CW1 Assessment MBA-draft one

This document is for De Montfort University use and should not be passed to third parties or posted on any website. Faculty of Business and Law Assignment Brief for Block Taught Class Module Title International Marketing Assignment Number Assessment 1 Module Code Assignment Title Individual Report: Developing A Suitable Market Entry Mode Module Leader Assignment Weighting 80% / 2800 words Table of Contents Section 1: Introduction ........................................................................................................................ 4 Company Strengths and Expansion Justification. ............................................................................ 5 Section 2: Attractiveness and Risk of Target Market. ..................................................................... 5 Section 3: Proposed internationalization theory ............................................................................... 6 Section 4: Proposed international marketing framework. ............................................................... 7 Internal Factors .................................................................................................................................... 7 External Factors ................................................................................................................................... 8 Transaction-Specific Factors .............................................................................................................. 8 Desired Mode Characteristics ............................................................................................................. 9 Section 5: Justification of a Proposed Market Entry Mode and Type .......................................... 10 Part 6: Summary of Report ............................................................................................................... 10 References ............................................................................................................................................ 11 Appendices ....................................................................................................................................... 14 Appendix 1: Officeworks Ltd Annual Report and Action Plan ....................................................... 14 Appendix 2: Office Work Five Year Achievements ........................................................................ 14 A ppendix 3: Sustainability Report of Office Work in terms of Total Team Members and Injuries Recorded for the past five years ....................................................................................................... 15 Appendix 4: Office Work Records Growth despite Covid19 Challenges ....................................... 15 Assignment Brief Template Page 1 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. Appendix 5: Singapore PESTEL Analysis ...................................................................................... 16 Appendix 6: Australia PESTEL ANALYSIS .................................................................................. 16 Appendix 7: Hofstede Insights 2023 ................................................................................................ 17 Appendix 8: OfficeWork Ltd Financial Information since 2018-2015 ........................................... 17 Appendix 9: Singapore Population .................................................................................................. 18 Appendix 10: Australian Population ................................................................................................ 18 Appendix 10: Firm Internationalization ........................................................................................... 19 Appendix 11: World Bank Ease of Doing Business in Singapore ................................................... 19 Abstract The report entails information about the market entrant of OfficeWorld Ltd, a small, medium-sized company that operates in Australia, as it explores its expansion into other nations and, in this case, Singapore. Office World Ltd has been operating for the longest time and has been doing great in the Australian market. However, since every business's dream is to internationalize, the report helps determine if it is attractive or risky for Office Word Australia to try and capture the new market in Singapore. The report results are based on an analysis of Office Word Company's strengths and weaknesses, assessing the Micro and macro environment in Singapore and Australia and then comparing the two and even looking at the risks involved. All the results indicate that Office World Company can enter the Singapore market. At the same time, the internationalization theory helped affirm the decision and argued that the entire process needs to proceed gradually with the market entrant. The report also provides several justifications as to why the market entrant formation was chosen.  Assignment Brief Template Page 2 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. 