The Process of International Expansion

Discuss about the Analysis of the International Marketing.

The process of international expansion can be a useful choice by the modern organizations to increase their growth in the industry. The international expansion based process further increases the customer base of the company and the reach of the services and products are also increased. The strategy of international expansion of an organization also includes the most crucial choices which are based on the strategy of market entry, the focus of the company on the primary market and the determination of the target customers (Aversa and Haefliger 2016). The international expansion related strategy of an organization is mainly based on a formal plan that is developed by the organizations for the increasing the reach in other parts of the world along with the areas in which they already have their operations (Bettis et al. 2016). The companies thereby need to extend the reach of their operations to the major continents of the world. The organizations thereby need to increase their reach to the other parts of the world for the purpose of successful international expansion. The process of global expansion is not only based on the investment that is made by the companies, the maintenance of the entire business in the other countries is also important (Bromiley, Rau and McShane 2014).

The report will be based on the analysis of the external environment of an organization of the country in which it is planning to expand its operations. The company that is taken into consideration in the report is Woolworths and the country in which the expansion is being planned is the United States of America.

Woolworths is an Australian retail organization which has its operations in New Zealand and Australia. The company has acquired the position of the largest retailer of the world in the year 2008. Woolworths is the second largest company in the retail sector of Australia after Wesfarmers which is a conglomerate mainly focussed on the retail sector. Woolworths has developed its operations as the largest chain of supermarkets with the large number of stores that are operating in Australia. Woolworths is known in the market for working with the Australian farmers and growers so that the best and fresh products can be offered to the customers. The fresh fruits and vegetables are sourced by Woolworths from the local farmers. The company is thereby known in the market as the fresh food people. Woolworths has also become one of the most innovative retailers of the world. The company understands that the customers mainly want products that are of the best quality and fresh as well. Woolworths has further created its presence on the ecommerce platforms to enable the customers to order the products from the comfort of their homes.

About Woolworths and its Operations

The country that has been selected for the expansion of Woolworths is the
United States of America. The United States has been able to provide huge options for the various countries that have made their expansion plans in this country. The strong economy of the country has been the major reason behind the success of the various organizations which operate in this country. The United States has been awarded with the position of one of the richest countries in the world (Carlsson-Wall, Kraus and Lind 2015). Woolworths has its physical operations only in Australia and New Zealand. The expansion of the operations in the other countries will be helpful for increasing the growth based opportunities of the company. The reach of the organization will also increase in the process. The company will be able to create a unique position in the market. The revenues of the company will increase due to the increase of the number of customers in these areas (Chen, Delmas and Lieberman 2015). Woolworths will thereby get a chance to increase its operations and revenues with the help of global expansion in USA. The company will however face tough competition from the different companies which are already operating in the country from the last few years. The various factors that can influence the operations and expansion of Woolworths in the US retail market will be thereby be analysed further (David and David 2017).

The foreign policy that is developed by the organizations are a combination of many factors that are based on the ways by which the government decides to restrict the entry of various foreign based companies. United States is also under a democratic government and the tradition that is followed by the citizens is a major driving force. USA is the third highest populated country in the world and has held the fourth position based on the total area of the country (David, David and David 2016). The population of the country is as high as 318 million. The growth of the country had been affected by the attacks of 9/11 and the recession in the year 2009. The attacks of 9/11 had huge effects on the political environment of the country. The situation had become hugely unstable in nature and the various business organizations were also affected in the process. The policy making processes of the country are hugely affected by the various political forces. The national and the global policies are also affected by political forces of the country. The country has however faced huge criticism for the policy making process that is followed (Durand, Grant and Madsen 2017). The United States has also become a powerful nation and has the ability to influence the various policies that are formulated by different countries of the world. The country has further taken steps towards the promotion and advocacy of democracy in the whole world. The political environment of the country has proved to be quite stable in nature. The country has been able to position itself in an effective manner for the foreign direct investment. USA has thereby become the first choice for the expansion related plans of many multinational organizations in the world (Engert, Rauter and Baumgartner 2016).

The United States as a Target Market

Analysis – The political analysis of the United States has shown that the government of the country has interfered in the various operations if the different sectors of the country. The booming retail sector of the country has also been affected by the various policies and procedures that have been formulated by the government. The intervention of the government in the retail sector of the country will affect the operations of Woolworths to a large extent. The company will thereby have to follow the policies that are formulated by the government and the restrictions that are provided by these policies to the operations of the retail organizations in the country (Favoreu, Carassus and Maurel 2016).

