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International business development is the process in which a company starts its franchise in the outside countries. The motive of company is to develop m ore branches in different places to extend their business. Basically for that it targets the countries which are not developed yet. They want that their development of international business have sustainability. For that the organization have to adopt the different environment of the market in various nations. So many companies are looking forward to extend their business in other countries(Chang, S.J., Van Witteloostuijn and Eden, 2010.). The business development in nations such that Brazil, Russia, India and China, these are quite suitable. Primark is one of the popular companies in UK, established their first store in 1971 at the Belfast City Centre, England. After that they have started so many stores in UK and international. Its is basically a retail company of clothing, food products, baby products and beauty products. Its a market leading company has a big share in the market of UK and other nations, also the brand has developed their variety of products in last few years to attract the new generation. Company have their stores in Portugal, Germany and Belgium and also in Netherlands. Now company wants to open their store in the cultural economic country
To develop their business internationally each company have to adopt a business strategy. Similarly Primark have to make their strategic planning to enter in the competitive market of Brazil. Such strategies have few factors on which are so important in international business development such that communication improvement, market should be global, competition is everywhere but company should aware of this, information about the market has to be available always, the entrepreneur should have the Craftsman approach of entrepreneurship.
In this report the initial research about the market of Brazil has discussed. They should know that how the company can use their potential to enter in the market of Brazil(Cantwell, Dunning and Lundan, 2010.). So a literature preview and critical evaluation of the each factor that is involved in the business development, has outlined in this framework. Market analysis, targeting the selected markets, selection of entry modes through which they enter to the market. According to the foreign market the firm have made a plan for marketing and business purpose. To meet the international objective, company should expand their resources in other countries and for that it has to grab the opportunities which can be helpful in such expansion.
Rationale- Brazil have cultural based economy as their economy depends on their traditional business. The main purpose to start the business in Brazil that it have so much potential in their economy. When the market has crashed in all over the world but the outcome from Brazil's market was still getting the profit. Its an expectation of the world that in next 20-30 years Brazil will be the 5th largest economy in the world. The other companies in the market are doing so well thus there is a large scope for the Primark to open their stores in the market of Brazil. They will have so much opportunities to set up their business successfully in initial stage.
The Primark can target the clothing market as the local people are so influenced with the different trends in fashion. The each sector of market is improving slowly but steady, So much relaxation the government gives to the company to develop their infrastructure(Birkinshaw, Brannen and Tung, 2011). The company will have tax incentives to make a better start in the competitive environment of market. Brazil exporting the raw material to the other countries, so its an opportunity for the entrepreneurs of Primark they can jump in that market with their attractive product and services.
Brazil have made a relationship on commercial side which have 5 themes such that innovative technology and green technology, facilitation of trade and development of business, cooperative society of intellectual property, different standards and methodology, enterprises of small and medium size. The market of Brazil gives priority to the new and innovative products which are not even accepted from the other countries. The south east area has more opportunities for the new companies if they want to develop their business. But now where so many incentives and others offers are provided from the government so the Primark can grow sin each area of Brazil.
Primark can enter the market because they have so innovative products also the its fashion trends are so popular in UK and many other countries where they already have their stores(Doz, 2011). Organization can lead the food market by providing the better quality of the product and and they should have attractive approach to show that product in the market. They can also provide a big range of baby products, which can make a different image. Business development in Brazil is quite beneficial for Primark.
