The Significant Opportunities Available to Pret a Manger for the International Expansion - Coursework Example

International Marketing Report Introduction International business is one of the key essential phenomenons in the context of business enterprises. Additionally, with the increase in the globalisation and reduction in the barrier in the international trading and operation led to higher level of interdependence of nations one another. Correspondingly, with this significant changing environment of the business, countries have started to think in a global manner (Hanley & et. al., 2013). Moreover, in order to become successful in the global context, organisations has recognises that they need to work efficiently and effectively for high level of expansion and growth. Besides, with having the revolutionary changes in the aspect of technologies was also been the possible reason for increase in the growth of international business in the current scenario. In this regard, the intensification of the business through having the competitive advantage in the domestic as well as international market has extensively driven firms land provide them the opportunity to look beyond the domestic market. Likewise the progressive availably and flow of capital with having the minimal amount of barrier in the international trading has stipulate immense increase in the imports and export as well as foreign direct investment (FDI) (Geiersbach, 2010 http://www.saycocorporativo.com/saycoUK/BIJ/journal/Vol3No2/Article_8.pdf). Moreover in the context of international business the transaction may includes transfer of goods and services, investment, logistics and technology among the others (Vaghefi & et. al., 1991). Pret a Manger Corporation headquartered in City of Westminster, London, UK is a leading serving wide variety of fast foods products and services in the international market. Pret a Manger was established in the year 1986 in London by two college friends Sinclair and Julian, Pret a Manger have total 335 stores in UK and worldwide. The notion behind opening the store was to provide healthy fast food products, which can be feed as the alternatives to food. Co-founders Sinclair and Julian having the desire to provide healthy sandwiches to the UK customers without compromising nutritious comfortable was significantly takes the shape of reality when they opened their first shop in London, UK through borrowing £17,000 from bank (http://www.theguardian.com/world/2001/feb/01/globalisation.foodanddrink) . During the earlier time company is struggling from lack of employees but the co-founder having the aim and objective of providing the sandwiches without the use of any chemical, additives and preservations. Since, the period of Incorporation Company propounded various up and down and during the year 2000, Pret a Manger corporation establishes their first international branch in New York and named it Itsu. Thus, the success story of Pret a Manger continuous from the small store in the London streets to an international market and placed them as one of the leading sandwich store in the UK market along with opening up wider opportunity of international expansion. In the international context the annual turnover of the corporation is around 450 million pounds. Regardless, of having the significant growth since the incorporation in order to become successful in the competitive business scenario, company needs to constantly conduct an effective analysis of entire market segment prior expansion of the business in the untouched location. Additionally, relevant information and positioning strategies with in-depth analysis needs to be obtained to commence business operations effectively in the new location. http://www.pret.com/about/ Correspondingly, this paper intends to address the significant opportunities that are available to Pret a Manger for the international expansion while enduring its business globally. In this context the paper will emphasis on determining the key strategies that company needs to endure to enter in German market and marketing strategies applied by them to become successful. Furthermore, different theories and models of international business will also be related with Pret a Manger intended expansion of the company in the country. Moreover, analysis is conducted in relation to the applying the key strategies to avail the opportunity prevailing in Germany. Country Selection In the present environment of business the first and foremost part before the commencement of the business in the international environment company needs to undertake the effective analysis of the nation before incorporation or commencing its operations in the country for assessing the opportunities and threat in the market. In this regard the culture, education, market economy, possibility of future growth, labour market and economy with the possible risks requires to observed that may have possesses in the targeted market. Similarly, relevant information’s aspect before the commencement includes business culture, investment climate, legal aspects and business opportunities in the country. Based on the assessment of the business opportunity in the location including the Romania, Denmark, Finland and Germany, company has decided to commence it business operation in Germany. In this regard, the main reason of starting and selecting German as the nation for the international expansion was that the nation is reorganizes as the one of the world fast growing nation. Additionally, Germany in terms of international trading and purchasing power parity (PPP) is ranked as 3rd and 5th largest economy in the world and is the largest economy in the European Zone. http://www.globaltenders.com/economy-germany.htm. Moreover, German law also allows the western company to incorporate and establish their business unit with having not strict restriction of repatriation of the share of profitability. Likewise, the nation is also renowned for its large segment of consumers compare to other European Union member countries with having the population of around 80.8 million. However, the trading market of Germany is not only limited to its domestic market but goes far beyond its national boarder. German economy in the last few decades has also marked immense improvement from the period of economic crisis. The national government were expects that the valuation of real GDP will be significant be grown by 1.8% till the end of period of 2014 and 2.0% respectively in 2015. Moreover, as per the scenario of the economy of the nation it has been revealed that relatively for the foreign investor can avail the noteworthy opportunity of larger amount of productivity, can undertake and utilise the availably of highly skilled labour force, highly developed infrastructure, quality engineering and position the business in the centre of European Zone. Additionally, with the sustainable polices of the nation country has recognises significant decrease in the unemployment with the content increase in the real income of the inhabitants, which could be major advantage for Pret a Manger to attract customers large amount of customers. According to the report of world bank during the year 2013 Germany has