Introduction of the selected company
Woolworths is one of the most remarkable grocery supermarket chains holding a recognizable place in the overall market of Australia. Headquartered in Bella Vista this organization has achieved 3,655.93 corers (AUD) of revenue in last year, 2017. Woolworths has started their journey from the soil of Australia. As per current business scenario, the organization has spread out their wings in the market of New Zealand as well by occupying total 995 locations all over Australia and New Zealand (woolworths.com.au, 2018). This very specific study has provided deep insight about the business expansion plan of Woolworths. As per the decision of business experts the organization aims to give a new market entry in the zone of Europe and Asia for globalizing their brands and services. UK is selected as a market entry zone where the business experts can spread their wings to various customers. On the other hand, China has also been selected as a market entry zone of Asia Pacific.
UK is selected amongst all countries of Europe due to its business growth opportunities primarily. The overall taxation policies of European Government are transparent that enables the business experts in running the entire process of business effectively (Mainela, Puhakka & Servais, 2014). In addition, the free trade policy of Europe is flexible enough in entertaining the new market entrants for gaining their brand identity and image. In addition, in such an economically developed country like UK the business experts do not have to face challenges in drawing customers’ attention. The rate of education in this country is high (Coeurderoy & Murray, 2014). Therefore, the business experts do not have to face challenges in hiring competent and skilful employees from UK market. On the other hand, the risk factor in the supermarket industry of UK is also very high. Large number of prestigious companies TESCO and ASDA has already gain business image and reputation by providing superior quality of products and services (De Villa, Rajwani & Lawton, 2015). Therefore, Woolworths as a new market entrant would have to face immense challenges in giving a market threats to those competitors and maintain business sustainability.
China as a business field is more promising where the business experts of Woolworths would be able to draw the attention of large number of customer. Low cost product method is the primary business strategy that China believes in expanding their wings (Chetty, Hendren & Katz, 2016). Therefore, Woolworths while entering in the market of China would have to focus on low cost pricing strategy with the help of which customers belonging to moderate income status would be able to purchase the products and services of Woolworths. In addition, the population of China is high. The business experts in terms of creating their effective target market would not have to face challenges.
Macro environmental and geo-political forces enable country on how they are effective enough in running a business organization systematically (Andersson & Evers, 2015). Before, entering in a new market the organizational experts always prefer to make in-depth analysis about the political, economic, socio-cultural and environmental factors of the country. In this very specific part macro-environment and geo-political forces of both UK and China is categorically evaluated.
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Factors |
China |
UK |
|
Political |
China amongst the regions of Asian pacific is one of the most developed countries in terms of business growth. China government has provided a stable political environment with the help of which business experts can easily run their entire business smoothly (Fu et al., 2015). With the initiative of communist party China has maintained a transparency in government rules and regulations. Therefore, a new market entrant would not have to face challenges in dealing with the government in order to run business. |
The incident of Brexit has created uncertainties and political debates in the soil of UK. However, UK government has rendered immense tax reduction for gaining their lost glory in the business market. UK government has announced 17% of tax reduction in business field. This particular decision may leave a positive impact on Woolworths in expanding their business in UK market. |
|
Economic |
As per nominal GDP China is the second largest country in terms of economic growth. In addition, the ultimate cost of labour market is low (Bacache, Bourreau & Gaudin, 2014). As a result, the business experts of Woolworths would not have to face challenges in hiring talents from China. |
Brexit has brought a huge economic recession in the market of UK. Otherwise, this country is highly developed in economy. Therefore, the customers belong to high income status (Chetty, Ojala & Leppäaho, 2015). Woolworths would be easily able to drag customers’ attention. |
|
Socio-cultural |
Socio-cultural factor in the soil of China is a major issue. China as per their regional culture is possessed with specific linguistic and cultural barrier Muzychenko & Liesch, 2015). Therefore, a business venture from different country has to face challenges in getting accustomed with socio-cultural backgrounds of this country. |
UK is possessed with the people of diverse cultural backgrounds and attitudes. In order to run the business process in the market of UK, the business experts would not have to face immense challenges in interacting with the people (Naidoo & Wu, 2014). Woolworths would have to focus on increasing their product diversity so that they can attract the people of different cultural backgrounds and attitudes |
|
Technological |
China is technologically advanced country where the inhabitants can easily handle advanced technology (Cain, Moore & Haran, 2015). Therefore, the business experts have to focus on operating the business by using advanced technology. |
UK on the other hand is very much advanced in technology. Therefore, Woolworths would have to use e-commerce method in order to grab the attention of those customers (Mozaffar et al., 2-15). |
|
Environmental |
Air pollution, industrial waste, deforestation, climate change are some of the most remarkable environmental challenges due to which organizations have to face difficulties in running their business effectively. |
In order to develop European environmental standards European government has implemented numerous initiatives. With the help of environmental sustainability laws and regulations environmental barriers and pollutions are trying to be overcome. |
|
Legal |
Antidiscrimination Act implies that every individual employee from different geographical and cultural background should get equal response from the business experts (Cavusgil et al., 2014). In addition, as per gender equality act, both male and female employees should get equal priority in being associated with the business organization. |
As per employment right act Employees should be allowed to take minimum of 11 hours rest for maintaining healthy right (Li, Li & Cai, 2014). Employees from different cultural and racial background should get equal respect and dignity. |
Identification of two country’s selected market entry
Table: Macro-environmental analysis and geo-political forces of two countries
(Source: Cain, Moore & Haran, 2015)
The necessary development that China has implemented within their trade policies are as follows:
- China eases foreign direct investment restriction by making the place as free trade zone. On January of 2017 China State Council has issued a circular by emphasizing the fact that new entrants would not have to bear additional tariff (Naidoo & Wu, 2014). This opportunity is a big privilege for Woolworths as well when they have decided to enter their business the China market.
