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Executive summary

International business is one of the popular scenarios in the world and one of the reputed tea
company George Steuart tea also can be concern as the global business. This assessment is
described about the recent international expansion decision taken by the business along with the
external and internal environmental analysis. Further this provides detail description about the
host country and home country cultural aspects as well. The selection of entry strategy and
internationalisation strategy also highlight under this assessment and propose about most
effective and efficient way of doing international business.

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Content

1. Introduction..............................................................................................................................5
2. Selected Company....................................................................................................................5
2.1 Drivers to compelling to internationalization........................................................................6
Local overview.............................................................................................................................6
2.2 Stage model.......................................................................................................................7
3. Host Country Market Analysis.................................................................................................7
3.1 PESTEL Analysis..................................................................................................................7
3.2 Porter’s Diamond Model........................................................................................................9
5. Strategy Formulation..............................................................................................................11
5.1 Entry Strategy......................................................................................................................11
5.2 Internationalization strategy.................................................................................................12
6. Project schedule......................................................................................................................13
7. Conclusion..............................................................................................................................14
References......................................................................................................................................15

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 1. Introduction

International trade and international business can be recognized as very popular terms in 21 st
century. Because it is widely using method for business in this era. International trade can be
defined as exchange goods, services capital as well as knowledge among several borders. The
term globalisation also used to describe about the international business (Baxter, M., 1995).

Different national markets become one specific market place when it is engaging with the
overseas business. However business should have ability to change their business activities in
accordance to the global environmental fluctuations and to reduce different trade barriers.

This assessment expect to provide detail description George Steuart tea company and it‘s recent
international expansion idea. Under this study author expect to analysis about the different
environmental factors including cultural influences. Further this is propose about the appropriate
internationalisation and entry strategy for the new expansion along with the time frame.

Author is a business consultant regarding the international trade and provide advice regarding
the market analysis before enter to the new market place. Not only have that as a consultant
authored advice for company regarding the strategies to enter the market place and international
trade.

2. Selected Company

George Steuart tea can be recognized very older and reputed tea brand in Sri Lanka. This was
established in 1835 by two brothers, James and George Steuart. This is known as foremost
quality tea producer in Sri Lanka. Company currently won many certifications for their
excellence tea productions as well. Main tea varieties offering by the company are black tea
collection, green tea collection, herbal tea collection, local tea, gift tea and Steurat tea collection.

The global presence of the company is marvellous and it is currently spread around huge number
of countries in Asia, Europe middle East etc.

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2.1 Drivers to compelling to internationalization

Local overview
Gorge Stewart is a renowned tea brand in Sri Lanka and worldwide. The company contributes
significantly to export earnings after exporting high quality premium tea to the world market.
The company's current local marketing strategy is to provide high quality premium tea to high
income consumers and Sri Lankan tourists, In order to maintain a good brand image in the
country.

Structure of the organization

Gorge Stewart is private limited company and can identify different management layers within
the company. The chairman is the head of the company. There are department heads for each
department, which include Human Resources, Finance, Marketing, Operations, Logistics, Supply
Chain and all of them are reported to the General Manager. The General Manager reports to the
Chairman of the Company. Company maintain vertical reporting structure, and as a result it is
easier to control the company and take the important decisions.

Human resources and financial resources

Gorge Stewart Company has multi skills and well competency basis work forces which is
support to gain competitive advantages among local and global. So company easily can achieve
the organizational overall goals and maximizing the shareholders wealth easily. As a
consequences company have sound financial strength and skilful workforce in order to enter to
the new market.

Market Relevant factors

Many Sri Lankan tea exporters can be identified in the Sri Lankan tea export context and many
of them produce the same range of tea to the global tea marketSome of the best reputable tea
companies offer wider tea authenticity to the local and global tea market than George Stewart,
while some Asian countries produce high quality tea for the global market. Therefore, the
company has to face widespread competition in both local as well as global context

Therefore, the company needs to focus on financial, human resources and technical skills and
weaknesses before entering a highly competitive new market in a global context.

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 2.2 Stage model
Forsgren, M., (2002) explain that. The Uppsala model is a well-recognized and appropriate
format for any company to enter the new market. It provides guidelines and suggestions for
expanding the current business in the international new market. This model further demonstrates
that internationalization of companies is a well-defined process and will take place step by step.
On the other hand, it relies on specialized expertise and relevant field experience.

