Market Entry Modes

International business can refer to the traffic of services, goods, capital, technology and knowledge across borders of nation and at transnational or international level. Engaging in such business practise require accurate understanding of business and trade regulations as well as legal requirements of the nation in which enterprise are operating their business (Mills and Smith (2011)). Generally this business enterprise can be operated by the private companies or the government. The Bronze Snake Company is an Australian fashion retailing organisation i.e. known for their trendy and high quality fashion wears. Bronze Snake is aiming to expand their business in Malaysia to create a global recognition and spread its branches in international marketplace. Enterprise has planned to launch NEW FEMALE SUMMER COLLECTION in Malaysia for entering in the fashion market of the country. The report will cover different operational structures, patterns and entry strategy to trade in global market. This will focus on different corporate objectives, entry modes, organisation design, product expansion, financial capital management and many other aspects i.e. required for expansion (Onetti, Zucchella, Jones, and McDougall-Covin (2012)).

Market entry modes can be defined as the ways of involvement and technique which assist an enterprise to enter to enter in a market strategically and successfully. These mediums differ on the grounds of risk of entry, control and commitment of resource which is required for enterprise and given return on investment. The decision of starting business in international market can highly impact on the results of enterprise. Bronze snake currently need very effective strategy to start their business in the Malaysian market in order to launch their NEW FEMALE SUMMER COLLECTION for women (Papadopoulos and  Heslop, (2014)). Here are mentioned some of the core market entry strategies that can be utilised by Bronze Snake to launch new product line in Malaysian business market environment:

• Exporting: -Exporting is refer to trade in and directly sale to the purchased domestically goods to another country. This is already well organized technique and very traditional way of communicating and reaching directly into the other foreign business markets (Zott, Amit and Massa, (2011)).  For exporting products, it is not that mandatory to produce commodities in that targeted country as this method provides the facility to exchange the products from parent organisation to host nation. Bronze Snake can manage to export their products of women new summer trendy fashion clothing line from Australia to Malaysia as this is cost effective and doesn’t require production system in the host nation (Renwick, Redman and Maguire, (2013)). The major drawback of this technique is that this consists of cost, scarcity, space and time issues that can lead to major problems to enterprise.
• Licensing: -International licensing contract permits international organization, either non-exclusively and exclusively to production a proprietor’s goods for a determined term in a certain market. The resources and rights may involve trademarks, patents, technology, managerial skills and others which can assist licensee to sell and produce in the host nation. For this, licensee pays certain amount to the parent enterprise in the exchange of technical assistance, allowed rights and intangible property. Bronze snake can also provide their license to their very trusted companies and organization to prosper in the same country (Ruigrok and Van Tulder (2013)). This will let them to do their business smoothly, beneficial and their new technique so they can get enter in the new market. In the way, enterprise can expand their business in Malaysia with saving numerous resources and avoid loss at the same time.
• Joint venture: -A joint venture can be refer as cooperative organization established into through two or more than two business enterprises for the aim of certain project or other activity of business. Major issue of this strategy is that it can create conflict over asymmetric fresh organizational investment and lead to lack of parent support. This is usually also characterized by their shared items, governance, risks and ownership etc. Bronze Snake can use this approach for entering in the market of Malaysia as this provide financial and other support to enterprise and aid in meeting the business objectives. It can prevent enterprise from major financial loss (Scullion and Collings (2011)).
• Franchising:The system of franchising can be termed as a framework in which parent enterprise gets the royalties and fees from semi-independent enterprise in return of agreement of becoming recognized trademark, to trade its services or products and often to utilize its business pattern, system and format. System of franchisee is a risky technique as this can lead to preserving franchisor brand image. This is beneficial for low political cost, risk but lead to lack of control. Bronze Snake can provide their NEW FEMALE SUMMER COLLECTION to their franchisees in Malaysia and introduce their business in the market. Through this, they can examine the response of consumer and target audience without any major loss as well (Shenkar, Luo and Chi, (2014)).

This can claim from the above notion that The Bronze Snake can use different market entry strategies such as joint venture, exporting, licensing etc. But Franchisee is most suitable techniques for entering in Malaysian market for The Bronze Snake. This is efficient, cost saving method that supports the availability of product in international market without its presence though enterprise has to follow certain agreements and rules to deliver product as per the concern organisation. On the other hand, other techniques were also appropriate but they contain the risk of loss and procedure complexity to trade abroad (Hair Jr, Wolfinbarger, Money, Samouel and Page, (2015)). Licensing can create lack of reliability, exporting can cause loss of financial assets and joint venture will require agreements which can be a complicated and less reliable procedure for The Bronze Snake to handle. On the other side, franchising procedure is efficient and can lead to benefits for delivering their royalty and can create better presence in the market. Therefore, this is suitable among other strategies of market entry (Yang, Hong and Modi (2011)).

