HI2011 International and Business Context For Kmart Australia

Answer:

About Kmart 

Kmart Australia Limited is a multinational retail based organization which operates a chain of retail based stores in the country. The stores thereby follow the low price based format and the company is owned by an organization named Wesfarmers. The organization operates more than 200 stores all over New Zealand and Australia. The head office of Kmart is located in Melbourne and the company was established in the year 1969. Kmart Australia was mainly developed with the help of a joint venture between two organizations named Coy Limited and G.J. Coles (Kmart.com.au, 2018). The stores of Kmart were thereby developed in Australia from the year 1968. The organization had further been able to show huge amounts of growth in the retail industry of Australia with the help of its stores and operations. The expansion process of Kmart to New Zealand had taken place in the year 1988.

The report will be based on the analysis of the ways by which the company can expand its operations in another country. The two countries which have been taken into consideration for this analysis are India and the United Kingdom. The countries have been selected based on their geographic position. The India has been selected from Asia and the United Kingdom has been selected from Europe. The external factors which will be able to affect the operations of the company in one of the countries will be analysed in the report.

Identification of countries where Kmart can enter

The countries have been selected for the expansion based operations of Kmart are related to the way by which they are able to provide opportunities to the company in order to grow its operations in an effective manner. The revenues which have been provided by the company will be affected by the external environment in a huge manner. The stability of the environment will be able to play a major role in the ways by which the company is able to operate and increase its profits in an effective manner. The two countries will be analysed with the help of proper implementation of PESTLE framework (Adekola and Sergi 2016). The geo-political environment of the countries will be analysed in the report and the trade policies will also be discussed in the analysis.

Study related to environment of countries 

Macro-environmental analysis of India 

The PESTLE framework is able to provide a view of the macro environment in which organizations can operate easily in India. The analysis will be able to provide an effective view of the environment in which the company is planning to start its operations.

Political factors – The effective position which has been developed by India in the world is an important part of the political situation of the country. Political environment which has been developed in the country is mainly considered to be highly stable in nature. Democratic will is thereby depicted by the people in the country which is able to develop a different culture altogether. The political climate of India is also stable and tolerance levels have been developed in an effective manner. However, the country has been facing major issues based on the corruption related activities of the politicians (Alden and Aran 2016).

Economic factors – India has been able to develop an effective GDP of 2.4 trillion Dollars and this has provided the country with 7^th position in the entire world based on economic capabilities. The expected growth of the country in the coming years is around 7%. The current rate based on corporate taxes in the country is 30% and the country has been able to gain the top position in the operations of different industries. The economy of India is considered to be quite strong in nature and this will be able to provide effective levels of support to Kmart (Beamish and Lupton 2016).

Social factors – The huge number of consumers who are present in the Indian market can act as a huge advantage for the profitability levels of Kmart. The expansion plans of Kmart will be facilitated effectively with the help of support which is provided by the consumer base present in the country. The 1.2 billion people of the country can be considered to be potential customers of Kmart. The availability of cheap labour is also considered an important factor which can affect the ways by which Kmart can reduce the costs of production in the country and in turn increase its revenues (Bortoluzzi et al. 2018).

Technological factors – The technological capabilities that have been developed by the country in an effective manner are able to provide effective opportunities of the improvement of organizational processes of Kmart. The development in technologies is thereby considered to be an important part of improvement of the processes which has been used by Kmart. The acceptance of e-commerce activities in India is also considered to be an important part of the improvement process of Kmart (Andersson et al. 2016).

Legal factors – The legal condition of the country is thereby an important for the purpose of supporting the activities of Kmart in an effective manner. The policies which have been developed by the company are affected by the ways by the legal factors of the country. The scope of operations of Kmart is also affected by the levels of foreign investments which are made in the country are effective for the proper entry of Kmart in the retail industry (Brannen, Piekkari and Tietze 2017).

Environmental factors – The progress which has been made by India based on the development of huge number of industries has affected the environmental condition of the country in an adverse manner. India has thereby started facing huge number of challenges based on air pollution, water pollution, floods and resource depletion. The environmental factors thereby need to be considered by the company in order to set up its operations in the country effectively. Kmart needs to develop the organizational processes in such a manner which will play a major role in its expansion in the country (Buckley 2014).

Geo-political analysis of India 

The position which has been developed by India in comparison to the neighbouring countries has been an important part of the geo political situation of the country. India has been able to maintain the position among the neighbouring countries with the help of effective strategies that have been implemented on a periodic basis. India has also been able to increase its global influence with the help of extensive natural resources and attractiveness of the market. The aim which the country has based on increasing its geopolitical reach is important for the effective operations of Kmart in India (Cuervo-Cazurra 2016).

Analysis of trade and business based policies in India 

The business and foreign trade based policies which have been developed by the Ministry of Commerce of India are able to facilitate the entry of new organizations. The other ministries that are based on proper development of these laws mainly include, agriculture based, finance and textile ministry. The trade environment which has been developed in the country is thereby effective for the proper and profitable operations of Kmart in the industry. Kmart will thereby be able to operate in an effective manner with the help of helpful foreign policies in the country (Davis 2014).

