MSc International business
Fundamentals of International
This essay assignment is the application of the theory, concepts and analytical tools of the module international business strategy in the context of a market entry strategy of a real company.
the uk firm homebase, part of the home retail group, proposed analytical study of its market entrance into the brazilian hardware/diy market.
Submission Date: 19th november, 2012.
Names: shenran Ma
Name: James de feu
homebase – home retail group uk
The chosen firm is Homebase which is a British home improvement and Garden center and has currently 342 stores across the UK and Ireland. It is part of the Home Retail Group plc. which is also the owner of Argos.
Homebase sells up to 38,000 products across DIY, home garden ranges and decorating. They also have a huge internet customer base and serve over 65,000 customers a year in their stores.
Homebase is also the holder of many awards such as Best DIY Superstore Manager of the Year Award at the Britain’s Best Retailer Awards and in 2011and they also won the Customer Focus Award from the Institute of Customer Focus. Homebase was the first UK DIY retailer to achieve Forest Stewardship Council Chain of Custody certification
We have chosen to expand Homebase into the foreign market of Brazil, the motive behind this was due to the fact that Brazil is an emerging economy. After some secondary research on Euro monitor it suggests that “as the construction of houses and apartments has expanded, so has demand for DIY.”
This is due to the people of Brazil able to find more work and have more disposable income than they would have had before. The demand is pushed by lower income classes purchasing homes for the first time.
The financial recession hasn’t hit the Latin American country as hard as it has to Europe or the US, in fact Brazil has had to,
“Slow down growth and improve the stock market in order to improve long term resources to finance a sustainable evolution of the Brazilian economy”
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With Brazil recently surpassing the UK to become the sixth largest economy in the world this is an optimum market for expanding companies to consider. Brazil's middle class is rapidly growing, being estimated by Fecomercio, the Sao Paulo consumer federation, to reach 127 million by 2014.
In contradictory to a minor slowdown in the Brazilian economy, the basic retail market in Brazil during the period of 2011 performed positively even though it had experienced a slowdown in comparison to the exponential growth it experienced in 2010, this was primarily as a result of the decreasing consumer confidence and the anticipated threat of a slowdown of the economy, due to the financial difficulties in Europe.
Nevertheless, MNEs and local businesses continued to invest in opening outlets by means of Greenfield strategy, joint ventures and mergers and acquisitions in 2011, which is evident that the retail market in Brazil is an attractive cash cow.
• See Appendix
Doing business in brazil
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Institutions, Cultures and Ethics
This section of the report will show an understanding of institutional forces and strategy relating to Homebase. It will also explain the strategic role of cultures and ethnics within Brazil concerning Homebase the tool used in to illustrate this section will be the Iron...
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