2021 fiscal year, Office Work Australia recorded revenue of AUD 2.56 billion, a 9.9% increase from the previous year (Office Work Australia, 2021). Moreover, the company has been consistently profitable, with a net profit of AUD 96.4 million in the same fiscal year (Office Work Australia, 2021). The company's strong financial position is reflected in its ability to invest in research and development, enabling it to innovate and improve its products and services continuously. In 2021, the company invested AUD 44.1 million in capital expenditure and innovation, including launching a new mobile app and a digital marketplace (Office Work Australia, 2021). The financial stability provides a solid foundation for the company's expansion into Singapore, allowing it to invest in the necessary resources and infrastructure to establish a successful presence in a new market. Additionally, the company's ability to invest in research and development will enable it to adapt to the unique demands of the Singaporean market and stay competitive. Additionally, Office Work Australia has several strengths that make it a justifiable candidate for expansion into Singapore. Firstly, the company has an established reputation for providing high- quality office supplies and equipment at competitive prices. This reputation has been built through a commitment to customer service, innovation, and strategic sourcing practices (Chopra & Meindl, 2021). Additionally, Office Work Australia has a broad range of products and services that cater to businesses of all sizes and across multiple industries, making it a one-stop shop for all office needs (Office Work Australia, 2023). Moreover, Office Work Australia's experience in the Australian market provides a solid foundation for expansion into Singapore. The company's success in Australia can be attributed to its strong supplier relationships, reliable supply chain, and commitment to innovation (Cachon & Terwiesch, 2019). These same factors will be crucial in establishing a successful presence in Singapore, with a growing demand for high-quality office supplies and equipment. In addition, Singapore's strategic location and business-friendly environment make it an attractive destination for international expansion. Singapore is known for its well-developed infrastructure, political stability, and favorable tax policies (Chen & Yao, 2020). These factors create a conducive environment for businesses looking to expand their regional operations. Furthermore, Singapore has a large and diverse business community, making it an ideal market for Office Work Australia's broad range of products and services (Soh, 2020). Section 2: Attractiveness and Risk of Target Market. The decision to expand a business into a new market involves carefully analyzing the market's attractiveness and risks. In this case, the target market in Singapore. The aim is to determine the attractiveness and risk associated with this market using the PEST analysis tool and the micro factor of market demand level. The PEST analysis examines four key factors: political, economic, social, and technological. The political environment in Singapore is stable, with low levels of corruption and an efficient government (Chung et al., 2020). However, strict regulations on foreign ownership of businesses and employment of foreign workers may pose a challenge for Office Work Australia (ILO, 2017). The economic environment is favorable, with a strong and open economy, a favorable tax regime, and access to skilled labor (Department of Statistics Singapore, 2022). However, the high cost of living and the competitive market may impact the pricing strategy and profitability of Office Work Australia (Singapore Business Review, 2019). The social environment is diverse, with a well-educated population and a growing demand for high-quality office supplies and equipment due to the increasing number of businesses in the country (Euromonitor International, 2021). Finally, the well-developed technological environment presents an opportunity for Office Work Australia to leverage technology to enhance its operations Assignment Brief Template Page 4 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. and improve its products and services (Chung et al., 2020). The micro factor of market demand level is also important to consider. The high market demand for office supplies and equipment in Singapore presents an opportunity for Office Work Australia. The country has a growing number of local and international businesses that require reliable and high-quality office supplies and equipment to support their operations (Euromonitor International, 2021). Overall, based on the PEST analysis provided in Appendix 5 and 6 and the micro factor of market demand level, Singapore appears to be an attractive market with moderate risk. However, the high cost of living and intense competition may pose challenges for the company. Nonetheless, Office Work Australia can establish a successful presence in Singapore by leveraging technology and adopting a competitive pricing strategy. Thus, the decision to expand into a new market requires a thorough analysis of the market's attractiveness and risks. Using the PEST analysis tool and the micro factor of market demand level, we have assessed the attractiveness and risk associated with the target market of Singapore for Office Work Australia. The analysis indicates that the Singaporean market is moderately