Gorge Stewart company going to practice Uppsala model to enter to the new international
market, Therefore, the company's R&D team studies the market information in order to analyze
the new markets to invest.

3. Host Country Market Analysis

In this model, the company will identify and analyze the environmental factors and conditions of
the country for which the company is going to invest. In this study going to use,

- PESTEL analysis
- Porter’s diamond model

To analyse the external market of the company.

3.1 PESTEL Analysis

Within PESTEL analysis going to examine about six environmental factors in UK context.

PESTEL factor Description Impact

Political - UK has stable political profile. Comparatively higher
- One of powerful country in Europe and influences towards
global demand and the price
- Reserved Separated business cities for of the tea.
investors (facilitating infrastructures)
- High tax and tariff rates 19 percent in 2018.

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 - (Besley, T.at,al 2019)
Economic - According to Fernandes, G. and Sridhar, D., Comparatively can
(2017) In a global context, the UK is in the highly influences
top five economies. consumer demand and
- Recorded 3 percent inflation rate in 2017 price.
(Fernandes, G. and Sridhar, D., 2017)
- Per capita income USD 2310 and minimum
wage per hour is £7.50,

Social - According to the 2018, recorded 65 million

of population. Reasonably influences
- Higher rates of middle age and mature towards tea industry. .
peoples.
- Cultural and demographic diversity
- Higher literacy and educational rates
recorded.
- The UK is in the top 3 countries in the global
rankings.
Technology - UK is best technological and innovative General impact
competency country in the global. towards Price and
- Government of UK invest more capital to the demand of tea.
ethnological researches (Talbot, D.E. and
Talbot, J.D., 2018).
- The state sector encourages businesses to
adopt modern technology.
environment - Public sector more aware of sustainability Comparatively
environmental practices. Moderate influence of
- Unpredictable and more challengeable tea prices and demand.
weather situation. Tea consumption vary
with weather status.
Legal - Higher legal and compliances regulations This is also the

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 towards labour and working practices. moderate impact.
- The government is very aware of
discrimination.

3.2 Porter’s Diamond Model

Diamond Description Impact

Factor
Factor Competency and skilful labour availability, extended infrastructure Highly
Condition resource and modern facilities for trade the tea in supermarkets. . influences
Demand Per capita income and earning per hour is high, so people of UK Highly
condition maintain respective living standard, so looking higher tea demand. influences
linked and Can identify well known supermarket facilities in UK, so can use fair
supporting supermarket chain for trade the product. Impact
industry
Firm As a market strategy should be follow up close competitors strategies High
strategy, marketing tools and techniques to survive within the market achieve Impact
organization competitive advantages, in here Most of the tea suppliers use low cost as
and a trading strategy.
competition
Need to maintain flat reporting structure in order to smooth the
operation.
Government Public sector of UK support towards direct investments. UK has higher Moderate
demand of Ceylon tea due to the quality and the taste. So government impact.
give GSP + and other benefits to encourages the Ceylon tea investors
(Aghdaie, S.F.A at.al 2012)
.
Chance Gorge Stewart consist well known brand name and image in the local fair
and global context. impact

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 4. Cultural Analysis
This cultural analysis mainly describe about the key cultural factors of the host country. In here
Hofstede’s cultural dimension is using. This dimension can use to compare about the host
country cultural situation and the home country cultural situation ( Hofstede, G., 2003). This
cultural dimension theory includes about five determinants.

The Hofstede’s cultural dimension for Sri Lanka and the UK can be stated as fallows.

Hofstede Culture of Sri Lanka Culture of UK Influence

Cultural
Dimension
Power Score is 80 Score is 35 Company should
distance Consisting with centralized Low score can be seen change their culture
culture. Companies use and inequalities cannot and should maintain
hierarchical order concept. be identified in the equality within the
Bosses are the main party business environment organisation
of company

Individualis Score is 35 Score is 89 Because of this

m This is denote that Sri UK has a private society deviation company
Lanka more towards the and the individualist should maintain
collectivistic society and society. individualistic culture
group works , team within the UK branch
collaboration

Masculinity Score is 10 Score is 66 Company need to high

Experiencing feminine UK experiencing orient towards the
society. More prefer Masculine society. business success rather
towards the wellbeing and Organizational success is than wellbeing and
flexibility
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 the key orientation flexibility.

