Implications Of Business Networks And Entrepreneurship

Woolworths Limited

The changing dynamics of the business world is being adequately manifested in the increasing focus of the various business enterprises to follow the paths of globalization and internationalization (Rask 2014). Bouncken, Muench and Kraus (2015) are of the viewpoint because of the plethora of benefits offered by the processes of globalization and internalization the contemporary organizations are no longer content being operational in one particular nation or business market. As opined by Castaño, Méndez and Galindo (2016), the effective utilization of the processes of globalization as well as internationalization offers the opportunity to have an enhanced customer base, new business markets for the sale of the surplus products or services manufactured by them, the opportunity to use the resources of the host business market and others. It is in the light of these benefits that the processes of globalization and internationalization are no longer just an option for the organizations rather it has become a necessity for the organizations.

Forsgren and Johanson (2014) hold the viewpoint that to effectively reap the rewards of the pursuit of internationalization the organizations need to take into consideration a whole gamut of factors like the threats as well as the opportunities presented by the host business market, the import and export norms followed by the host nation, the tax system of the concerned nation and others. However, it is seen that the organizations fail to take into consideration these factors and this is one of the major reasons for the failure of the majority of the international business ventures. As opined by Mangematin and Baden-Fuller (2015), the business enterprises are also required to effectively modify or transform not only the nature of the services that they offer to the customers but also the model of business followed by them so as to gain success in the host business market. This report will highlight the challenges that an organization is likely to face on the score of a host country’s trade policy and international business environment in the particular context of the proposed expansion of Woolworths Limited in the nation of South Korea.

Woolworths Group Limited, founded by “Percy Christmas, Stanley Chatterton, Cecil Scott Waine, George Creed and Ernest Williams” in 1924 is one of the largest retail organizations of Australia (Woolworthsgroup.com.au 2018). The organization, headquartered in New South Wales, is the 2^nd largest organization of Australia, next to Wesfarmers, by virtue of the net annual revenue that it generates (Forbes.com 2018). Furthermore, the organizations offer various kinds of goods or services to the customers starting from books, electronic equipments, furniture to liquor and petroleum as well. More importantly, the organization under discussion here has more than 70 shopping centers in the different cities of Australia and New Zealand (Woolworthsgroup.com.au 2018). Moreover, the organization as per a statistic of 2018 has more than 205,000 employees for providing effective services to its customers (Woolworthsgroup.com.au 2018). The organization is the 486^th largest business enterprise of the world and for the year 2017 the net revenue generated by the organization management was A$55.669 billion (Forbes.com 2018).

Choice of South Korea as the host business market

One of the major reasons for the unprecedented success that the organization under discussion here has been able to attain over is because of the high quality products or services that it offers to the customers under one roof. In addition to these, it is seen that in the recent times, in order to enhance the prospects of its business, the organization is taking the help of the “omni-channel business strategy” (Woolworthsgroup.com.au 2018). It is pertinent to note that through the effective usage of this particular business model the organization apart from following the traditional “brick and mortar” model of business is also trying to embrace the e-commerce business model within its framework (Forbes.com 2018). This can be seen as an initiative of the organization to mitigate the adverse effects of the high business competition which it is currently facing in the business market of Australia like Wesfarmers, Amazon and others (Forbes.com 2018). However, the organization is currently looking to expand the prospects of its business in the other nations by following the process of internationalization.

Republic of Korea (ROK), popularly called by the name of South Korea, is one of the most developing nations of the world because of the congenial opportunities that the business market of this nation offers to the business enterprises (Choung, Hwang and Song 2014). Lee, So and Yok-Shiu (2017) are of the viewpoint that the factor which encourages the majority of the organizations to expand into the business market of this nation is the geographical connectivity that the concerned nation shares with the other countries of Asia. In addition to this, another factor which has propelled the rise of this country as one of the most amiable business market for the various business enterprises of the world is the suitable trade, import, export, corporate law and other regulations of the nation (Appendix 1). Furthermore, in the recent times, it is seen that the nation under discussion here has achieved remarkable improvements in the fields of technology. More importantly, nation is the host to some of the largest business enterprises of the world like Samsung Electronics: Suwon, Hyundai Motor: Seoul, Hanwha Corp: Seoul, SK Holdings: Seoul and others (Eshima and Anderson 2017). These organizations have contributed in a substantial manner towards the economic growth of the nation under discussion here. More importantly, the free trade policy which the nation follows makes the business market of the nation particularly more favorable for the business operations of the different business enterprises (Chung 2014). These in short are some of the main reasons for the selection of the business market of the concerned nation for the expansion of Woolworths Limited.

Analysis of the Business Environment of South Korea

South Korea follows the Presidential form of government wherein it is seen that the President of the nation is imbued with the responsibility of effective governance of the nation (Korea.net 2018). In addition to the central government of the nation, several local or regional constituencies have been created which helps the central government to manage the different affairs of the nation in a much effective manner. Furthermore, the centralized form of government that the nation boasts of has actually enabled the national government to reduce the number of political strikes and turmoil in a substantial manner (Eder 2016). However, at the same time, it is seen that the nation shares a hostile relation with the neighboring countries like North Korea, Russia and others (Choi and Nakano 2018). More importantly, the national government of the concerned nation takes various kinds of measures as well as initiatives for the promotion or encouragement of trade and commerce within the nation. This actually acts as an opportunity for the organization Woolworths Limited since the organization can utilize the congenial political environment not only for the process of their business operations but also to gain a higher level of growth.

