MBAA22101

INTERNATIONAL BUSINESS MANAGEMENT

Student Name : Kandhula Manish Reddy

Student Number : 97659823
Module Code : MBAA22101
Submitted To : Philip Tokmark
Submission Date : 18-12-2023

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 Table of Contents
Task 1: Introduction...................................................................................................................................3

Task 2: External environment analysis......................................................................................................4

Task 3: Organizational capability support and international business expansion.....................................6

Task 4: International Business expansion strategies..................................................................................8

Task 5: Recommendations.......................................................................................................................10

Conclusion...............................................................................................................................................11

References................................................................................................................................................12

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Task 1: Introduction

This management consulting report details the potential expansion into India of the UK-based
real estate investment trust SEGRO Plc. The goal of this paper is to examine the pros and cons
of the company's growth in the Indian market. SEGRO Plc is a REIT that specialises in the
acquisition, management, and development of contemporary light industrial and warehouse
buildings. Retailers, wholesalers, manufacturers, data centre operators, and third-party logistics
and transport businesses may all make use of the firm's large box and urban warehouses.
Percival Perry and Noel Mobbs established the firm in April 1920 and it is based in London,
UK (GlobalData Plc 2022). Northern Europe, Southern Europe, Central Europe, National
Logistics, Greater London, and the Thames Valley are the divisions that make up the company.
The transportation logistics and retail industries are among those that take advantage of its
features (physical and online) (GlobalData Plc 2022). However, India's consumer market is
huge and its middle class is growing rapidly. Recent economic changes in India have made it
easier for foreign firms to do business in the country. Strategically, SEGRO may benefit from
India's expanding economy and dynamic business environment. Data from the last several years
shows that urbanisation, the growth of online shopping, and government programmes to
improve industry and infrastructure have all contributed to India's status as one of the world's
most rapidly expanding major economies (Tigari, and Chandrashekhar, 2019). Examining the
potential advantages and disadvantages of SEGRO Plc's expansion into the Indian market is the
primary objective of this paper. Through an examination of the present state of the Indian
market, this study will identify critical success factors for penetrating this new realm.

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Task 2: External environment analysis

When researching India's external business environment, researchers use the abbreviation
PESTLE, which stands for Political, Economic, Social, Technological, Legal, and
Environmental factors. The external elements that might impact SEGRO's business
environment in India can be better understood with the help of this framework.

Political Factors: India's government is both democratic and well-established. Numerous

actions have been taken by the federal government to streamline internal
business processes. Businesses in the country have found the Goods and
Services Tax (GST) particularly helpful in streamlining and reducing their
tax burden (Bouamara, and Jörg-Martin 2023). Given the unstable
political climate in India, this might affect SEGRO's activities.
Economic Factors: The Indian economy would have grown to the point where it becomes the
world's third biggest. The country's massive consumer market and rapidly
expanding middle class provide chances for SEGRO's expansion. It is the
country itself that offers these possibilities. However, the large informal
sector, rising inflation, and India's complicated regulatory system might
all be problems for companies operating in the nation (Singh, 2022).
Social Factors: The reputation for diversity that India has earned is borne out by the
diversity of its social and cultural traditions. A large portion of the
population is under the age of 30, and their tastes in leisure activities are
dynamic (Tigari, and Chandrashekhar, 2019). This opens the door for
SEGRO to deliver its customers something really special: cutting-edge
goods and services. The company would be well to bear in mind cultural
variations in India as it grows its business there (Singh, 2022).

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Technological India has accomplished a lot in this field over many years. The IT sector
Factors: and the supply of qualified IT workers are both enormous (Tigari, and
Chandrashekhar, 2019). If SEGROs want to improve their operations and
deliver cutting-edge goods and services, they should take advantage of
this opportunity to increase their use of technology. However, some
difficulties come with operating in a technologically advanced setting, and
the organisation has to be aware of them (Anand, 2022).
Legal factors: India has a complex legal and regulatory environment. Numerous factors,
such as particularly convoluted labour regulations and lengthy legal
processes, make conducting business challenging despite the country's
best efforts (Singh, 2022). Careful navigation of the regulatory and legal
environment is required to guarantee that SEGRO complies with the local
norms and laws (Biswas, 2020).
Environmental India is experiencing tremendous suffering due to several environmental
Factors: challenges, including water shortages, air pollution, and the effects of
climate change (Ramalingam, 2023). The government has responded to
these worries by implementing many initiatives, which have provided
opportunities for SEGRO to advance economic sustainability. Before
beginning any project, the company should determine how it will affect
the environment (Singh, 2022).
Table 1: PESTEL analysis

