Export Strategy Essay For Roshanstore To Enter UK Market.

Write a Board Paper asking the board of directors of the chosen exporter to adopt and implement your proposed export strategy. Your Board Paper should include an analysis of the proposed strategy taking into account the following issues:

International trade theory: Why and how firms engage in international trade

Approaches used by firms to adhere/avoid/bypass instruments of trade protection or to benefit from trade promotion and investment tools (at national, regional and global levels)

Types of export-related strategies

Accessing market opportunities: entry strategy, cross-border collaboration and risk analysis

Logistics, modes of transport and information technology

Incorporating ethical issues in strategic decision-making

Your analysis and recommendations should also consider the benefits and potential barriers to successful implementation of the future strategy.

Analysis of Export Strategy

The company named as Roshanstore is located in Mohali district, Punjab region of India. The company is a famous store for packed foods in its area. This paper aims to explore the export strategy of the company. The company is firmly established in the market of its native court and plans to expand its business. It tends to tap the potential of the market of UK as packed food has high demand in European countries and the USA. The company is in the financially sound position and there is anti-incumbency against Chinese due to the low quality of their products. This development can be an advantage for the Roshanstore. In addition to this, the protectionism policy adopted by the governments of developed countries will benefit India and Indian companies (Mutize & Gossel, 2018). The recommendations are provided in the next section, after that, the topic is researched well then, the arguments against and in favor of recommendations are presented. After that, the implementation strategy is discussed. In the end, a suitable conclusion is drawn.

The company should enter the market of the UK and export its products there

The Indian diaspora present in the UK should be supplied the taste of their native land provide native cuisines to them.

The company should take the benefit of protectionism policy adopted by the USA and developed countries against China.

The company should promote Indian foods in the market of UK with the campaign of incredible India

The business-friendly government in India under the leadership of Narendra Modi aspires to increase exports for bridging the current account deficit (Chen et al., 2018). The business organizations are provided export incentives by the government like less number of tariff and non-tariff barriers. In such a situation, the company cannot remain behind.

The food products related to taste of the UK should be provided along with the focus on healthy products, especially when, developed countries are grappling with the problem of obesity. The healthy products will gain a significant part of the market because of health awareness among citizens of UK.

The company was established in the year 2000 and since then exporting packed food products to different countries. The company wants to enter the UK market where large numbers of Indians are residing on a temporary or permanent basis. The laissez-faire policy adopted by the European countries will make the company big competitor of other retailers present in the market (Yakubu et al., 2018). The company can export directly to the customers or it can hire any other agency associated with the food industry as an intermediary. The intermediary will provide the required platform and infrastructure to sell the products in the market of the USA. The best strategy for the company will be to use a mixed approach and access the market, either directly or through an intermediary agency. The exports will be increased if the quality products are supplied to the citizens and subjects of the UK. There is demand in the market as British citizens are affluent. They can easily access the packed food economically. They have big pockets and consume quality products. India exports its raw materials to the European market. The potential for processing is not considered serious. There is a need to help the sector grow with the growth of forwarding and backward linkages (Lee & Lin, 2018).

Benefits and Potential Barriers to Successful Implementation of the Future Strategy

Recently India improved its ease of doing the business ranking by 31 points and has reached up to 100th position. In addition to this, after Brexit, UK is keen to sign free trade barrier with India. Entering the market of UK will lead to access to other European markets. This will lead to further expansion of the business. The price instability in the market regarding agricultural products used in food industry as raw material will not have a significant impact. The government of India has developed a plan to double the incomes of Indian farmers by 2022. For this to happen, the company can be used as a forward linkage in supply chain management. It will get raw material directly from farmers and process them (Pata, 2018). The Indian companies always face lacunae in packing and processing, this is the reason exports of India are less as compared to imports. According to international trade theory, India has the natural advantage of natural resources and low labor wages. Thus according to international trade theory, India has specialization in the agriculture industry which is directly related to food processing industries. This potential benefit is exclusively available in India which the company should take advantage of. In addition to this, it should stress packing as British citizens like the products with good packing (Shahbaz et al., 2018).  

Along with this, there is one more aspect to be considered. The WTO which regulates the international trade promotes free trade in goods and services. India is a founding member of WTO and has a considerable say in the matters of WTO. India is among the strong lobbying group of BRICS which covers more than 30 % population of the world. BRICS is a regional organization involving 5 countries namely, Brazil, Russia, India, China, and South Africa. These countries have strong potential to tile the balance in WTO in favor of emerging and underdeveloped countries. The BRICS is an important lobbying group which takes underdeveloped countries along with it (Murshed, 2018). The trade among BRICS countries is continuously increasing and there are opportunities for the UK to sign a kind of free trade agreement with India. If this trade pact is signed there will be a plethora of opportunities for the business organizations in the UK and other European countries.  

According to some arguments, the Brexit will lead to a reduction in the growth of the economy of the UK. Along with this, there will be many other repercussions like loss of the European market. So few political analysts recommend staying away from the country like UK (Chen & Hu, 2018). In addition to this, the UK customers prefer standard and quality products so the company in a country like India cannot provide them the quality products. In addition to this, the resolve of the Indian government to double the incomes of a farmer by 2022 is viewed in negative. Some economists predict that this increase in farm income cannot be done without increasing the prices on agricultural produce. Thus, they predict the increase in prices of raw material used by the food processing industry. It is believed that many countries are still facing recession so there is need to give ample time for the market to balance itself. It is said by economists that the world is not growing at the rate it has the potential to grow (Liu & Lee, 2018). There are many international organizations which have predicted the ailing banking sector in India leading to less number of credit provisions and affecting the economy overall. The economic turmoil has been witnessed in many countries. China is also shifting its growth pattern to consumption, so it will have global repercussions as China is a major exporter in the world. In addition to this, there are many other business aspects to be considered before expanding the business and tapping the market of UK (Yan, 2018).