Literature Review And Critical Analysis
PESTLE Analysis of Primark
Primark is the top retailer company stands in the current retail market of the UK. For the new market set up of primark in Brazil, there is a vast requirement for the market strategies and the PESTLE analysis require to study that brazil is suitable for the ptimark market set up ot not. Each and every organization have their different market strategies and tactics to survive in the current market trend(Govindasamy and et. al.,2011). Moreoer, the different retailer companies follows the several analysis to approach the marketing strategies and target goals. Retail organization mainly set their specific target market and have an efficiency to bring the customer's demand in the new market trend. Primark is realizing that for the long term benefits, the Pestle and swot analysis help them to reach the long term goals at very great extent. For the market set up of primark in Brazil, need of the Pestle analysis is very important for the study of the current market environment of Brazil(Pestle and Colvard, 2012). Primark is looking for gaining the great benefit to set the market at Brazil and provide the best services to the customer's of Brazil. Pestle analysis for the primark is given below:
Political factors: Political factors are very major factors that affect the new market set up of every organization in the form of changing the rules and policies by the government and also the pressure groups has a great impact on the market set up of primark. Retail organization moght be affected by several acts of the government like health and safety act, sales protection act, disability discrimination act, sex discrimination act and many more that affect the market of the primark. Moreover, many of the political factors that affect the new business in the wat of the policy change by the Brazil government, policy of the retail market would be changed, tax policy and more. These are the factors that affect the marketing entry strategies of the primark at Brazil's retail market. This analysis mainly concern the ability of the organization that has to be follow the different rules and policy of the government and take the effective initiative which are helpful in the growth of the primark.
Economical factors: In this analysis Primark's marketing strategy affected by the changing of the economy and market trend as well. These market changes indirectly affect the economical growth of the company and production or supply services as well. Primark is the top brand retailer and has the effective contribution in the gross domestic product of the country. A strong monetry fund is very effective approach to sustain in the economical changeable environment which holds the low exchange rate made by the import or export operations. Brazil's economy directly affect the marketing strategy of the Primark, which is also affected by economy policies of the international monetry fund. The strength of policy supports the business cycle of the Primark in the matter of economic condition(Dane and Cody, 2010).
Social factors: In this analysis, Primark mainly focuses on the demographic changes of the Brazil's population and it is having the great impact on the growth of the firm. These factors can directly affect the new buying perception of the market and also the production of the company. Social changes directly forces to the company's current processing in the way of conduct further research about the product and develop the process and invent the new product that help to earn the trust of the market of Brazil. Organization may found the new market strategy that help to enhance the business at all over the market of Brazil. Primark has that type of capability to sustain the market changes of the Brazil and accept the challenges by competitors(Ulca and et.al., 2013).
Technological factors: In this analysis Primark has that type of ability to adopt the latest technology of the Brazil's market trend. In this case, there are various factors that affect the business like software development changes, and more. Recent technology provide a great help to the business growth and the improvement of ptoduction rate as well. By applying the new technology, Primark reduce their labour cost and increase the rate of technologies.
Legal factors: This analysis mainly includes the efforts of the company which abide by the law like terms of tarrifs, trading policies, taxation, insurance policies and more. Primark mainly focuses on the consumer's requirement and supply the services accordingly and to sustain the same they follows the legal factors of Brazil's government as well. Because most of the policies and rules are apply by the government and these rules are affect the Primark's marketing strategies. Primark is very concern about to deliever the best services to their customer's and give the importance to customer's right.
Porter Diamond model
The porter diamond referred to as the porter diamond theory of national advantage. It is a kind of model which has designed to assist understand the competitive advantage nations or group possess due to certain factors available to them. The American strategy professor Michael poster has been developed this model in order to aid business by understand their competitive position in global market. Primark can easily understand their competitive position in the global market like Brazil by use of this model. According to the Michael porter, there are four kind of cluster that is firm strategy, structure and rivalry, demand condition, factor condition and related and support industries. With help of this model cited firm can able to know that how national advantage can translate into international advantage. Primark can gain the internal advantage by use of this model. There are four determinants which are as follows-
Factor condition- This factor includes the production related elements like material resources, human resources (labour costs, qualifications and commitment), knowledge resources and infrastructure. As per the Anton, R., 2015By considering this factor and its element, Primark can analyse its internal knowledge and infrastructure in the international market. Factor condition can be implies as a profitable and beneficial factor sound in the new country. This factor assist in developing a more competitive firm in the country. With help of high skilled workforce, Linguistic abilities of workforce, rich amount of raw material and workforces shortage, company can develop high level advantage and benefits from business in the international market.
Related and supporting industries- According to Grünig and Kühn, 2015 In the international market if the local supporting industries and suppliers are more competitive, then primark will potentially get more cost efficient and receive more innovative parts and products. This thing potentially lead to greater competitiveness for Primark. The success of the company is also depends upon the supplier and related industries within the country. In the Brazil, Primark can able to gain high quality of suppliers because of the similar industry are available there. This thing will be more beneficial for the cited venture in the international market.
