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Going Global: International Business and Globalisation

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Executive Summary

Global markets are very complex when approached in a not strategic manner. With this in

mind, it is essential to understand various factors different from the existing country's condition.

Therefore, companies having international operations tend to be older, conduct Investments in

research and development more frequently, and gain competitive advantages through the

differentiation of products or processes based on technology. Additionally, founders of major

global enterprises might be distinguished by having able to employee skilled workforce. In

comparison to services and products that are distributed internationally, services that are only

marketed on national markets are more client-specific and have higher modification costs.

Therefore, the timing of market entry for Endava PLC into the U.S and Indian IT sector market

has to be well planned. The organizational structures of overseas operations and their

development through time are all considered to be effects of managers' growing commitment to

international markets. The process of learning fuels this rising dedication. In contrast,

monopolistic advantage and internalization theories attempt to initially explain the existence of

multinational businesses as institutional forms for managing global production. It is challenging

to draw direct similarities because these distinct theories examine various facets of

internationalization and attempt to provide answers to various concerns.

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Introduction

There are a lot of businesses that want to expand internationally because doing so can cut

costs and bring in more money. When expanding a business internationally, it is essential to be

familiar with the laws and regulations of the countries you visit. There are a number of issues

that can arise when going global, including difficulties with linguistic and cultural differences,

issues with multiculturalism and diversity, political issues, and financial issues. It is essential to

comprehend the consequences of going global as well as the significance of expansion for the

company. Globalization has enabled this by increasing the movement of goods, services, capital,

individuals, and ideas across international borders (Cote, 2021). As transportation and

technology have advanced, the company has become increasingly global. In addition to new

challenges and tensions on a global scale, the purposeful expansion has resulted in new

employment opportunities, new customer audiences, and new economic opportunities.

For this particular paper, the business sector chosen is the Information Technology sector.

One Company operating in the UK and Europe at large will be used to make the case. The

Company chosen is Endava Plc, which is located in London, UK. As a British publicly traded

software development business, Endava PLC was established in London, United Kingdom, in

2000 (Endava PLC, 2022). It offers consultancy for digital transformation, agile software

development, and a range of automation options. Information about the Company's operations

will be used to contrast two international markets in two countries. The selected countries are the

United Kingdom, where the company is from and the new targeted countries for new market are

India and the United States. It will also analyze the different factors that challenge globalization

and simultaneously show the awareness of living in a world of internationalization and its
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drivers. To complete the analysis, there will be various sections four of them, followed by

recommendations and a conclusion.

Section 1A: Importance, Impacts, Benefits and Challenges of Global and Trade

Globalization

When globalization is considered in the case of Endava PLC, it is presumed that it would

be an innovative, more productive, and create more employment. The company will also be able

to provide consumers with more cheap goods and services, open trade also benefits households

with lower incomes, in this case, the provision of digital transformation consulting services. It

plans to expand into international market into India and the United States. By doing it will be

able to feel the importance and impact of globalization even more.

Importance and Impacts of Globalization

By employing the term ‘globalization of markets,’ the New Trade Theory's evidence clearly

demonstrates the growing economic integration and interdependence of nations worldwide

(Wheelen et al., 2018). While internationalization of companies refers to the tendency of

corporations to systematically increase the international scope of their business activity,

globalization is a macrotrend that is characterized by intense economic contacts between nations

(Wheelen et al.,2018). As a result of globalization, businesses are encouraged to internationalize

and significantly increase the variety and quantity of cross-border transactions in goods, services,

and capital.

Benefits of Globalization

According to Wheelen et al. (2018), organizations can transition from one market and

venture into new markets through strategic management. It requires long-term performance is
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prioritized in strategic management. While many businesses are capable of managing brief

periods of high performance, very few are able to maintain it for an extended period of time

(Mourougane et al., 2021). Companies need to be able to carry out their current operations in a

way that will satisfy a market that is already in place; however, in order for them to be successful

in the long run, they must also be able to adapt those actions to serve new and changing markets.

