International Expansion Plans

Question: Describe about the International expansion plan. Answer: Introduction International expansion plan refers to the activities of the business undertaken by the company in several countries all over the world. It is more than just making investments in the regions outside the home country. The international expansion plan is mainly a guide to the expansion tips of an international business. The international expansion plan mainly refers to the strategies of the companies to expand in the new markets by professionally making the use of their potential. The international expansion plan mainly comprises of the strategies that includes the strategy of market entry (Verbeke 2013). The international expansion plan in this case is for a trading tobacco company in Arab and the name of the company is Prestige General Trading. This company was established in the year 2008 and it is a multinational organization with an international commodity trade house. This company mainly focuses on the production of tobacco, fertilizer, agriculture as well as metals (Channon and Jalland 2016). International Expansion of the company in Asia The strategy of Prestige General Trading Company is to expand its business and capture new prospects in Asia, Europe as well as north and South America. The company has a strong presence in the international market. As per the recent trends, the company desires to expand its trade in Asia. With nearly 280 million individuals who uses tobacco, China becomes the international tobacco market with nearly 60 percent of the population involved in smoking. The company will be able to gain if it is capable of expanding the market in China (Yao et al. 2014). Initial expansion of Prestige General Trading Prestige General Trading is a multi expanded general trading company which is located in various financial services which in turn represents various producers as well as financial institutions in the competitive market. Prestige General Trading continues the expansion of its Global Network of new supply channels with the help of joint ventures. The company is mainly engaged in the physical trading of the tobacco products. The initial expansion of the company has taken place in Singapore, Dubai, the USA as well as Europe. The company is known to operate via service centers and the branches which are located all over the world. The initial expansion of the company also includes the fact that the company has visualized in the world of aquariums. PGT is known to offer state-of-the-art aquarium solutions that range from big public aquariums to eye-catching business settings. PGT also offers unmatched commodities and services that include widespread experience in aquatic biology as well as engineering that is combined with strategic partnerships with global subject manufacturers. PGT is known to offer completely incorporated marketable as well as residential solutions for aquaria of various sizes all over the world. KPI of the company KPI or the key performance indicator is a set of quantifiable measure that is used by a company in order to gauge the performance of the company over a period of time. The progress of a company is generally determined by the KPI. The total annual sale of the company has been estimated to be 2.5 million USD. The percentage of export of the company is 45 percent. International Strategy that will help the company The international strategy will help the company to expand its business on the worldwide basis as it leads to a broad range of the business strategies. The international strategy will also help the company to get adapted to the domestic environment. Being a trading company, the main objective of the company is to lead to the growth of the company. The foreign operation will help the company to attract the executives who will help them to reduce their budget as well as to augment the profit (International Business Strategy - Reasons and Forms of Expansion into Foreign Markets 2013). Pricing strategy The pricing strategy that a trading company should undertake is the geographical pricing that will help the company to decide how to price its goods to the diverse customers. The pricing strategy will help the company to decide whether they will charge a higher price to the distant customers in order to cover the cost of shipping or they will charge a lower price so as to gain additional profit as well as business (Danziger et al. 2014). Modes of Entry The mode of entry that will be beneficial for the company is joint venture and licensing. Since, it is a tobacco company licensing will authorize the company in the target country to use the property of a licensor. In order to get the right to use the insubstantial property in the target market, the company needs to pay a fee to get the license (Boon and Liang 2015) With the help of joint ventures, Prestige General Trading continues the expansion of its Global Network of new supply channels. Joint venture mode of entry will help the company to stay up to date about the latest movement in the market and it will also help the company to make smarter investment decision. The joint venture will help the company to build an equal position and an executive voice in the foreign country (Block and Walter 2012). The year 2014 was a significant year for the Chinese market and as a result, China became the China Global Demographic. China comprises of 25 different groups of market which in turn is characterized by unique climate as well as expansion and wealth. As per the reports, in the past few years it has been recorded that more and more Chinese started to travel the world for the purpose of business. Planned outcomes The outcome will be that the company will be able to gain by adopting the geographical pricing strategy as well as the licensing and joint venture mode of entry. Conclusion It can be concluded that Prestige General Trading is a multinational organization with an international commodity trade house. It has also been concluded that the pricing strategy that the company should undertake is the geographical pricing that will help the company to decide how to price its goods to the diverse customers. As per the recent trends, the company desires to expand its trade in Asia where it has been found that China is the international tobacco market with nearly 60 percent of the population involved in smoking. The mode of entry that will be helpful for the Prestige General Trading Company is joint venture and licensing. Joint venture mode of entry will help the company to stay up to date about the latest movement in the market. However, licensing will authorize the company in the target country to use the property of a licensor. References Ajami, R., Cool, K., Goddard, J.G. and Khambata, D.M., 2014.International business: Theory and practice. Routledge. Block, J.H. and Walter, S.G., 2012. National culture and modes of entry into entrepreneurship.Available at SSRN 2027864. Boon, B.T.L. and Liang, T.W., 2015. Firms Marketing Mix Effectiveness and Modes of Entry in the Host Countries. InProceedings of the 1998 Academy of Marketing Science (AMS) Annual Conference(pp. 474-474). Springer International Publishing. Channon, D.F. and Jalland, M., 2016.Multinational strategic planning. Springer. Danziger, S., Hadar, L. and Morwitz, V.G., 2014. Retailer pricing strategy and consumer choice under price uncertainty.Journal of Consumer Research,41(3), pp.761-774. International Business Strategy - Reasons and Forms of Expansion into Foreign Markets. (2013). Poland: Katarzyna Twarowska, p.2. Verbeke, A., 2013.International business strategy. Cambridge University Press. Yao, T., Jiang, N., Grana, R., Ling, P.M. and Glantz, S.A., 2014. A content analysis of electronic cigarette manufacturer websites in China.Tobacco control, pp.tobaccocontrol-2014.