Essay on the International Business

Question: Write an essay on the international business. Answer: 1.0 Introduction 1.1 Background of the report and objective The international business includes all the activities that need to produce the products to the customers of the foreign market. It involves all the aspect, which includes the trade, import, export, license, foreign asset as well as foreign investment. It also includes the policies in the corporate finance, and the global fianc system along with the foreign exchange policies. The present assignment will focus towards the development process of a proper marketing plan of the selected organization Aesop. The objective of the study is to evaluate all the factors, which are required towards the development process of a proper expansion (Atkinson, 2014). It is one of the most significant points that there are certain organizational goals as well as organizational objectives which majority of the company irrespective of the nature of the business develops towards the development process of proper and strong business operations. The objective of the firm in the study is to expand the business operations in different cities of India. India is one of the most popular growing economies across the world and different organization based on the nature as well as the objectives of the business wants to expand the business operations in the top cities of India (Bienkowski et al., 2014). After completing different kinds of research and investigation procedures, the compa ny has decided to evaluate a part of the operational activities in India. 1.2 Report Scope The selected organization is one of the top Australia cosmetics and Beauty Company, which operates its overall business proceedings across the national boundary. The study will focus on some of the key factors, which include developing proper marketing strategies, competitive strategies, and different kinds of pricing strategies, which will allow the company to evaluate a strong position in the Indian market in order to develop a strong and a proper customer base (Cooke et al., 2014). 2.0 Brief background to company and selected International Country 2.1 Company Background Aesop is the Australian company, which produces skin care products in their hair care, soaps and fragrance segments. The Dennis Phaphitis founded in the year of 1987 in Melbourne (add company web site). The company has its wide range of products, which has the best quality. They involve wide variety of plant-based as well as laboratory-made ingredients. 2.2 International country background India exhibits a rapid growth in the segment of the cosmetic and the beauty products. The increasing purchasing power of the Indian people enables the country to demand for the large variety of consumer-based products. The increase amount of advertisements of the products in beauty and cosmetic segments enable the rapid growth of personal care in the Indian market. India expanded through the formulation of strategy, which enables the improvement of the performance and gives opportunity for the organization to grow and expand effectively. The skin care market has shown a rapid growth in the market. the present market in skin care estimate to be around Rs. 3,400 crore among which India itself estimates $950 million. The market in beauty and cosmetics segment is growing twice than the growth of the United States and European market. The Company expanded to Indian market because of its high return investment. 2.3 Economic Analysis The economic slowdown has made the world to curb their investment and the growth for almost all countries. However, the Aesop remains optimistic throughout the time. They have further maintained their constant price strategy along with providing the best quality. Figure: Restoring macroeconomic stability (Source: finmin.nic.in, 2016) The inflation rate is continuing to be as moderately progressive. The above diagram shows that the price inflation has declined from the 5.4 percent from February 2015 to 5 percent in October 2015. It also showed that WPI has shown as negative territory since November 2014. While Figure 2 it shows that rural wage growth and the minimum price increases. Figure 3 shows that gold imports stabilized at a lower rate since the period of high inflation. Figure: Restoring macroeconomic stability (Source: finmin.nic.in, 2016) The above figure shows that current account deficit is declining which is near about 1.2 percent of the GDP. Foreign exchange reserve has risen from the month of December 2015. The Figure further shows that FDI inflows have grown over the years of 2014-2015. The Figure further shows that, India has showed well positioned against the dollars in the recent years. 2.4 Political/ legal analysis India shows a change along with the nature of the market from the increase of globalization in the process of the economic. The first Phase was originated in the year of 1985, under Rajiv Gandhi who was the prime minister of India at that time. He declared the first New Economic policy emplaning the productivity and utilizing the adaptation of the modern technology. The policy of the Export-Import has initiated with the facilitation of the technological up-gradation. The second reform initiated in the year of 1991. The policy is crisis driven and the adoption would implement to the crisis itself. The main benefit is high growth. Terrorism has become one of the concerns for India mainly because of the neighboring countries. The social issues became a large concern for India. Figure: Political issue 2.5 Culture Details of the Indian cultural analysis has been done using Hosftedes cultural analysis model. The detailed of the analysis has shown in the below mentioned model. According to this analysis, it can be said that company is direct by very strong individual (Zhou et al., 20145). At the same time, Team follow instruction by team leader, no complaints. Figure: Hosftedes analys (Source: Geert-hofstede.com, 2016) 2.6 Ethics The ethics of Aesop helps to deliver the better explanation of the company. It enables to provide healthy diets, which benefit the taste and culture of the people. It enables to provide the value to the customers through the supply chain. It also won the Energy Star Partner of the year, which was awarded by the Environmental Protection Agency (Zhang et al., 2013). 