Strategies For International Business Expansion: A Case Study Of Hungry Jack In India, Essay.

About Hungry Jack

Question:

The hungry jacks franchise wants to launch in India ( mumbai ). Discuss and compare the differences in business models in Australia and India?

Due to globalization, many successful companies are now considering the thought of carrying out the operational activities on a foreign land. This is done by selecting the best and suitable entry mode, through which the intending company can easily carry out the operational activities on a foreign market. This report highlights the required and essential business strategies that need to be considered at the time of drafting plans for carrying out international business. Investment is one of the biggest criteria’s that needs to be analysed, at the time of planning for an international business.  Through effective planning strategies, the company can reduce any sort of probabilities that can affect the performance of the operational activities. This report has been prepared for Hungary’s Jack that has proposed to offer franchise in India. At the time of proposing the plan, the company intends to analyse the cultural differences and other challenges that can affect the sales of the food items that is sold to the clients. In the similar manner, analysis has to be done for evaluating the political challenges that can directly impact the sales. Such an analysis will help in drafting the best policies that would cater the needs of the clients and the company (Beamish, and Kachra, 2004).

Hungry Jack is a private limited company that is located in Australia. The company specialises in fast food and is the franchise of the Burger King.  Hungry Jack serves one of the finest and quality burgers to the clients from different parts of the country in Australia. In order to extend the business operational activities, the company offers licenses to new operators from the local and international market. In this process, the company ensures to evaluate the quality of the food that has been proposed to be sold by the franchise companies. At present, the company has more 300 locations that have been successfully catering the needs of the clients. Management of the company has proposed to offer new fast food stores in India. For this, the company has proposed to offer franchise to some of the potential companies in India. In order to do so, the management has evaluated the investment process and the method through which the business activities would be carried out. India is one of the fastest developing countries. Stable economic condition of the country and willingness of people to taste different types of foods has been one of the reasons for selecting India for business expansion purposes. (Goldman, 2007)

India is one of the developing countries, where customers enjoy the highest purchasing power parity or PPP. The business culture and the process that has to be followed for negotiating purposes have to be considered. This is one of the most important aspects, through which the companies can set right the expectations and agree to carry on with the business activities in the decided manner. Hierarchy plays an important role in the business culture. The roles of the managers and others are well defined. This has to be analysed at the time of arranging meetings with the delegates. Business decisions are taken by the top authorities, and by the delegates who have been authorised to do so.  At the time of doing business with any Indian company, it is necessary to draft strategies for building long term and positive relationship. This is a part of the business culture. At the time of presenting lucrative offers, it is essential to involve trust factor as this will help in negotiating with the deal. In other words, a good working deal or relationship has to be developed and implemented. (Voreacos, 2011)

Factors Influencing the Selection of India for Business Expansion

Negotiation is a term that is used for arriving at a common agreement that would benefit both the parties. Business dealings with Indian companies can be slower than expected; in case there are no trust involved in it. As the important business decisions are made by the top authorities, it is recommended to check for their presence. Many companies in India merely don’t enter into business agreement based on the statistical reports or empirical data. The authorities make use instinct and faith for analysing the benefits associated with the offer. Also, it is suggested to avoid tactics that is related to high pressure. This can affect the process of negotiation. It is recommended to be prepared for handling the criticism and disagreements, as this is a part of the conversation (Brouthers, Brouthers, & Werner, 2000).  

Delegates of the Indian company would always prefer to follow the formal method for negotiating the business terms. It includes formal handshake, addressing the party with the title of Mr and others. This is one of the most important parts of the cultural factors that have to be considered at the time of planning for business operations. The contract details are expected to be discussed in an elaborated manner. This is done to remove any sort of ambiguity that can affect the business performance. Apart from this, the people usually choose English to the medium for communication. The professionals are quite often formal and humble for carrying out the discussion. Different factors that are included in the contract details are discussed in details. This is done to minimise any sort of confusion that can delay the decision making process (Brouthers, and Bamossy, 2006).

Since 1991, the government authorities of the country have been drafting and implementing different strategies to improve the economic condition. In this process, many rules related to international trading activities were regularised. This was done to attract many foreign investors into the country. Apart from this, the country has been successful in improving the infrastructure condition, which is one of the most important aspects for foreign investments. The roadways have been properly linked with the waterways as this would felicitate quick transportation. Such a change in fact improved the foreign investment, which increased the earning rates for the educated employees of the country. Due to improvement in the education quality, many qualified individuals could easily find the best jobs that would pay well. This increased the savings rate for the individuals. Buyers of different age groups are now interested in buying products that were sold by the international companies. This has been one of the prominent reasons for Hungry Jack for proposing to open a new store in India. The young crowd are quite fascinated by fast food, which includes burgers and pizzas. Apart from this, the other benefits that can be associated with the business operations in India includes –

• Easy availability of labour (Bryman & Bell, 2003).
• Low rate for business set-up, which is required for controlling the operational expenses.
• Willingness of the customers to buy new and better products.