Strengths and Weaknesses

To pose the promotion of The Bronze Snake’s new trendy SUMMER FASHION LINE for women’s against their lots of competitors in the business marketing environment. Here are mentioned some major strengths which can help enterprise in succeeding in marketplace.

Strengths: The key strength of enterprise is its high quality of services and products which makes it unique. Also, one of the core strength of The Bronze Snake is its trendy cloths which can make the NEW SUMMER FEMALE COLLECTION launch in Malaysia successful as there are few organisations in market that deliver cloths as per the trends. On the other hand, strong market recognition and positive reviews of consumer has created good reputation of enterprise in market which is also helpful to create good recognition in Malaysian market. Online availability of enterprise is also one of major strength of organisation (Franke and Richey, (2010)).

Weakness: The main weakness of enterprise is its limited reach and limited product line which can lead to boredom among consumer. Also, lack of financial support is another weakness of organisation that can lead to major fallback to company. In order to meet this, organisation need to launch new product line within a certain time period and manage a proper financial administration.

Operational strategies refer to the techniques which an enterprise uses in order to reach their determined objectives (Forsgren and Johanson (2014)). Via improving these strategies, Bronze Snake can examine and implement effective and efficient structure for using resources, personnel and work procedures. The enterprise examined that there are numerous tactics which can be used to operate business in which, but The Bronze Snake use consumer-driven strategy to keep their target consumer as the main concern and key focus to serve

Customer-Driven Strategy: Customer satisfaction is an effective and one of most suitable strategy for The Bronze Snake for operating business in Malaysia as enterprise mainly focus on providing trendy and value-added quality cloths in the international market to satiate the demands of consumer. This type of approaches involve customer-centric approaches which enterprise use for satisfying requirements and demands of target consumer group. This is good approach which can assist The Bronze Snake to analyse the market of Malaysia and provide the products and service suitable in their market. This is the core competency of chosen organisation which builds one of the major strength of The Bronze Snake.

Corporate objective:

Founder of enterprise states that they still believe on the concept of Bricks and Mortar Store. The Bronze Snake is one of the emerging fashion providers and retailer which is earning more than $10million turnover each year (Fernie and Sparks, (Eds.). (2018)). Core corporate objective of The Bronze Snake is to remain one of the trendy organisations and satisfy the requirements of audience along with earning more than 10% benefits on ROI.

Operational Strategies

The term, organisation design is the procedure of selecting the traits of organisation’s primary characteristics that designer aims to posses in company. For the purpose of successfully introduce the NEW SUMMER FEMALE PRODUCT LINE in Malaysia; The Bronze Snake need to create an effective structure and organisational design (Stokes, Wilson and Wilson, (2010)). This design refers to the structure and pattern of entire components and determining utilisation to manage the whole company. The Bronze Snake need to create an accurate layout of organisational design for performing more appropriate and easy operation pattern that can lead to smooth running and reduce the risk of loss. Major function of designing structure is that it delivers assistance in aligning task to worker, resources, informing process of employee, rules and expectation and accumulating information. There are mainly five organisational design forms comprising global area, product, global consumer, global consumer and matrix. Here is elaborated entire design concisely:

• Global Consumer:It is mainly employed when an enterprise serves their services to different customer units or consumers, along with certain requirements and delivering special expertise and paying attention to details (Ehlich and Wagner, (Eds.). (2011)).
• Matrix Design: It is one of the hardest and complex designs which can be defined as the superimposing result form. This has numerous advantages i.e. flexibility of company, brings entire functional divisions together and involve strong managerial working. On the other hand, this consists of long decision-making process, unstable products and unstable environments which are one of the major disadvantages of this tactic.
• Global Product: This concept aligns responsibilities of specific commodity and products to eliminate operating division within company (Dunning, (2013)). Marketing, managerial experience, manufacture efficiency and flexibility are the major benefits of this sort of organisational design. On the other side, complex coordination or cooperation and unnecessary duplication are the key drawbacks of this report.
• Global Area: It allocates the firm’s actions and activities around specific areas and regions worldwide. Key drawbacks of this method are slow process of diffusion of technology and resources duplication (Tarique and Schuler, (2010)).
• Global Functions:The design of global function allows firm to improve departments which have international duties for common enterprise function such as finance, human resource management, research and development etc. Centralised control and experience transfer is advantage of this organisational design. Its complex coordination and duplication of resources is one of key weaknesses of this approach.

After examining the whole case of organisation and different organisational designs, this can claim that Global function and Global product is most efficient and suitable designs which The Bronze Snake can follow in order to operate a successful business in the international market (Jeston (2014).). Enterprise highlight its emphasise on the trendy cloth providing and product quality along with creating an international recognition which can be possible through using these patterns of enterprise. NEW SUMMER FEMALE COLLECTION can be disseminated in the market of Malaysia using these techniques which are helpful to expanding their business. Consumer can not only access service from stores but can also order the products on-line through which can deliver services in entire Malaysia.

