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MGX3121 International Business Strategy

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MGX3121 International Business Strategy

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Course Code: MGX3121
University: Monash University

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Country: Australia


In the second assignment you will strategically design the implementation plan for the first assignment organisation’s international expansion. In this individual assignment, each team member needs to use unique (different) countries within the appropriate clusters. This assignment demonstrates the achievement of Learning Outcome 3 (International business strategy implementation).
An important part of demonstrating your higher-order learning is the comparison between the case and the literature. Attempt to demonstrate your critical and nuanced understanding of the similarities and differences between what has occurred in practice and the literature.


International expansion is defined as the broad expansion of the business activities carried out by a company into several other countries in the world, which in simple terms expansion of the business activities outside the country of origin of the company. International expansion of business requires suitable strategies to be incorporated for successful establishment of the business in the foreign country (Alexander, Nobbs & Varley, 2018). it does not only imply that the business is making investments in the foreign Nation but it has a concept of maintaining the  presence of the actual business activities in the countries in which the business has expanded. Taking the business to an international country and hence facing and chasing the international market is a capital intensive and risky strategy (Steenkamp, 2017). Therefore suitable strategies need to be adapted for making the business profitable and popular in the foreign Nation. The study below will discuss the international expansion of General Pants Co., an Australian company, into the foreign nations Canada and Germany. The study will highlight as to why this location is selected, the assessment of the institution, entry strategy, organisational design corporate citizenship approach model and a strategic position of the organisation. Lastly, it will provide suitable recommendations on the gas that were identified.
General Pants Co. is the name of a fashion retailer of Australia. Headquarter of General Pants Co. is situated in Sydney. the main product of the retailer are clothing, eyewear, footwear, accessories, denim, street wear, surf wear and skate clothing of several popular brand and it even manufacturers clothing of its own in-house brand. The company is known to provide top quality and trending fashion to the people based on skate, pop culture, art and music. According, to the recent records the company has over 56 stores across various locations in its origin country of Australia. The company reaching out to the people around the globe buy shipping its products with the help of online platform (e-commerce). The company plans to expand its business to an international country, which will help it to seek new market. For that reason the international markets of Canada and Germany is assessed in the section below, which will help the company decide, whether to expand in the mentioned country (General Pants Global., 2018)).
A location selection assessment
Fashion retail market of Canada:
According to the Consumer Trends Report, the retail sector of Canada is vital and plays an increasingly important role in the Marketplace of Canada. It has a huge contribution to the economy of the country. The fashion industry and the regional market of Canada provides huge number of opportunities to the companies, which plan to expand into the country. In the previous year more than 50 foreign companies entered into the retail market of Canada, which was a record breaking issue (Fashion industry statistics Canada. 2018). The retail market sales of clothing and accessories stores was estimated to be $ 26,049,959 in year of 2011, which was approximately 5.7 % of the total retail market share. The retail market of Canada is developing day by day and the GDP of the country is high and inflation rates are low, which increases the purchasing power of the customers (Affairs, 2013). The main advantages of International expansion into Canada are the affluent concentration of customers in the metropolitan areas, the Geographic proximity of the country helps to reduce the costs of transportation, most products have duty free access and many more advantages.  All these common factors make the retail market of Canada to be suitable and a preferable location for the international expansion of General Pants Co (Gain.fas.usda.gov. 2018).
Fashion retail market of Germany:
Retail market of Germany is very attractive. It has over 20% of the total purchasing stock in Europe. The total turnover of the retail market in Germany is about EUR 512 billion, which is estimated to be more than the total GDP of Sweden. Retail market of the country is ever growing although it is highly competitive in nature. The strong growth of the market is in terms of its value sales in the E-commerce market and specialised goods. The Reader industry of Germany is very important as it employs approximately 3 million people. There exists more than 366000 companies in the market (Business-sweden.se., 2018). The population of the Germany is shrinking but digital market of the country maintains a stable and a continuous growth. The market structure of Germany is oligopolistic market, which means it is dominated by large number of domestic retailers. The prices are competitive in the retail market of Germany. It offers multiple opportunities to the new entrants, who desire to gain knowledge about the market. The purchasing power of the people is very high and the country has large base of customers which is a great opportunity for the retailers to expand into Germany (Jll.de. 2018). The retailers like General Pants Co., which search for new concepts and brands have greater opportunities in the retail market of Germany. The changing behaviour of the customers also create multiple opportunities and new demands. However the trip to the new entrance is that the market is highly competitive and has a large number of domestic retailers, show the prices of the goods need to be kept low by the newcomers for gaining a dominating position in the market. Thus, one can analyse that there is more positive factors than negative in the regional market of Germany for which it would be a good choice for the company to expand into the country (Bnppre.de., 2018).