The economics of the country has been view favourably by countries that intends to increase the profit margin without increasing upon the operational expenses. Apart from this, the country offers wide market for new eatable products. Besides this the companies can easily expand the business operations by adopting the strategies that has been drafted by the authorities of the country. The rules for international investment were de-regularised with an intention of attracting maximum number of foreign investors. Through this process, the authorities had proposed to increase the employment ration, which has always been a concern for the authorities. Such process was followed to enable the country and the people to cope with the challenges that were related to development. The process for registration or opening a new firm or company in the country was made simple. Some of the changes that were implemented in the process were –

• Quick availability of information through online method
• Less paper works, which had implied the process for registration a new company in the country? (Canabal, and White, 2008).
• Regularising the taxation process, which was one of the biggest concerns for the companies that had intended to trade with the country?
• Regularising different markets, which was considered to be essential for attracting new investors from various markets?
• Following a transparent system for sharing information with the foreign company

Cultural Differences and Business Negotiations in India

India is one of the highly populated countries in the world, and this again makes it a favourable choice for many countries that intends to expand the business operations. (Rava, 2011)

There are many political parties that exist in the country. However the parties intend to implement strategies through which the developmental plan for the nation can be implemented. The rules that would attract the attention of international investors are analysed by the ruling and opposition parties. This is done to arrive at a consensus, which is required for implementing the plan through which the required changes for business development can be introduced (Chen, 2007).  

The parties ensure to introduce plans that would -

• Improve the transportation system within the country
• Introduce changes that are required for improving the telecommunication system
• Analyse the challenges that exists with the current rules that has been drafted for implementing changes for attracting the international investors.

Some of the changes that has been introduced by the federal authorities are –

1. Introduce effective rules for improving the labour laws

2. Control the inflation rates, which can directly impact the performance of the foreign companies

3. Analyse the challenges that can impact the performance of the companies, and introduce an effective strategy through which the issue can be overpowered.

Hungry Jack is one of the leading fast food companies that have been successfully rendering quality services to the clients in Australia. The management of the company intends to develop strategies through which the preferences of the Indian clients can be analysed and catered. Change’s has been proposed after analysing the below mentioned factors –

• Labour market
• Available resources that includes skilful labs and infrastructure
• Feasibility of the rules that would encourage the foreign investors to carry on with the business activities

Apart from this, the challenges associated with the policies related to business activities have always been analysed. This has been done to analyse the challenges that can restrict the performance of the company. Some of the aspects that are analysed in this process are leadership style and the management process that needs to be adopted for attracting the clients (Child, 2006).  

In India, the business plans can be improved and the targets can be accomplished through effective leadership style that has been adopted by the managers. The managers are vested with additional responsibilities, through which the staffs can be encouraged to perform better at the workplace. Participative style is the best type of the leadership style through which the managers can encourage the staffs to perform well at the workplace. Through this process, it is possible for the managers to motivate the staffs to improve the productivity for the company. This would also reduce the possibility of the project failure, which can affect the performance of the organization.  An attempt needs to be made for increasing the quality of the services that has been proposed to be rendered to the clients (Child, & Tse., 2001).  

The labour law in India has been quite often reviewed and regularised. This has been done to ensure that the staffs are provided with better opportunities to work and earn at the workplace. HRM policies have to be drafted and implemented in the right manner. This also includes adopting the best practices through which the members would be encouraged to work better at the workplace. Cultural practices followed in Australia are quite different when compared to India. This is one of the reasons, the company needs to analyse the challenges that are related to human resource management in the country and draft the best policy that will cater the needs. It is quite important to have an effective communication system, through which the changes intended to be implemented can be interacted with the staffs and others. Best practices include adopting the best strategies that would enable the company to make the best use of the resources and knowledge that is required for increasing the productivity (Clegg, Kornberger, and Pitsis, 2008).

Impact of Economic Policies on Foreign Investments in India

The success of the company depends upon the strategies adopted for the change management system. In this process, the principles related to the change management system can be analysed. The changes need to be implemented for improving the quality of the production and attracting many clients. Apart from this, there are many fast food chain restaurants that have been carrying out the operational activities in the country. In this process, the cultural factors and other things have been also analysed. The management of the company has proposed to introduce innovative methods for carrying out the order processing method. This also includes collecting information from the clients regarding the quality of food and services that has been rendered to the clients. Cultural factors and beliefs of the potential customers have to be closely reviewed as this will help the management in adopting the best strategies that will enable the company to attract and retain maximum number of clients. This process has to be also analysed for analysing the innovative strategies that needs to be adopted and implemented by the company. It is a lengthy process, and the steps involved in the same have to be analysed. This will help the management to adopt the best strategies to increase the sales. Strategies that has been proposed to be adopted by the company needs to be communicated with different members, as this will help in analysing the expected challenges that can impact the process of execution (Demirbaga, Glaister, and Tatoglu, 2007).