3.0 Entry decisions on India 3.1 PESTLE analysis Particulars Explanation Impact Political The political factors need to consider on the legal issues and the regulations of the government of India. The company also need to include of giving high tax rate. The company need to develop strategies to avoid any political disturbance. India has offered the competitiveness and has jumped in 16 places in the World Economic Forum in the global ranking. The ranking showed that India ranked 55 among the 140 countries. Medium Economical Indian market is expecting to grow annually because of its increase in the purchasing power and the decrease of inflation level. The country also experience with higher literacy rate and awareness of fashion not only on women but on men. High Social The country increased its social awareness among the promotion of gender equality. Aesop can create an image of the brand, which would be social, modern and classy. The Global Competitiveness report 2015-2016 showed the reversal in the attribution of its growth to a large amount (Wang et al., 2015). Medium Technological Aesop can have the opportunity to produce the products in the Indian market because of the countries increased technological development. They need to develop products catering the needs of the skin problems and protecting the harm like tanning, discoloration, pimples etc. The technological up gradation is the key on Indian market. In specific, the skin care market through online easily is catching the busy employees. High Legal The trade law is reformed which helped the organisation to spread its market easily. The company need to follow the rules and the regulations of the country. They also need to inform any major investment to its stakeholders. The company need to follow rules regarding contains of minerals in the product. Medium Environmental The Company need to make effective environmental analysis other country. In India, the use of mercury in the skin care products is prohibited. Aesop needs to make products so that it does not induce mercury in products. Table: Pestle Analysis 3.1.1 Target Market India has a wide amount of population, which ranks between the second largest in the world. From the analysis, it can be said that the product needs to target the customers of mainly the metropolitan cities like Mumbai, Delhi, Bangalore and Kolkata. They need to target the age group between 18- 30. This age group can easily be targeted through the distribution and the promotional activities. Another age group that need to consider is from 31- 55 (Zhang et al., 2015). 3.2 CAGE Framework The further analyze can explain through analyze of CAGE model in the Indian market. The expansion of Aesop Cosmetics and beauty products in India has an emerging scope. 3.2.1 Cultural Distance The first, which comes for the expansion, is the countrys culture. For Aesop the most important obvious is its beauty and cosmetics segments. The culture represents the customers preference for the use of the use and it on other hand shows the expansion of the product. The Aesop will never produce beef and pork to respect the culture of India (Wang et al., 2015). 3.2.2 Administrative Distance The second parameter, which comes in this regard, is the administrative distance. It comprises of the aspects in regarding with the historical and the political internationalization. India is a country, which gives a wide scope for the expansion of the countrys location, staff and marketing strategies. Political stability is another important factor for its growth. 3.2.3 Geographic Distance Geographic considerations involve the size of the country along with the distances within the country. It also involves the transportation and communication network. In case of AESOP Cosmetics and beauty products, the product, which comes from the Australian market, will lead to have easy transportation because of the network of the transportation between the two countries. 3.2.4 Economic Distance The important consideration in the economic distance is the economic situation as well as the income of the target customers. Another important benefit is that Aesop will get an advantage over the product from the other local products because of its quality price. 3.3 Financing trade Trade Finance is one of the traditional forms of bank fianc in India. International trade is an important impact for the overall efficiencies of the production of the organization. It results in the support for the activities of the production. In India, the major way through which the country financed is the letter of the credit. 4.0 Recommendation for the entry mode and multinational structure 4.1 Evaluation of the company Aesop has the beauty and cosmetics products, which has the most possible effect for its expansion in the foreign market. Aesop aims to expand the stores throughout the world in a vision of leading the department stores in the world. It already expanded its stores all across Australia, Asia, Europe and US. It opened 50 stores throughout these countries. 4.2 Porters Generic Strategy 4.3 International strategy The company needs to think to expand its market not only locally but also internationally. They have a wide scope of market, which can get attracted from the various products of cosmetics and beauty products that they offer. Configuration is the marketing activities and the performance in the way of local and centralized way. Coordination need to involve the role of international marketing which delivers the marketing in different countries. The third role is the linkage where they need international configuration and coordination in adopting the international strategy. 