An institutional assessment 
General Pants Co., Australian Retailer Company plans to expand in the international market to seek knowledge about the customers in the foreign countries and the new demands and at the same time to increase their overall profitability and popularity in the world. It has already been mentioned in the earliest actions that for a company to expand in the foreign country, it is risky and highly capital intensive (Cuervo-Cazurra, 2016). Thus, companies which plan to expand internationally, needs a foreign policy, which will help the company to adapt to the geological risks attached to the foreign expansion. It is important for an organisation to view the foreign policy in an entirely new way so that they are able to manage it properly (S3.amazonaws.com. 2018). This requires a good foresightedness for the upcoming future events. These foreign policies will prove beneficial for the companies who wish to expand globally. General Pants Co.  Plans to expand internationally in order to become popular increase the sales and also to gain knowledge about the international market.
For this purpose, the truth of the chosen foreign Market by the company are the retail markets of Canada and Germany. The foreign policies will certainly help General Pants Co. to protect itself from the sudden changes taking place in the international market, which can cause serious problems for the business and needs to be overcome within time. The companies need foreign policies to face the issues and protect themselves from any future issues to prevent damage. It was assessed that in Canada the customers make sophisticated selections of the products available and the distributors prefer to work with the Canadian brokers, which could be an issue for the new entrants (Brydges, 2018). The companies that needs to make a foreign policy to fight that and survive in the market. On the other hand, in Germany, there are already many domestic retailers hence the company needs some strategies, so that it can give same amount of competition to the existing companies (Rahman, Wong & Yu, 2016).
An entry strategy selection 
To facilitate be successful entry into the markets of Canada and Germany, some intelligent entry strategies must be selected (Vicari, 2016). The company Global Pants Co. need to hire an international trade specialist, who will analyse the markets to find out suitable strategies that will enjoy successful establishment of the company in the foreign Nations Canada and Germany. as it was discussed in the earlier session, the customers in Canada specifically make sophisticated selections from the good available at the Canadian Stores,  the retailers and the distributors of the country are more comfortable to work with the Canadian brokers which makes it difficult for other companies to established themselves (StuDocu. 2018).  German retail market is highly competitive with the large number of domestic retailers, which also needs a specific entry strategy selection. The company, Global Pants Co., can form allies or Collaborate with a domestic retailer which will help the company to gain new customers (in the name of the domestic retailer) and successfully established itself (Ayers & Odegaard, 2017).
A design of the organisation 
Global Pants Co. in order to survive in the international market of Canada and Germany may become a multiunit Enterprise. A multi-unit enterprise is defined as an organisation that is geographically dispersed and developed from several standard units such as service centres branches Store and few others, which are combined together into large Geography grouping such as regions, division and district (Lawrence, Pietrafesa & Kaufmann, 2017). Each division has an onset of managers to take care of the respective departments. Profit and loss statement will then be based on the number of units that are operating to report to the managers. The departments responsible for meeting the target that are set by the headquarters of the organisation. The management levels irresponsible to frame several policies, make strategies, budget, marketing decisions, and developing programs and pricing, which will help the organisation to succeed in terms of its behaviour, priorities and actions. The organisation that needs to offer to the people of the foreign country (Canada and Germany) with more innovative goods and services that match their needs and are not available in the existing market (The Multiunit Enterprise., 2008).
A corporate citizenship approach model 
The corporate citizenship model if something which comprises of the social responsibilities that the businesses needs to undertake (Causes and Effects. 2003). It is also referred to as the extent to which the organisation meet the ethical, legal and economic responsibilities, which are established by the shareholders. The charitable activities that are undertaken by the organisations may not be profitable to them but it helps them to enhance their brand in front of the people (Crane & Matten, 2016). When companies take up social responsibilities, for example, doing charity, providing food or clothing to the old and poor people, child education and few others, it helps the company to gain reputation in the eyes of the people and thus become popular (Ssc.wisc.edu. 2018). This strategy of adapting social activities certainly proves to be beneficial for the company. Global Pants Co., after expanding into the markets of Canada and Germany may undertake several social responsibilities to help enhance their brand in the foreign countries, which will certainly help in their successful expansion and establishment (Heald, 2018).