Home demand conditions- The demand of the customer in the market is another major consideration while any firm operate its business in the international market. According to the () High demand of product and services can lead the high profitability and sales forthe organisation. In the international market Brazil, Primark have to analyse demand of customer related to product and services. If the local market for the product is larger and more demanding at home than in foreign market, then Primark put more emphasis on the improvement than the foreign companies. This thing assist in increasing the global competitiveness for the Primark in the Brazil country. In addition to this, there always exist an interaction among the economies of scale, transportation cost and size of the home country. If customer have high level demand then it directly possessively influence company's profitability and sales.
Strategy, structure and rivalry- As per the Anton, 2015 This factor is related to the way in which an organisation is organised and managed. Organisation structure, strategies and business system plan a very crucial role in the company in order to attain determined objective and success. It focuses on the condition in a country that determine where a company will be established. The structure and management system of the corporation in various countries can potentially affect competitiveness. Primark have to consider effective strategy, structure and business system in the Brazil.
Market entry strategy of Primark
Primark is a one of the leading retail sectors which has occupied a prominent position in the marketplace. Company is planning to develop new chain in Brazil where it can generate more profits by introducing their product range. In this case, the company needs to conduct an analysis of market so as to ascertain potential demand and competition prevailing. In order to get established into new market segment, the company is supposed to formulate effective strategies. Marketing strategies are based on information about the current market position and proper knowledge about the existing competitors. It is through proper planning that the company get easily enter in new market and successfully introduce products(Ang, Benischke, and Doh, 2015. ).
There are various marketing strategies that are formulated to target new market segment. In this report, Ansoff model is adopted to evaluate adequate expansion strategy for the organisation. Further, the marketing model is a strategic planning tool that helps in providing a proper working method of implementation. This model helps to generate growth in marketplace. In this model, there are four key aspects for expansion: Market Penetration, market development, product development and diversification. In order to expand business operations, Primark has opted the strategy of Market development. Henceforth, in this case, firm has to also develop their entry mode strategies to enter in new market. There are various ways through which company can establish itself in new market segment.(Tayar and Jack, 2013.)
Direct exporting: It is the process of selling of goods and services produced in one country to other country. Whereas; Direct exporting is a selling directly into the market .
Licensing: Licensing is the most essential part of any new business where it is a legal confirmation agreement to introduce product. With help of licensing political risk is minimized and helps the business unit to quickly expand operations without any risk.
Partnering: Partnering is way to provide two different persons are get together. Which means other are the two persons are get partnership in business concern and then go for target new market to generate more profit. Primark get parnership with other one’s to get enter in new market.
Joint venture: Joint venture is a form of partnership where primark connected with two companies and they both are agree with doing work together in target market . In this situation risk and profits are generally shared equally.(Laufs and Schwens, 2014. )
Buying a company: This strategy is helpful to for above cited company to enter in new marketplace easily which means in some market companies are buying a small scale company which are help them to enter in new market.
Strategic alliance: In strategic alliance cited company get merged with some another company to enter in new market. This is a cooperative agreement between two firms. with the help of merger company creating new products and new technologies.
Impact of these strategies in various sectors
Company use various type of strategies for new business expansion these are the strategies are help them to successfully established in new marketplace. Company get more productive and generate high profitability with the help of all these strategies. But somewhere these strategies are create influences in different sectors which means these strategies had render impact on different organisational activities as follows:
Corporate culture: In corporate culture company has face so many various issues for applying new strategies. Where as in an organisation some people are use to habitat with old technologies in that case they create resistance to change environment. They all are not comfortable for new working practices. This will create bad impact on the new business environment. In that situation employee get back off the whole process so in that case employee turn over ratio is increase in that situation. (Brouthers, 2013. )
Advertising: Advertisement is create a buzz in current marketplace about their products. with the help of some advertising strategies company get introduce their products easily. Firm had to create some innovation and creativity in advertisement where as with the help of advertising people are knowing their primark's products . Proper advertising is helpful to generating more profitability. So advertisement create a good impact on whole organization to achieve successful goals. Company apply social media marketing tool for their product advertising.