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Task 3: Organizational capability support and international business
expansion

Before considering an expansion to India, it is essential to evaluate SEGRO's organisational

abilities. One helpful tool for this kind of examination is the McKinsey 7S framework. Strategy,
structure, systems, shared values, skills, style, and staff are the seven pillars that comprise the
McKinsey 7S model.

Strategy: The framework's Strategy goal is to see how effectively the important parts
operate together with the big picture of the company's strategy and goals. This
evaluation could reveal how well the framework works (Clarke, 2019)
Structure: In the Structure portion of the framework, the researcher discusses how the
organisation intends to accomplish its goals (Kuria, 2018). The SEGRO's
organisational structure is characterised by a decentralised decision-making
process and a well-defined line of command. The company may have to
reorganise its internal processes to match the requirements of the Indian market
(Mercer, Dargusch, and Hill, 2022). Systemic adjustments, such as investigating
the prospect of joint ventures or partnerships, may be necessary to navigate the
complexities of the Indian market.
Systems: The company must reassess its practices to ensure their efficacy in India. For
want of a better term, researchers may claim that the principles held by an
organization's employees form the basis of its policies and procedures (HS,
2019). Modern technology is used by SEGRO in several areas, such as property
administration, customer interactions, and financial reporting. System
integration may be required to fulfil the commercial and regulatory
requirements in India (Clarke, 2019).

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 Staff: Many people who work for SEGRO have extensive backgrounds in logistics
and real estate. While it's true that SEGRO will have to shell out some cash to
make sure its employees in India get the training they need to accomplish their
jobs, the company still values personal and professional development highly
(Cbinsights, 2022)
Style: SEGRO has a culture that encourages collaboration and adaptability, and it is
ubiquitous across the company (Aithal, 2017). There is a possibility that this
approach will need to be altered to fulfil the constraints that are imposed by the
Indian market.
Shared SEGRO strongly emphasizes the principles of sustainability, innovation, and
Values: putting the needs of the customer first (Clarke, 2019). To ensure their
acceptance by the local Indian market and stakeholders, it is necessary to share
their ideas and make certain changes to them.
Table 2: McKinsey 7S framework

The organizational qualities of SEGRO Plc provide a strong foundation for worldwide growth.
However, to accommodate the intricacies of the Indian firm, certain adjustments are needed
before implementation. To build reliable relationships in India's business sector, it's crucial to
highlight common values that align with community expectations and needs.

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Task 4: International Business Expansion Strategies

Before expanding a company into a new country, it is necessary to seriously consider the
strategies that may be used to achieve success in the new market.
Joint Venture: A Joint Venture(JV) is a system where two or more companies cooperate to
achieve a shared objective( Sharma et al., 2021). The Parties choose to split the project
expenses and risks. Using this technique companies with only the resources and knowledge
required to compete in a foreign market could succeed(Javalgi et al., 2020). SEGRO might been
able to overcome the challenges and make an identity for themselves in the industry if they
collaborated with a well-known Indian real estate developer.

Figure: Definition of Joint Venture (Source: Hargrave, 2023)

Deals with two or more businesses merging are generally referred to as "mergers and
acquisitions"(M&A). Though the two terms are frequently used together, mergers and
acquisitions (M&A) contain various implications in legal situations (Javalgi et al., 2020). An
organisation become stronger when two or more firms of similar size merge. As an additional
strategy, SEGRO might pursue mergers and acquisitions (M&A) with regional Indian
enterprises that match its corporate ethos and objectives (Bahoo, Alon, and Paltrinieri, 2020).
Some ways that putting this strategy into action might be helpful are getting access to local
knowledge, customers, and infrastructure.

