International Business Expansion: JB HI-FI's Essay On India

International business expansion has emerged as one of the key aspects of achieving continues growth in the market. Globalization has allowed organizations to expand their reach in different geographical locations for increasing the revenue level in an effective way (Burgenmeier & Mucchielli, 2013). Now, international business comprises of all the activities associated with the commercial transactions including sales, investments, logistics and transportation that take place beyond the political and geographical boundaries. Over the years, several organizations have achieved immense success through the effective expansion in the global market. International business expansion not only provides opportunity to penetrate in greater potential market but also allows enhancing the present level of revenue in a major way. For that reason, international business expansion has become obvious for all the organizations to for fulfilling all the aims and goals in an effective manner. In this report, the focus would be on the international business expansion perspective of Australia’s largest home entertainment retailer JB HI-FI. The report would aims to describe all the factors that can have impact on the international business expansion perspective of JB HI-FI. Here, the selected country for business expansion is India, as it is likely to provide huge amount of potential market for expanding the sales volume in an effective way. The report would include a brief introduction about the selected country India for business expansion. It would also evaluate economic, political and legal, culture and ethics factor comprehensively so that it can provide a clear idea about the market to JB HI-FI.     

JB HI-FI is regarded as one of the largest retailers of consumer goods, specializing in Blue-rays, CDs, DVDs, Video games and other electronic software and hardware equipments. JB HI-FI has also included home appliances in its product list for maximizing the impact on the market. The organization was established in 1973 with the objective of providing high-class electronic consumer goods to the customers (jbhifi.com.au, 2017). Presently, JB HI-FI has established strong presence in Australia and New Zealand market. In fact, it is regarded as one of the most successful and fastest growing organization of its kind. The innovative and unique strategies of JB HI-FI has allowed to remain one step ahead of its present prime competitors like Myer, Harvey Norman, Target Australia, David Jones and Big W. Therefore, it has allowed the organization to fulfill all the business aims and objectives in an effective manner.

Revenue Level of JB HI-FI

In 2016, the revenue level of JB HI-FI was accounted around A$ 4 billion, which was 6.8% higher from its previous year (jbhifi.com.au, 2017). It illustrates the fact that JB HI-FI has able to create immense popularity in both Australia and New Zealand market. For that reason, it will be obvious for JB HI-FI to look for other market with huge potential to enhance the sales revenue even further. Overseas expansion will provide JB HI-FI the opportunity to interact with people from different culture, values and religious background, which will definitely help to position the brand in global platform. Now, development of strong global brand will allow the organization to spread the business in all across the globe. It will definitely help to increase the overall sales revenue level in a major way. Hence, overseas expansion is likely to provide more opportunity to JB HI-FI in achieving sustainable growth for long period of time.    

As described by Wild, Wild and Han (2014) organizations will have to extremely careful at the time of selecting any country for business expansion. Improper selection of country might not allow the organizations to create desired impact on the business process. For that reason, JB HI-FI also has to assess all aspect of the selected country India before initiating any business expansion strategy. Presently, India is among the fastest growing economies in terms of GDP, per capita income and other factor.  In fact, India is ranked higher than the countries like Italy, Russia or Spain in terms of consistent growth for sustainable timeframe. It has created positive impact on the overall purchasing power of the people living in India. Recent survey has highlighted that people in India are spending much bigger amount on daily activities compared to 10 years earlier. Specifically, in the prime cities of India like Bangalore, Delhi, Mumbai, Chennai and Kolkata, people are looking to invest bigger amount to lead a luxurious life. Moreover, India holds the second largest population with around 1.4 billion people (Cavusgil et al., 2014). For that reason, it is likely to represent a massive potential market for JB HI-FI to enhance the sales volume in a major way. Moreover, India represents an extremely culturally diversified economy that includes people from different religion, culture and language. For that reason, expanding business in the Indian market will provide a new dimension in the operational procedure of JB HI-FI. In addition, international trade policies, foreign direct investment and legislative regulations are very much supportive for international business expansion. Therefore, it will reduce the amount of challenges JB HI-FI will have to face at the time of expanding in Indian market.