4.4 Market entry strategy Marketing strategies need to make joint venture, export, acquisition, export plus sales office, Green field manufacturing plant, etc. They need to develop the joint venture with other companies. In the Indian market, they can make joint venture with Herbal product companies so they get an advantage for it. Moreover, they need to adopt strategies while exporting its product the world market. They need to evolve effective measure through imposing the sales strategy in the market. They can introduce sales office in the foreign market. The company provides the Greenfield project. They can use the unused land where they can remodel and open their stores. 5.0 Global Marketing Strategy 5.1 Marketing Strategy Aesop needs to develop the marketing adopting some important strategy for the product. The marketing strategy in the foreign market, need to visualize the market as one and build the brand according to the environment of India. Aesop needs to develop the segmentation concentrating the behavioral, psychographic and the demographic segmentation in India. The second respect is the market positioning in the global market. Aesop needs to involve in differentiation strategy with respect to the favorable image of the product against the product of the competitors. Aesop need to develop they need to adapt policies according to the policies which prevails in India. The company also needs to adopt decisions regarding the international pricing strategy. It should include the trade barriers, currencies, and longer distribution Channels. Aesop needs to adapt the advertising along with the promotional and distribution activities of the country. The marketing strategy of Aesop in the Indian market can best way to highlight through the 4Ps of marketing mix. Here we need to analyze the price, product, place and promotion of Aesop. Price- The price of the beauty products need to generate considering the foreign market. In India they need to develop the product with low price for the age group of 18-30. And as well as high price product considering more on quality and benefits for age group of 31-55. Product- The Company needs to make marketing strategy on the beauty products mainly considering herbal products. Place- Aesop needs to focus the market of metropolitan cities. They can start to give promotions in offices. They can give presentation on the products. Promotion- The Company needs to give promotions through organizing events in colleges and shopping malls. They need give the promotions through the advertising in Television and radio along with print media in major newspaper and magazines. They further need to give promotions in social networking site. Aesop needs to consider not only the opportunity but also threats related with 4Ps. The competitor is pricing strategy need to consider on that. They need to consider the products of the home brands of India, which has much lower price than others do. India is country which experience economic downfall though in recent years the conditions improved but Aesop needs to make it as its considerations. Aesop needs to analyze the opportunities like free trade, which are included in it. 5.2 Environmental Analysis The microenvironment, which consist of the internal forces in Aesop the internal forces are the customers, suppliers, competitors, media, shareholders and employees. They need to develop its strength according to the utilization of the resources of the product. The country also showed an improvement comparing with the last years rankings. If we give a close look from the year of 2007 till present it will show that India always experienced growth on every year (Zhang et al., 2015). Last year the National Democratic Alliance government showed an improvement in the business environment of the country. The Gross Capital Formation of India also includes a land improvements in terms of the plant and machinery, purchase of equipments, constructions of the roads, railways also the commercial and industrial building. The gross fixed capital formation has made a rapid growth in the first quarter of 2016. It showed 8861.45 INR Billion in 2106. It showed a considerable amount of growth from the last year (Tiedemann et al., 2015). 5.3 Outlines the product and the service including the local and international market Distribution channel acts as a backbone for the Indian market. The language for Aesop becomes more important with the difference in its custom, culture, language etc. of India and Australia. They need to build the intermediaries in the distribution channel. The Aesop need to involve with the quality distribution network. Companies need to locate the intermediaries considering the engagement of the negotiation (Roy et al., 2016). Indian market mostly consists of people with low or middle income group. Aesop needs to reduce the product price for certain segments. But if they need to cater the market of India as whole then they need to introduce products of low price categories as well as the products with high price categories (Rothaermel, 2015). India is a country, which has diverse people who believes, customs, religious different from each other. They mostly do not consume beef or pork. While introducing the product the Aesop need to make it as a consideration that the consumption of the ingredients does not consist any of such. Moreover, they need be more conscious about the packaging and the labeling of the product. Aesop needs to develop a strategy keeping in mind the culture of India (Pachori Totala, 2012). 6.0 Recommendation regarding the production and supply chain The company needs to develop a very strong strategy in the production and the supply chain of the organization. There are some issues, which are prevailing in the market of India. However, the supply chain is improving a wide way but it needs to go for a long way for it. The supply chain of India cost 13 percent of the total GDP. The demand side of the supply chain of India prevails in relation with the price and the variety (Moalla Mayrhofer, 2014). The main issues regarding the supply chain is the poor infrastructure of complex tax structure. Aesop can meet the challenges in the supply chain through adoption of strategy in the supply chain with it is as a key enabler. An effective and efficient review of the supply chain can make the design of the companies in respect to supply chain better and enables the company to do the business enabling the advantage in the marketplace. The production of the Aesop, need to develop a very effective strategy for the development of its product (Machan, 2012). Now they need to develop franchise for their production purpose. They need to look over the quality and efficiencies of the franchise. It should include the development internal audit and establishment of effective franchise. The franchise need to give targets so that they ensure the strategy for maintaining of quality. 