Table of Contents
Individual Notes 1.
The European Economic Community (EEC)
What are the pros and cons of the EEC?.
Individual Notes 2.
Changes in the domestic markets.
Reasons why MNCs internationalize.
Typical challenges MNCs encounter
Individual Report (1,200 words)
2.0 Analysis of domestic market
3.0 Strategy for Tesco to internationalize in Sri Lanka market
3.1 Ansoff’s Growth Matrix.
3.2 Process of Internationalization.
4.0 Environmental analysis of Sri Lanka.
5.0 Mode of entry, challenges it may find in Sri Lanka and possible solutions.
5.1 Mode of entry.
5.2 Potential challenges for Tesco in Sri Lanka.
5.3 Possible solutions.
6.0 Leadership qualities of Tesco that support the market entry in Sri Lanka.
Individual Reflective Essay.
Individual Notes 1
The European Economic Community (EEC)
The European Economic Community (EEC) was an endemic association that purposed to center its member states financially. The Treaty of Rome has created in 1957. In 1956, the Intergovernmental Conference on the Common Market was signed to Rome and then they established this community. Customs union was created by the EEC. In 1962, the EEC established common price levels for agricultural products and this is one of the first achievements of EEC (Matthew, 2017). In 1961, Norway, Ireland, Denmark, and the United Kingdom applied to join the community. Besides, France, Italy, Belgium, the Netherland, West Germany, and Luxembourg were fostering economic corporation.
The EEC is scratched next to the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (EAEC). In 1967, these three communities were brought together and then its official name became the European Community (EC). The Common Market became the prime material of the European Community (Kelson, 2017).
In 1992, the EC (European Community) became the EU (European Union). Maastricht Treaty addressed the three ‘pillars. These three pillars are remained the EC, being Common Security and Foreign Policy (CSFP), and the second covers Justice and Home Affairs (JHA).
What are the pros and cons of the EEC?
In 1970, European politicians had the idea of the common currency as early as possible. In 1979, the EEC member introduced the Exchange Rate Mechanism (ERM). The European members are agreed to this idea within a narrow band. In 1968, internal taxes are removed on certain products between the member nations. The structure of these communities was met with objections because of the dread that state sovereignty would be overstepped. In 1962, the CAP (Common Agricultural Policy) came into force and it is another crisis. The transitional moment was created by unanimity which had come to an end and most of the voting was taken by the Council which is effected the community. Greece was suffered a lot in this crisis though this country’s members were the most dynamic in this crisis period. This same situation happened in Spain. When the country joined the Eurozone, their imbalance of GDP growth was growing. Moreover, the European Commission didn’t do anything and it also didn’t push Greece and Italy to abate their public debt. The regulatory failure and the disability to enact the responsibilities growing from the Maastricht criteria became the prime cause of the crisis (John, 2011).
Individual Notes 2
Changes in the domestic markets
A domestic market means an international market or domestic trading. Ross (2016) stated that domestic market changes have a significant impact on international business.
Competitions are good but very high competition can make the company less profitable. In the domestic market, they face a lot of competitors in international business. This can change their market structure. Besides, the competition makes the cost of the product very high. It is a bad thing for a business (Jane, 2018)
Maturity of the market
A mature market refers to when a market has reached a state of equality. As a market transfer from the accrual stage to the mature stage, the companies make several strategic mistakes. Good production levels, pricing strategies, and marketing are different in a mature market. In the domestic market, this maturity level can be changed (Shaver, 2014)
Reasons why MNCs internationalize
MNC is a short form of Multinational Company. There are many reasons that MNCs became internationalized. Uppsala/Process Model, Network Perspective Model, and Electric/Economic Model are used to internationalized the global entrepreneurship business (Sanders, 2013). These models are suitable for understanding international business. The main process of internationalized MNCs are:
Market knowledge plays a significant and unavoidable role in the internationalization process of MNCs and firms have to earn sufficient market instruction as well as make use of the remaining knowledge which already remains in the firm to overcome the obstacle of internationalization. According to Pettit (2014), there are five reasons to internationalize the companies. These are cost reduction, the Pursuit of growth, Globalization of customers, market responsiveness, and competitive response. Market knowledge is one of the main reasons behind the MNC’s success and its internationalization.
Local and Foreign Business Relationship
According to Michael (2014), internationalization is very useful for every company’s success. For this, every company has to be in touch with other companies. That’s means, the local and foreign relations with each other are very important. A company needs many requirements for its products. If they have a good connection with local companies, it is very helpful for them. But if they have a better relationship with foreign companies, they can have huge success. So local and foreign business relationship is the best for MCNs internationalization
Entrepreneurial behavior and activities are very sufficient for every company. They are the main source of the company’s success. If the entrepreneurs are hard workers, the company has more success. Their activities and behavior affect the company most. Besides, their behavior can understand the company’s structure and process. So this entrepreneurial behavior or activities are very necessary for MCNs internationalization.
The quick globalization of the environment, the liberalization of trade, and the quick advances in technology have all accelerate the imposition of the two fields of entrepreneurship and international business. They have also pronounced the rise of the interdisciplinary field of IE (International Entrepreneurship).
According to Fernando (2017), every company wants an internationally experienced employee. This can bring the company success internationally. There are lots of competitions globally among all the companies. If any company has international experience, they face the competitions very smoothly. This can make the MNCs internationalized.
Relationship with Customers, Suppliers, Competitors
A firm’s international development has been observed as an evolutionary method with the stages of primary and leading levels of internationalized. A good relationship with the customers, suppliers and competitors can prove that the company is very well organized. So it is very important to have a good connection with customers, suppliers, and competitors. ………………………………….