Global Expansion Strategy For Danone MNC, UK In Asian Countries

Selecting Factors to Expand in International Markets

Danone MNC, UK is one of the multinational companies that has been headquartered at Paris, France. The company deals in the food items majorly the dairy items. The concern was founded in the year 1919 in the city of Barcelona in Spain. The company had changed the location of its headquarters in the year 2002 (Danone.com 2018). The major brands that are endorsed by the company include both the local and the international brands. The company tends to target the countries with the emerging markets for their expansion. This helps the concerned company to deliver the mission of the organization. This also helps the company to ensure the fact that there is a long-term growth in the business that the company is involved in.

The following report attempts to throw light on the various complexities that are involved in the matters pertaining to the entry of the company in the global market. The report proceeds further to discuss an international development strategy that the company might abide by for the expansion in the Asian countries like India and Singapore. The second part of the report tends to focus on the evaluation of Singapore on the basis of Hofstede’s model of Cultural Dimensions in order to help the company to prepare the expatriates of the company to serve in the various business ventures that are located in this country. The report also throws light on the measures that should be taken care of by the company while preparing and motivating the concerned expatriates in serving the company at these foreign locations.

Complexities involved in the entry to a global market

The companies are advised to select the various factors that might be used to decide on the ways in which the company might expand in the international markets. The companies are advised to carry out the researches in order to select the areas wherein the concerned company might expand. The management of the concerned company is advised to take care of the various needs that might have been observed in the concerned market scenario. The concerned management of the company should look forward to identify the various area where the customers tend to display a huge demand of a certain service or the demand for the solution of a problem that they have been facing with regards to a particular product or service (Forsgren and Johanson 2014). The company must identify the actual needs and requirements of the masses of the market wherein the company has been intending to expand. The company is advised to take care of the various needs of the customers that they tend to serve. The researches that the company officials undertake must ensure that they have a sound knowledge of the local businesses and the safety regulations of the concerned country. This might help the concerned company to modify and refurbish the products, the name of the product or the packaging of the product in compliance with the local cultural and legal regulations.

International Development Strategy for Danone MNC, UK

The company might tend to resort to the various website that enable the online sale of the products. This is considered to be beneficial for the company as this method would lead the concerned business organization to incur low costs for the entry into the local market of the region wherein they would like to expand. The concerned department of the company is advised to put efforts in the designing of the website suited to the needs and the cultural preferences of the concerned country. The company might also take the help of the various distributors in order to make the target customers of the concerned company aware of their market presence. The distributors help the concerned company to reach out to the target customers in the chosen country but provide the company lesser control over the marketing of their products. The companies might also choose to sell the products directly to the target customers by the organizing the sales visits to the concerned countries wherein they might have identified the demand. The companies might also engage in the various joint ventures with the local business partners in order to gain an entry into the selected market (Blackburn, Hart and Wainwright 2013). This might help the concerned company to learn more about the local markets and the preferences of the target consumers.

The various companies might look forward to expanding their business in the international market through the opening of an operational house of the concern in the concerned countries. The company might also export their products directly to the customers through the medium of the online sales. The company might also tend to launch their products in these Asian countries through the various agents or the distributors or by taking over an existing business in the concerned country. Danone MNC, UK might attempt the sale of their products in India and Singapore by collaborating with an existing business that deals with the similar products in the chosen markets.

This international developmental strategy of joint ventures or the collaboration with the existing businesses in the country has its own benefits. The various benefits of the joint venture strategy are enlisted below.

• The joint venture helps the concerned company to gain insights into the concerned target market.
• The joint venture might help the company to gain better resources in the concerned target market.
• The joint venture might be used as a temporary arrangement by the company in order to gain entry into the market in the concerned countries (Verbeke 2013).
• The joint venture allows both the companies to share the risks and the costs that re involved in the business.
• The joint venture allows the parties that are involved to sell their products in an individual manner. The parties that are involved in a joint venture tend to build better and long-lasting business relationships.
• The joint ventures of the international levels help the parties that are involved to eradicate the risks involved in the discrimination.

This strategy of the joint venture might be considered to be disadvantageous for the reasons that have been enlisted below.

• Vagueness of the objectives
• The restrictions of the flexibility
• The non-existence of the equality of the involvement of he involved parties.
• The cultural clashes and the difference in the management styles that exist among the parties that are involved in the joint venture (Yan and Luo 2016).