attractive, with opportunities for growth and expansion. However, it also poses some risks and challenges the company must consider when developing its market entry strategy. Section 3: Proposed internationalization theory Internationalization is the process of expanding a company's operations beyond its domestic borders, and it involves choosing the most appropriate entry mode and internationalization theory. For Office Work Australia, the company can consider the Uppsala model of internationalization theory, also known as the gradual internationalization approach. The Uppsala model suggests that firms gradually increase their commitment to foreign markets as they gain experience and knowledge (Johanson & Vahlne, 2009). The model proposes that firms enter foreign markets through incremental steps, starting with markets that are culturally, geographically, and institutionally close to their domestic market, then expanding gradually to more distant markets. This approach aligns with the current strategy of Office Work Australia, which is to expand into Singapore, a geographically and culturally close market, before venturing into other more distant markets. The main reason for using the Uppsala model for Office Work Australia is that it aligns with the company's current cautious expansion strategy. The gradual internationalization approach is less risky than other internationalization theories, such as the born-global approach or the eclectic paradigm, which require a higher level of commitment and resources upfront (Johanson & Vahlne, 2009). Office Work Australia can use the gradual internationalization approach to test the waters in Singapore, assess the level of demand for its products, and refine its market entry strategy before committing more resources to expand further into other markets. Moreover, the Uppsala model recognizes the importance of experiential learning and knowledge acquisition in the internationalization process. Office Work Australia can use the gradual internationalization approach to gain experience and knowledge about the Singaporean market, including the cultural norms, legal regulations, and competitive landscape. This knowledge can inform their market entry strategy and enhance their chances of success in the new market. Therefore, the Uppsala model of internationalization theory is a suitable approach for Office Work Australia to use when entering the Singaporean market. The gradual internationalization approach aligns with the company's current cautious expansion strategy, and it recognizes the importance of experiential learning and knowledge acquisition in the internationalization process. Using this approach, Office Work Australia can gradually increase its commitment to foreign markets, gain Assignment Brief Template Page 5 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. One of the macro-environmental factors that should be considered is Singapore's political and legal environment. This includes the stability of the government and its policies, as well as the laws and regulations governing foreign investment and business operations. Singapore has a stable political environment with a business-friendly government committed to attracting foreign investment (Central Intelligence Agency, 2022). The country has also established a favorable legal framework that encourages foreign companies to establish themselves in the country. For instance, the government provides tax incentives and subsidies for foreign investors and has implemented a robust intellectual property protection regime (International Trade Administration, 2022). Another important macro-environmental factor is the economic environment in Singapore. The country has a highly developed and open economy characterized by a high level of international trade and investment. According to PESTEL analysis and Appendix 5, its GDP per capita is one of the highest in the world, and the country has a favorable business climate conducive to growth and innovation (Central Intelligence Agency, 2022). The country also has a well-educated and skilled workforce, investing heavily in research and development to drive innovation and technology adoption. Regarding micro-environmental factors, Office Work Australia needs to consider the competitive landscape in Singapore. The country has a highly competitive business environment, with many established players across different sectors. Office Work Australia needs to assess the level of competition it will face in the market and identify strategies to differentiate itself from its competitors. This could include offering unique products or services, focusing on a niche market, or leveraging its existing marketing and customer service strengths. Finally, cultural and social factors also influence the external environment. Singapore is a multicultural society with a mix of Chinese, Malay, and Indian cultures. The country is also highly cosmopolitan and attracts a diverse mix of expatriates and international students, as revealed by Hofstede's insights in appendix7. Office Work Australia needs to understand these cultural nuances and tailor its marketing and branding strategies to appeal to different population segments. Therefore, the external factors in the market entry