International expansion is a relatively complex process for a business organization. This is because of the challenges and risks that are associated with an international venture, for example, loss of the investment in the event of the failure of the business (Gutierrez, Spencer, & Zhu, 2012). In this regard, a successful venture into foreign markets requires a process of extensive research activities and careful planning by the involved company. The selection of country of destination and the method of entry should be done after a careful assessment of the prevailing environmental and economic factors (Burgenmeier & Mucchielli, 2013). If these are done correctly, a business organization will successfully expand its market share and increase its profit margins. In line with these aspects, this paper is going to provide a report on JB HI-FI entry into the Indian market. It is going to start by providing a brief description of the company and analysis of India as the choice of destination. The report will also address the recommended mode of entry, competitive strategy, and multi-national structure to be adopted by JB HI-FI in the Indian markets. The report is also going to discuss some of the factors to consider in marketing and research and development, recommendations regarding production and international HRM issues and considerations.
India is an appropriate country of destination because it is closer to Australia, and therefore, it will take an estimated 10 hours to of direct flight to transport products from the Australia to India. The demographic characteristics of India also are encouraging for this particular international venture, for example, India has a young and youthful population who are employed, are in campus and colleges and who fall between the ages of 15 and 30 years. The major means of products distribution in the country include airlines, ships, rail and road transport. Road transport includes the use of trams, trucks, and canters, and this happens to be the major means of transports used by business organizations in the country (Pylee, 2006). The major channels of distribution in India include wholesale and retail outlets such as Hypermarkets and supermarkets. The main communication networks in India include the electronic media such as radio and television, print media such as the newspapers and magazine, and the internet. These will play a vital role in the product promotion efforts for this company. According to (Mayank, Tiwari, and Choubey (2015), India’s communication network is ranked second in the globe, and among the types of physical distribution and communication networks that are available in China include road transport using trucks, trams and canters, electric train, ships, and airways. Supermarkets, hypermarkets, and retails outlets form major distribution points for snacks and cereals.
The government has prioritized the expansion of ICT, and manufacturing industries and these will help boost the business performance of JB HI-FI upon into venture into India (Datt & Ravallion, 2002). However, despite this, the government tightly control and regulate foreign businesses to ensure that they observe all the policies and regulations of FDI in the country. Besides, there is a high rate of taxes on foreign products, trade tariffs and import duties that may negatively impact the performance of this company (Allard, Martinez, & Williams, 2012).
However, there exists a huge disparity between the high and low-income earners, creating an economic imbalance. This means that the market may not be readily available despite the country’s large population (Mallet, 2016). The currency of the country is also very stable against major currencies such as the US dollars, British pounds and the Euro (Shukla, 2010). In addition to this, the Indian middle class composes the larger part of the country’s population. The middle class in the country have increasingly become wealthy over the past decades, and this presents a major business opportunity for foreign investors such as JB HI-FI (Mayank, Tiwari, & Choubey, 2015).
According to Murray, Ju, and Gao (2012), building a fully owned subsidiary in India, JB HI-FI will absorb all the revenues that are generated from its business activities in the country. This is critical because the major aim of engaging in foreign ventures is to expand the market share and increase the profit margins (Durmaz & Tasdemir, 2014). Another goal for developing a wholly owned branch is that this strategy will enable this company to sufficiently supply the steadily rise in demand for entertainment equipment and electronic appliances in India. Establishing a branch in India will enable JB HI-FI to study the market trends and developments in the country (Wuff, 2015). Therefore, JB HI-FI will manage to keep track of the records as well as the patterns regarding the supply and demand the company’s products in the Country (Westerman, 2006). This strategy will help this company to maintain a sufficient supply of entertainment products and electronics in India. The branch will play a role producing and supplying the company’s products in India. Finally, establishing a wholly owned subsidiary in India will give the company an opportunity to customize its products in accordance with the taste and preferences of the Indian consumer, and this will ensure a large volume of sales and consequently higher profit margins.
To successfully venture the Indian markets, JB HI-FI should implement the localization as their international strategy. According to Peng (2011), localization refers to the method of designing products and services according to the particular local area that is being served. In this regard, JB HI-FI should adopt the localization method and produce goods according to the specific needs of the Indian markets. The localization method is appropriate for this company because through this, JB HI-FI will be able to meet the specific needs of the Indian target market, hence, leading to satisfaction. According to Peng (2011), businesses should aim at satisfying the needs of the target market, and localization helps JB HI-FI to meet the needs of the target market.