Opportunities and risks that can be faced by Kmart in India 

The opportunities which are thereby provided by the India for operations of Kmart are based on the trade policies and the environment based on business that is provided. The organization is also able to increase its revenues in an effective manner due to the huge customer base in the country.

The risks which can be faced by Kmart in the Indian market are based on the high levels of corruption in the political environment. The situation of the environment is thereby considered to be a huge risk for the proper operations of Kmart in the country.

Macro environmental analysis of United Kingdom 

Political factors – The political environment which has been developed in the United Kingdom has further depicted the stability of politics. The country is further considered to be a major part of the political operations which have been conducted in the European Union. Many issues and debates which have taken place after the implementation of Brexit in the country has been able to play a major role in affecting the entire political situation. These factors need to be considered by Kmart in order to continue its operations effectively (Denicolai et al. 2016).

Economic factors – UK has acquired fourth biggest position in the world based on its economic size. The recession related factors have thereby affected the country in a negative manner. This has further been able to affect the ways by which organizations are able to operate in an effective manner. The unstable economic condition of UK after the implementation of Brexit thereby needs to be considered by Kmart before it plans to start the operations (Dimitratos et al. 2016).

Social factors – UK possesses a huge consumer based market that has been able to develop its unique position in the industry. The rise in population of the country has played a key role in improving the size of the consumer market. This is a factor that can affect the operations of company in a positive manner. The rise which has been seen in the population of the country can also be considered to be an important factor which will facilitate the entry of Kmart in an effective manner (Forsgren and Johanson 2014).

Technological factors – The technology based sector of the country has also been able to depict growth in the current business environment in the United Kingdom. Kmart thereby needs to implement the new technologies which are available in the industry in order to improve the operations in an effective manner.

Legal factors – The effective legal condition of the country will play a major role in the proper operations of Kmart in United Kingdom. The effective policies which have been implemented by the government will affect the procedures that will be developed by Kmart (Fainshmidt, White and Cangioni 2014).

Environmental factors – The increase in industrialization and different economic activities have played a major role in the ways by which the environment is affected in a huge manner. The country has thereby faced many challenges based on the environmental operations and challenges which have been faced by the weather based conditions.

Geo-political analysis of United Kingdom 

The exit related activities of the United Kingdom from the EU has been able to affect the geopolitical situation of the country. The alliance that had thereby been made between the countries was a major part of the position which had been held by the country. The trade policies of the country have thereby gone through huge number of changes due to this issue. Kmart will thereby be affected in an adverse manner due to the changes which have taken place in the situation (Kolk 2016).

Analysis of the business and trade based polices of United Kingdom

The trade based policies that have been developed in the United Kingdom cam play a major role in facilitating the operations of Kmart. Although the policies have gone through huge amounts of change, issues can still occur in trade policies.

Opportunities and risks that can be faced by Kmart in United Kingdom 

The technological environment of United Kingdom is able to provide huge number of opportunities for the effective operations of Kmart. The population level is also an important factor which acts in a positive manner.

The risks which are faced by the country are thereby based on instability which has taken place in the country due to implementation of Brexit in the operations. The revenues and profitability of the company will thereby be affected in a negative manner by the lack of proper trade policies (Forsgren and Johanson 2014).

Conclusion

The analysis in the report can be concluded by stating that India will prove to be a better choice for the operations of Kmart. The emerging country is able to provide huge number of growth based opportunities for the operations of Kmart. The company will thereby be able to gain profits and expand its operations in a profitable manner with the help of opportunities provided by the country and its policies as well.

References 

Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective. Routledge.

Alden, C. and Aran, A., 2016. Foreign policy analysis: new approaches. Routledge.

Andersson, U., Dasí, À., Mudambi, R. and Pedersen, T., 2016. Technology, innovation and knowledge: The importance of ideas and international connectivity. Journal of World Business, 51(1), pp.153-162.

Beamish, P.W. and Lupton, N.C., 2016. Cooperative strategies in international business and management: Reflections on the past 50 years and future directions. Journal of World Business, 51(1), pp.163-175.

Bortoluzzi, G., Kadic-Maglajlic, S., Arslanagic-Kalajdzic, M. and Balboni, B., 2018. Innovativeness as a driver of the international expansion of developing markets’ firms: evidence of curvilinear effects. International Marketing Review, 35(2), pp.215-235.

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Denicolai, S., Håkanson, L., Majocchia, A. and Zucchellaa, A., 2016. Striking the Right Balance: Sources of Knowledge in International Expansion. In The 42nd EIBA Annual Conference 2016. European International Business Academy.

Dimitratos, P., Johnson, J.E., Plakoyiannaki, E. and Young, S., 2016. SME internationalization: How does the opportunity-based international entrepreneurial culture matter?. International Business Review, 25(6), pp.1211-1222.

Fainshmidt, S., White, G.O. and Cangioni, C., 2014. Legal distance, cognitive distance, and conflict resolution in international business intellectual property disputes. Journal of International Management, 20(2), pp.188-200.

Fernández-Méndez, L., García-Canal, E. and Guillén, M.F., 2018. Domestic political connections and international expansion: It's not only ‘who you know’that matters. Journal of World Business.

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