In the Brazil country, company will use the social media marketing which have incurred various kinds of risk related to the company's information. According to the (Grünig and Kühn, 2015) while company uses the social media marketing then it is issue related to the daily update. Company requires providing information about product and services to customer with help of social media channels like Facebook, twitter etc. On the various channels of social media, company can transfer their product related information like features, prices, etc. If company does not properly update on the various channels then customer may mis the right information about the product. As per the (Risk Analysis for Social Media Marketing. 2012) On the other hand customer can easily put their review and comment on the channels so if customer put their negative comment on the channel then it will show to all customer who are engaged with page of social media. So it can be said that there are various kinds of advantage of social media marketing for Primark but it also incurred some kind of risk.
Different functional area: Strategies are some time create a problems in different functional area. There they all have own strategic tool to achieve goals . In that situation new marketing modes are changes whole organisational departmental strategies . So it will create a some problems and misunderstand in between different function are. This problem is create a huge impact on organisational productivity. In that case company has face conflicts and misunderstanding between employees and top management. This will decrease organisation profitability and render impact on new market business and product range.
The report is concluded that by following all planning procedure of research proposal is essential for expansion of Primark through establishing its new branch is Europe. Different data collection methods are considered for gaining accurate business performance and market value of entity. In this regard, various tools and techniques are obtained for analysing market value through PESTLE and porter's five factors. Therefore, methodologies for increasing strength of organization for effective competitive and marketing strategies are considered. In addition to this, through report, learners understand systematic process through research proposal and increasing efficiency of organization.() Hence, several kinds of tools and techniques related to project planning and accomplishing tasks are determined through this assignment. Including this, varieties of new technologies and tools are obtained by online marketing and remains benefited for increasing marketing and competitive strategies of firm. Methods to increase efficiency of organization to make place in market that impacts on various components of organization are considered through this research proposal. Hence, different ideas generated for activating business operations and creating developing environment of entity. Moreover, project manager of organization roles to analyse accurate business position that leads to preparing strategies for action plans as well enlargement of entity are achieved effectively. (Holtbrügge and Baron 2013)
The report has been presented varieties of tools and techniques for establishing new branch of Primark in Europe. It is determined that organization effectiveness can be achieved by using different strategies for implementing action plans and following planning procedure efficiently. In this regard, it is require for project manager to analysing all business operations and looking for environment of Primark in overall UK. Through this project planning, initially, it is necessary to conduct proper market research and analysing all factors including business strategies of entity. However, different environmental determinants are required to be focused for enlargement of entity through establishing its new branch in Europe. In accordance to this, several planning tools are to needed to be followed for gaining effectiveness of organization at high level. Moreover, for retail sector entity, company should recognize its strength, weakness and opportunity at workplace and further preparing strategies for implementation and enhancing quality services of Primark. In addition to this, by establishing good relationship with other business entities influences market positive as well remains helpful for increasing strength to face competition in market. Therefore, competitive and marketing strategies of entity can be increased through using different tools and technologies to reach out set goals. However, good reputation of organization can be achieved through this project planning procedure. In accordance to this, it is necessary for entity to preparing strategies and analysing all environmental factors of organization. It influences competitive and marketing strategies to face competition and making place in market. Thus, determining all research proposal's is valuable for increasing efficiency of entity.
Hence, by recognizing all environmental factors including PESTLE and porter's five factors are useful for enhancing strength of organization as well liable for expansion of entity at large scale. In this regard, it is obtained that researcher of Primark must collect information systematically that considered as key tools for preparing planning procedures to be followed on. It is interrelated with expansion of business entity and increasing quality services of entity. Thus, the present research proposal should be followed efficiently to gain positiveness at high level. In accordance to this, a new branch of Primark in Europe can be established effectively that impacts on marketing and competitive strategies. However, by preparing action plans and getting contribution of each worker of the entity, organization can meet set target effectively. It influences positive and developing environment of firm that affects market value of entity to increase productivity as well profit earning capacity of firm.
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