Global Strategy and Development

Introduction

Lush Retail Ltd is a British company in the retail cosmetic industry of Britain. The headquarter of Lush Retail Ltd is located in Poole, Dorset, United Kingdom. Lush Retail Ltd provides a large variety of products such as masks, moisturisers, shower gels, soaps, creams, lotions, and other cosmetics for both hair and face. Lush Retail Ltd focuses on making its product using vegetarian recipes, consisting of 85% of the vegan product. The total turnover of Lush Retail Ltd was 803.8m pounds, as of 30th June 2020. Lush Retail Ltd also performs its business in 49 countries globally; some of them include Canada, Australia and Germany. Additionally, Lush Retail Ltd should also focus on planning the expansion of its business in India. 

Reasons for internationalisation

The rise in the internationalisation of a business is strongly linked with issues of the highly competitive environment in the cosmetic retail industry due to the presence of external firms. Additionally, the influence of the international economic environment in the market provides a more dynamic pressure that helps in enhancing the profitability of the firm (Sarikdakiset al., 2019). The key reason for the business in implementing internationalisation are:

⦁ It enables the company in accessing a wider market range.
⦁ Assists in enhancing the public image of the company.
⦁ Reduces costs through developing an enhanced efficiency in the manufacturing of the product
⦁ Provides support in developing independence through local market cycles of business

Diamond Model

Factors condition

The Factor condition focuses on providing a detailed understanding of the current sources in India for the expansion of business by Lush Retail Ltd. The factors condition enables the business to create a detailed evaluation of physical resources, knowledge, human resources, infrastructure, and capital resources available for Lush Retail Ltd to maintain a healthy expansion of the business (Hamilton and Webster, 2015). The effective business expansion enables the firm to understand the importance of key specialised resources that are widely available and provide specific importance in the firm's internationalisation. It supports the firm in gaining a strong competitive advantage over other cosmetic businesses in the global market.

Related and supporting industries

It enables the firm in gaining improved support for the business with the strong availability of large manufacturing and supporting industries. The availability or unavailability of the suppliers' industries, along with the development of related industries in the market, assists in the internationalisation of the competitive market (Collinson et al., 2020). The rise in economic development results in the growth of strong emphasis and is essential for the growth of complementary industries.

Firm Strategy, structure and rivalry

Understanding the competitiveness of the business through the evaluation of strategies and structure of its competitive business. The development of competition is largely dependent on the nature of the creation of the companies, its management, and the nature of its desired domestic rivalry in the market (Johnson et al., 2017). However, the development of retail industries in India strongly impacts the rise of the corporate culture required to perform over its international firm. 

Demand Condition

The development of the demand condition assists in providing a strong competitive tool for the business in the international market. The existence of a local market for a large variety of cosmetic products supports the business in gaining improved export of the product and enhancing its sales. Moreover, business is required to perform an improved evaluation of the demand of the cosmetic retail industry in India. Evaluation of demand size consists of the rise of home demand, the pattern of growth, the size of customers, and demand size (Wild and Wild, 2020). Detailed evaluation of demand size is crucial to attaining an improved understanding of competitive advantage for the business in India.

Strategy Selected

Lush Retail Ltd should focus on the implementation of Factors condition due to the large availability of the human resource in India. It would provide support to Lush Retail Ltd in gaining a great improvement in its business practices. 

Strategy

Transactional Strategy

The transactional strategy supports the business to develop in the international market. A transnational strategy enables the business in providing strong competitive growth that results in the effective development of the business (Daniels et al., 2019). The development of global strategy enables Lush Retail Ltd is experiencing global integration along with the development of local response over the given rise of the cosmetic brand in the Indian market. It enables the business to focus on the importing and exporting of its goods, which results in maintaining the strong expansion of the business in the international market. The strong availability of various luxurious cosmetic products would enable Lush Retail Ltd is experiencing a significant profit margin. 

Multi-domestic strategy

Implementations of multi-domestic strategies enable the business to understand various domestic sales of cosmetic products. The availability of different sales and marketing strategies in India would enable the organisation in gaining a strong rise in its desired sales of the products. Additionally, the strong availability of various luxurious brands would enable the business to successfully identify various small cosmetic brands in the local market that would impact the sales of its products. 

Global Strategy

Business organisation through global strategy in maintaining its large global brand that results in delivering minimal changes over the external market. It provides assistance of Lush Retail Ltd in experiencing a strong expansion of the business into a large global market like India. The effective development of the global strategy enables the firm to include global awareness of its desired products strongly and maintain an improved understanding of the desired overall sales of its products (Peng, 2021). Additionally, global strategies also assist the business in making new sales as well as enhancing its desired customer base to create more profits.

International strategy

The international strategy enables the business to develop a strong in exporting and importing its products over global sales. The implementation of international strategy is required to develop an improved understanding of the initial approach of the business on its expansion and internationalisation. The initial step acquired by most businesses to implement their international strategy is importing and exporting quality products and launching them in the international market.