The economy of South Korea is not only one of the fastest growing ones of the world but at the same time one of the most thriving ones as well. As a matter of fact, the economy of the country under discussion here is the 4^th largest of Asia and 11^th largest one of the world (Korea.net 2018). The nation boasts of a mixed economy wherein equal emphasis is being placed on both the industries and also on the agricultural activities. In addition to this, the technological growth of the nation has enabled the farmers to take the help of the modern machineries for the purpose of agriculture (Korea.net 2018). More importantly, because of the mixed nature of economy of the nation under discussion the nation is not suffering from the adverse effects of the economic recession from the major developed nations of the world are still reeling from (Chung 2014). Thus, it can be said that the economic framework of the nation actually acts as an opportunity for the organization Woolworths Limited. The organization under discussion here can not only utilize this strong economy of the country for the sale of the products or the services offered by them but also attain a higher economic growth rate through the effective utilization of the same.

The nation under discussion here has a multicultural society wherein it is seen that people from different parts of the continent of Asia coexist (Lee, So and Yok-Shiu 2017). In addition to this, the culture which is being followed within the framework of the nation is a very liberal one and the people of the nation are actually very open towards the use of new products or services. More importantly, it is seen that the citizens of the nation are being influenced by the western culture and this is perhaps one of the major reasons for the popularity of the western products or services in the nation (Eshima and Anderson 2017). Moreover, the retail industry of the nation is one of the most booming ones of Asia and thus it can be said that the social condition can be utilized as an opportunity by the organization under discussion here for the sale of the products or the services offered by them.

South Korea is one of the most technologically advanced Asian nations and is reputed for the manufacture of various kinds of machineries which can be used in the industries to enhance the process of manufacturing (Choung, Hwang and Song 2014). In addition to this, it is seen that more than 89.3% of the people of the nation actively take the help of one form of technology or the other for the process of the completion of their daily activities (Korea.net 2018). In this regard, it needs to be said that this will actually act as an opportunity for the organization Woolworths Limited since the organization can utilize the superior technological resources of the nation to offer better quality products or services to the people. Furthermore, it is expected that the e-commerce services offered by the concerned organization would be appreciated by the people of the country under discussion because of their urge to use various forms of technologies for the completion of their daily activities.

The nation of South Korea has one of the most effective bodies of corporate legislations which are designed to help the organizations to conduct business operations not only in an ethical but at the same time in a legal manner (Lee, So and Yok-Shiu 2017). Some of the most important legislations that the organizations in the concerned nation are required to follow are Act on Prohibition of Improper Solicitation and the Provision/Receipt of Money and Valuables (Kim Young-Ran Law), Foreign Exchange Transactions Act and others. In addition to these, the organizations are also required to abide by the various precepts of the European civil law system (Korea.net 2018). Furthermore, the free trade policy that the nation follows along with the lenient import and export at the same time helps the organizations to conduct business in the nation in an effective manner (Choung, Hwang and Song 2014). Thus, it can be said that the legislative system of the nation actually acts as an opportunity for the organization which it can use in an effective manner to improve the prospects of its business in the concerned nation.

South Korea is one of the signatory members of the Paris Agreement of 2016 and following the precepts of the treaty the organizations of the nation are required to reduce the amount of environmental pollution caused by them by almost 2.5% (Korea.net 2018). In addition to this, there are other legislations as well that the organizations are required to follow for the process of their business operations in the nation. It is pertinent to note that the organization Woolworths Limited has been used to following these legislations in Australia as well and thus it can be said that the environmental factors are also congenial for the organization.

The nation of South Korea follows the processes of “economic liberalization and deregulation” for the import as well as the export of the products or service to and from the other nations of the world (Choi and Nakano 2018). As per the dictums of the KORUS FTA, the various good or services entering or exiting the nation are required to be checked by the authorities of the nation (Korea.net 2018). Furthermore, the entire process of import and export of goods or services is being controlled by the International Trade Administration Enforcement and Compliance authority of the nation (Choi and Nakano 2018). More importantly, the nation charges a nominal fee of 10% Value Added Tax (VAT) on all the goods or services that are exported to the other nations and 10-20% tariff fee on the goods or services which are imported into the nation (Korea.net 2018). Apart from these two tariff charges the organizations do not pay any additional tariff charges for the sale of the products or the services in the business market of the concerned nation. Thus, it can be said that the import and the export regulations of the nation are congenial ones that the organization Woolworths Limited can utilize for the export of their products or services into the nation.