7.0 International HRM strategies Aesop needs to develop the human resource strategy for its developed and focused to manage the people. These strategies need to involve, as the company is new so the staffs and employees need to give proper tarring for the product. They need to provide starting from the appraisals to the talent and the succession and the auditing skills (Lederer et al., 2013). The company need to indulge the development programmed of the employee along with the key principles of the appraisals. It will help to adopt the new environment and assess performance. The company needs to develop the audit skills and provide development opportunities for its staff (Jensen, 2013). The company needs to involve the relation of the staffs between countries. Now the countries will have different structure along with different customs, preference and belief. Now the company needs to respect the culture and custom of each country. The culture of India is totally different from the culture of Australia. Therefore, strategies need to involve through the training and development module of the staff (Hinterhuber Liozu, 2012). The companies need to indulge workshop on the cultural Diversity. Management structure should meet the business objectives. It should include the process of the planning, organizing, leading and the control of the efforts of the members of the organizations. 7.1 Etiquette and customs adoption by the international business manger Aesop cosmetics and beauty products need to involve the global business through the expansion. The mangers need to adopt and involve the etiquette amenders and the cross cultural as well as the intercultural communication through the active participations of the mangers and the employees (He, 2016). The mangers need to involve the importance of the cultural diversity among the employees. The mangers need to evolve the learning skills and the proper etiquette manners. It should involve the communications skills on the business etiquette that need to be understood. 7.2 International labor relation The present assignment will focus towards the development process of a proper marketing plan of the selected organization Aesop. The objective of the study is to evaluate all the factors, which are required towards the development process of a proper expansion. India is one of the most popular growing economies across the world and different organization based on the nature as well as the objectives of the business wants to expand the business operations in the top cities of India. After completing different kinds of research and investigation procedures, the company has decided to evaluate a part of the operational activities in India (Grant, 2015). The selected organization is one of the top Australia cosmetics and Beauty Company, which operates its overall business proceedings across the national boundary. The study will focus on some of the key factors, which includes developing a proper marketing strategies, competitive strategies, and different kinds of pricing strategies, which will allow the company to evaluate a strong position in the Indian market in order to develop a strong and a proper customer base. 8.0 Recommendation on the HRM approach The Aesop Company needs to involve n the human resource management for the development of the staff. For this approach, they need to initiate the ethnocentric, egocentric and the geocentric staffing (Gilmore et al., 2013). 8.1 Ethnocentric Aesop can adopt the Ethnocentric staffing through the involvement of the staff in the foreign subsidiaries with the expatriates from the companys home country i.e. Australia. It will help the organization to take an advantage through the alignment of the interest of the staff in respect to Australia s well as India. 8.2 Polycentric staffing It will enable Aesop to hire the staffs of India from the host country nationals. It will help to guide the country in better way considering the local market of India in politico, law, culture etc. 8.3 Regiocentric staffing It helps the host country nations of the staff for the suns day of the foreign country that is India largely. 9.0 Conclusion Aesop is the multinational company of Australia in the field of cosmetics and beauty products. It planned to expand the market in India. Now establish the market it enables to expand the market through effective measures. The company enjoys a wide a wide range of global competition from other market. India has advantage ever its countrys competitiveness and the gross capital formation. It also enjoys the competitive strategy over other countries. the company need to develop a compact distribution channels and pricing through the development of the effective way of the product. The company through some measures in international HRM strategies can evolve effective measures. Aesop need to understand the power of the union in India., India is a country which involves the power of union as well as the frequent strikes. Aesop need to take measures for the forbidding the strikes. Mangers need to involve strategy on that. They need to solve the matters in relation with the power of the union. 10.0 References: Atkinson, R., (2014). MOOCs revisited: An Aesop's fables perspective.HERDSA News,36(2), p.20. Baumgart, M., (2016). Designing retail success.Artichoke, (54), p.93. Bienkowski, M., Feldmann, A., Grassler, J., Schaffrath, G. Schmid, S., (2014). 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