Table of Contents
Individual Notes 1.
Individual Notes 2.
2.0 Analysis of domestic market
3.0 Strategy for Sainsbury’s to internationalize in the Indian market
4.0 Environmental analysis of India.
5.0 Mode of entry, challenges it may find in India and possible solutions.
6.0 Leadership qualities of Sainsbury’s that support the market entry in India.
4.0 Action plan.
Individual Notes 1
The European Union (EU)
The European Union (EU) is the political and economic union of 27 member states of Europe. Multinational institutions and intergovernmental organizations are the operating centers where every decision is made (Gellar and Freeman, 2018). It is an organized system and the aim of this union is to integrate the European states. All the members of this union must obey the laws of this union and together they build an integrated market and economy. All the laws and regulations are made for maintaining the coherences on trade, regional development and other sectors. It also ensures the free movement of goods, people and services, and ratify legislation. 26 out of 27 member states have common regulations under the union policies. These states have a standard human development index. EU has the largest economy in the world (Gellar and Freeman, 2018).
In the EU’s unique institutional set-up European Council sets the EU’s broad priorities and brings together the national and EU-level leaders. It has no power in passing laws but it can set the EU’s overall political direction. Charles Michel is the current president of EC. The citizens of this union are represented by the directly elected MEPs in the European Parliament. European Commission controls the interest of the EU and national governments are selecting the members.
What are the pros and cons of the EU?
Freedom of movement
One of the most important advantages of this union is that the citizens of the member states can easily travel from one state to another. They can live, travel, study or work in any EU state. The whole area that covered the states of the EU is known as Schengen Area. This area is considered a single country and uses a single visa policy (Boolan and Green, 2018). The citizens don’t need any passport or visa. For example, a British can move from Britain to any of the member states for living or working or study whenever he/she wishes.
Better jobs and workers’ protection
The citizens of the member states have the opportunity to work in any of the EU states. This provides a better option for all the citizens (Boolan and Green, 2018).
Access to health benefits
EU Health Insurance Card is issued for EU citizens. They can use it in any kind of emergency while traveling to any of the member states (Boolan and Green, 2018).
Lower prices of goods and services
As the market is free for any member state and free of taxes, the prices of the products and services are low (Boolan and Green, 2018).
High cost of membership
The membership cost per head is about £300 to £873. Though the EU has many benefits, the member states or the states that are wanted to be a member have certainly considered the worth of the cost (Beiser, 2016).
Problems with the policies
Operating an integrated market requires some strict policies to follow which results in some divergences. The impact of common regulations varies from country to country. And for maintaining a balance, wealthier countries sometimes have to share their wealth with other Member States such as Germany bailing out Greece (Beiser, 2016).
Problems with the Single Currency
EU has a single currency Euro. And it causes several problems including high unemployment rates, slow economic growth, and inappropriate interest rates in the Eurozone area (Beiser, 2016).
Overcrowding due to immigration
For the advantage of free movement, some member states are fighting for the control of immigration (Beiser, 2016).
Individual Notes 2
Changes in the domestic markets
A domestic market can be defined as the supply and demand of goods and services within a sole country (Carter, 2017). The firms that only operate in the domestic market only sell their goods or services to the citizens. The domestics markets going through some changes due to some factors. The factors that are the reason behind the changes of the domestic markets are given below:
The most important factor of the domestic market change is competition. The competition creates the business more effective. Competition is the reason behind the lower prices and varieties. High competition in the domestics market helps the less productive domestic-oriented firms to shift necessary labor and investment to the high productive export-oriented firms (Carter, 2017). These firms will use the resources in a better way and produce high production and revenue. And in this way, the productivity of a country can be boosted up by increasing the competition in the domestic market.
Maturity of the market
Every market is going through a lifecycle. There are four stages in a lifecycle of a market. The stages can be gone through at a different speed based on the nature of products and the market. These stages are startup, growth, maturity, and decline. The stage where the growth rate slows down, possibly to zero, is known as the maturity stage of the market (Carter, 2017). Due to the fall of the growth rate, companies are having an excess amount of capacity of inventory. They want to get rid of this by offering discount prices. This can result in leading pressure on profits. Due to the discount prices, there creates a war of price and the companies are very intense about this war. Matured market competition is about the prices not about the product diversities.
Besides these factors, there are some other factors that are responsible for domestic market change. For example Governmental fiscal, regulations, taxes, bank interest rate (Carter, 2017).
Reasons why MNCs internationalize
Due to globalization, many companies are expanding their business beyond the national borders (Jensen, 2018). Expanding the business in foreign markets brings some advantages such as greater opportunities for market growth and expansion. The reasons for MNCs internationalization are described below…………………….