USA is considered to be the largest economy in the world in terms of the GDP. The country has acquired the topmost position in the world based on the strength of its economy. The country has been home to some of the largest and most successful companies of the world like, Apple, Microsoft, Google, Coca Cola and Facebook. These companies have been able to shape the discussions based on the socio-economic conditions. The recession that had occurred in the year 2009 has however affected the company to a great extent (Frynas and Mellahi 2015). Many of the organizations were on the verge of collapsing and the economy of the country faced tough consequence based on these major factors. However, the US economy was quite fast to recover from the conditions that were being faced after the economic recession based process. The levels of unemployment started falling in the year 2015. The companies that were operating in the country were able to revive the operations and the economy was also revived in the process (Gumerov et al. 2015). The cost of labour in the country was still high as compared to the other hugely populated countries like, China, India and Mexico. The availability of the cheap labour has thereby increased the outsourcing of business activities by the various US based companies. The country has acquired the position of the largest superpower in the world based on the strength of its economy.

Analysis – The economic factors of the US have shown that the country has a strong and developed economy which has been home to various organizations. The large multinational that are operating in the country have been benefitted by the economic condition of the country. The decision of Woolworths to enter the market will thereby prove to be effective for the successful growth of the company in the strong US economy. The company will be provided huge benefits from the liberal and financially strong customers of the country (Hill, Jones and Schilling 2014). The lack of cheap labour in the country can cause issues for the proper operations of Woolworths. The company thereby has to apply the process of outsourcing to increase its profitability in the industry. The outsourcing of labour will thereby provide opportunities to Woolworths to create a profitable position in the retail industry. Woolworths will thereby be able to increase its international presence with the help of the successful operations in the country. The strong economy of the country will provide chances of improvement to Woolworths.

Political Analysis

The United States is considered to be the third highest populated country in the world with the population as high as more than 300 million. The country however does not have its name in the top 20 list of the highest number of aging population. However, the aging population in the country is quite high. This issue can cause the lack of adequate labour for the companies which operate in the country. The levels of diversity in the population of USA is also quite high. The country has a people coming from various areas in the world (Hubbard, Rice and Galvin 2014). The population of the country however has a liberal type of mind set (Kenworthy and Verbeke 2015). The mobility of socio-economic nature has increased in US in the past few years. The movement of the people belonging to different classes in the society in USA has increased in the last few years. This has further involved the increase of the mobility of people to the different classes (Longo and Rotolo 2016).

Analysis – The analysis of the social factors of the United States has shown that the social condition of the country will affect the organization in a positive manner. The citizens of the country are highly health conscious and fresh food image of Woolworths will be effective in the increase in sales of the company. The country also consists of people who belong to the lower and the upper class of the society. The wide range of products that are offered by Woolworths will thereby be accepted by the different parts of the society. This will help Woolworths to cater to the needs of various groups of people (Meyer, Neck and Meeks 2017). This will be a major opportunity for the increase of revenues of the company. The fast food culture of the country can be changed with the help of the fresh products that are offered to the customers by Woolworths. This will help the company to improve the social conditions of the country in which it has its operations (Morschett, Schramm-Klein and Zentes 2015).

The United States is considered to be a global leader in the technology industry and the Americans have a fascination for technologies and technology based products. The high-end technology based companies like, Apple, Google, Facebook have been started in the US. The country has been in the forefront for adapting to the wide range of technologies that are available in the market. The new technologies have thereby been able to change the ways by which the organizations operate (Movil? 2017). The various jobs have been transferred from USA to the various other countries and the production based facilities have also been shifted in the process. The US based companies have thereby been able to decrease the production costs. However, the native Americans are not quite happy with this arrangement. The rate of innovation in technology has been rapid in the country (Popkova et al. 2015). The people of the country have been hugely affected by the major changes in the technological environment. The country has however been facing strong competition from the emerging countries like, China, India and South Korea. The technological capabilities of these countries are also increasing with a rapid pace. This has caused huge effects in the operating processes of the business organizations (Sakas, Vlachos and Nasiopoulos 2014).

Economic Analysis

Analysis – The analysis of the technological factors of the company has depicted that Woolworths has the opportunity to use the advanced technologies that are provided by the developed environment. The environment will thereby be helpful for the company to create better operations with the help of different advanced technologies. The use of technologies can further help the company to improve its ecommerce platform that is provided to the customers. The improvement of the ecommerce platform will further help the company to gain a customer base in the young and tech savvy group (Theriou 2015). The improvement of technology will help the company to increase its reach with the help of the ecommerce platform. The tech savvy customers of the country will be benefited in an effective manner with the help of the technology that is provided by US environment. The ecommerce website of Woolworths will help the company to compete with the US technology giant Amazon which has been able to capture a major part of the US market.