framework are critical for Office Work Australia to consider in its potential expansion to Singapore. The macro-environmental factors, such as the political and legal environment and the economic environment, are important to assess the market's overall attractiveness. The micro-environmental factors, such as the competitive landscape and cultural and social factors, are important to develop effective marketing and branding strategies. By carefully analyzing these external factors, Office Work Australia can make informed decisions about the best entry mode and strategies for success in the Singaporean market. Transaction-Specific Factors This factor refers to the ease of transferring skills and knowledge of product development and use to potential investors and consumers in the target market (Hollensen, 2020). In the case of Office Work Australia's potential expansion to Singapore, transaction-specific factors play a crucial role in determining the level of success in the target market. The company needs to evaluate the level of knowledge transfer required to enter the Singaporean market effectively. This includes language barriers, cultural differences, legal and regulatory frameworks, and consumer behavior. Understanding these transaction-specific factors is essential for successful market entry (Luo & Shenkar, 2016). In Singapore, English is the dominant business language, making it easier for Office Work Australia to communicate with potential partners and customers. However, cultural differences may pose a challenge, and the company needs to understand the cultural nuances and values of the target market to tailor its products and services (Cavusgil, Knight, & Riesenberger, 2017). Additionally, Singapore's legal and regulatory framework is known to be strict and can be challenging to navigate, especially for foreign firms. The company must ensure it complies with Assignment Brief Template Page 7 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. all legal and regulatory requirements to avoid any potential legal issues hindering its market entry efforts (Shenkar & Luo, 2018). Furthermore, understanding consumer behavior is critical for successful market entry. Singapore has a diverse consumer market, and Office Work Australia needs to conduct extensive market research to identify the needs and preferences of its target customers. This will help the company tailor its products and services to effectively meet the Singaporean market's needs (Kotler et al., 2017). Thus, the transaction-specific factors play a significant role in determining the level of success for Office Work Australia's potential expansion to Singapore. The company needs to evaluate the ease of transferring skills and knowledge of product development and use to potential investors and clients. Understanding language barriers, cultural differences, legal and regulatory frameworks, and consumer behavior are critical for successful market entry. By understanding these transaction-specific factors, Office Work Australia can effectively tailor its market entry strategy to enter the Singaporean market. Desired Mode Characteristics The fourth factor of the Hollensen market entry framework is Desired Mode Characteristics, which refers to the risk attitude of the selected company. According to Hollensen (2020), the level of risk that a company is willing to undertake in entering a new market will influence its entry mode choice. Some entry modes are considered riskier than others, so a risk-averse company may prefer to choose a less risky mode of entry. For instance, Office Work Australia may prefer a low- risk entry mode, such as exporting, as it involves lower investment and commitment than other modes like joint ventures or wholly-owned subsidiaries. In contrast, a high-risk entry mode, such as direct investment in a wholly-owned subsidiary, requires a significant investment of resources and carries a higher level of risk, as indicated in appendix 2. In addition to the company's risk attitude, the desired mode characteristics may also be influenced by factors such as the firm's financial resources, expertise, and objectives for international expansion. For example, a firm with limited resources may opt for a low-risk entry mode to minimize financial risk, while a firm seeking greater control over its operations may choose a high-risk mode. Research by Li and Ferreira (2019) has found that a firm's risk attitude plays a critical role in determining the entry mode choice. Their study examined the entry mode strategies of Chinese firms entering the Brazilian market and found that risk-averse firms preferred low-risk entry modes, such as exporting. In contrast, firms with a higher risk appetite were more likely to use high-risk modes such as joint ventures or wholly-owned subsidiaries. Thus, the desired mode characteristics factor of the Hollensen market entry framework emphasizes the importance of a company's risk attitude in choosing an appropriate entry mode. By considering these factors, Office Work Australia can decide on the most suitable entry mode for its expansion into the Singaporean market. Section 5: Justification of a Proposed Market Entry Mode and Type Based on the analysis conducted in the different sections, it is recommended