JB HI-FI will implement both push and pull communication strategies. According to Wulf (2015), the push communication strategy refers to a technique where the company presents and feeds the customers with information over the various channels such as television and newspapers. Similarly, JB HI-FI will use the pull communication strategy to reach the target markets. in the pull communication strategy, the target market will be required to subscribe to the various communication channels of this company, for example, their social media platforms such as twitter and facebook pages.
Product: The products that JB HI-FI offers to its consumers are CDs, DVDs, Blue Rays and domestic electronic appliances.
Price: JB HI-FI will offer its products at reduced prices. As a cost leader in the market, JB HI-FI will set its prices relatively lower than those of its major competitors in the Indian markets,
Place: The products of JB HI-FI will be available at the major retail outlets in India, for example, supermarkets and hypermarkets.
Promotion: JB HI-FI will use marketing, sale promotion, and PR to promote its products. Marketing will be carried out using advertisements over the electronic, print media and social media.
Following the above recommended entry strategy, JB HI-FI is required select to choose the most appropriate strategy for entering the Indian markets. With regards to multinational strategy, JB HI-FI should adopt the Global Strategy. The global strategy will ensure that the company has a form of centralized control of all business activities from its headquarters in Australia (Karami, 2007). With regards to multi-national structure, the recommended structure for JB HI-FI is the functional structure. The functional structure refers to a system of management which is composed of several departments, for instance, human resources, finance, accounting, sales, marketing, sourcing, and manufacturing (Polesello, Amal, & Hoeltgebaum, 2013). This is the recommended strategy because it will ensure that JB HI-FI coordinates effectively all its operations in the chosen country of destination. The implementation of the functional structure will require the management of this company to remain conversant with the operations and activities international market, and particularly, those that are related to the Indian markets in order to put the right resources in the right system. Besides, the functional structure will ensure that JB HI-FI is well organized for a successful venture. The functional structure is as illustrated in figure 1 below.
A competitive strategy refers to a business activity that a business adopts in order to gain a competitive edge in the market (Peterson, Arregle, & Martin, 2012). Based on the analysis of JB HI-FI Company, the most appropriate competitive strategy that should be adopted by this company is the cost leadership competitive strategy. According to Talaja (2012), cost leadership refers to when a business firm sets to sell its products at the least prices as compared to its competitors within the involved market. In this regard, JB HI-FI should identify its major competitors in the Indian markets to determine the prices at which these companies sell their products. It is from the findings of this market research that JB HI-FI should set its prices lower than its competitors. To successful achieve this, JB HI-FI should narrow down its target market, and as mentioned initially in the sections above, JB HI-FI should appeal to Indians aged between 15 and 30 by offering CDs, DVDs, and other product in its portfolio at much-reduced prices. JB HI-FI can utilize the cost leadership as a competitive strategy by taking advantage of its access to proprietary technology and its large economies of scale as compared to companies that produce similar or substitute products in India. By adopting this competitive strategy, JB HI-FI will, however, be required to set its prices within a range that is close to the industry average. The cost leadership strategy will be boosted by the presence of wide variety of products in the company’s portfolio.
Marketing and research and development are integral elements of successful international venture because the integration of the two enables the involved business to gain insight of its target market and to reach and meet their needs accordingly. To ensure that it successfully enters the Indian markets, the following are the major factors of marketing and R&D that should JB HI-FI consider.
This refers to the chosen market segment that a company has selected to serve with its products. A target market can be segmented on the demographic characteristics such as the age, sex, education level, or economic level (Thompson, Strickland, & Gamble, 2010). It is necessary to take into consideration the demographic characteristics to design a marketing message or plan that is relevant to the chosen target market (Thompson, Strickland, & Gamble, 2010). Based on these demographic characteristics, JB HI-FI has chosen to serve both male and female consumers who are aged between 15 and 30 years in India. Therefore, to engage in a successful research and development, JB HI-FI should consider its target market in to enable the company to narrow down into a focused research with specific goals and objectives to be achieved. It is also necessary for JB HI-FI to take into consideration the characteristics of its target market in order to design and develop an effective marketing strategy.
After the identification of the target market, it is necessary that the organization that is undergoing internationalization should consider the objective of marketing or the R& D activity. Research helps the involved company to gain insight into the market trends and consumer behavior and purchasing habits (Banutu-Gomez, 2014). With regards to R&D, JB HI-FI will have to formulate a clear objective to achieve with the research and development activity. Similarly, the company will have to develop a clear objective for its marketing activity. A marketing activity can have several objectives, for example, introducing a new product into the market or increasing the sales volume of an already existing product (Banutu-Gomez, 2014). In its marketing strategy, JB HI-FI should develop a marketing strategy that introduces its products to the Indian consumers. In line with these aspects, JB HI-FI will have to develop an effective marketing strategy based on the 4Ps marketing mix to successfully venture into the Indian market.
