Assessment Front Sheet

Assessment Title Case Study on assessing International Markets

Qualification Module Code and title

Advanced Diploma in Business HP76 47 International Marketing

Student ID Assessor’s Name

Mr. Chrishan Smith

02001034

Cohort Date Issued Submission Deadline

22.01.2022 30.01.2022

No. Learning Outcomes Task no

L01 Explain the criteria used for international market selection.

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L02 Evaluate methods used for assessing international markets.

Learner Declaration

I certify that the work submitted for this Assessment is my own and research sources are fully
acknowledged.

Student Signature:…Isuru Upadya Epage… Date:..31/01/2022…

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Assessment Brief

Questions

1. Explain and justify the minimum of three (3) reasons why The Stirling Bakers is considering
entering international markets.

2. (a) What are PESTEL factors and why are these important when considering opportunities and
threats of entering international markets?
(b) Using three (3) PESTEL factors, explain key opportunities and threats that The Stirling
Bakers should think about when considering entry to international markets.

3. Describe a minimum of two (2) sources of information that The Stirling Bakers should access
before deciding which international markets to enter.

4. Explain a process that The Stirling Bakers could use to select which international markets to
enter.

5. Explain different modes of international market entry available to The Stirling Bakers, identifying
the advantages and disadvantages of each method.

6. Explain which method of international market entry would be most appropriate for The Stirling
Bakers, clearly identifying the criteria you have used in making your choice

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Explain and justify the minimum of three (3) reasons why The Stirling Bakers is
considering entering international markets.

Since the establishment of The Stirling Barkers they are interested in entering into
international markets due to a couple of obvious reasons. Following are three of those
reasons identified and explained.
1. As a family shop they have had an immense growth in the local area for their quality
food. After their expansion in the local industry selling on many local platforms such as
numerous hotels, restaurants including ‘own label’ products for department stores, also
by their factory expansion and partnership with the Waitrose TM supermarket, they
experienced higher demand and sufficient supply. But since then due to the high
competition their retailers face the pressure of reducing the prices which resulted in
future margins and The Stirling Baker’s profits are taking a down turn because if this.
Moreover their own label business has been accounted for a smaller potion of company
sales leading by this situation, and have realized depending on the Supermarket in the
own label business strategically is not a long term interest any longer. Which has lead
them to make the decision on growing their own brand “The Stirling Bakers” furthermore
in international markets rather own label for retailers, which at this stage of their business
causes slow business growth.

2. After deciding to enhance their own brand through a promotional campaign they
participated for the International Food Festival in London which become a great success
and winning an award for Stirling Baker’s shortbread and oatcakes brought them fame
among a number of French, German and Italian food distributors who were interested in
selling the company’s products. Also they had a proposal by an Asian company
requesting for license to produce and market products in China, and to set up its own
manufacturing unit in North America to expand Scottish products in US and Canada. So
the campaign was a total success and the company had landed with considerable
opportunities to enter into international markets with the assessment they made by the
reaction to their products at the food fair.

3. The Stirling Bakers are experiencing a slow growth in the home market due to economic
downturn, increased rival competition, as their solutions including expanding the range of
products hoping to increase sales had also failed and was difficult to capture the home
market. With the current economic climate it is wise to seek opportunities outside their
country as they have enough proof that there is a demand for them in international
markets, since their factory expansion they have recourses and could also partner up with
investors to supply products in international markets.

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(a) What are PESTEL factors and why are these important when considering opportunities
and threats of entering international markets?

PESTEL Analysis evaluates the macro-economic variables of an organization.

i. Political
ii. Economic
iii. Social
iv. Technological
v. Environment
vi. Legal sectors
PESTEL forecast allows a company to assess and prepare for future threats and make plans
to take on future opportunities. Furthermore this research helps the company to understand
the surrounding if the market they are planning to enter, as Stirling Bakers are considering to
enter into International markets a thorough evaluation of North American, Asian, European
markets would allow them to take the best approach in this venture and advert their products
accordingly.

 Get a better understanding about the emerging social and technology developments,
digital marketing platforms to consider in advertising products.
 Increase risk awareness, established and emerging competitor awareness and keep
updated on new developments to be applied to the company.
 Allows the company to minimize the harm that could cause by threats and maximize
profits. And also allows to take on new risks as opportunities and expand the business
growth.

