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International Business Expansion

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by

Issy Oli

on 26 March 2015

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Transcript of International Business Expansion

International Business Expansion
St Andrew's Anglican College
By Isabel Oliver

Demographics - Location
Western Europe Islands
Situated between the North Atlantic Ocean and the North Sea
One Viable Option - England
Currency Used Pound Sterling
Economic Factors
Customs
Overall business communication is similar to Australia
Etiquette and Protocol
Satire and direct communication
Culturally diverse country - variety of etiquette
Traditional ways (direct) communication is most commonly used
Written communication has strict protocol (formal)
Cultural Factors
Demographics - Population
Densely inhabited country
Makes up a large 80% of total
population of the United Kingdom
Substantial 50 million inhabitants place England in top quarter of world’s most popular countries
Median Age 36-37 years






Languages

Vast number of nationalities have immigrated to England
English, Spanish, German, Italian, Indian and African
Religions
Apathetic or Neutral (15%) and remaining religions are Buddhism, Islam, Judaism, Hinduism and Sikhism
The relationships and difficulty of communication between the unchristian families could be negative due to different beliefs. Some families may not want to encourage Anglican principles on their child.
England
Indonesia
What is international business?
Transactions (private and governmental)
Investments
Sales
Transport
Logistics
Why do businesses expand?
"Marketing Seeking, Resource Seeking, Strategy Asset Seeking and Efficiency Seeking." (Dunning, 2002)
Positive factors in terms of
the country that will benefit
SAAC.
In terms of a school expansion....
Factors that will need to be taken into account.
New prospects.
Something that the school cannot change.
Degrades the viability of the country.
Particular things that COULD effect the school negatively.
Degrades the viability of the country.
Strength
STRENGTH
Threat
Weakness
Strength
Christianity (70%)
"England is an ancient country that boasts layers and layers of complexity; making it fascinating and intriguing." (Englandforever, 2014.)
Foreign Exchange
(XE, 2015.)
Economic Factors
Employment Factors
Strength
Economic Factors
Working Environments
The 1999 Employment Relations Act - “Under British law, all workers have the right to establish unions except those in law enforcement and the military.” (Encyclopedia of the Nations, 2015.)
Legalised – Worker’s right to strike
Law mandates – companies with 20+ employees must allow unionization
30% British workforce is unionized
Strikes decreased by 43% since 1990
Sixth-lowest strike rate – “On average, British companies lost 12 days per year per 1,000 workers due to strikes.” (Encyclopedia of the Nations, 2015.)

Threat
Economic Factors
Working Environments
Forced labor is illegal (child labor)
Strengths
“National minimum wage is 6.50 British pound sterling per hour for anyone over the age of 21” (The Guardian Newspaper, 2015.)
Strengths
Cultural Factors
Decision-Making Processes/Business Relations
General planning for business meeting - reviewed by all colleagues (organiser can receive recommendations for changes)
Punctuality is crucial
Relaxed flow of various ideas and opinions
Highest ranked individual in business meeting will commonly speak and make final decisions

Strengths
48-hour maximum work week
Laws order additional pay for overtime work
Full-time workers receive minimum of 4 weeks paid vacation per year

Second Viable Option - Indonesia
Demographics - Location
-Located in South Eastern Asia, archipelago amongst the Indian Ocean and the Pacific Ocean
Strength
Demographics - Population
Total population last recorded in July 2014, with 253,609,643 people
Median age is 25-54 years
Strength
Languages
Over 700 languages spoken in country e.g. Bahasa Indonesia Dutch, English and local dialects.
(Index Mundi, 2014)
Religions
Muslim 87.2%
Christian 7%,
Threat
Weakness
Opportunity
Economics
Currency Used
Indonesian Rupiah
Foreign Exchange
(XE, 2015)
Economic Factors
Employment Factors
Average age of unemployed individuals in Indonesia are aged 15-24 (22%)
Males = 21.6% and females = 23% (2009)
Economic Factors
Working Environments
Cultural Factors
Customs/Etiquette and Protocol
Indonesians spend decent time through communication
Face-to-face communication is only taken seriously
Constructs a strong relationship between their businesspeople

Cultural Factors
Decision-making processes/Business Relations
• First meetings – ‘get to know one another’ than actual business
• Indonesians believe time does not bring money - decent relations and harmony do
• Any arguing/negotiating, puts pressure on other individuals and Indonesian businessmen can be easily offended and back off
• Presentations need to include Bahasa language (shows signs of respect)
• Women must be covered head to toe (not tight fitting) in terms of business attire (religious protocol)

Survey Results
Key staff believe the essence of St Andrew’s Anglican College should remain the same and adapt to suit the local culture
Staff believed the school expansion must adapt to its culture
A specific point was made to create shade sails, or covered walkways, suited to the countries climate

Issues that arise when expanding a business...
-Demographic, economic and cultural factors can differ between countries
-Particular countries could not possibly be suitable to SAAC due to…
-Religious beliefs
-Protocol
-Immediate surroundings (nature and community)
-If the population could not afford private schooling

Links between SWOT and survey results...
“The failure of personnel to fully comprehend cultural differences in the transacting of business has led to many international business blunders, resulting in loss of contracts.” (Reference Rasmussen et. al, 2012)
-Keep SAAC’s Essence (adapted to area of country e.g. sport, climate, communities interests)
-Private co-ed school, with appropriate fees
-School’s facilities will provide a comfortable environment to students, staff and occupants on the campus

Decision Making Matrix
Key:
By using a scale of 1-5 (1 = little 5 = best), a list of the weighted criteria is evaluated
Recommended Country: England
Discounted Country: Indonesia
Demographics - Location
SAAC's essence and culture can be
promoted to a wide variety of families
Demographics - Densely inhabited country (abundance of interest and attendance of families)
Demographics - Religion - Christianity
Economics - Currency + Employment prosperous





• Cultural factors (customs, etiquette and protocol, decision-making processes and business relations very similar to Australia
The country is too far behind in terms of development compared to Australia. A private school would not suit Indonesia because the people could not afford it.
Also the cultural side of Indonesia is dramatically difficult to Australia. This would lead to many communication difficulties.
Indonesia could be a place for a SAAC international expansion in the future, after expanding to more alike countries like England.
Have to deal with...
Food + waterborne diseases e.g. bacterial diarrhoea, hepatitis A, vector borne diseases e.g. malaria)
Child labour is common throughout Indonesia - 5-14 years (7%) in child labour


Weakness
Threat
Threat
Weakness
Opportunity
Opportunity
Weakness
A Way Forward...
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