JB HI-FI needs to consider the taste and preferences of its target consumers. According to Thompson, Strickland, and Gamble (2010), the ability to identify and meet the needs of the consumers is the backbone of a successful business. There is an incessant change in the taste and preferences of consumers across all industries, in this regard, to serve the needs of its target consumers in India, JB HI-FI needs to carry take into consideration the tastes and preferences of consumers. In this regard, the company’s research activities should be focused on gaining insight into the consumers’ tastes and preferences in order to develop products that meet these needs.
Marketing and research and development of every company that is undergoing internationalization should take into consideration the competitors in the chosen market (Thompson, Strickland, & Gamble, 2010). In this regard, JB HI-FI will have to take into consideration the competitors in designing its marketing messages and determining the marketing channels and strategies to use to market its products. This will include considering the companies that produce similar or substitute products in the Indian market. For example, while designing its advertisements and marketing messages, JB HI-FI will have to consider the products offered by its competitors and mentions the benefits and the unique prepositions in their products that are not present in the products of the competitors.
Successful marketing requires taking into consideration the socio-cultural factors within the country of destination (Lindberg, Voss, & Blackmon, 2013). In this regard, JB HI-FI will have to consider the cultural dimension of the Indian population such as language, cultural values, and practices. Understanding language is critical in designing effective and appropriate marketing messages while observing cultural values ensures that the marketing activities are culturally acceptable in the country of destination.
Production and logistics are closely linked to one another, and hence, they play a vital role in the successful business venture. Production and logistics activities should be handled carefully in order ensure continued supply of products into the market (World Integrated Trade Solution, 2017). For successful international venture into the Indian market, JB HI-FI should implement the following recommendations.
JB HI-FI should locate its wholly owned subsidiary near the source of raw materials. Locating the production firm adjacent to the source of raw materials ensures efficiency in logistics (Miltenburg, 2005). For instance, it saves time and cost required for the transportation of the raw materials to the firm. It also ensures that the materials are delivered in time, hence, avoiding delays in production and delivery of products.
To ensure the production of high-quality products at a relatively reduced cost, JB HI-FI as a company should adopt the six sigma in its production process. According to Breslin, Hamilton, and Paynter (2014), six sigma entails the use of techniques that identify and eliminate causes and defects in the production process. The implementation of this technique will help JB HI-FI Company to improve the quality of its products while at the same time reducing waste and cost associated with production in India.
Upon venturing into India, JB HI-FI will encounter several HRM issues. JB HI-FI will encounter cultural problems in its HRM practices. This is because of the difference in the culture of India and Australia, for example, power distance, individualism, and feminism (Peng, 2011). In this regard, JB HI-FI will be required to promote cultural diversity among its employees to enhance collaboration and teamwork. JB HI-FI will be required to use Geocentric Staffing Policy, which involves selecting the best individuals to the leadership positions regardless of background (Banutu-Gomez, 2014).
JB HI-FI will also be faced with the issue of training and monitoring of employees. To align its culture, activities and organizational behavior, the company will be required to take into consideration the skills and knowledge of their employees in India, and hence, engage in active training and monitoring of their employees to ensure that they are uniform to achieve the company’s goals and objectives (Peng 2011).
Another HRM that JB HI-FI will encounter in India is with regards to the policies and regulations of FDI in the country. The company will find encounter a major challenge to adhere to the Government of India’s policies on foreign traders such as trade tariffs and taxes, salaries and remuneration, and employment diversity in the country. However, the company will be required to observe and adhere to all these requirements.
Conclusion:
In summary, India is an appropriate country of destination for JB HI-FI. The government of India has an active involvement in all business activities within the country though planning, regulation, and promotion of business. In addition to this, the Indian government welcomes and encourages foreign investors and enhances bilateral trade activities with other countries. Establishing a wholly owned subsidiary is the selected mode of entry in India. This is because remaining in control of company’s business activities is very vital for successful entry into international markets. This is because having control of the operations allow the company to take part in global strategic co-ordination. In addition, business organizations that are in full control of their activities can align all their activities with its policies, hence, promoting the achievement of the established goals objectives. The recommended structure for JB HI-FI is the functional structure. JB HI-FI can utilize the cost leadership as a competitive strategy by taking advantage of its access to proprietary technology and its large economies of scale as compared to companies that produce similar or substitute products in India. It is recommended that the company should take into consideration the target market, it competitors, and the cultural differences. JB HI-FI should the production firm should be located an area that is easily accessible through either road, rail, or air transport. Accessibility promotes fast delivery of products into the markets to reach consumers. Six Sigma will also enhance the quality of its products.
