Internationalization of a Multinational Firm into an Emerging Economy Context - Essay Example

A Proposal for a Dissertation" Identifying, Analysing and Critiquing the Internationalization Strategy and Activities of a Selected Multinational Firm n its Efforts to Enter and Establish Itself in a Specific Emerging Economy Table of Contents 1.Title 3 2.Discussion 3 2.1 Background, Research Topic and Research Questions 3 2.2 Literature Review 4 2.2.1 A Brief Overview of Internationalisation Strategy and Its Types 4 2.2.2 Advantages and Drawbacks of International Strategy 5 2.2.3 A Brief Description of Tesco China 6 2.2.4 A Brief Description about International Strategies and Activities Adopted by Tesco China 6 2.2.5 Methodology 8 3.Timetable and Resources 9 4.Ethical Implications 9 References 11 1. Title The chosen title for this proposed research study would be — “A Case Study of the Internationalisation of a Multinational Firm into an Emerging Economy Context” 2. Discussion 2.1 Background, Research Topic and Research Questions This proposed research study will be principally concentrated on recognising, analysing and critiquing the internationalisation strategy and activities of a selected multinational firm in its efforts to enter and establish itself in a specific emerging economy. In this regard, one of the foremost retailers in the entire world, i.e. Tesco PLC has been selected to perform a case study aimed at analysing its efforts to enter China, taking advantages of its emerging economic prospects. Strategies play a decisive role in assisting organisations towards performing their respective business operations in both domestic and international markets, preserving adequate effectiveness. In this regard, relating to the above stated research title or topic, internationalisation strategy, also acknowledged as global strategy, refers to a particular theory based on which, the business firms can acquire a brief understanding about how to compete and offer standardised products and/or services to the customers on a worldwide basis (Peng, 2013). Based on the above portrayed research title, it can be affirmed that the firms adopting internationalisation strategies, are often able to reap certain benefits that further tends to rejuvenate their competitive stance to a considerable extent. These benefits include enlarged market size, attainment of superior economies of scale and most vitally, accomplishment of superior competitive positioning (Slideshare Inc., 2014). In this present day context, wherein the market environment is incessantly changing due to increased level of internationalisation, globalisation as well as liberalisation, firms operating in varied industries are identified to be adopting internationalisation strategies at an extensive rate and performing activities with the aim of establishing their respective businesses in emerging economies. In this similar context, Tesco has been apparently observed to adopt effective internationalisation strategies and conduct quality strategic activities as deliberate efforts towards entering and establishing itself in the emerging economy of China. With this concern, the research questions for this particular proposed research study have been depicted in the following. What are the advantages and drawbacks of internationalisation strategies and performing strategic activities for a firm while establishing itself in a specific emerging economy? How Tesco utilised internationalisation strategies and performed strategic activities while establishing itself into the emerging economy of China? 2.2 Literature Review 2.2.1 A Brief Overview of Internationalisation Strategy and Its Types According to Melin (1992), internationalisation strategy can be described as a process, which facilitates contemporary organisations to conduct their respective operational functions effectively in worldwide market segments. As per the observations made by Leeman (2010), internationalisation is often viewed to be a major form of globalisation, which has its scope on a larger scale emphasising development of international trade between diverse nations throughout the globe. In this similar concern, Tsang & et. al. (2013) noted that the organisations belonging to this modern day context have become increasingly inclined towards adopting internationalisation strategies with the aim of attaining maximum profitability by expanding businesses in foreign nations. It is worth mentioning in this context that the diverse forms of international strategy or entry modes that contemporary organisations generally adopt are licensing, exporting, foreign direct investment (FDI) and joint ventures along with alliances among others, which are supposed to offer them with an extra competitive edge to strengthen their foothold in the market. Modern organisations strongly believe that these forms of international strategy or entry modes might help them to enlarge their businesses in international business market segments successfully, resulting in establishing themselves in varied emerging economies (Slideshare Inc., 2014, Tsang & et. al., 2013; Leeman, 2010). 2.2.2 Advantages and Drawbacks of International Strategy After acquiring a brief idea about the notion of international strategy and its significance in this modern world, further arguments can be drawn on the reasons owing to which the modern firms have been so heavily inclined towards adopting well-structured internationalisation strategies for expanding their respective businesses in overseas locations. In this similar context, it can be affirmed that internationalisation strategies possess certain advantages due to which, the organisations adopt these sorts of strategies towards the attainment of their predetermined targets. According to Twarowska & Kakol (2013), the advantages that can be derived with the application of international strategies include greater level of product standardisation and maximum degree of responsiveness towards local business settings among others. Specially mentioning, adoption of international strategies has been assisting the organisations to address and mitigate various sorts of risks relating to their business and enable them to possess greater market control (Twarowska & Kakol, 2013; Kazmi, 2008). One of the drawbacks associated with the acceptance of international strategies is the cost factor. It would be vital to mention in this similar concern that while adopting certain international strategies like exporting or licensing, joint venture or merger and acquisition (M&A), a few of the business firms often have to incur maximum expenses that affect their overall financial performance at large (Levi & et. al., 2007). 