ranked 21st and 18th in terms of doing business and Index of Freedom respectively http://export.gov/germany/MarketResearchonGermany/CountryCommercialGuide/DoingBusinessInGermany/index.asp. Correspondingly, the fast food play in an integral part in the Germans’ day today life, as they continuous seeks towards sophisticated and wide ranges of offering from the domestic market. The inhabitants of the nation are high conscious regarding the health and undertaker after the proper supervision of the ingredients used in the products. In this regard, this could be significant opportunity for the company as the quality remains the key factor in the Pret a Manger products demand and renowned image in the international market. During the year 2011 the total turnover alone in the German food sector as amounted to be around €65.3 billion and having the strongest prospect of growth in the future. Likewise, inhabitants of the nation have increasing started investing their funds towards fast food, which could be significant opportunity for the company. Moreover, it could be affirmed that food sector will be future grow in the future driven by changing trend households and increasing population http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Strongest%20Growth%20In%20Recent%20Years%20_Berlin_Germany%20EU-27_1-4-2013.pdf. Thus, starting the business unit will be highly beneficial for Pret a Manger company as the policies of staring the business is relatively straightforward. While few legal and regulatory policies needs to be compelled for starting a business in Germany, which relatively homogeneous as compare to Western nations. Besides, the German law does not distinction domestic and international company in terms of establishing new business in Germany. On the other hand, The German Ministry for Economy and Technology will also aid significant assistant through providing opportunities to various international business that wishes to establish their business in Germany through educating and teaching them approach of start-up business and its strategic and management planning techniques to ensure successfulness of the company in the nation http://berlin.angloinfo.com/information/working/starting-a-business/. The key reason for rejection of Romania from the possibility of establishing the business in the nation apart of having the considerable opportunities to investing funds in the region was the lower level of development, as vapours industries as well as sectors of economy yet lacing from privatisation, which possesses major threat for the company to reform in the nation. Moreover, theory of SWOT and PESTAL analysis reveals the important fact that post-Communist Romania is also suffering from taking the systemic ailments along with the wide amount of corruption is also been the major point of the concern for the businesses, which will be create major issue in the economic transactions of the operation. Moreover, fluctuation in the legal framework is also confusion and uncertainty, which will hinder the economic planning and over all development of the nation. http://www.cdfai.org/PDF/Door%20Half%20Open%20-%20Opportunities%20and%20Challenges%20for%20Potential%20Investors%20in%20Romania.pdf. Moreover, GDP, real GDP, per capita income, inflation rate, unemployment rate of Romania is comparatively weaker than the other European Union nations, which were the key reason for rejection of nation for starting the new business in the country. The nation is likely to very much dependant on the foreign capital for the overall growth in economy. Apart from this, high level of bureaucracy, continuous increasing in the rate of unemployment, budgetary deficit, lack of information of market, education system, under develop locations and less transparency in the banking system are the crucial reason for rejection for country for starting the new business. Nevertheless, the population of the nation is significantly declining, which reduces the possibility of probable customers for the company in long run. On the other hand, while comparing the nation with the other region of EU, nation is rated as one of the worst performers in the region of eastern and southern EU states on the availability and development scale. http://steconomice.uoradea.ro/anale/volume/2008/v2-economy-and-business-administration/025.pdf http://www.helsinki.chamber.fi/files/3997/Romania.pdf Denmark on the other hand, could be one of the high performer nations comparatively with the other three prospective nations i.e. Romania, Finland and Germany for Pret a Manger corporation for expanding the business in the country. Additionally, bases on assessment from the theory of SWOT and PESTAL analysis, in OECD nation’s country is recognises as one of the high income group nation. However, the major reason for rejection of the nation is due to constant changes in the policies of starting the new business in regulatory environment. Moreover, economic downturn in the resent years will also be the major threat, which will affect over the demand and consumption of products. Besides, with relatively having the one of the high income group nation the buying behaviour of the consumers, taste and acceptability towards the company’s products is expected to become change. Ineffective marketing for the fast food chain and higher level of completion for the domestic brands will be major threat for the company to enter into the Denmark markets. Furthermore, in the context of the Danish market lacing is marketing and distribution of products is relatively possesses key reason for many foreign investor to move away from the nation. Whereas, ever increasing production costs, export pricing, high demand for labour cost could probably be negatively affect over the company successfulness in the nation. Furthermore, non availability of appropriate trading partners and distribution channels will be major drawback in performing the operation in the country, which will mismatch the company values, image and probable target customers is consider to the important factor on the bases of which company possesses threat in performing the business operation in Denmark. https://www.theseus.fi/bitstream/handle/10024/46569/Pakarinen_Tea.pdf?sequence=1 http://www.doingbusiness.org/~/media/giawb/doing%20business/documents/profiles/country/DNK.pdf Based on the assessment of Finland on the bases of theory of SWOT and PESTAL analysis it can be comprehended that Finland is regarded as the second safest place after Greenland for starting new business. Moreover, on the bases of risks analysis the issues related to transfer of exchange, political violence, legal regulation, political interference and disruption in the activities of supply chain possess major threat in the nation. Based, on the notion of labour market conditions country has been rejected for probable choices for starting the new business because labour market condition is an integral part for Pret a Manger corporation for undertaking the business operation in Finland. Whereas, the scenario of nation advocates that labour market remains the specious aspect in the business environment of Finland due to high costs and various regulatory restrictive clauses. Read More