Globalization Strategies Brand Expansion

Question: Discuss about the Globalization Strategies Brand Expansion. Answer: Introduction In todays era of business development, globalization is considered as one of the most important aspects of business. Globalization is a specific process where a business starts to expand internationally or develop business opportunities on an international scale (Dunning 2014). Todays advance businesses do not want to restrict their business operations in a particular area or country, as they want to expand their business internationally. Globalization helps the business organizations to earn more revenues and to increase the profitability of the business. It can be seen that there is a deep relation between globalization and expansion of businesses (Wild, Wild and Han 2014). Both these activities are based on each other. A business cannot expand internationally with effective globalizations strategies. In order to expand a business internationally, various kinds of business environmental effects of the host country needs to be confirmed as the success of the businesses vastly depend s on them. After the analysis of the external business environments, the businesses needs to chose proper expansion strategies like localization, international, transnational or global. After the completion of all these steps, the process to establishment the businesses are started. Hence, all the stages are important stages (Cavusgil et al. 2014). PESTEL Analysis of Singapore In order to launch the new cold drink, named Clarissa, in Singapore, the organization needs to know the impact of various external business factors of Singapore that can have an impact on the business of Clarissa. In order to do this, PESTEEL analysis is one of the appropriate tools. There are six major factors in PESTEL analysis; they are political, environmental, social, technological and legal (Yksel 2012). All these aspects are discussed below: Political Factor: Political situation of a country is one of the major external factors that decide the fate of an existing or new business organization. The stable political condition of a country is favorable for any business organization. On the other hand, the unstable political condition of a country is one of the hindrances that affect the growth of the business organization. however, the political condition of Singapore is mostly favorable for the existing as well as new business organizations. The extent of political risk is quite low in Singapore. According to the report of the Political and Economic Risk Consultancy, Singapore enjoys the lowest amount of political risks in Asia continent (Tremewan 2016). The power to elect the political representative to run the country in on the hands of the people of Singapore as it is a democratic country. Since, the time of independence, the people of Singapore has been enjoying relative political stability. It can be seen that the stan dard of living of the people of Singapore has been improved due to political stability. Most importantly, there is a fare business opportunities for the new business organizations in Singapore. However, it can be seen that there are restrictions in the free speech of opposition parties in the country. Overall, it can be said that the political condition of Singapore is stable and it is perfectly suitable for new businesses (Fozer et al. 2017). Economic Factor: The success of a business largely depends on the economic condition of the country. Favorable economic condition of a country is responsible for the success and expansion of the businesses in the country. It is evident that Singapore has a vibrant free-market economy. The consumers and the open market set the prices of various kinds of goods. There is not any rule of government intervention in the businesses (Saad 2012). On the other hand, the force of supply and demand is free from any kinds of rules and regulation of the government. The per capita income of Singapore was $51855.08 in the year of 20115 that was the highest in the Association of Southeast Asian Nations (ASEAN). This indicates the growth of the economy of Singapore. The legal and financial business framework of the country supports the economic development of it. Due to the recent attempt of the government of Singapore to diversify its economy, many industries have flourished like tourism industry, ph armaceutical industry, food and beverages industry and others. Cheaper labor costs from the neighbor countries help Singapore in the cost saving. However, some economic constraints are affecting the economic growth of the country; they are the shortage of labors, the continuous rise in the labor costs, the decline in productivity and others. Thus, it can be said that the economic condition of the country is suitable for new businesses (Qu and Meng 2012). Social Factor: Various kinds of social factors are available for the successful expansion of any kinds of business in a country. There is not any exception of this fact in Singapore. Singapore is similar as other eastern countries in terms of social cultures and values. People of Singapore uses to follow traditional family values and cultures. However, young generation of this country has a tendency of follow the eastern culture. The people of Singapore are hardworking people and they work hard in order to fulfill their materialism desires (Payne 2015). Hence, they have a tendency to work hard. This aspect indirectly increases the national productivity of the country. It increases the purchasing power of the country and the businesses can be benefitted from this. It can be seen that the literacy rate of the country is very high. For the purpose of social development, the government uses to provide various welfare services. Two of the major social development agencies of Singapore are the Ministry of Community Development and Singapore Council of Social Services. Hence, it can be observed that the various social factors are favorable for the expansion of new businesses (Lee 2012). Technological Factor: In the era of twenty-first centuries, technology is a driving force behind the success of any existing or new businesses. Technology plays an integral part in the business development of Singapore. The technological development of Singapore is a significant one. The technological advancement of the country is vastly responsible for betterment of the lifestyle of the people of Singapore. One of the major drivers