Evaluation of Singapore using the Hofstede model of Cultural Dimensions

The Hofstede model of Cultural Dimensions is a framework that is related to the cross-cultural communication that exists between two different societal cultures (Tran 2016). This model tends to put forth a description of the effects of the cultural activities that are followed by the members of the concerned society on the various values of the members of the concerned society. This framework also tries to put forth the relation between the concerned values and the behavior that is depicted by the concerned members. The framework uses a structure for the description of the same which has been derived from the analysis of the various factors that are involved. The evaluation of the business environment of Singapore based on the Hofstede’s cultural dimension framework is as given below.

• Power Distance – This concept helps the concerned company to have an insight into the relationships that exist between the employer and the employee (Wild, Wild and Han 2014). In Singapore, the subordinates and the employees are comfortable with the fact that they are instructed by their seniors and trust the decisions that are taken by their superiors.
• Uncertainty Avoidance – The concept refers to the feeling of comfort or the discomfort that is experienced by the concerned employee when treated with a particular situation that is unstructured (Beugelsdijk, Maseland and Hoorn 2015). The business environment in Singapore is observed to abide by the various rules that have been set by the concerned management.
• Individualism and Collectivism – This concept deals with the extent of the interdependence that is maintained by the concerned members of the society in order to remain as a part of the concerned group (Hsu, Woodside and Marshall 2013). The business community of Singapore is known to be a collectivist society wherein the members maintain a cordial relationship among themselves with a strong bond of interdependence.
• Masculinity and Femininity – This concept deals with the emotional roles and the exchanges that take place between the members who belong to both the genders (Mazanec et el.2015). The Singaporean society tends to promote the softer aspects of the culture that is prevalent in the society. The Singaporeans are observed to be sympathetic and avoid conflicts.
• Short-term and Long-term communication – This concept deals with the maintenance of the linkages to the challenges that were faced in the past days while dealing with the challenges in the present times and in the future days to come (Venaik, Zhu and Brewer 2013). The Singaporean business culture depicts the cultural qualities that uphold the long-term investments in the concerned fields like the sustained efforts that are displayed by the employers as well as the employees.

Evaluation of Singapore Based on Hofstede's Model of Cultural Dimensions

A person who has been living in a foreign land or any country wherein the concerned person does not a citizenship for a temporary period of time due to work related issues might be referred to as the expatriates (Cerdin and Selmer 2014).  The expatriates might also be the people who have given up the citizenship of their home country in order to hold the citizenship of some other country. The various business organizations that deal with the international markets tend to employ the expatriates to the countries wherein they do operate. The expatriates need to be prepared for the job that they have been assigned by the concerned organization (Huff 2013). They also need to be provide with the needed motivation in order to help them to deliver the work that they have been assigned in a proper manner.

The various measures that can be taken in order to prepare and motivate the expatriates. The business organizations might tend to send the expats to the concerned countries in order to help the employees, who have been serving the organization in the concerned branches, with the knowledge that the company needs to deliver (Hbr.org 2018). The expatriates are often assigned to various locations in order to transfer the concerned knowledge or to generate the same among the employees of the concerned branch of the company. The concern might also employ the expatriates in order to help them in the development of the global leadership skills that they might need to portray in the concerned business organization. The concerned business organization should offer certain benefits, rewards and the compensations to the concerned expatriates in order to help them to continue with their service in the country where they have been assigned (Yanadori 2014). The benefits that might be offered to the expatriates are enlisted below.

• The fair remuneration packages.
• The various international pay packages.
• The fair healthcare packages and the other insurance packages that might be availed internationally (Agwu 2013).
• The social security of the concerned expatriate and the family of the concerned expatriate.
• The hardship allowances that might take care of the crime rates and the political situations of the concerned country.

The management of Danone MNC, UK might use the joint venture strategy in order to expand in the Asian markets. The company might try to set up a collaboration with the various other companies in the countries of India and Singapore in order to make an entry into the markets. The company might try to introduce in these markets their popular products as well as some new products in these markets in order to grab on to the target customers of the company. The company might also tend to sell their products directly to the customers by allowing the concerned customers to order the products of the company over the online medium.

Preparing and Motivating Expatriates

Conclusion

In lieu of the discussion above, it might be concluded that the business environment that exists in the Asian Countries like India and Singapore are favorable for the expansion of the companies like Danone. The company might employ the expatriates who might help in imparting education to the staff that has been hired to serve the company in these countries. The concerned management of the company might find it easier to expand in these countries due to the high demand of the products that are manufactured by the company. Thus, it might be safely concluded that the company might venture into the Asian business environment majorly with the purpose of expansion.

References

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