Selection of India for Business Expansion

As illustrated by Beamish (2013) proper analysis of the present economic condition is extremely important for overseas business expansion. Proper evaluation of the economic factors will provide a clear idea about the kind of revenue can be expected from the country. Now, India is regarded as one of the fastest growing countries, as its GDP growth rate was accounted around 7.3% in 2015-16 financial years, which was comparatively higher from previous year. It reflects that higher amount of products has been developed and consumed in the Indian market. For that reason, it is likely to provide greater opportunity to JB HI-FI to expand their reach in the Indian market as well. It has also created positive impact on the per capita income level of the people, which is likely to increase the spending on the regular consumer goods as well. In 2015, 47 organizations were listed in Forbes Global 2000 raking (Dzever & Jaussaud, 2016). Therefore, it highlighted the kind of potential Indian market has for overseas business expansion. On the other hand, Forsgren and Johanson (2014) have highlighted that foreign direct investment (FDI) is another major monetary source for assessing economic development rate of India. In 2015, Financial Times mentions that India had already overtaken countries like US and China, as the prime destination for foreign direct investment. Statistically, India captured investment of around $31 billion compared to $28 billion and $ 27 billion of US and China respectively (Weiss, 2014). Therefore, it is also likely to help JB HI-FI at the time of expanding business in the Indian market.

Now, favorable economic factor is also likely to minimize the amount of challenges organizations have to face at the time of expanding business in the foreign market. Hence, it will allow JB HI-FI to minimize the risk level associated with the international business expansion perspective in an effective way. Moreover, India also reflects an extremely flexible economy in terms foreign exchange perspective. Hence, it will help the management of JB HI-FI to eliminate the risk associated with the foreign exchange in a significant manner. Moreover, electronic consumer goods in Indian market are worth around $12 billion (Autio & Fu, 2015). In addition, India has recently gone through demonetization process at the end of 2015 for countering challenges associated with black money and corruption in a significant manner. The demonetization process has allowed Indian government to minimize the amount of black money present in the market, which is likely to create positive impact on the economic expansion perspective. As a result, it has allowed minimizing the income differences between poor and rich people living in India. It will allow JB HI-FI to target people from different income group for expanding the revenue level effectively. Now, greater potential market will definitely create positive impact on the overseas business expansion objectives of JB HI-FI. Therefore, it is also likely to provide enough opportunity to JB HI-FI in expanding the business in Indian market. Moreover, strong presence in Australia and New Zealand would also likely to create positive impact on the business expansion perspective of JB HI-FI.       

Evaluation of Economic Factors

As illustrated by Lindberg, Voss and Blackmon (2013) proper evaluation of political context of new economy is extremely crucial for fulfilling the aims and objectives of overseas business expansion. Several political factors can actually create massive impact on the overall business condition of the organizations. Traditionally, India’s political condition has always allowed international businesses to enter into the market in an effective manner. Political factors include stability of the government and kind of leadership approach the present government has taken for running the country. It has been assessed that India is an extremely politically stable country that is very unlikely to fluctuate in recent time. As a result, it would induce JB HI-FI to face minimum amount of political challenges at the time of expanding the business in the country. For that reason, it can be expected that JB HI-FI will receive required amount of political support from the Indian government, which is essential for fulfilling all the business objectives in an effective manner (Allard, Martinez & Williams, 2012). However, different types of political pressure are present that will induce JB HI-FI to recruit certain percentage of employees from the host country. In addition, JB HI-FI is also likely to face pressure of following the minimum wage payment rules and regulations that can affect the overall business procedure.