A strategic position for the organisation 
The most powerful way to deal with the competition in the market is still not visible to various companies. Competition prevails in the foreign markets of Canada and Germany, where there exist many domestic retailers (Scott, 2017). In order to deal with the heavy competition in the market the company needs to adapt several strategies, they should identify, cultivate and exploit the core competencies, which will facilitate the growth of the business activities in the foreign market (Willart, 2015). Global Pants Co., need to identify the demands of the customers in the foreign country and manufactured good according to that to deal with the competition and hence increase the sales of the company (Prahalad & Hamel, 2006).
Recommendations to the audience in regards to the international implementation and learnings to others 
Although international expansion is beneficial to the companies, there lies several gaps. The strategies needs to be selected properly to cater to the demands of the foreign market. The two foreign markets chosen in this case are Canada and Germany. Both the market have different threads so Global Pants Co., needs to adapt different strategies for the international expansion. Suicide the competition in the German retail market, the company need to keep its prices reasonable and in case of Canada the company can form allies with the domestic retailers.
The study above makes it easy to understand the concept of International Expansion of Business. It focuses on the international expansion of the Australian retailer, Global Pants Co., which plans to seek knowledge about the needs of the customers in the foreign market and thus increase their sales by expanding globally. For this purpose the study assess the markets of Canada and Germany and highlights the positive and negative factors of the retail sector of both the countries, which will help the company to formulate strategies for its international expansion in both the countries. Lastly, it provides relevant recommendations for the process of implementation of the strategies.
Affairs, O. (2013). Canada’s Changing Retail Market —Consumer Trends Update – Summer 2013 – Office of Consumer Affairs. Ic.gc.ca. Retrieved 6 October 2018, from https://ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02854.html
Alexander, B., Nobbs, K., & Varley, R. (2018). The growing permanence of pop-up outlets within the international location strategies of fashion retailers. International Journal of Retail & Distribution Management, 46(5), 487-506.
Ayers, J. B., & Odegaard, M. A. (2017). Retail supply chain management. CRC Press.
Bnppre.de. (2018).  Retrieved 6 October 2018, from https://www.bnppre.de/wp/wp-content/uploads/2018/03/bnppre-retail-market-germany-property-report-2018.pdf
Business-sweden.se. (2018). Retrieved 6 October 2018, from https://www.business-sweden.se/contentassets/ce6afe38474b4121840c20b971127d48/germany-retail-opportunities.pdf
Causes and Effects. (2003). Harvard Business Review. Retrieved 6 October 2018, from https://hbr.org/2003/07/causes-and-effects
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Cuervo-Cazurra, A. (2016). Multilatinas as sources of new research insights: The learning and escape drivers of international expansion. Journal of Business Research, 69(6), 1963-1972.
Fashion industry statistics Canada. (2018). Fashionunited.ca. Retrieved 6 October 2018, from https://fashionunited.ca/fashion-industry-statistics-canada
Gain.fas.usda.gov. (2018).  Retrieved 6 October 2018, from https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Ottawa_Canada_6-26-2018.pdf
General Pants Global. (2018). General Pants. Retrieved 6 October 2018, from https://www.generalpants.com/global/
Heald, M. (2018). The social responsibilities of business: Company and community, 1900-1960. Routledge.
Jll.de. (2018).  Retrieved 6 October 2018, from https://www.jll.de/germany/en-gb/Research/Retail-Market-Overview-Germany-JLL.pdf?55de1ddc-1852-4002-bc97-f74225ead5cd
Lawrence, B., Pietrafesa, C., & Kaufmann, P. J. (2017). Exploring the growth of multi-unit franchising. In Handbook of Research on Franchising. Edward Elgar Publishing.
Prahalad, C. K., & Hamel, G. (2006). The core competence of the corporation. In Strategische unternehmungsplanung—strategische unternehmungsführung (pp. 275-292). Springer, Berlin, Heidelberg.
Rahman, O., Wong, K. K. K., & Yu, H. (2016). The effects of mall personality and fashion orientation on shopping value and mall patronage intension. Journal of Retailing and Consumer Services, 28, 155-164.
S3.amazonaws.com. (2018).  Retrieved 6 October 2018, from https://s3.amazonaws.com/academia.edu.documents/31085679/Distance_still_matters.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1538850124&Signature=kZnHhi%2FhtYajEKHS7S0G0Pv51lM%3D&response-content-disposition=inline%3B%20filename%3DDistance_still_matters.pdf
Scott, P. (2017). Geography and retailing. Routledge.
Ssc.wisc.edu. (2018) Retrieved 6 October 2018, from https://www.ssc.wisc.edu/~jpiliavi/965/Cone%202003.pdf
Steenkamp, J. B. E. (2017). Brand and Retailers under Attack from Hard Discounters. Edward-Elgar Publishing.
StuDocu. (2018). HBR 5: Why your company needs a foreign policy – EBP003A05: Introduction to International Business – StuDocu. Retrieved 6 October 2018, from https://www.studocu.com/en/document/rijksuniversiteit-groningen/introduction-to-international-business/mandatory-assignments/hbr-5-why-your-company-needs-a-foreign-policy/905405/view
The Multiunit Enterprise. (2008). Harvard Business Review. Retrieved 6 October 2018, from https://hbr.org/2008/06/the-multiunit-enterprise
Vicari, A. (2016). The international expansion of fashion retailers through franchising networks: goldenpoint case study(Bachelor’s thesis, Università Ca’Foscari Venezia).
Willart, S. P. (2015). Price competition in retailing: The importance of the price density function. Journal of Retailing and Consumer Services, 26, 125-132.

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