for the technological development of the country is internet. The internet is playing an integral part in the technological development of the country as it has eased communication and has increased the connectivity. Apart from this, innovation is another driving force behind the company (Yue and Zubillaga-Pow 2012). Due to technological advancement, businesses have been successful to implement better facilities and as a result, the cost of production has decreased along with the increase in productivity. Technological advancement has allowed people and b usinesses of Singapore to connect with the rest of the world. The infrastructure for IT industry in Singapore is commendable. On the other hand, the E-Commerce and eB2C businesses have been flourished. The growing IT infrastructure of Singapore is one of the reasons that many multinational companies are setting up their regional operations in Singapore. Most importantly, the government is also moving towards electronic government era. Hence, from the above discussion, it can be said that the technological advancement of Singapore is suitable for setting up new businesses (Chatterji 2016). Environmental Factor: The ministry of Environment and the Anti-Pollution Unit of Singapore is working continuously to maintain all the environmental factors of the country. It has been seen that 30% of the mangrove forests of Singapore is lost (Dryzek 2013). On the other hand, many species are in danger. The Water Pollution Control and Drainage Act help to control the water pollution. In addition, the other environmental acts of the country help to restrict pollution from different sources. A new company needs to comply with many laws and regulations before setting up the business in the country. Hence, it can be said that the environmental rules and regulations are strict (Tietenberg and Lewis 2016). Legal Factor: Another important external environmental factor is the legal factor or the legal laws and regulations. As per the government of Singapore, there must be transparency and market favorable laws and regulations for the growth of businesses in the country. The government thinks that there is a strong need for legal regulatory frameworks for business development and economic growth (Bell 2012). There are some major regulations of Singapore to support businesses; they are Electronic Transactions Act, Intellectual Property Rights, Amendments to the Evidence Act, Content Regulation, Import and Export Procedures and various taxation related acts. All these acts ensure the smooth running of the businesses in the country. One of the major legal initiatives of Singapore was the introduction of E-Commerce acts in the year of 1996. All these acts are favorable for the expansion of any new business (Bin Abbas 2012). Selection of Strategy In the era of twenty-first centuries, globalization is an important aspect for every business organization. The importance of globalization is significant to those companies that want to expand their business in the other countries. In this aspect, the business needs to analyze various aspects of the host country that can influence the business both positively and negatively. In case of globalization, it can be seen that there are four kinds of business strategies; they are Localization, International, Transnational and Global (Harrod and O'Brien 2012). Before the international expansion of any business, the organizations need to select the most appropriate globalizations strategies. All these four globalizations strategies are discussed below: Localization: Localization is an important strategy of globalization. Localization is the process of adoption of various products in the worldwide market. This is a crucial aspect of international business. The main aim of localization strategy is to feel the people that the particular product is planned and procedure for them and adapted to their needs, cultures and languages. Many companies all over the world are adopting this strategy, as this is an effective strategy in order to launch a new product in a new country. The success rate of this strategy is high (Bandiera, Mancino and Ricci 2012). International: In the process of globalization, international strategies are the important strategies for the expansion of any business internationally. In simple words, international strategies are the strategies that help the organizations to sell their products or goods in the other countries. One of the major reasons of the development and implementation of international strategies is that it has the capability to yield more business opportunities. There are four major benefits of adopting the international business strategies; they are increase in the market size, opportunity for greater returns from major capital investments or from new investments, the opportunity for greater economy of scale and the opportunity for competitive advantage (Killing 2012). Transnational: Transnational strategy is another important strategy in respect of globalization. This is considered as one of the complex international business strategies as the development and d adoption of this strategy is a complex one. With the help of transnational strategies, the business organizations try to hold a middle position between multi-domestics strategies and global strategies. The main reason behind the adoption of this strategy is to maintain efficiency with the need to adjust preferences of the locals. Hence, it can be considered as one of the major strategies for globalization. Businesses with transnational strategies have foreign operation investments, central corporate facility, RD division and others (Abbott and Snidal 2013). Global: Global strategies are the most important strategies for the purpose of globalization. The main characteristic of global strategy is to allow the business organizations to market and sell their products in the international market. There are three major areas of global strategies; they are global strategies, multinational strategies and international strategies. Business organizations can achieve the organizational goals and objectives with the help of global strategies. The organizations that want to expand their businesses or want to introduce new products in the market, global strategy is appropriate for them. It has been seen that the companies that adopted the global strategy use to change their products majorly according to the condition of different markets. However, the