that Office Work Australia enter the Singaporean market through a joint venture with a local partner. Several factors justify this market entry mode. Firstly, the internal factors of Office Work Australia indicate a need for more experience in the Singaporean market, which poses significant risks for the company if it were to enter the market independently. By partnering with a local firm, Office Work Australia can leverage the knowledge and expertise of the local partner to mitigate these risks and gain a better understanding of the Singaporean market. Secondly, the external factors, specifically the favorable economic and political climate in Singapore, make it an attractive market for foreign investment. According to the World Bank's Ease of Doing Business Index, Assignment Brief Template Page 8 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. References Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. doi: 10.1177/014920639101700108 Barringer, B. R., & Greening, D. W. (1998). Small business growth through geographic expansion: A comparative case study. Journal of Business Venturing, 13(6), 467-492. https://doi.org/10.1016/S0883-9026(97)00043-1 Cachon, G. P., & Terwiesch, C. (2019). Matching supply with demand: An introduction to operations management (4th ed.). McGraw-Hill Education. Calof, J. L., & Beamish, P. W. (1995). Adapting to foreign markets: Explaining internationalization. International Business Review, 4(2), 115-131. doi: 10.1016/0969- 5931(94)00028-w Central Intelligence Agency. (2022). The world factbook. https://www.cia.gov/the-world- factbook/ Chen, Y., & Yao, Y. (2020). The impact of social media on consumer purchase intention: An empirical study. Journal of Research in Interactive Marketing, 14(4), 456-473. https://doi.org/10.1108/JRIM-02-2019-0033 Cheng, L. T. W., & Krumwiede, D. W. (2012). The effects of market and enterprise factors on exporting in Canadian SMEs. International Business Review, 21(5), 842-854. doi: 10.1016/j.ibusrev.2011.08.005 Chopra, S., & Meindl, P. (2021). Supply chain management: Strategy, planning, and operation (7th ed.). Pearson. Assignment Brief Template Page 10 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. Chung, J., Park, J., & Shin, J. (2020). The effects of corporate social responsibility on customer loyalty: The moderating role of corporate ability. Sustainability, 12(8), 3225. https://doi.org/10.3390/su12083225 Department of Statistics Singapore. (2022). Home page. https://www.singstat.gov.sg/ Dunning, J. H. (1980). Toward an eclectic theory of international production: Some empirical tests. Journal of International Business Studies, 11(1), 9-31. doi: 10.1057/palgrave.jibs.8490676 Dunning, J. H. (1993). Multinational enterprises and the global economy. Wokingham: Addison- Wesley. Euromonitor International. (2021). Home page. https://www.euromonitor.com/ Grönroos, C. (1994). From marketing mix to relationship marketing: Toward a paradigm shift in marketing. Management Decision, 32(2), 4-20. doi: 10.1108/00251749410054765 Hollensen, S. (2020). Global marketing: A decision-oriented approach (8th ed.). Pearson. International Labour Organization. (2017). Women and men in the informal economy: A statistical picture (3rd ed.). https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/ publication/wcms_618436.pdf Johanson, J., & Vahlne, J. E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9), 1411-1431. https://doi.org/10.1057/jibs.2009.24 Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23-32. doi: 10.1057/palgrave.jibs.8490676 Kotler, P., Kartajaya, H., & Setiawan, I. (2017). Marketing 4.0: Moving from traditional to digital. John Wiley & Sons. Luo, Y., & Shenkar, O. (2016). Toward a perspective of cultural friction in international business. Journal of International Management, 22(1), 1-7. https://doi.org/10.1016/j.intman.2015.11.003 Office Work Australia. (2023). Home page. https://www.officeworks.com.au/ Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. Rugman, A. M., & Verbeke, A. (2003). Extending the theory of the multinational enterprise: Internalization and strategic management perspectives. Journal of International Business Studies, 34(2), 125-137. doi: 10.1057/palgrave.jibs.8400014 Samiee, S., & Roth, K. (1992). The influence of global marketing standardization on performance. Journal of Marketing, 56(2), 1-17. doi: 10.1177/002224299205600202 Assignment Brief Template Page 11 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. Appendix 2: Office Work Five Year Achievements. A ppendix 3: Sustainability Report of Office Work in terms of Total Team Members and Injuries Recorded for the past five years. Appendix 4: Office Work Records Growth despite Covid19 Challenges. Assignment Brief Template Page 13 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. Assignment Brief Template Page 14 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. Appendix 7: Hofstede Insights 2023 Appendix 8: OfficeWork Ltd Financial Information since 2018-2015. Assignment Brief Template Page 16 of 18

This document is for De Montfort University use and should not be passed to third parties or posted on any website. Appendix 9: Singapore Population Appendix 10: Australian Population. Assignment Brief Template Page 17 of 18