of the country, GDP, per capita income etc.
There are many factors which can affect the growth and expansion of business in international market. Failure to understand and incorporates these elements can result in increased cost and lack of support from the people. For instance, McDonald was banned in Bolivia because the management failed to understand the cultural needs of the people. According to Zander, McDougall-Covin & Rose, 2015, “ Each country has their pre defined variables such as regulations, laws, culture, infrastructure and economy which has to be studied before choosing the target market” (Zander, McDougall-Covin & Rose, 2015). Management should make sure that all the variables are favorable for the company in the new market. Wu & Chen, 2014 supports the argument “Macro environment elements have impact on the business units whether it is small or big” (Wu & Chen, 2014). Legal factors make it more complex for the business to devise a strategy for their growth. They have to comply with all the policies and regulations of the authorities. Non compliances can lead to penalties or cease of operations. Apart from this, the community can also file a suit against the organization which will directly affect the long term positioning of the business. Economic position of the country has to be assessed before planning. Many companies have been facing difficulties due to lack of credit availability for them. Along with the, cultural factors have to be studied. Wu & Wu, 2014 believes that “Those markets should be selected which has similar culture with the home country” (Wu & Wu, 2014). It will reduce the cultural differences between the counties. On the contrary, ……states that “ International companies should adopt the culture and people of the country to achieve better growth and development opportunities.”
According to Zander, McDougall-Covin & Rose, 2015, “International organization can adopt corporate cross culture matrix to deal with macro level factors” (Zander, McDougall-Covin & Rose, 2015). The more a company expands its operation, the more impact they have on their business. But organization should adapt them with the changing needs o f the business. They can use information from the researches to understand the attitudes, preferences, culture and demands of the people. They have to reduce cross cultural differences by adopting all the requirements. As per Buckley & Casson, 2016, “ Cultural sensitivity increases with the increase in expansion of the business to new regions” (Buckley & Casson, 2016). Integration plays an important role in their perspective. Organizations can appoint experts and researchers who can assess different factors related to the target market. The plans and strategies have to be created according to it. Furthermore, their impacts on the business should be analyzed and measures have to be taken. It is important for international organizations to adopt a pro active approach in their expansion plan. They have to be flexible in their operations which will help them to crate their market in the industry. Tassal Company should also use integration process which includes macroeconomic factors and interlinking between cross cultural activities.
Aim:
To determine different factors that can affect the expansion of the business at international level
Objectives:
Research Methodology
Methodology is one of the important parts for conducting research in an effective and systematic manner because it comprises number of research methods for getting solutions of the research question (Mackey & Gass, 2015). For instance it focuses on the research philosophy that plays important role in making a base for completing research on international expansion of the business. Along with this, the current investigation will shed light on appropriate design which will assist in making an appropriate plan for whole study. Research methodology comprises approach for the investigation (Brinkmann, 2014). Including this, it will help in selecting most suitable method for obtaining data and completing a meaningful analysis. Overall research methodology will be a significant section for conducting research for determining different factors that can influence the international expansion project of Tassal.
General approach
Research Approach
It is one of the best tools for conducting specific or general research. There are two types of approaches inductive and deductive. Inductive focuses on the general to specific research and deductive focuses on specific to general (Blumberg, Cooper, & Schindler, 2014). For the current study author will use inductive research approach because author has framed research question rather than hypothesis. Along with this, author wants to analyse different theories for determining specific factors for international expansion of Tassal. Including this, inductive approach will help in conducing general research will resolve the issue of Tassal. Therefore, it will make general to specific report that will help in attaining all objectives in appropriate way.
Researcher needs to follow a specific way by which he/she can collect a specific data about the phenomenon and this way is called research philosophy. Therefore, a research paradigm plays important role in collecting, analysing and using data for resolving problem of the research in effective manner (Brinkmann, 2014). There are two different types of research philosophies positivism and intrepretivism. For completing the current investigation author will use positivism because it focuses on the objectivity of the subject rather that subjectivity of the data (Berry, 2014). Therefore, using the positivism research philosophy researcher can determine various factors which can affect the international expansion of Tassal. Along with this, impacts of these factors can also be determined by using this philosophy. Therefore, positivism research philosophy will be appropriate for conducting whole study.
Research Design
It is a blue print for conducting research on international expansion of the business (Mackey & Gass, 2015). Therefore, it helps in developing whole plan for completing investigation. There are three different types of research designs Descriptive, experimental and casual. For the current investigation author will use descriptive research design because it is an appropriate method for conducting subjective or qualitative research. As per the research objective study wants to determine number of factors which can affect the international expansion project of Tassal. So, it is completely subjective topic. So, using the descriptive research design author can conduct the whole investigation in easy manner. Overall, descriptive research design will play important role in developing plan for collecting and analysing data and resolving research issue in effective manner (Teece, 2014).