References:
Banutu-Gomez, M. B. (2014). The role of culture, language, and ethics in global business. European Scientific Journal, special edition, pp. 231-242.
Breslin, E. S., Hamilton, K. M., & Paynter, J. (2014). Deployment of Lean Six Sigma in Care Coordination: An Improved Discharge Process. Professional Case Management, 19(2), 77-83.
Burgenmeier, B., & Mucchielli, J. L. (Eds.). (2013). Multinationals and Europe 1992 (RLE International Business): Strategies for the Future. Routledge.
Datt, G. & Ravallion, M. (2002). Is India’s Economic Growth Leaving the Poor Behind? Journal of Economic Perspectives, 6(3), 89-108.
Durmaz, Y. & Tasdemir, A. (2014). A Theoretical Approach to the Methods Introduction to International Markets. International Journal of Business and Social Science, 5, (6(1)), 47-53.
Gutierrez, B., Spencer. S. M. and Zhu, G. 2012, ‘Thinking globally, leading locally: Chinese, Indian, and Western leadership’, Cross Cultural Management, 19(1), pp. 67-86.
jbhifi.com.au. (2017). Jbhifi.com.au. Retrieved, from https://www.jbhifi.com.au
Karami, A. (2007). Strategy formulation in entrepreneurial firms. Aldershot, England: Ashgate.
Lindberg, P., Voss, C. A., & Blackmon, K. L. (Eds.). (2013). International manufacturing strategies: context, content and change. Springer Science & Business Media.
Mallet, V. (2016) Faster growing India confirmed as most dynamic emerging market. Financial Times Online. Retrieved from, https://www.ft.com/content/06b63142-2748- 11e6-8ba3-cdd781d02d89
Mayank, M., Tiwari, R., & Choubey, S. (2015). Population Dynamics in India. International Journal of Scientific & Engineering Research, 6(1), 2106-2133.
Miltenburg, J., 2005. Manufacturing strategy: how to formulate and implement a winning plan. New York, NY: Productivity Press.
Murray, J. Y., Ju M., & Gao, G. Y. (2012). Foreign Market Entry Timing Revisited: Trade-off Between Market Share Performance and Firm Survival, Journal of International Marketing, American Marketing Association, 20(3), 50–64.
Peng, M. W. (2011). Global Business. (2nd Ed.). Ohio, IL: South-Western College Publications.
Peterson, M. F., Arregle, J. L., & Martin, X. (2012). Multilevel models in international business research. Journal of International Business Studies, 43(5), 451-457.
Polesello, D., Amal, M. & Hoeltgebaum, M., (2013). Determinants of International Entry Mode Choice: A Case Study of a Brazilian Multinational, BASE – Revista de Administraçãoe Contabilidade da Unisinos, 10(2), 181-194.
Pylee, M. V. (2006). Constitutional Government in India. (6TH Ed.) New Delhi: S. Chand and Company, Ltd.
Shukla, R. (2010). How India earns and saves: unmasking the real India. London: Sage Publishers.
Talaja, A. (2012). Testing VRIN framework: resource value and rareness as sources of competitive advantage and above average performance. Management, vol. 17(2), 51- 64.
Thompson, A. A., Strickland, A. J. & Gamble, J. E. (2010). Crafting and Execution Strategy: The Quest for Competitive Advantage, Concepts and Cases. New York, NY: McGraw-Hill Companies, Inc.US Census Bureau. (2017). Trade in Goods with India. Retrieved from, https://www.census.gov/foreign-trade/balance/c5330.html
Westerman, W. (2006). The financial management of foreign direct investment: A case study of Dutch firms investing in Europe. International Journal of Management, 23, 851-861.
World Integrated Trade Solution. (2017). China trade statistics: Exports, Imports, Products, Tariffs, GDP and related Development Indicators. Retrieved from, https://wits.worldbank.org/CountryProfile/en/CHN
Wuff, J. N. (2015). Empirical Research in Foreign Market Entry Mode. (Unpublished PhD thesis). Aarhus University. Aarhus.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download