International Business Essay
Unit: INB 2102 Lecturer: Evans Mwiti
Question: As a Chief Strategic Analyst prepare a report on expanding the company into the Australian market
As chief Strategic Analyst for Kenyan based business, Nakumatt, we have been given he task to look beyond our home market as Nakumatt Supermarkets prepares to expand beyond the national market overseas into Australia. This report points out key details necessary for decision making on the ventures feasibility. Australia is known for financial stability amongst it’s population even through the global economic crisis and the mostly middle-class nation relies on big retail outlets for everyday needs. The retail supply chains have grown more common over the last quarter century and although Australia has two dominating supermarkets in place, Nakumatt (being a leading supermarket in Kenya) may stand a chance at being successful overseas. The cot-competitive market could prove to be an advantage for Nakumatt during market entry. This report outlines the legal obligations involved in tapping the Australian market as well as the policies in place, the skillset of the workforce, a brief look at the competition to be faced and a few strategies that may be of use to Nakumatt. The report should be able to conclude weather or not the move is best at this time.
Legal and Political Environment
“Under the Corporations Act 2001, every company in Australia has been issued with a unique, nine-digit number, an Australian Company Number (ACN), which must be shown on a range of documents. The purpose of the ACN is to ensure adequate identification of companies when transacting business. New companies are issued with numbers by the Australian Securities & Investments Commission (ASIC) upon registration.” The statement above can be found at the end of every Australian Business Registration Form, which is formally issued by the Australian Securities and Investment Commission. Australian Business owners have been quite happy with the service of the ASIC because they find that their information is often easily accessible and at any time (ASIC.2001). The system is effective and under constant monitoring therefore the likelihood of loss of documentation, fraud, and falsification of documents is never an issue. Business people in Australia have put complete trust in an effective system. As a leading supermarket in Kenya, Nakumatt has mounts of paperwork and sensitive documents, which require safekeeping. The charges for new documents are high and the processes are tedious and time-consuming. Another issue which can be worrying is the likelihood of private or implicating information falling into the wrong hands but this would not be an issue with the strict regulations and laws on privacy and with the quick easy access but highly secure system.
Australia and the global financial crisis
The existing financial crisis presents both challenges and opportunities for existing business and new ones trying to tap into the Australian market. One advantage for a new business is that the constant rise and fall of the Australian dollar has helped convert Australia into a cost competitive market… which was not the case only five or six years ago. As a Kenyan business looking for new opportunities to create a new target market, you can use low costs to lure your target market in and include this in your marketing message. New strategies, which are unable to take off in Kenya, can be an advantage in Australia. E-marketing and e-business are a big part of the Australian market so a shopping web-page is another way to increase sales for Nakumatt by heightening the ease of shopping for customers. The Australian Trade Commission advices that it is best to, “Minimize your risk with a balanced spread across a broad customer base, without stretching your resources too far.” (ATC Annual Report.2008) The ease of this for a...
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