Technique of the research
Determining factors which can influence the international expansion of Tassal is the major objective of this project. Author can use different techniques for conducting research on this topic such as qualitative and quantitative (Daszkiewicz & Wach, 2014). The current research researcher will apply qualitative research because author wants to complete this investigation in subjective manner. This strategy will help in conducting review of literature which will provide appropriate assistance in understanding the research problem.
Data collection
Using this research method author will collect appropriate data for international expansion project of Tassal. There are two different methods for collecting data such as primary and secondary. In which primary data helps in collecting new and fresh information about the subject (Buckley & Casson, 2016). But on the other hand secondary information will play significant part in obtaining past facts about the similar projects. For conducting the whole investigation author will use secondary data collection method because it will resolve the research issue and plays important role in getting solution of every research question. For obtaining secondary data author will use review of literature. Regarding this author will collect information from books, journals, research papers, library, annual report and websites of the company. Therefore secondary data will help in resolving research problem in effective manner.
Data analysis
As per the above discussion author will use qualitative research technique so, for analysing the secondary data author will use thematic analysis. It is one of the important methods for analysing subjective information. It includes different themes, graphs, charts and diagrams for analysing the research problem (Zander, McDougall-Covin & Rose, 2015). Major themes will be based on international business management, factors that can affect the global expansion of Tassal. Data analysis will help in finding appropriate solution for making a meaningful conclusion for this research.
Research limitation
Accomplishment of the current research was one of the complex tasks for researcher because of the number of limitations associated with this. But author has used suitable strategies for managing these limitations (Berry, 2014). For instance lack of budget, time and data was one of the major limitations. But, author has used suitable budgeting techniques for managing budget and Gantt hart for managing time. Including this, advance search method has helped in getting lots of information about the subject.
Ethical considerations
Researcher has used secondary data collection method so; plagiarism is one of the major ethical issues which can affect the entire research in negative manner. Author has developed the entire report in own words. Along with this, author has used appropriate references and citations for resolving such kind of issues.
Results
The main aim of the research is to determine different factors that can affect the expansion of the business at international level. It can be seen from the literature review that a company cannot enter in international market without carrying out extensive research and planning. They cannot use generalized approach for the new market. It is essential of them to take into account the factors which affect their objective. The literature review provides the inputs of different authors, scholars and researcher. The information has been collected from books, peer reviewed journals, articles and online publications.
Tassal Company has been planning to enter New Zealand market due to high growth potential. But there are certain factors which will affect them:
Cultural differences: Tassal Company ahs to understand the cultural differences and expectations of people of New Zealand. They have to make sure that they fulfill their expectations and provide them with products which satisfy them. Ineffective cross cultural decisions can lead to failure of the business. For instance, McDonald was banned in Bolivia for the similar reason. They should focus on extensive research to accomplish this.
Legal compliances: Tassal Company works in a regulated industry which requires approvals and compliances with many regulations. There is difference between the rules and regulations of Australia and New Zealand. Furthermore, they have to understand the international laws. They have to comply with all the regulations and get licenses to avoid any legal complications in the business. They can employ experts who can guide them in the entire process.
Political factors: Political factors also affect the strategies of a business to expand. They have to ensure that they get support from the government. There is political stability in New Zealand which is a positive sign for Tassal Company. But they should adopt CSR and sustainability in their operations so that the government and local authorities does not intervene in their business.
Economic factors: Tassal Company will be affected by exchange rate fluctuations, interest rates, inflation and credit availability. It is essential for them to carefully plan all these things. They can enter into contracts with other parties to avoid change in exchange rates. Similarly, they should make sure how they will be dealing with other changes in economy. They have to adopt a pro active approach for this.
Demand of the people: Tassal Company has great potential to grow and develop in New Zealand. But they cannot follow the same approach which they have been following in Australia. They should understand the demands of the people about their products and services. The business strategy should be based on it. Adapt from this, they have to be flexible so that they can make timely changes as per the business environment.
Competition: The level of competition should be analyzed by the Tassal Company and market entry strategy should be chosen accordingly. They have to build their marketing plans, distribution channels etc to compete in the market.
Conclusions
It can be concluded form the research that a company should consider all the external factors which can affect the growth and development. It can be legal, political, cultural, economical, level of completion etc. It fulfills the main objective of the research which is to identify different factors which affect the business. It can be used by Tassal Company to analyze their impacts on their business and expansion strategy. The literature review ahs provided sufficient information which has allowed the researcher to accomplish the other objective which is to analyze the impact of different factors. Furthermore, Tassal Company should adopt appropriate strategies to ensure their growth and development in New Zealand.
References
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