By analysing such factors, the authorities can make the right decision regarding the implementation program for the business development on a foreign land. There has to be back-up plan that needs to be used upon, when the company intends to introduce new strategies.

It is quite important to analyse the finance system that exists in India. This will help in drafting the best policies through which the funds can be raised by the companies for business expansion. The RBI or the reserve bank of India is known to be the apex bank of the country. Authorities of this country make decisions related to regulations of the foreign investment and other factors that are essential for the improving the performance of the international companies. Some of the decisions that are made by RBI include -

• Determining the interest rates
• Regulating policies for promoting international trading activities
• Drafting policies for living taxes or collecting taxes from foreign investments
• Ensure the right amount has been remitted to the clients (Filatotchev et al., 2007).

The fluctuations in the foreign exchange rates are analysed, and this has been done to check upon the benefits that the company would derive. Rules are simplified as this will help in regulating the policies that is required for introducing the changes that will attract foreign investors into the country. The purpose for analysing the rules is to check the different factors that can affect the proposal for foreign investment into the country. There are many nationalised banks that functions as per the rules that has been drafted by the apex banks. In this process, the changes that are intended to be introduced by the company is drafted and communicated with the concerned teams or banks (Ferraro and Briody, 2012).

Benefits of Business Operations in India

Australia also has an apex bank, which is known as Reserve bank of Australia. The bank was formed in 1960, and since then has been working towards drafting better policies that are meant to improve the performance of financial sectors of the country. Reserve bank of Australia performs different tasks that include issuing currency notes, analysing the transactions between different banks, and other factors. Such things are quite important as this helps in drafting the best possible policies through which the financial sectors can be improved. Some of the other tasks that are performed by the bank include –

1. Controlling the movements of money (Forsgren , 2008)
2. Draft the best policies for banking

The tasks performed by the apex banks of both the countries are quite similar. This would help the management in drafting the best policy through which the required changes can be implemented by the company for improving the business performance.

The law system followed in Australia is quite strict when compared to the policies that are followed in India. However there are many rules that have been imposed by the Indian government on foreign companies that intends to carry on with the business activities in the country. In India, the policies has been drafted and implemented with an intention of improving the performance of the company. The company law has been amended with an intention of introducing changes through which the management will be encouraged to follow the right strategies for improving the operational activities. Also the rules are reviewed so as to ensure that the company follows transparent method for carrying out the operational activities. It is essential to enter into legal contracts, as this will encourage the parties to follow the best practices that will benefit the companies and the people. In this method, the companies will also have to include RBI and the policies drafted by the bank needs to be followed. The law specifies the steps that needs to be followed for –

1. Transferring funds out of the country
2. Tax payment (Gaspar, 2014)
3. Declaration of tax and conducting audits

Any deviations in the process need to be informed to the concerned authorities. This will help in analysing the performance of the company in India. Also, through such imposition the authorities intend to minimise any sort of illegal practices that can affect the performance of the company.

Australia also follows the right process to ensure that the companies do the right thing for carrying out business on a foreign land. In this method, the rules clearly define the steps that have to be followed for venturing with a foreign company. This is done to ensure that the companies declare the profit and earnings in the described manner. Also, the company is expected to share the right type of information with the federal authorities and others who are associated with the organization.

In the ethical practices, the companies are expected to follow the right information sharing method through which the production activities can be improved. Ethical practise include –

1. Sharing the right type of information
2. Analysing the changes that can affect the performance of the company
3. Develop values through which the challenges related to customer satisfaction and rendering quality services is analysed.

The ethical practise followed in both the countries are almost the same? In this process, an attempt is made to ensure that the right steps are followed for improving the information and other important details of the company. In this process, it is necessary to share the right details with the clients and the authorities. Also, the customer services are one of the biggest concerns for the authorities. In this process, the management attempts to adopt the best strategies through which the best services can be rendered to the clients (Hanif, 2011). 

Conclusion

It is quite important to adopt and implement the right type of strategies through which the company can venture into foreign land. Indian market has been viewed to be one of the fastest developing countries with stable economic condition. The strategies need to be adopted after analysing the challenges that are involved in the process of venturing into foreign market. In this method, the law and the process that needs to be followed by the management of the company for implementing the required changes. The rules differ from one country to another, and the same needs to be analysed before introducing the changes related to venturing into foreign market.

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