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(b) Using three (3) PESTEL factors, explain key opportunities and threats that The
Stirling Bakers should think about when considering entry to international markets.

PESTEL factors will help in identifying the favorable factors leading to opportunities and
unfavorable factors leading to threats that influences the company.
Following are Economical, Political and Technological 8i which creates opportunities and
threats for The Stirling Bakers when they consider entering into the international markets.

Factors Opportunities Threats

An increase in GDP of the country Higher Inflation rates causes trouble

causes to venture into international in exporting products. Such as input
Economic markets. costs, cost of materials and labor.
Factors

The Stirling Bakers is planning set
Political up its own manufacturing unit in
Factors North America, if the Government
gives subsides and support which
will help The Stirling Bakers to set
up its own manufacturing unit.
Various unavoidable taxes that may
cause in price increments, as the
product is new a heavy price would
lower the popularity and sales.

International technical innovations Many markets The Stirling Bakers

can be used and introduced in
Technological making company products which
Factors will increase future productivity
and may also can be achieve
higher quality and standards.
are looking forward to enter such as
China, US and Canada are in the
constant verge of technological
advancement, which may cause
monitory disadvantages in applying
new technology and training costs
for updating employees in new
techniques.

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Describe a minimum of two (2) sources of information that The Stirling Bakers should access
before deciding which international markets to enter.

Consultations of Experts.

Before The Stirling Bakers enter into international market, there are numerous highly important
figures to be understood. Foreign territories can be extremely challenging without an experts
consultation in regard of the company’s PESTEL figures and more on how to build the brand
name in foreign markets, such as marketing methods, overseeing financial matters beyond reach,
handling human recourses overseas, legal conditions and policies that might apply when
venturing business in foreign countries. The expertise can help to gather necessary information
on the new market its size and growth, what to avoid, how to manage a vast business.

Multicultural Research on Countries the products are to be distributed.

Establishing a new product in countries which has their own cultural authenticity can be a tricky.
The Stirling Bakers has decided to venture into international markets it is important to do a
research on the languages, resources, economies, social structures, behaviors, attitudes and
market trends of the main countries their products are going to be distributed in order to mingle
the brand among the natives of those countries. A report on economic situation, market structure,
political situation, social diversity and product barriers are highly important for a successful
marketing campaign.

Scottish Enterprise.

Scottish Enterprise is a non-departmental public body established to overseeing Scotland’s

national economic development, working along with public and private sectors to identify and
exploit the best opportunities in interest with economic development. The Stirling Bakers can get
national aid by the help of Scottish Enterprise to get external information regarding international
markets And business development advice, funding and grants, tax, policies, and other relevant
government support.

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Explain a process that The Stirling Bakers could use to select which international markets to enter.

Using International marketing planning process to assess and evaluate which international
markets to enter analyzed in 5 different stages.

Stage 1 Identification of the Country, which involves the understanding and evaluating the
company’s needs and matching the country’s needs against their own for cultural, heritage
similarities. Identifying the current needs and wants of the market enables Stirling bakers to
prepare the products and market them to the ideal target groups and suitable to the demand for
Stirling Baker’s products.

Stage 2- Preliminary Screening, Which involves raking the nations based on PESTEL factors,
and calculating market entry cost.

Stage 3 – In Depth Screening, Which involves a feasibility study on target markets, marketing
mix 4Ps and 7Ps, Market segmentation, Product positioning as such information on every aspect
of the market structure to maximize the outcome of the proposition.

Stage 4 – Final Selection, Which involves a thorough competitor study on domestic companies
who produces similar products. An in depth understanding of their products, their growth,
similarities and background for decision making.

Stage 5 – Direct Experience, Which involves visiting the countries and explore cultural, social
differences and similarities, busine1ss practices, try other similar products in those countries to
get a good idea on taste, where to install and distribute products, the packaging, launching etc.

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Explain different modes of international market entry available to The Stirling Bakers,
identifying the advantages and disadvantages of each method.

Exporting

Selling products services of one country to another. Exporting can in either direct exporting or
indirect exporting.