Selected strategy for Lush Retail Ltd

It is essential for Lush Retail Ltd to implement an international strategy as it enables the firm to provide its products globally. It results in creation in the strong rise of its business adoption that impacts the growth of its desired global strategy of the firm. The international strategy supports the firm in the effective establishment of its desired domestic plan that enables Lush Retail Ltd to be aware of its desired products properly. It creates substantial assistance on the effective development of global integration and the measurement of its local responses.

Country Analysis

Country attractiveness

Involvement of politics

The federal structure in the parliament results in seeking the interest of improved investment of foreign business. It provides support in enhancing the employment rate that impacts the country's development. The increase in demand for foreign investment enables in making the country investment easily.

Economics of country

There has been a rise in annual GDP results in the foreign development and growth of the business in India. Additionally, the FDI inflow in India assists in creating $45.15 billion and has increased consistently (Simoes, 2020). 

Social factors

The availability of a large population in India would support Lush Retail Ltd in the development of strong growth of its human resource that would enhance the productivity of the firm. The effective rise in the overall understanding of the firm helps in the development of attractive social factors.

Legal factors

There has been a strong development of its factors that have led to the creation of proper supports in creating a strong Indian constitution for the development and growth of foreign business markets (Pandey et al., 2021). 

External environmental analysis

Porters five forces

Bargaining power of buyer (High): The large population in India results in gaining an improved sale of its products. The availability of a large pool of buyers results in the high bargaining power of the buyer.

Bargaining power of supplier (Low): The easy access of quality material for the production of quality products would result in creating a low bargaining power of the supplier.

The threat of new entry (High): The rise in opportunity for business in the cosmetic retail industry due to the high demand for cosmetic products results in creating a high threat for the new entry.

The threat of substitutes (High): Large numbers of customers in India focus on utilising natural and ayurvedic cosmetic products. It assists in creating a strong rise for the threat of substitutes creating a high threat for the firm.

The threat of competition (High): The availability of large cosmetic business organisations such as Patanjali in India creates strong competition for Lush Retail Ltd. The competition of indigenous and local cosmetic businesses provides a high threat to Lush.

PESL Analysis

Political Factors

The Secular, Democratic and Republican functioning of India enables the business to easily promote its products depending on the demands of its customers. It results in the effective creation of strong business tools, and the promotion of foreign products enables Lush Retail Ltd in enhancing its sales on the firm (Pandey et al., 2021).

Economic Factors

The regular improvement of the economic condition of India provides assistance to Lush Retail Ltd in improving its sales and gaining more profits. In 2020 the GDP of India was noted to be around 2.62 lakh crores USD, enabling the business to improve its sales and develop a strong profit for the firm (Marathe and Gawade, 2020).

Social Factors

The development of the social factors of India enables the business to the strong promotion of its products. Additionally, the current population in India of about 138 crores in 2020 provides an opportunity for Lush Retail Ltd in maintaining efficient performance and provide quality service to its customers through an improved workforce (Nayak and Kayarkatte, 2020).

Legal Factors

The effective development of Anti-discriminatory laws in India such as IPC 1860 (Section 153 A) that criminalises the use of language over violence or discrimination of an individual over its caste, sex, race, and the place of birth. It encourages the business in maintaining a healthy workplace culture and promote the high-quality performance of the employees. 

Mode of entry

The mode of entry of a business in internationalisation largely depends on their market entry strategy. Different market entry strategies of the business include licensing, franchising, joint venture, and merger and acquisition.

Licensing

Licensing provides an effective transfer of the business depending on the firm's entry strategy. It results in the strong involvement of a business that provides the license to another business for selling its products to the customers (Chew et al., 2020). This license assists in granting permission to the firm in a different global market. The grant is provided through intellectual property rights for products over a given period of time.

Franchising

Franchising the market entry strategy allows a firm to generate awareness of its products in the foreign market. Franchising enables the business is paying a distinct royalty or fees to the original owner of the product (Ghantous and Christodoulides, 2020). This royalty provides support to the franchisee in utilising the trademark of the business and selling its products.

Joint Venture

It is an effective market entry strategy that enables a business organisation in establishing a third company with one of its partners. Firms mostly utilise it to establish their products in various emerging markets (Hardaker and Zhang, 2021). It provides scope to the business in developing its strategy by utilising its partners business infrastructures. 

Merger and Acquisition

The utilisation of an effective merger and acquisition market entry strategy enables the firm to the effective expansion of the business in the international market. This market entry strategy enables two different firms in merging together as one distinct firm (Singh and Das, 2018). The availability of large Indian firms results in the restoration of the acquisition through establishing a strong foothold over an effective foreign market.