Zander, McDougall-Covin and Rose (2015) are of the viewpoint that the prospects of an organization in the business market of a host nation depends to a large extent on the kind of internationalization strategy which the concerned organization follows for the process of expansion. In addition to this, the importance of the notion of internationalization gets reflected in the diverse internationalization theories which have gained prominence within the framework of the contemporary business world (Maitland and Sammartino 2015). One of the most important internationalization strategies in this regard is Uppsala Internationalization Theory. The major precept of this theory is the fact that the organizations before actually embarking on the process of internationalization needs to build trade relations with the concerned host nation through various kinds of export relations (Knight and Liesch 2016). Pukall and Calabrò (2014) hold the viewpoint this actually helps the concerned organization to test the feasibility of the business markets and also the response from the customers of the concerned business market in a much more effective manner. Furthermore, this at the same time helps the organization to reduce or mitigate the business risks which it might have faced had it expanded into the business market of the concerned nation straight away (Holmes Jr et al. 2018). The organization Woolworths Limited can take the help of this theory of internationalization for the establishment of trade relations with South Korea and after it had build a stable customer base in the nation for its products or services then it can undertake the actual process of expansion.

As opined by Dimitratos et al. (2016), the market entry strategy or mode that a particular organization uses for the process of entry into the business market of a host nation should be in synchronicity with the objectives that the concerned organization is trying to achieve in the business market of the host nation. In this regard, various kinds of market entry strategies are available to the contemporary organizations like merger and acquisition, joint venture or collaboration, sole proprietorship and others (Arregle et al. 2017). The organization Woolworths Limited for the process of their entry into the business market of South Korea can take the help of the market entry strategy of collaboration. The use of this strategy will require the concerned organization to form strategic alliance with an already established organization of South Korea (Forsgren 2016). Bouncken, Muench and Kraus (2015) are of the viewpoint that the effective utilization of this strategy offers various benefits to the organizations that are undertaking the process of expansion into the business marker of the host nation. For example, the use of this method enables the organization to not only share the risks or the losses with its collaborating organization but at the same time allows them to use the customer base, resources, product or service line of the collaborating organization (Demko 2018). Thus, it can be said that through the effective utilization of this strategy the concerned organization would be able to mitigate the business risks faced by in the business market of South Korea but at the same time would enable it to take full advantage of the business opportunities presented by the business market of South Korea.

Conclusion 

To conclude, the process of internationalization or global expansion is the most important emerging trend within the framework of the contemporary business world and the diverse organizations are increasingly resorting to the use of this method to reap the benefits offered by the same. The use of this trend offers various benefits to the organizations like the opportunity to earn extra amount of profit, a market to sale the surplus services or products manufactured by them and others. However, there are several factors that the organizations need to take into effective consideration before actually undertaking the process of international expansion. In this regard, the organizations need to analyze the threats as well as the business opportunities by the business market of the host nation, the kind of marketing strategies that they need to follow within the business market of the host nation and others. In addition to these, the organizations are also required to take into effective consideration the import as well as the export legislations of the concerned host nation. More importantly, it is seen that the internationalization strategy as well as the business market entry strategy used by the organization also determines to a great extent the business prospects of the organization in the host nation. Thus, it can be said that the success or the failure of the process of internationalization undertaken by an organization depends to a large extent on the effectiveness with which the concerned organization is being able to take into effective consideration these plethora of factors. 

I would like to say that the course work as well as this assignment has provided me with the kind of knowledge and information which is likely to help me in my future line of work as an international business practitioner. For example, I am hoping that the knowledge which I have gathered in this course related to internationalization, internationalization theories, the factors that the organizations need to take into effective consideration while expanding into the business markets of other nations and others are likely to help me in a substantial manner in my future line of work. In this regard, I would like to say that the concepts which I needed to research as well as explore for this assignment and also for the overall course are some of the most basic features of the contemporary business world. Thus, I am hoping that I would not only be able to apply the knowledge that I have gained through the course and the assignment in my future line of work but at the same time gain a substantial amount of success through the use of the same.

The assignment required me to research the kind of topics which were not at all familiar to me. For example, before the completion of this task I had very rudimentary knowledge about the business market or the business environment of South Korea however it was during the course of the task that I gained a thorough knowledge regarding the various aspects of the business environment of South Korea. In addition to this, the assignment also afforded me with the opportunity to explore the various aspects of the business of the organization Woolworths Limited. Furthermore, I was able to gain a significant amount of knowledge regarding the various market entry modes or strategies commonly used by the different organizations for the process of entry into the business markets of the other host nations and the diverse benefits that these strategies offer to the concerned organization. The assignment also familiarized me with the concept of import and export policies used by the different nations and specifically the nation of South Korea. This is something which I believe would actually help me in a positive manner during my future line of work as an international business practitioner. More importantly, I am hoping that a concrete knowledge regarding these concepts would provide me a competitive edge over the other individuals since in the contemporary employability sector it is seen that the organizations prefer the kind of candidates who already have a core idea regarding these aspects of business. Thus, the organization that would hire me would not have to provide me with extra training to brief me regarding these aspects of international business. Furthermore, having a concrete knowledge about the theoretical aspects of international business would also help me to undertake a practical application of the same in a much effective manner than the other individuals. Thus, I would conclude by saying that the assignment as well as the entire course itself has offered me the kind of knowledge which is likely to help me in my future line of work as an international business practitioner.

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