- The awareness in LGBTQ has implied that employers should give the opportunity of safe work environment where sexual minorities would get an liberal approach of showing their skills and talents.
The necessary development that UK has implemented within their trade policies are as follows:
- UK business employment law implies that employees associated with UK business organization need to get proper maternity and paternity leave holiday pay, sick pay and so on. In addition, the employees who are working more than 48 hours at a stretch are allowed to get minimum 11 hours rest.
- In previous business scenario, it is observed that UK business organizations did not follow proper rules and regulations before terminating an employee. As a result, the employability opportunity and insecurity both became high in the market of UK. However, in this kind of situation, the rate of redundancy and termination of employment was affecting UK business market (Andersson & Evers, 2015). In order to overcome this scenario, an amendment is implemented within redundancy and termination of employment policy. As a result, employees while underperforming constantly get a warning mail to rectify which is otherwise considered as notice period. After getting notice period of one month the employees get the opportunity of searching for a new option. Woolworths would have to follow these regulations after launching the business in the market of UK.
Free trade policy is possessed with a major risk factor. The competition rate of regional business in supermarket industry has become high after entering the organization like Woolworths. China regional supermarket industry would have to get constant threat after implementing free trade policy.
As per business opportunity free trade policy is possessed with high positive impact. The business growth and opportunity of a country increase highly due to the implementation of free trade policy (Coeurderoy & Murray, 2014). In addition, China would be able to render more economic growth.
Employment law as a business policy is possessed with major risk factors. Employees who are working for 48 hours at a stretch have to face challenges in providing productive work. As a result, the quality of work is highly damaged. On the other hand, employees get de-motivated in performing well towards the services after working at a stretch (Muzychenko & Liesch, 2015). Therefore, UK government should render an amendment on these laws and regulations.
These regulations and business policies have positive impact as well. Employees have opportunities in getting additional monetary benefit. As a result, both the service users and service providers can get equal opportunity to gain profits (Naidoo & Wu, 2014). However, this very specific study has focused to make detailed analysis on how redundancy and termination of employment policy warns the employees to improve the performance level of employees. As a result, both the business experts and the employees get equal benefits after the implementation of this act.
Conclusion:
The study has provided in-depth overview about the impact of effective market entry plan in the overall expansion of business. As per the decision of business experts Woolworths aims to give a new market entry in the zone of Europe and Asia for globalizing their brands and services. UK is selected amongst all countries of Europe due to its business growth opportunities primarily. The study has evaluated that China as a business field is more promising where the business experts of Woolworths would be able to draw the attention of large number of customer. Before, entering in a new market the organizational experts always prefer to make in-depth analysis about the political, economic, socio-cultural and environmental factors of the country.
As stated in this study UK does not concentrate on employee security effectively. In previous business scenario, it is observed that UK business organizations did not follow proper rules and regulations before terminating an employee. The competition rate of regional business in supermarket industry has become high after entering the organization like Woolworths. Employment law as a business policy is possessed with major risk factors. Employees may not be accustomed with delivering additional duty hour. In this kind of situation, business organizations should be flexible in allowing the employees in maintaining their duty as per flexibility. However, after making an effective comparative analysis between China and UK as a business market field it can be concluded that both the two countries have major scopes and opportunities in launching new business. In terms of labour market China is very much flexible and low cost. On the other hand, in terms of business policies and employability opportunity UK is far beneficial.
Reference List:
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Bacache, M., Bourreau, M., & Gaudin, G. (2014). Dynamic entry and investment in new infrastructures: Empirical evidence from the fixed broadband industry. Review of Industrial Organization, 44(2), 179-209.
Cain, D. M., Moore, D. A., & Haran, U. (2015). Making sense of overconfidence in market entry. Strategic Management Journal, 36(1), 1-18.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
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Mainela, T., Puhakka, V., & Servais, P. (2014). The concept of international opportunity in international entrepreneurship: a review and a research agenda. International Journal of Management Reviews, 16(1), 105-129.
Mozaffar, H., Williams, R., Cresswell, K., Morrison, Z., Bates, D. W., & Sheikh, A. (2015). The evolution of the market for commercial computerized physician order entry and computerized decision support systems for prescribing. Journal of the American Medical Informatics Association, 23(2), 349-355.
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