2.2.3 A Brief Description of Tesco China Tesco, which is a British multinational retail company, has long been operating in China since the year 2004. The company expanded its business in China due to attractive market growth and the presence of huge figure of populaces in the nation. In today’s modernised global marketplace, China is emerging as one of the major worldwide superpowers, enabling the companies like Tesco with persuasive opportunities to attain long-term financial growth. In this similar context, according to the report published by Tesco (2014), the company mainly focuses on delivering its broad assortment of product offerings to the Chinese customers through retailing in the form of displaying such products in the hypermarkets and the company’s online websites. 2.2.4 A Brief Description about International Strategies and Activities Adopted by Tesco China In accordance with the report published by Scribd Inc. (2014), the international strategies of Tesco are mainly observed to be joint ventures with the local business partners in China, in order to capture a sustainable market share within the nation, investing in the short-term. Correspondingly, the company also followed internationalisation strategies like ‘Greenfield investments’ and acquisitions in China to omit socio-economic and cultural differences. Specially mentioning, the report of Scribd Inc. (2014) highlighted that the international strategies adopted by the company in emerging Asian markets like China have been successful, given its sense of greater sensitivity towards local culture along with the expectations of the customers. Moreover, the company’s greater understanding about the respective domestic market setting through the assistance of M&As ultimately made its utilisation of international strategies quite successful. This could be understood with the help of the following pictorial representation. Source: (Scribd Inc., 2014) Based on the above portrayed graphical presentation, it can be affirmed from a broader understanding that Tesco has adopted the international strategy of Joint Ventures as one of its efforts to enter and establish itself in the emerging economy of China. As per the report published by Scribd Inc. (2014), Tesco decided implementing joint venture as an international strategy with Hymall Chains (Ting Hsin International Group) in order to expand its business into one of the potential Asian business markets, i.e. China. Tesco had entered into the Chinese business market by performing joint venture with Hymall Chains in the year 2004 obtaining 50% of its shares and elevating stakes to nearly about 90% in the year 2006. According to the report published by Scribd Inc. (2014), Hymall Chains is viewed to be one of the formeost retail stores in entire China, which aided Tesco with an immidiate growth in its marlet share within the country post the joint venture. Thus, it can be affirmed that by adopting joint venture as its international strategy, Tesco has been able to enter and established itself in the emerging Chinese economy quite successfully. 2.2.5 Methodology Designing a suitable methodology is quite necessary to gather relevant and appropriate infirmation for the purpose of ataining the desired research objectives (New Age International, n.d.). In relation to the proposed research study, qualitative approchof research methodology would be undertaken, focusing on specific questions relevant to the research study. Theoretically, the qualitative approch of research methodology signifies exploring the identified issues, comprehending phenomena and most importantly, answering research questions in the form of analysing unstructured data (Carter & Thomas, 1997). The basic reason for selecting this approach of research methodology is that this method will help to gain better accessibility of suitable as well as quality data for assessing the internationalisation strategies and activities performed by Tesco China in entering and establishing itself in the emerging Chinese economy (Taylor, 2005). Apart from taking into concern the qualitative approach of research methodology, secondary data would be mainly collected, i.e. through accessing various industry reports, books, journals and peer-reviewed articles among others. 3. Timetable and Resources The projected timetable for completing the proposed research study has been portrayed hereunder. The various kinds of resources that would be needed to conduct the proposed research study include an experienced research team and quality research instruments among others. In this regard, the research instruments would be the above discussed various secondary sources, i.e. the industry reports, books, journals and peer-reviewed articles among others. 4. Ethical Implications It is worth mentioning that misinterpretation or fraudulent analysis of the collected secondary data might impose negative ethical implications on the proposed research study, which will therefore be strictly avoided when performing the proposed study. Additionally, special emphasis will be laid on examining the reliability and validity of the secondary sources taken, avoiding any chances of irrelevancy or limitation of clarity and transparency in the information generated through the study (Rogelberg, 2002). References Carter, Y. & Thomas, C., 1997. Research Methods in Primary Care. Radcliffe Publishing. Kazmi, A., 2008. Strategic Mgmt & Bus Policy. Tata McGraw-Hill Education. Leeman, J. J. A., 2010. Export Planning. BoD – Books on Demand. Levi, K. J. B. & et. al., 2007. Market Entry Strategies of Foreign Telecom Companies in India. Springer. Melin, L., 1992. Internationalisation as a Strategy Process. Strategic Management Journal, Vol. 13, pp. 99-118. New Age International, No Date. Research Methodology: An Introduction. Chapter 1, pp. 1-8. Peng, M., 2013. Global Strategy. Cengage Learning. Tsang, D. & et. al., 2013. The Routledge Companion to International Management Education. Routledge. Rogelberg, S. G., 2002. Handbook of Research Methods in Industrial and Organizational Psychology. John Wiley & Sons. Slideshare Inc., 2014. What is International Strategy. Share. [Online] Available at: http://www.slideshare.net/rhizluna/what-is-international-strategy [Accessed April 28, 2014]. Slideshare Inc., 2014. Modes of Entry. Exploring Strategy. [Online] Available at: http://www.slideshare.net/daryl10/international-strategy-15123842 [Accessed April 28, 2014]. Scribd Inc., 2014. Foreign Market Entry Strategies. Tesco Plc. - International Business Entry Strategy (SWOT, PESTEL, Porters 5 Forces). [Online] Available at: http://www.scribd.com/doc/145951074/Tesco-Plc-International-Business-Entry-Strategy-SWOT-PESTEL-Porter-s-5-Forces [Accessed April 28, 2014]. Twarowska, K. & Kakol, M., 2013. Why Do Companies Go International? International Business Strategy - Reasons and Forms of Expansion into Foreign Markets, pp. 1005-1011. Taylor, G. R., 2005. Integrating Quantitative and Qualitative Methods in Research. University Press of America. Tesco, 2014. Tesco China. About Us. [Online] Available at: http://www.tescoplc.com/index.asp?pageid=290 [Accessed April 28, 2014]. Read More