overall strategy remains the same irrespective of any country. Hence, it is an effective strategy (Smith 2014). The above discussion sheds lights on the four types of globalizations strategies; they are Localization, International, Transnational and Global. As per the provided information, the soft drink brand Clarissa is going to be launched in Singapore. However, the main existing business is the country of Vietnam. In this regard, it is essential to have a proper globalizations strategy as the successful launch of Clarissa vastly depends on the effective implementation of these strategies. As per the provided information, the host country is Singapore. Thus, for the launch of Clarissa, the localization strategy needs to be chosen. There are some specific reasons behind the selection of localization strategy. Clarissa is going to be launched in only Singapore. Hence, the company does not needs to make globalization s strategies for all other countries. Since the main objective of localization strategy is to make the people feel that the products are made for them looking at the taste and pre ferences of them, localization strategy is the perfect strategy for Clarissa. There are some advantages and disadvantages of the localization strategy. Both are discussed below: Advantages: There are some major advantages of localization strategy. They are: Since, the organizations are localized in a particular area, the product of the organization become popular in that particular area. This affects the sales of the products positively. Due to have production faculty in a particular area or country, the opportunity of employment become more. Due to the process of localization, the cost of production becomes lower and the quality of the products become higher. Both the producers and customers become beneficial from this. At the area of localization, other subsidiary industries grow up in order to supply various kinds of needs to the business organizations. This process leads to the economic development of those areas (Reinke and Beinschob 2013). Disadvantages: Apart from these advantages, there are some major disadvantages of localization strategy. They are discussed below: When an industry is localized in a particular area, the people of that area along with the economy of that area become highly dependent on that business. This is a major disadvantage. The process of localizations gives birth to many social problem like congestion, accidents, strikes, emergence of slums and many others. Due to the target in a particular area or country, the other areas become underdeveloped. This is a major disadvantage of localization strategy (Yang and Wu 2015). These are the major advantages and disadvantages of localization strategy. However, it can be seen that the portion of advantages is greater than the portion of disadvantages. Marketing of the Product As per the above discussion, localization strategy needs to be taken into consideration at the time of launching Clarissa in Singapore. There are some certain steps involved in the process of marketing Clarissa. All the steps are interconnected among each other. These steps are discussed below: Step 1: The first step is to know the geographical positions of the customers. It needs to be determined that that the places of the customers in order to know their social and cultural backgrounds. In addition, this will help the organization to make effective strategies. Step 2: The next step is to find out the taste and preferences of the customers of Singapore. It can be seen that the customers from different areas of Singapore have different taste and preferences. The management of Clarissa needs to ascertain this in order to make the product more acceptable to the customers. Another important aspect is language. The company needs to know the language of the customers. Step 3: The next step is to ascertain the number of people of Singapore that are not converting in the customers of Clarissa. It is obvious that not all the people of Singapore will become the customers of the products as people has different taste and preferences. This is an important step as this step helps to find out the loopholes in the localization strategy of the products. This process provides scope to make improvements in the business strategies. Step 4: The next step is to understand that which market will be more profitable for the marketing of Clarissa. It is obvious that not all part of Singapore is going to be equally profitable. This analysis will provide the organization to make focus and cost leadership strategies. Due to the identification of these profitable and non-profitable places, the company can emphasis on places accordingly. Step 5: This last step is the combined result of all the above stages. In this step, the marketing strategy of the product needs to be made and the product needs to be launched in the respective areas of Singapore. The outcomes of above four stages help the organizations to know the buying behaviors of the customers. This is a crucial aspect for the marketing of Clarissa (Terpstra, Foley and Sarathy 2012). Conclusion The above study sheds light on the various aspects of globalization and international business. The main objective of the study is to analyze and evaluate the various aspects of business expansion. As per the provided information, a business organization of Vietnam is going to launch a new soft drink, Clarissa, in the market of Singapore. Based on the PESTEL analysis on Singapore, it has been seen that Singapore is a good place for the expansion of any business. The stable political condition and the continuously growing economy of this country helps the new organization to grow. In addition, technological advancement of this country is one of the major drivers of the success of news businesses in the country. After that, based on the evaluation of four kinds of globalization strategies, it is suggested that the company should go for Localizations strategy of globalization in order to expand the business in Singapore. This globalization strategy is selected because this will provide the business organization better understanding over the consumers and various markets of the country. It is a fact that the company is going to launch Clarissa only in Singapore. Hence, at this point, the adoption of global strategies will be expensive for the company as it is a vast strategy. 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