Challenges of Globalization

Even with the benefit, leadership and capital investment are two areas in which

multinational corporations face challenges as a result of globalization. Starting a business

requires a significant initial investment, particularly in developing nations. It is possible that

there isn't enough infrastructure in place. There is also the question of offshore; as it makes use

of fewer national limitations, some enterprises may benefit from it (Katerina et al., 2014; Gaille,

2018). The fear of moving to a different, less expensive country could be used to justify lower

salaries domestically even if they retained employment close to home, which are brought about

by globalization, businesses continue to face difficulties.

Section 1B: Background of the Chosen Company (Endava PLC)

Company Background Overview

Concise and Compudava, both founded in 2000 in Chișinău, Moldova, and London,

respectively, are the companies that makeup Endava PLC. The Endava Group was created with

the merger of the businesses. It provides a range of services, including Agile Transformation,

which helps the business identify, specify, and put the right process, technology, and cultural mix

in place. Additionally, it offers Cloud, Architecture, Software Engineering, Digital Evolution and

Automation, Test Automation and Engineering, and other services (Bloomberg, 2022). The
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business provides services to several sectors, including economics, retail and consumer goods,

telecommunication, mass media and technology, coverage, and health care, among others.

As of June 30, 2022, Endava PLC had 11,853 employees who were spread across offices

close to client locations in Australia, Austria, Canada, Denmark, Germany, Ireland, Netherlands,

Singapore, Switzerland, the United Kingdom, United Arab Emirates, and the Latin American.

Nearshore delivery centers were also located in Central European nations, Latin American

nations, and Malaysia in the Asia Pacific. Endava understands the value of giving our employees

rewarding and challenging jobs, and by doing so, it has positioned itself as the employer of

choice in several areas. This is in addition to investing in long-term client connections. Presently,

markets for industrial goods and commodities meet a need shared by everyone on the planet

(Meyer & Peng, 2016). There are more global than markets for consumer goods, where national

disparities in tastes and preferences are still frequently significant enough to act as a brake on

globalization.

Type of Business and Possible Operational Revenue, Profit and Losses, And ROI

The company being present in the global business market for some time now, it has been

able to maintain a good financial tract. As of thirtieth June 2021, the Company had operating

revenue of 446.3 million Euros, a 27.2 percent increase from the previous financial year. All of

the Company's verticals saw strong revenue increases. Client revenue in the Payments and

Financial Services vertical increased by £41.2 million (22.3%) from FY2020 to FY2021 for a

total of £226.4 million (Endava Plc, 2021).

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Table 1: Endava PLC Revenue (Endava Plc, 2021)

At each reporting date, the carrying values of the Company's investments are examined to

see if there are any signs of impairment. The asset's recoverable quantity is assessed if there is

such a sign. The statement of comprehensive income includes losses, which are offset by a

provision for uncertain accounts. Additionally, the historical cost of investments in subsidiary

undertakings is reported, less any provision for impairment. Below is a table of the Company's

financial summary for 2022 compared to that of 2021 and 2020 (Endava PLC, 2022).

Image 1: Financial for Endava PLC (Endava PLC, 2022)

When it comes to ROI, the company has performed well in the past three years. Using

data from the company’s income statement, as indicated by the table 2 below. The income

statement shows that the company has been having an increase in all the three years. In 2020

June 30th it had 250.80 million Euros, while in 436.83 million Euros in 2022 June 30 th. This is

also reflected in the ROI for the last years as shown in table 3.
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Table 2: Income Statement in million Euros (Reuter, 2022)

Table 3: Endava Return on Investment for the past three years (Macrotrens.net, 2022)
Section 2: Contrasting International Markets

Before Endava PLC expands its international market into India and USA, it should have a

clear understanding of how the markets in the two countries compare. The best way to make the

comparison is by using the PESTLE and PORTER Five force models as applied to international

markets. The Company has chosen works in the Information Technology sectors, and it would be

right to analyze the PESTLE and PORTER Five force models (Hall, 2015). It is because fast
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foreign operations are frequently the only method to recover expensive investments in new

technologies and breakthroughs due to the small size of the national markets. According to

Bürgel et al. (2015), it clearly shows that many companies are operating internationally as it

increases their profits as well as the GDP contribution of the countries, they operate in.