Malaysia is nowadays examined as one the highest leading fashion brands which is emerging each and every day as the economy of country is more open and promoting industrialisation these days. Revenues in the segments of fashion in Malaysia are US$943 in 2018 which is expected to increase 10% in 2019 (Theron and Terblanche (2010)). The market is wider in Apparel segments with US$637 market value. Malaysia is one of the most export-driven economies that do not provide vast scope to fashion in-store retailers only but provide open market to the e-commerce activities (Cheng, Yip and Yeung (2012)). More than 25.08 active users of internet are there in Malaysia in which 15.3million users are online shoppers who prefer to trade online. As per the recent survey of Vogue, people are willing to buy products online as much as they do in-store shopping hence the number of online shoppers are increasing rapidly in Malaysia. The Bronze Snake is expanding their business in Malaysia which is popular for its large Apparel market. Hence, enterprise has vast scope of development in future as they provide not only good quality but trending cloths worldwide (Mellahi and Collings (2010)).

Corporate Objectives

Financial capital is one of the most significant issues and aspects while entering into new market as over-costing can lead to major loss to host enterprise and parent enterprise. It is essential for enterprise to maintain required capital and funds to perform all the operational efficiencies and activities without any pressure (Meskendahl (2010)). The Bronze Snake need to follow numerous legal requirements, taxation and trading policies to enterprise in Malaysian market along with investing financial resources in the industry. The Bronze Snake has prepare $50million budget for the expansion strategy and created a layout of all expenses. In order to manage the funds, organisation has planned to take assistance of bank.

It can be said that human resource management is a very important part of every organisation but it is also a major concern for the international businesses. Also, there is various kind of staffing policies that are being followed in these organisations in order to hire or recruit employees and along with this it also helps in controlling the organisation in a proper manner (Trkman, (2010)). In international business of the Bronze Snake, in order to recruit staff, the HR manager is required to know that from where they will be hiring the employees. There are various kinds of HR management practices that can be used by HR of The Bronze Snake while recruiting the staff members. They are as follows:-

Ethnocentric Staffing: It is a kind of staff technique in which the main positions of the organization is being filled with the employees of the parent company. It is also believed these employees express their enterprise in a much better manner and are also able to properly align the foreign offices with the headquarters (Briscoe, Tarique and Schuler (2012)). Therefore, while doing staffing, the employee’s who are currently working with the company is selected and are transferred to the country where the company is doing their business. There are various kinds of benefits of this kind of approach of staffing like the company will have good control over the subsidiary company as the employees will be similar. Also the operations that are being conducted there can be closely watched. But there are few negative thoughts as well in this like the culture followed in parent company and subsidiary country will be different so there is a chance of clash. The Bronze Snake Company can make use of this approach while doing staffing process in Malaysia.

• Figure 1: Ethnocentric Approach

Organizational Design

Polycentric Staffing: This is also a kind of hiring technique in which the human resource manager of the company hires people for the international business (Bageac, Furrer and Reynaud (2011) ). The main purpose of adopting the approach is mainly to reduce the cost of foreign operations in a gradual manner. It is also believed that many times companies that initially adopt ethnocentric approach later shifts to polycentric approach. The main purpose of taking this big step is to understand the local marketing conditions of the country, their cultural and legal requirements in a better manner. All these activities are being managed by the HR team who is working in that country. There are various advantages of this approach like it develops the morale of the local staff people and it also helps them in getting better government support.  But there are few drawbacks also like there can be lack of communication between host and parent company and there can be lack of knowledge as well (Verbeke, (2013)). The Bronze Snake Company can make use of this approach in order to mix the culture of both the destinations.

Geocentric Staffing: In this kind of staffing policy, the focus is on recruiting the best employee for the company irrespective of what nationality they belong. The main thought behind creating this strategy is that there are various kinds of talented people all around the world and therefore everyone should get an opportunity to prove them and does not depend on their nationality (Astrachan (2010)). The main benefit of this kind of strategy is that the company gets so many expertise staff to achieve the aim of their company and also the employees’ gets to learn something with each other. Its drawback is that the cost of training and compensation of an employee is excessively high. The Bronze Snake Company can make use of this approach as it will make their work environment effective.

Conclusion

This can affirm that to operate international business, organisation need to cooperate and coordinate numerous factors include the strategy development, staffing etc. Bronze Snake is looking forward to expand their business in Malaysia with launching of NEW TRENDY SUMMER FEMALE COLLECTION. In order to expand their business, they need to take care of the lots of in regard of performing business in the international marketplace such as legal permit for the Malaysian Government for trading in their nation etc. Enterprise needs proper entry strategy for launching their products such as licensing, exporting, joint venture, franchising etc. Apart from that, enterprise will require proper corporate objectives and effective organisation strategy in order to compete their rivals and for this, enterprise needs to do the strong market footing in the business environment of the Malaysia country. A company also require effective staffing policy for managing the business activities in international market as well.

Market Analysis of Malaysia

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