Globalization at present is defined as the process through which businesses are observed to operate its business at a global level (Mosedale, 2014). In addition, the globalization process is mostly used for business expansion. This report mainly focuses on the business expansion strategy and dynamics of a cloth and apparel manufacturing organization, namely XYZ Company. Through this study, three countries will be chosen for the business expansion as well as select one of the three countries. The study also focuses on differentiating the business environment based on the four basic factors such as barriers, laws, and e-commerce, and product liability. In addition, the study also focuses on highlighting the globalization strategy along with global competitive dynamics as well as the process recommended for the purpose of entering the preferred market.
For this report, the UK, India, and China have been taken into considerations for business expansion of XYZ Company. This is owing to the reason that these countries have large market size. At the same time, people of these countries prefer to use fashionable along with unique products at affordable price. The analysis of these countries has been explained underneath.
Expenses can be observed to be a major barrier in this market, as the cost of the property is significantly high. At the same time, market competition is also a strong barrier in the above-mentioned three countries, wherein XYZ Company may face issue to decide the product price (International Trade Administration, 2018a). On the other hand, India has the potential market for business but the infrastructure and foreign tariff are high. At the same time, product demand of this country can be measured is varies in each state (International Trade Administration, 2018b). With respect to China, the economic growth has observed to be low. Simultaneously, business regulation in China has been unfavorable in the last few years (International Trade Administration, 2018c). These aforementioned factors can be considered to be the major entry barriers in selected countries for the business of XYZ Company.
International Laws. With the intention of developing a business in the UK, the higher associates of XYZ Company must focus on certain laws such as Sale of Goods Act (SoGA) 1979, Supply of Goods and Services Act (SGSA) 1982, and Consumer Protection (Distance Selling) Regulations 2000 among others. Only proper maintaining of these laws, XYZ Company can conduct business in the UK (Kelly, Holmes, & Hayward, 2005). In the context of India, initially XYZ Company must follow up Indian Contract Act, 1872 to establish contract within the suppliers. At the same time, Mercantile Law is another law, which has been implemented in each business sectors. Besides, the company will maintain Indian Contract Act 1872, the Negotiable Instruments Act, the Sale of Goods Act 1930, and Indian Partnership Act 1932 and Companies Act 1956 to conduct business in India (Department of Higher Education, 2015). For expanding its business in China, XYZ Company must follow Company Law of the People’s Republic of China, 2014 (HFG, 2014).
E-commerce. With respect to e-commerce in the UK, it has been observed that many people of the country have been using the internet in their daily life. Hence, the scope of business expansion is likely to happen. At the same time, e-commerce growth is also observed to be high in India. In the case of China, the growth rate of e-commerce is low, XYZ must focus on these factors to expand their business (Dobreva, 2018).
Product Liability. Any organization in the UK has product liability under the Consumer Protection Act 1987. Any type of negligence regarding product manufacturing as well as breach of contract has treated to be offense. The consumer can claim his or her rights under the Consumer Rights Act 2015 (Freeman, Dobson, & Roberts 2018). On the other hand, similar aspects are being followed in India under the Consumer Protection Act, 1986 and The Sales of Goods Act, 1930 (Seth, n.d.). In the context of China, every organization must maintain product quality law, while manufacturing and selling product within the market. However, the country has not maintained any specific product liability law (Global Legal Group, 2018).
Based on the above discussions, it has been identified that varied countries have different types of business prospect and constraints. After analyzing the various factors, the UK has been taken into consideration for the business expansion of the XYZ Company. India and China have not been selected for the business, as both, the countries have major drawbacks. Contextually, in India, the entire country was divided into several parts, wherein demand and cloth preference are completely different (International Trade Administration, 2018b). Hence, XYZ Company will face failure to provide appropriate product to the customers. On the other hand, economic growth and governmental support in China are observed to be weak and non-preferable. In the context of the UK, economic condition, government support, market diversity volume, and consumer trend has been observed to be reasonable for XYZ Company to expand its business.