While looking at India and the USA, there are a lot of opportunities which can be utilized

in the IT sector. Big Tech companies such as Endava PLC can benefit greatly. Although tech

platforms can foster a lively marketplace of ideas, keep us connected, and provide new avenues

for commercializing goods and services, they can also cause serious harm in the real world by

dividing people (Barik, 2022). According to the governments of the two nations, a few numbers

of powerful Internet platforms abuse their position to "limit market entrants, to engage in rent-

seeking, and to amass intimate personal information that they might exploit for their own profit."

These international activities include everything from exporting to foreign direct

investment, as well as cooperative partnerships, including joint ventures and licensing. As a

result, comparisons between the companies and the two nations show important variances (Hill

& Hult, 2017). While some businesses appear to find it simple to quickly join foreign markets,

others either lack an international focus or are just starting to do so. Therefore, the Porter's Five

Forces is utilized to assist businesses in developing competitive strategies and in establishing the

structure of an industry; while the PESTLE models are an analytical tool that can be used by

businesses to determine how external factors affect their operations and raise their market share

competitiveness (Hall, 2015). Knowing this, it becomes quite easy to better identify the various

forces which are which help in structuring the new market in India and USA. They include;
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 The existence of a competitive industry in India and USA at large. These are the major

forces within Porter's five forces, which are present wishing the IT sector in regard to the

international markets.

 The availability of key and new players in the industry. This is a result of a new entrance

into the market showing that there is an opportunity to be utilized, in this case, for a big

company that has been operational for many years.

 The availability of supplier power when it comes to the creation and delivery of much-

needed services. For an IT company, this would mean that it is able to serve the market

share effectively.

 The availability of a high software market in the USA and in India. Knowing this

facilitates the idea of Endava PLC setting up shop in the country.

 Both are Tech leaders, hence becoming a good place for Endava PLC to expand its

international market too.

When it comes to the PESTLE analysis for the two markets (India and USA), it is evident

that the partisan, financial, sociocultural, technological, legal, and ecological factors affecting

the market are well analyzed. Hence, to examine important macro-environmental elements that

are used in strategic management's business environment scanning (Chewa, 2021). When

looking at all the factors in PESTLE analysis, it is evident that India and USA are favorable

markets which are profitable for Endava PLC. According to Bhalla (2022) and CNBCTV18.com

(2022), the Indian Tech industry companies have contributed nearly 200 million dollars to the

US economy which greatly reflects on its GDP. On the other have the U.S. Tech industry has a

contribution of nearly 2.1 trillion dollars to the economy (Shepardson, 2019). With this

information it shows that expansion is promising for Endava PLC. Therefore, the PESTLE
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analysis is more thorough since it considers an organization's goals and the tactics that are used

to achieve them in addition to defining what the company (Endava PLC) should accomplish.

Section 3: Internationalization

When earning about international markets, it is essential to comprehend the model of the

internationalization process. The emphasis on its managerial components. The timing of market

entry, the organizational structures of overseas operations, and their development through time

are all considered to be effects of managers' growing commitment to international markets

(Meyer & Peng, 2016; Bürgel et al., 2015). In contrast, theories of monopolistic advantage and

internalization attempt to initially explain the existence of multinational businesses as

institutional forms for managing global production. It is challenging to draw direct comparisons

between these diverse ideas because they each examine various facets of internationalization and

attempt to address distinct issues (Wheelen et al., 2018). However, parts of both theories can be

used to provide recommendations for the structural forms of international activities by

suggesting that various entry modes are replacements, with each having a commercialization

objective which Endava PLC is looking for when carrying out the expansion to India and USA.