The selected mode of entry

Lush Retail Ltd to have an effective expansion of its business in the Indian market, should focus on implementation a franchising market entry strategy. Through a franchising strategy, Lush Retail Ltd should provide its franchisee with proper availability of its product under its trademark. It would provide benefit to Lush Retail Ltd in lowering the level of its own capital investment to create a strong awareness of its products in the market. It also assists in lifting the brand value and brand awareness of Lush Retail Ltd in the Indian cosmetic market.

Linking to the above points

The franchising market entry strategy is also assisted by the social factor of the external environment of India. The large population base of India enables Lush Retail Ltd in accessing strong franchising of its products to the different franchisees.  

Select 3 Problems from Managerial and Organisational

Organisational Coordination

The functioning of the management assists in the effective coordination of the firm that assists in ensuring proper departure of the groups that results in the sync. It results in the effective development and performance of the business. There exist strong issues and challenges in maintaining effective coordination with the different working organisations. The mismanagement of the organisational coordination impacts the effective performance of the employees and reduces the efficiency of the firms (Mutebi et al., 2020). The collaborative issues in the firm's impacts on large scale production of the firm and reduce its sales.

Culture-related Issues

The cultural diversity in India provides large resistance to the business in the effective management of its workplace. The significant cultural difference of working employees negatively impacts healthy relationships between the employees that reduce their collaborative working (Krendl and Pescosolido, 2020). Differences in the cultures of employees provide an effective reduction on the management policy and organisational strategies resulting in dissatisfaction of the employees.

Hofsted’s Cultural Dimensions

Power distance

The power distance dimensions of Hofsted’s cultural dimension assist in either accepting or rejecting various unequal distributions of its power in the different functioning departments of the business. It assists in the creation of effective distribution of power in gaining great improvement of its business practices. 

Uncertainty Avoidance

The implementation of uncertainty is related to the level a society tolerates or gains an uncomfortable with changes, situational as well as risk uncertainty. This dimension results in the evaluation of the exact tolerance of the society as well as adapting to the change in the situation.

Individualism Collectivism

It is associated with the degree to which the community or society focuses on appreciating as well as acknowledging the accomplishments of the individual's interest and accomplishments. On the contrary, of the overall interest or accomplishments of the groups (Alsswey and Al-Samarraie, 2021). 

Masculinity Femininity

Masculinity and femininity are associated with a measure that a community focuses on appreciating or values developing materialism and assertiveness compared to feelings, quality of life, and relationships (Bissessar, 2018). It results in generating strong issues with relation to various gender roles of individuals. 

Time Orientations

It assists in understanding the overall development of the key associated tools that limit the individuals in completing the work in the given period of time. Proper maintaining of time orientations results in the creation of effective development of the performance of individuals in the workplace (Huang and Crotts, 2019).

Solutions

There could exist a large organisational and cultural difference that impacts the growth and performance of the business in global marketing conditions. Detailed development of effective solutions is necessary to overcome various organisations as well as management issues and challenges during the expansion of Lush Retail Ltd in India. 

Coordination

Improved Leadership

The organisation should focus on the strong implementation of a democratic leadership style. It provides an opportunity for the business is performing a strong rise. The democratic leadership style enables the business to encourage its employees to put forward their thoughts, views as well as ideas that would assist in maintaining an ethical workplace environment. Effective leadership assists in providing a strong direction to the employees in enhancing their collaborative working results in the effective development of its desired business tools (Faizet al., 2017). Employees should be provided with improved direction in the performances that would encourage the employees in working towards achieving common business goals.

Organisational Structure

Lush Retail Ltd should focus on implementing a hierarchical organisational structure. It provides support in providing a proper chain of direction to the employees and results in enhancing the efficiency in its business performances (Hupkeset al., 2018). Hierarchical organisational structure provides a proper improvement in the coordination of the employees working in the firm. 

Cultural

Effective Communication

Employees are encouraged in developing effective communication. Effective communication supports the employees in understanding other views as well as properly explaining their views. Effective communication provides assistance in reducing misunderstanding and maintaining a proper workplace environment (Stachoet al., 2019). Effective communication results in encouraging improved coordination between the employees impacting on efficient completion of the business objectives of Lush Retail Ltd.

Embracing cultural diversity

Employees should focus on understanding and respecting each other culture in the workplace. It would provide support to the business in avoiding conflicts and maintaining a positive workplace culture. Employees should be encouraged to embrace their fellow employee's cultural differences. Maintaining diversity in the workplace provides the opportunity for the employees to develop a strong interaction and provides the scope of learning new traditions in the workplace (Dalton et al., 2020). It would assist in developing a strong relationship between employees and assist in achieving positive workplace culture in the organisation.

Conclusion

It is concluded from the report that the internationalisation of the business provides assistance to the firm in maintaining an effective expansion of the business globally. Lush Retail Ltd is required to understand the main reason for the global expansion of the business to improve its profitability along with enhancing its sales. Understanding of different external environmental factors in India through PESL and Porter's assists Lush Retail Ltd in the implementation of the franchising market entry strategy of the firm.