Uncertain Score is 45 Score is 35 With this nature

Avoidance Sri Lankan business not This score describe that company need to high
much thing about the UK business are very focus towards the
uncertain avoidance contended with uncertain uncertain scenarios.
scenarios

Long term Score is 45 Score is 51 This cultural dimension

orientation This score is recognized UK also not much prefer of the country is similar
that Sri Lanka is not much for the long term to each other’s and
prefer to long term orientation company does not need
orientation to change it’s
orientation

5. Strategy Formulation
Under strategy formulation author expect to define about the entry strategy and internalisation
strategy.

5.1 Entry Strategy

Entry strategy identification is most important requirement for international trade. When
Business expects to expand their business in international market it should firstly identify about
the entry mode for particular country. There are several ways means using by internal business.
Some of them are direct methods and some are indirect methods. The risk involve with each
options also different from one method to another (Buckley, P.J. and Casson, M.C., 1998)

The propose entry strategy for this Company is direct export methods. Because this is known as
the easiest and low cost strategy to start the international operations. However company need to
analysis about the tax and duties, distribution cost, marketing and promotion cost interrelates

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with this option. Because those factors are much important to decide about the final selling
prices and the exact margin of the product.

Under the direct export method George Steuart Tea Company expect to make agreement with the
tea agent in UK. This is signed by both parties according to their mutual agreement. In here
company is expect to maintain better relationship with this agents. Agent is distributing George
Steuart Tea via famous retail chains situated in Sri Lanka. Modern supermarkets are the key
points of distribution.

5.2 Internationalization strategy

Apart from entry strategy, the internationalisation strategy also very much important for the
global business operations. According to the Bartlett and Ghoshal matrix there are four different
options available.

Those options are divided based on the level of responsiveness and the global integration level.
Accordingly those options are global, transnational, and international as well as multi domestic
(Melin, L., 1992).

When evaluating the each strategy the most suitable internationalisation strategy for this
company is multi domestic strategy. According to the nature of business the level of integration
is very high and level of responsiveness also high (Chryssochoidis, G. and Clegg, J. eds., 1997)

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By implementing both these entry strategy and internationalisation strategy, company can easily
achieve competitive advantage over other rivals. Because by using those strategies company can
minimize its cost and easily customize product varieties in accordance to the requirements of
customers.

6. Project schedule

7. Conclusion
George Steuart Tea is globally spread company and it is currently operating in many countries in
the world. Recently it is going to enter to the UK market. The external environmental factors and
the internal characteristics of the company are much more supportive for this expansion idea.
However the cultural factors of Sri Lanka and UK are very different and company need to
address those cultural deviations to become success. Further this is proposed about the entry

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strategy and the internationalization strategy. Those two strategies also very much supportive for
George Steuart Tea to achieve competitive advantage.

References
Aghdaie, S.F.A., Seidi, M. and Riasi, A., 2012. Identifying the barriers to iran's saffron export by
using porter's diamond model. International journal of marketing studies, 4(5), p.129.

Besley, T., Jensen, A. and Persson, T., 2019. Norms, enforcement, and tax evasion (No.
w25575). National Bureau of Economic Research.

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Baxter, M., 1995. International trade and business cycles. Handbook of international
economics, 3, pp.1801-1864.

Buckley, P.J. and Casson, M.C., 1998. Analyzing foreign market entry strategies: Extending the
internalization approach. Journal of international business studies, 29(3), pp.539-561.

Chryssochoidis, G. and Clegg, J. eds., 1997. Internationalisation strategies. Springer.

Forsgren, M., 2002. The concept of learning in the Uppsala internationalization process model: a
critical review. International business review, 11(3), pp.257-277.

Fernandes, G. and Sridhar, D., 2017. World Bank and the global financing facility. bmj, 358,
p.j3395.

Hofstede, G., 2003. Cultural dimensions. www. geert-hofstede. com.

Melin, L., 1992. Internationalization as a strategy process. Strategic management

journal, 13(S2), pp.99-118.

Talbot, D.E. and Talbot, J.D., 2018. Corrosion science and technology. CRC press.

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