Figure: Mergers and Acquisitions (Source: Hayes, 2022)

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Greenfield Venture is a form of market entry strategy with establishing a new wholly owned
subsidiary in either a foreign country or one's own country by constructing its facilities from the
start (Sharma et al. 2021). Using this strategy, the organization can stay in charge of all its
activities and avoid problems with local partners or mergers with businesses in the area.

Figure Greenfield Investment (Source: Chen, 2020)

Each of these strategies has its own set of strengths and weaknesses. This is shown, for
instance, by the possibility that SEGRO may reap the benefits of local partners' expertise via
joint ventures. However, there is also the chance that SEGRO could lose control of its
operations or clash with the partners' goals (Sestu, and Majocchi, 2020). A lot of effort, money,
and managerial expertise is needed for mergers and acquisitions (M&A), but the payoff is more
consumers and a larger portion of the market (Sharma et al., 2021). Lastly, one of the best
things about a greenfield approach is that it lets you take full control of the business. The
possibility of encountering regulatory hurdles or being unable to break into the market is only
one of many things that aren't completely out of the question (Fakhri and Mohamad, 2019).

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Task 5: Recommendations

A joint venture with an Indian partner would be ideal for the company's expansion into
international markets. An advantage of forming a joint venture is the increased speed,
productivity, and profitability it may bring to your company. New distribution networks and
markets may be accessed via joint partnerships as well. SEGRO can access new markets with
joint ventures as well as make distribution networks. Research shows that MNCs often use joint
ventures as a means of breaking into emerging markets like India's (Sahai and Gupta, 2016).
Joint ventures allow multinational corporations to reap the benefits of local distribution
networks and expert market knowledge. SEGRO can also increase their capacity with the help
of this strategy. more to lessen the impact of the unknowns and hazards associated with
relocating, it is helpful to have a local partner who is familiar with the marketplace, regulations,
and traditions of the region (Kaur and Singh, 2018). SEGRO can access new expertise and
knowledge for example technology and finance. As a result of forming a joint venture, SEGRO
and its local partner have an opportunity to better manage resources while reducing the costs
and risks associated with expanding the company. This lessens the dangers of venturing into
uncharted markets (Barua and Mukherjee, 2020). Joint ventures allow multinational
corporations to establish local networks. This not only saves companies time and money but
also increases their credibility.

Figure: Joint venture partnership advantages and disadvantages (Source: Ansari, 2021).

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Although there are many potential upsides, there are also some potential downsides to joining a
joint venture (Tiwari, 2016). One of the advantages is that the objective of the venture is not
clear. When two individuals get together, their divergent cultural perspectives may cause
friction. the communication between companies is also affected (Tiwari, 2016). Cultural
differences may impact how members of the joint venture communicate, make decisions, and
collaborate (Sarkar and Chaudhary, 2020). from the joint venture, the partner's count also varies
on several stages. Finding a local partner who is familiar with SEGRO's culture and traditions
and who can establish trustworthy communication channels is essential if the company is to
overcome this obstacle (Sahai and Gupta, 2016). moreover, the work and sources are also not
distributed equally (Kaur and Singh, 2018). Contractual limitations pose a danger to a partner’s
core business operations. A well-defined agreement outlining the responsibilities and benefits
of the local partner and the SEGRO is crucial for resolving this issue (Fakhri and Mohamad,
2019). The fact that SEGRO is partnered with an Indian firm allows them to tap into the
partner's extensive business expertise.

Conclusion

The primary purpose of the research was to determine the feasibility of the company's entry into
the Indian market. The researcher analysed the Indian market using the PESTLE framework to
determine the opportunities and threats that the company may encounter. The management
competency evaluation confirmed that the organisation have the knowledge, skills, and assets to
achieve its worldwide growth goals. The research could require the corporation to choose
between several viable choices for expanding its operations worldwide. Among these choices
are acquisitions, greenfield investments, and joint ventures. Not only did the researcher weigh
the techniques' benefits and drawbacks, but they also rated how well they addressed the
organization's requirements. The research suggests that a potential joint venture with an
established Indian construction firm may be a good way for the corporation to get into the
Indian market. If SEGRO wants to get into the Indian market, it may look at forming a joint
venture with an established Indian construction business, according to this research. This
strategy may allow the firm to tap into its knowledge of real estate and high-quality building
construction in conjunction with a local partner.

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