The strategy that will be used by Woolworths to enter the US retail industry is the process of own stores of the company. The own store concept will be the best to enter the market as this will enable the company to maintain its style of stores and the ways of operations as well. The major reason that has been considered by Woolworths before taking the decision based on the entry in the retail market of USA is the opportunity that can be provided to the company regarding the speedy growth in this area (Trigeorgis and Reuer 2017). The company will however face major competition from the companies like Walmart, Target, Costco and many more. Woolworths thereby needs to formulate strategies that van help in creating a position in market.

The entry mode that has been chosen by Woolworths for the entry in the US retail market is licensing. The company has planned to open its stores in the prime locations of
USA with the help of licensing based process. The licensed stores of the company will operate in different areas of the country. The areas of the stores will also be chosen by analysing the effects that it can have on the local customers of these areas. The stores will be based on the format that is used by Woolworths in its home country. The company will thereby be able to increase its revenues and reach in the market with the help of various types of products that are offered to them by the company (Wheelen et al. 2017). The foreign market entry mode of the company is based on the ways by which Woolworths can create a different position in the market.

Social Analysis

Woolworths has to create an effective position in the market with the help of a proper marketing mix. The marketing mix will thereby be created in such manner which will help Woolworths to decide the type of products, the prices of the products, the place where the products will be offered and the promotional activities of the organizations as well.

Product – Woolworths is considered to be the top retailer in Australia based on the products that are company offers to the customers. The various products that will be offered by Woolworths in the United States are, fruits, vegetables, packaged meat. The other major items that will be offered to the customers in USA will thereby include, stationery items, DVDs, selling magazines. The company will provide a wide variety of products which are related to the local produce, the brands and international cuisine as well (Wudhikarn 2016). The customers are thereby not dissatisfied with the number of choices that are provided to them. The products that will be provided in the stores will be checked and tested beforehand by the quality managers of the company. The products that are offered to Woolworths thereby include a wide range of jewellery, bags, beddings and furniture. The diverse range of products offered by Woolworths will thereby help the company to cater to a wide range of customers (Zehir et al. 2016).

Place – Woolworths has tried to maintain an effective position in the market with the help of the high quality products that are offered to the customers. The stores of the company are located in strategic locations which have helped in the increase of revenues. The company has thereby planned its stores in the prime locations in the US so that the premium customers can be reached with the help of effective locations (Trigeorgis and Reuer 2017). The company has also developed a mobile app for the tech savvy customers in USA. The products will be provided to the customers with the help of the website. The various brands that will be offered by Woolworths include, Woolworths Select, Woolworths Gold, Woolworths Fresh (Wudhikarn 2016).

Price – The price of the products provided by Woolworths are higher than that of the other organizations in the industry. The premium products of the company will thereby be offered in the US as well. The strong economy of the country will be able to provide support to the high cost based products that are manufactured by Apple. Woolworths will also serve the customers whom prefer low priced products. The company has also planned to offer various reward programs and loyalty benefits to the customers. The shopping card that will be offered to the US customers will provide reward points and various other products. The company will also provide discounts on the fuel prices to the customers (Sakas, Vlachos and Nasiopoulos 2014).

Promotion – The promotional activities of the company will be based on increasing the awareness of the brand among customers. The promotional activities of the company have been innovative in nature and has been able to attract the customers from various parts of the world. The promotional methods that will be used by Woolworths in this case is mainly based on the extensive promotion of various products of the company in the market. The company has also been providing gift cards to the customers to attract them towards the products (Morschett, Schramm-Klein and Zentes 2015).

Conclusion

The report is based on the analysis of the external environment of the country in which Woolworths wishes to operate. The country that has been chosen for the expansion of Woolworths is the United States. The political, economic, social and technological environment of United States has been analysed in the report. The analysis of the different factors has depicted that the country is suitable for the successful operations of Woolworths. The company will thereby be successful in increasing the profitability with the help of its operations in the country. The strong economy of the country is the most important factor that can support the operations of Woolworths. The lack of labour can however pose issues for the expansion of the country in this area. The marketing mix of Woolworths that will be suitable for the successful operations of Woolworths in the area. The analysis has thereby depicted that in spite some issues in the country, the decision of Woolworths to expand its operations in this country will be suitable for the company. The discussion has thereby proved that Woolworths can operate in an effective manner in the US retail sector and increase its international presence in the process.

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