1. Direct exporting

Direct selling or exporting to the market without any intermediaries or else third party
distributors. This is the most common approach which can be used by the company to minimize
risks in regard to financial losses as the company itself is responsible for handling the market
research, foreign distribution, logistics of the shipment and invoicing.

Advantages of direct exporting

Can avoid unnecessary costs as there are no intermediaries invention.

Can increase potential profits due to being the independent distributor.
Can understand the market better and also gain more accurate feedbacks from the customers
directly and faster.
More control over transactions between customers and yourself.

Disadvantage of direct exporting

Requires more time, energy, money and workload.

Overseeing work on every level of the exporting, logistics and everything comes between
customer and the product.
May take a longer period of time to reach the customers which could ruin the reputation and lose
customers.
Slower customer respond due to too many intermediaries.

2. Indirect exporting

Indirect exporting is selling products to the customers through intermediaries or third parties
involvement. The mother company wont be doing transactions directly with the final customers
but their representatives, partners or distributors.

Advantages of indirect exporting

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Involvement can be dropped down to the bare minimum so less workload and responsibility.
Can concentrate on the home business growth, and spare market research and huge money
spending.
No involvement needed concerning logistics, and exporting process.

Disadvantage of indirect export

Low profits due to intermediary invention.

Higher chargers on the final product due to the commissions taken by the intermediaries, which
effects badly when a higher price is charged in the introduction stage.
Not having the control of the products overseas might creates quality and standard problems.

Franchising

Franchising is one of the most popular and successful ways to enter into foreign markets for a
food and beverage company such as Stirling Bakery. Franchising means semi dependent
business companies pay a fee as royalty to the parent company to be identified by their
trademark to sell its products and services.

Advantages:

Expansion on brand awareness and corporate image.

Customers usually trust familiar companies rather an entire foreign entity.

Disadvantages:

Limit creativity of the franchisee’s part as they follow a given recipe.

As the ingredients used can be changed and techniques used the quality of the product can be
differ which can effect the image badly or in an unrecognizable manner.
Level of quality is crucial to follow just like the parent company does to maintain the brand
image.

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Explain which method of international market entry would be most appropriate for The Stirling
Bakers, clearly identifying the criteria you have used in making your choice.

As mentioned above The Stirling Bakery has a couple of options to consider in choosing an
exporting method in international markets. With analyzing and evaluating the above export
methods Direct, Indirect and Franchising and by taking their advantages and disadvantage, I
believe the company can use two methods, Indirect selling and Franchising.

Stirling Bakers were offered suggestions by French, German and Italian and food distributors
who were interested in selling company products when they participated and won in the food
fair. It seems to be a great opportunity for Stirling Bakers to consider at least in the beginning
their international market venture since indirect selling can be done by less money and less
workload involved such as logistics, since they are new to the foreign concept and have no
experience, it is much more appropriate to sell the products through a native seller for a period of
time until the product is a big popular and growing.

Also Stirling Bakers were presented with another opportunity by an Asian company requesting
for license to produce and market products in China, and to set up its own manufacturing unit in
North America to expand Scottish products in US and Canada. Franchising can be a good
opportunity to set place in China, US and Canada where Franchise business are massively
growing in those countries and since investment is also been settled it would be a huge
opportunity to grow their brand name worldwide.

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References

Anon., n.d. 12 Advantages and Disadvantages of a Joint Venture. [Online]

Available at: https://businesstown.com/12-advantages-and-disadvantages-of-a-joint-venture/
[Accessed 30 January 2022].
Anon., n.d. Development Co-operation Report. [Online]
Available at: http://www.oecd.org/dac/development-cooperation-report/
[Accessed 30 January 2022].
Anon., n.d. Funding and support for businesses in Scotland. [Online]
Available at: https://www.scottish-enterprise.cgro [Accessed 30 January 2022].
Delaney, L., 2019. Direct Exporting Advantages and Disadvantages. [Online]
Available at: https://www.thebalancesmb.com/direct-exporting-advantages-and-
disadvantages1953310
[Accessed 30 January 2022].
Delaney, L., 2019. The Advantages and Disadvantages of Indirect Exporting. [Online]
Available at: https://www.thebalancesmb.com/advantages-disadvantages-of-indirect-
exporting1953328
[Accessed 30 January 2022].

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