On the other hand, Yang, Su and Fam (2012) have describes the fact that proper maintenance of legislative guidelines is critical for fulfilling international business expansion aims and objectives. Proper maintenance of legislative guidelines will allow JB HI-FI to conduct business in the Indian market without facing too many troubles. Over the years, several legal regulations such as Indian Contract Act, trade Union Act, Industrial disputes act, Foreign Trade regulation and Employee protection act by the Indian government. It has ensured effective international business activities (Ardichvili et al., 2012). Therefore, JB HI-FI will also have to focus on utilizing all these legislative guidelines for fulfilling business aims and objectives in an effective way. Moreover, Indian government also has provided a guideline regarding the way information technologies will have to be used by the organizations at the time conducting business in the market (Budhwar, 2012). In addition, it can be assessed that tax rate of Indian government is not very high, which will allow JB HI-FI to enhance the revenue level in a appropriate way. Supportive legislative guideline will also allow JB HI-FI to import different advance technology in Indian market. Many studies have emphasized the fact that proper utilization of advance technology is crucial for enhancing the effectiveness of the operational process (Hallbäck & Gabrielsson, 2013). Specifically, international business induces organizations to face huge amount of competitions from different prime organizations. As a result, use of advance technology will allow organizations to achieve competitive advantage in the global market.   Therefore, it will help to fulfill all the requirements related to JB HI-FI operational process in an effective manner. For that reason, it can be expected that the legal and political environment of India will encourage JB HI-FI to expand its business comprehensively.             

Evaluation of Political Factors

As per the article by Peterson, Arregle and Martin (2012) culture of a particular economy can actually create major impact on the overall business procedure. Culture plays an important role in developing values, believes and though process of the people. Therefore, it also can have major impact on the purchase decision-making process of the customers, which eventually will create adverse impact on the business level. For that reason, JB HI-FI will also have to focus on the proper evaluation of the Indian culture at the time of overseas expansion process. Now, India is among the most culturally diversified country that includes people from different religion and caste. In the present time, India has 22 official languages that people use in their daily lives. The number increases to more than 150 at the time of counting unofficial language procedure. For that reason, it is critical for JB HI-FI to understand the state wise or area wise differences in culture for performing all the operational responsibilities in an appropriate manner. JB HI-FI also has to assess the educational level of the people living in different parts of the country at the time of assessing potential target market. Now, Tamil Nadu and Punjab is among the most educated state in India (Turcan, Marinova & Bakhtiar Rana, 2012). For that reason, JB HI-FI can actually expect higher sales on the areas compared to other cities. In addition, JB HI-FI will also have to focus on assessing the social structure of the Indian economy for fulfilling business expansion objectives.

As highlighted by Hoppe (2013) handling ethical challenges associated with the business procedure has emerged as one of the prime responsibilities for the organizations for achieving sustainable growth in the market. India also has highlighted the significance of maintaining ethical responsibilities for representing itself as a responsible corporate citizen. Therefore, ethical aspect of India will induce JB HI-FI to perform different ethical responsibilities, which might increase the cost associated with the operational procedure (Wilks, 2013). However, ethical practices or CSR activities has emerged as a global phenomenon over the past few decades. Therefore, JB HI-FI will have to perform ethical responsibilities at the time of conducting business anywhere in the world. In fact, modern competitive environment has encouraged organizations to utilize CSR activities as brand development tools in the global market. Thus, effective use of ethical activities can actually help JB HI-FI to enhance the revenue level in a major way (McGee & Jain, 2012). Hence, JB HI-FI will have to maintain human resource right, children right, and labor right for conducting business in the Indian market effectively. Environmental pollution is another critical factor that JB HI-FI needs to take in to account for avoiding any challenges related with the business procedure. Thus, JB HI-FI will have to handle all the ethical dilemmas comprehensively for avoiding any type of challenges in the international business expansion procedure.       

Evaluation of Legal Regulations

Conclusions:

The above analysis has established the fact that international business expansion is extremely important for achieving consistent growth in the market. International business expansion can allow organizations to conduct business in the global platform. However, proper evaluation of different factors is also important for establishing the business in the new country. For instance, economic factor will help organizations to identify the purchasing power of the customers, which will create impact on the overall sales level. On the other hand, political and legal factor will help organizations to avoid any types of unnecessary or unavoidable challenges in an effective way. It will also provide a proper guideline for the businesses for handling different overseas expansion perspective effectively. To conclude, it can be mentioned that organizations will have to assess all the factors in an in-depth manner for creating desired impact on the target market.  

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