Through strategies such as the creation of value and global integration and

responsiveness, Endava PLC will be able to undergo the internationalization process. This

reflects on the Company through the use of appropriate expertise and experience to offer high-

quality client and industry solutions while collaborating with our clients and account teams

(Wheelen et al., 2018). All delivery personnel who are working for a client report to the account

teams, ensuring that their evaluation and compensation are dependent on the level of delivery

success we accomplish for their clients, in the new markets.

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Additionally, by utilizing entry and penetration into a new market strategy, for

international Companies, the internationalization process is achieved. Some of the strategies

which are mostly used include the greenfield strategy, acquisition, and collaboration strategies.

All this works hand in hand to make sure that the new market is able to function and operate well

(Wheelen et al., 2018). It enables the Company to venture into new markets is able to work

within new boundaries which are different from the normal ones in the origin country.

The ANSOFF matrix is also an essential aspect of expanding into new markets. It is a

two-by-two planning and evaluation tool that management teams and analysts use for growth

initiatives. According to Yakupov (2019), the tool specifically assists stakeholders in

conceptualizing the degree of risk associated with various growth strategies. As a result, using a

market penetration strategy, management of the company tries to sell more of its current

products into markets they are familiar with and with whom they already have contacts. in both

the USA and India.

Section 4: Finding and Current Issues

Working with the information in sections 2 and 3, the current issues and findings are

evident that India and USA would be a good place to expand Endava PLC operations. It is a

leading Tech nation, as well as having a large software market which contributes greatly into

their GDP. It is evident that Endava PLC has an existing opportunity to expand its operations

into India and the United States, as it has done for more than 20 years, which has had a positive

influence on our business, communities, and beyond, in addition to the differences force from

Porter's five forces model and the PESTLE analysis. This can well be advocated for by the

investment graph which for foreign markets.

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Graph 1: Investment pattern for Foreign Direct Investments (Wheelen et al., 2018)
Additionally, Endava has expanded while staying faithful to its mission and core

principles. These principles define who we are and guide how we conduct ourselves both

professionally and personally. We are considerate and profoundly concerned with the success of

our employees, clients, the communities we work with, and the environment. We assist our

customers in accelerating transformation in their industries by reinventing the interaction

between people and technology. We increase the self-assurance and motivation of the users of

the systems we plan, create, and manage to interact with online. We have faith in the ability of

local communities to bring about change, and we strive to give back to them as well as the

broader technology and services sector.

Recommendations

When planning to expand, the Company has to make sure that the resources a corporation

commits and the percentage of those resources that are located overseas vary depending on the

operating modes for foreign operations. Remember that there are trade-offs in this regard. A
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choice, let's say, to take no ownership abroad, for example, by granting a license to another

business to manage foreign production, may lessen exposure to political risk. For Endava PLC,

the expansion into India and USA, it will need to understand the policies sin place.

Also, using the theories of direct foreign investments, such as the notion of market

imperfections, when a market flaw makes a transaction less efficient than it could be, a company

will engage in FDI to internalize the transaction and eliminate the imperfection. (Wheelen et al.,

2018). Engineers' technical know-how or managers' unique marketing skills could be this

knowledge. The only way to take advantage of a market opportunity in another country is when a

company's workers are endowed with specific knowledge.

Conclusions

Therefore, when comparing the international markets of the UK and that of the new

market (USA and India), in is right that Endava PLC gets some background information.

Globalization has made business operations more flexibly and making the entry into new

markets easier. This assignment has analyzed carefully the two international markets that Endava

PLC want to enter. The different section has carefully outlined the major aspects from the

impacts, benefit and challenges of globalization, the comparison of the new markets (USA and

India), and current issue that are affecting globalization. It is only right that Endava PLC should

expand into the new markets.

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