According to the Zou and Cavusgil (2014), it can be stated that XYZ must focus on three major factors prior to creating a global strategy. These are internal organizational aspects, external organizational aspects, and global strategy. With respect to the internal aspects, the higher associates of XYZ Company must analyze market orientation, organizational culture, capability, and experience in the global market. Based on this, XYZ Company will examine the potential external factors such as international market, cost, competition, technology, and business environment of the UK. After analyzing these factors, the company will develop a strategy. Initially, the company will investigate the ways to penetrate the market. After that, they will develop the product as per the demand of the customers. At the same time, the company will take an integrated decision against the competitor’s behavior. The company can consider merger and acquisition among others to enter the market. However, the success of these strategies depends completely on XYZ’s financial and strategic performance in the global market.
Organizational performance is one of the major factors, which has been examined through the process of competitive dynamics. With respect to XYZ Company, four factors have been observed, which can help in analyzing global competitive dynamics. These include actor, reactor, action, and response, which can further assist in enhancing the organizational performance. In here, the actor is the company itself, which will provide the product in the market. The action is the promotional and distributing strategy through which the products will reach the customers. The response is consumer satisfaction and the reactor is the development of the brand image. By following this process, the company will be able to develop market performance in a sufficient manner (Albers & Heuermann, 2014).
Based on the above aspects of globalization, it can be recommended that XYZ Company must focus on their financial as well as workforce capability prior to business expansion. With the intention to penetrate the UK market, the company must conduct market research in their initial stage. It will help them to identify the market demand and trends. The next step is of entering into the UK market through an alliance with biggest sellers within the market such as Tesco Plc, Sainsbury, and others to sell the products within the market. Additionally, XYZ Company must provide attractive offers and arrange promotional activities such as free sampling to develop a proper customer relationship. By following this strategy, they will able to penetrate the market of the UK, which will lead the organization towards market success.
Conclusion
After analyzing each various aspects of globalization, it can be inferred that XYZ Company can expand its business in the UK market. Appropriate business environment and market flexibility can be considered as the major reasons behind selecting the markets of the UK. The company will use proper business stagey and dynamics to penetrate the market. Only proper alliance and promotional activity can assist the organization to attract customers in the UK market.
References
Albers, S. & Heuermann, C. (2014). Competitive dynamics across industries: An analysis of inter-industry competition in German passenger transportation. University of Cologne, 109, 5-29.
Department of Higher Education. (2015). Business law. Retrieved December 19, 2018, from https://164.100.133.129:81/econtent/Uploads/Business_Law.pdf
Dobreva, K. (2018). Global E-commerce trends and statistics. Retrieved December 19, 2018, from https://amasty.com/blog/wp-content/uploads/2018/02/GLOBAL-E-COMMERCE-TRENDS-AND-STATISTICS.pdf
Freeman, R., Dobson, S.J., & Roberts C. (2018). Product liability and safety in the UK (England and Wales): Overview. Thomson Reuters, 1-20.
Global Legal Group. (2018). Product liability 2018, China. Retrieved December 19, 2018, from https://iclg.com/practice-areas/product-liability-laws-and-regulations/china#chaptercontent1
HFG. (2014). Company law of the People’s Republic of China (2014). Retrieved December 19, 2018, from https://www.hfgip.com/sites/default/files/law/company_law_of_the_people_s_republic_of_china_2014_english.pdf
International Trade Administration. (2018a). UK market challenges. Retrieved December 19, 2018, from https://www.export.gov/article?id=United-Kingdom-Market-Challenges
International Trade Administration. (2018b). India – market challenges. Retrieved December 19, 2018, from https://www.export.gov/article?id=India-Market-Challenges
International Trade Administration. (2018c). China-market challenges. Retrieved December 19, 2018, from https://www.export.gov/article?id=China-Market-Challenges
Kelly, D. Holmes, A., & Hayward, R. (2005). Business law. London: Routledge.
Mosedale, J. (2014). Globalization. Retrieved December 19, 2018, from https://www.researchgate.net/publication/236881170_Globalisation
Seth, K. (n.d.). Product liability in India. Retrieved December 19, 2018, from https://www.sethassociates.com/wp-content/uploads/Product-liability-in-India.sethassociates2.pdf
Zou, S. & Cavusgil, S. T. (2014). Global strategy: A review and an integrated conceptual framework. European Journal of Marketing, 30(1), 52-69.
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