Company Background and Market Potential of UK

Many economists argue that Brexit will benefit India and related countries as the UK will need friends for free trade in the international community. This benefit should be used by the company to further its profit aims. There are many others who consider the economy of India as the fastest growing economy in the world. In addition to this, there are low labor wages which can lead to economies of scale. There are many other benefits like ease of doing business, large market, and suitable political situations. The UK can sign trade pacts with India leading to further increase in profit for the company (K?ral & Erden, 2018). Plus, the Indian government has reduced the tariff and non-tariff barriers which will benefit the company. There will be more supply of raw material because of large agricultural production leading to a lowering of prices. The sustainable packaging will entice the UK customers to buy the products if the company. Promotion of product along with healthy food campaigns will promote the growth of the company. There would be economies of scale and state of the art facility that will compete with the standards of products used by British citizens. There will be supportive government and positive economic growth. The world has come out of the financial crisis of 2010 so there is the perspective of growth. Various international institutions like IMF, World Bank, and WTO are predicting the faster economic growth in India. In addition to this, in the year 2019, parliament elections will be held during which there is a chance of increased investment leading to further buoyancy in the market (Andre et al., 2018).  

The recommendations given above must be implemented. The world is on the trajectory of growth and the rising protectionism against China will benefit countries like India. Sustainable packaging with quality products will definitely be liked by British citizens. There are many competitors but the company has the advantage of specialization economy. All the raw material needed in the processing are locally available so there can be the maximization of profit. The low labor wages will lead to the less operational cost which can lead to low pricing of manufactured products. This will give a competitive advantage to the company. The company will be able o sell the products at lower rates leading to gain of significant part of the market. Healthy food products will attract the population of the UK which is one of the many developed countries grappling with increased obesity among children and adults. Healthy food will be available to Indian diaspora as well. There is a need to harness the potential of the Indian diaspora. It will also generate goodwill for the company (Yépez, 2018). The Indian diaspora has not been considered seriously till now, but it can generate a lot of earning opportunities for the persons and organizations of India. There are a plethora of opportunities which need to be taken advantage of.

Recommendations for Implementation of Export Strategy

Conclusion

It can be concluded from the above discussion that there is potential for the company to do better in the UK. There is a need to have strategic planning so that exports are increased, but at the same time, operational cost is reduced. The sound campaigning and the supply of quality products will lead to an increase in exports (Raza et al., 2017). The demand in the market is already there. But it needs to be considered that expectations of the customers are high in the era of globalization so there is a need to provide competitive and quality products. According to the recent reports, the world GDP is on the trajectory of growth so there are opportunities to tap the potential of the new market and increase the exports in long run. There are multiple benefits which have been described above (Ahmad et al., 2018). The company needs to have a tacit understanding of the market of UK and accordingly strive hard to gain access to its market. The campaign of incredible India can be used as the company to promote or advertise its products. This will generate a brand image of the company, increase the exports and build the goodwill for the company. The company should comply with the norms of WTO and other international institutions concerning with trade and business, but should also strive hard to increase its exports and gain access to UK market (Uprety, 2017).

References

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Andre, C. et al., 2018. Current account sustainability in G7 and BRICS: Evidence from a long-memory model with structural breaks. The Journal of International Trade & Economic Development, 27(6), pp.638-54.

Chen, M. & Hu, X., 2018. Linkage between consumer price index and purchasing power parity: Theoretic and empirical study. The Journal of International Trade & Economic Development, 27(7), pp.729-60.

Chen, C.-Y., Lin, S.-H., Chou, L.-C. & Chen, K.-D., 2018. A comparative study of production efficiency in coastal region and non-coastal region in Mainland China: An application of metafrontier model. The Journal of International Trade & Economic Development, 27(8), pp.901-16.

K?ral, H. & Erden, L., 2018. Bilateral trade effects of fiscal devaluation: Evidence from OECD countries. The Journal of International Trade & Economic Development, 27(6), pp.585-606.

Lee, C.-C. & Lin, C.-W., 2018. Economic growth, financial market, and twin crises. The Journal of International Trade & Economic Development, 27(8), pp.937-67.

Liu, T.-Y. & Lee, C.-C., 2018. Testing explosive behavior of public debt in OECD countries. The Journal of International Trade & Economic Development, 27(7), pp.761-91.

Murshed, B.A.D.&.S.M., 2018. Transmission channels matter: Identifying spillovers from FDI. The Journal of International Trade & Economic Development, 27(7), pp.701-28.

Mutize, M. & Gossel, S., 2018. The effects of sovereign credit rating spillovers on neighbouring countries’ financial markets. The Journal of International Trade & Economic Development, pp.857-900.

Pata, U.K., 2018. The Feldstein Horioka puzzle in E7 countries: Evidence from panel cointegration and asymmetric causality analysis. The Journal of International Trade & Economic Development, 27(8), pp.968-84.

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