Master global expansion strategies with this sample: Analyze EEC, MNC challenges, Tesco's Brazil entry, and gain key insights to excel in your international business assignments today.
Expanding the business operation at global level is beneficial for the organizations because it facilitates the market diversification, access to new talent pools, enhances revenue potentials, improves brand reputation and increases innovation opportunities (Nielsen, Wechtler and Zheng, 2023). Apart from this, the current UK Assignments will be based on the global business and cover various aspects relevant to it. This report will highlight advantages and disadvantages of European Economic Community (EEC). It will also depict reasons associated with the internationalization of MNCs and related challenges. Additionally, this report will also include detail analysis of Tesco in relation to expanding the business expansion in Brazil with the evaluation of domestic market, strategies to internationalize etc., that supports in its global expansion. This assignment will also shed light on the learning gained during the module.
EEC was a regional company and its key objective was to involve its member states economically. This community was established by the Treaty of Rome in 1957. Before 1993, the name of this community was European Union (EU). The European Communities comprised of EEU, European Atomic Energy Community and European Coal and Steel Community which were submitted under EU. Additionally, this community was framed to create the common marketing in between the members through the establishment of common external trade policy and avoidance of the most trade barriers (Eichengreen, 2024). Along with this, the key of this community is to protect the liberty and peace as well as laying the foundations of closer union in between the people of Europe. EEU is the large scale example of common or single market that allows for goods and services as well as people and capital to move around freely within single country.
Pros
Single market: EEC has eliminated all the barriers related to the trade by reducing the complexity of existing trade. The key aim of this community was to simplify the rules and regulations of the existing trade so the members can make the purchase easily and successfully.
Free movement of people: EEC has provided right to the people to move from one place to another freely within the European country (Dimier and Stockwell, 2023).
Better jobs and workers protection: EEC has provided the opportunity to the staff members and citizens to work in any local area of any country which ensures higher availability of the jobs. EEC is also playing an immersive role in building working time directive which helps in protecting the rights of employed people.
Cons
High membership cost: To become the member of EEC, it is necessary to pay high amount of fees.
Problems with policies: Compliance with the same policies and operating the business aspects in the common market creates various discrepancies (Blake, 2021). There are same policies for all the countries and in this case, EEC framed the different regulations for the small companies from which they can easily and directly affect the large nations.
Multinational Corporation (MNCs) is the one that perform its operations in the home country as well as other countries in all over the world. This type of companies are maintaining their central office in one country that co-ordinates the overall management of other offices such as factories or administrative branches. For example, Marks and Spencer, Tesco, Hilton etc., are the leading MNCs. Additionally, being a MNC is beneficial for the organizations because it facilitates efficiency, development, employment and innovation which positively influence the overall operations. In the context of efficiency, MNC’s are competent to reach their target market more easily as compared to the other companies (Reim et al, 2022). MNC’s can easily admittance to raw materials and cheaper labour costs which increase sales & generates higher profits.
3 Years | MSc
In addition to this, MNCs are favoured by the local government because substantial amount of local tax paid by them which helps in boosting the country’s economy. As per the view of Evers et al, (2023) multinational companies tend to make focus on recruiting the native workers who have complete knowledge of local culture which leads employment. Usually, MNCs are employing both international and local workers so they have different perspectives and suggestions so they are competent to come up with the innovative and creative products. Innovative products contribute in attracting the customers which leads sales and profitability at higher rate as compared to the competitors (Child, Karmowska and Shenkar, 2022). Expanding the business at global level gives admittance to organization to different profiles from the cultures that enhance international performance and enrich teams. The cultural difference gives opportunity to organizations to gain the competitive advantage over competitors by bringing better understanding of customer’s expectations and country’s culture. As critically argued by Neubert (2022) despite of benefits being a MNC is disadvantageous for the MNCs because it increase legal burden and tax compliance, negative public relations and experiencing political instability which eventually negatively influence on the overall growth and success.
Apart from this, access to lower production cost is considered as one of the common reason for expanding the business operation at global level. Setting up the production in the developing countries helps in reducing the overall costs which leads to increase profits. As said by Bai et al, (2022) outsourcing is considered as one of the common way of accomplishing these objectives, setting up manufacturing plants in other countries which seems cost-efficient. Due to the large size, multinational organizations are taking the advantage of economies of scale and develop their brand at international level. On the critical note, it has been argued by Zhao et al, (2022) legal and regulatory compliance is one of the common challenges that are encountered by organizations while expanding the business operation at global level. At the time companies are expanding into the new markets then they have to comply with all the rules and regulations of different legislations. Each country has its own standards, rules and regulations (Colovic, 2022). For example, Companies which are operating the business operation in UK it is crucial for them to follow the rules and regulations of general data protection regulation (GDPR) in order to protect and ensure the privacy of sensitive information.
Additionally, high profit and sales margin is another reason of MNC’s for the internationalization. At the international level, the uses of emerging technologies are rapidly increasing. Thus, with the help of advancement organizations can manufacture the innovative and unique products which help in attracting customers and positively impacts the overall sales as well as profitability. According to Purkayastha and Gupta (2023), the companies which have higher profits and sales are able to grow and operate the business at global level easily and successfully as well as capable to gain competitive advantage over competitors. On the other hand, understanding of peculiarities of new market is another issue that faced by the companies at the time of expanding the business at international level. As per the view of Gao et al, (2021) in other countries MNCs are facing challenges in understanding the demographic characteristics of inhabitants, preferences and needs as well as consumption habits of potential buyers who have interest in the purchasing products. To run the business operation at global level successfully it is important for organizations to assess the demand of products and services as well as factors in relevant to provided export destination (Vătămănescu et al, 2022).
Large customer base is another reason of MNC to do the business at the international level. Generally, new markets or countries mean new customers with the new behaviours and expectations. To meet the expectations and fulfil the needs of new customers, MNCs are placing emphasis on producing innovative and unique products that also helps in gaining competitive advantage over competitors. This is an opportunity for the companies to improve their performance in the context of customer satisfaction and also helps in their growth & development. Having the large customer base is beneficial for MNC’s because it helps in increasing sales, profit as well as improves the brand reputation in the competitive market. As critically opposed by Casson, (2022) language and cultural barrier is also another challenge that is encountered by the companies during operating the business operations at international level.
For the successful expansion of business operation at global level it is crucial for the companies to understand the local culture, language and business etiquette. From the language and cultural barrier, the employees are not able to understand their roles and responsibilities in relation to the completion of tasks accordingly which ultimately negatively impacts the productivity, sales and profitability (Gaweł, Mroczek-Dąbrowska and Pietrzykowski, 2023). Along with this, for expanding the business operation at global level it is essential for the organizations to bridge gap between the team members who reside in the diverse countries but collaborate for the work effectively and efficiently. For this, MNC’s are required to build cultural sensitivity among the employees in order to avoid the circumstances or remarks that may be regard unsuitable in the new country.
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As per the thought of Bouteraa et al, (2023) gaining high competitive advantage is one of the biggest reasons for the organizations to enlarge the business operations at global level. Global expansion provides organizations with new appetite and dynamism for the entrepreneurships as well as desire to push the limitation of what can be accomplished. Internationalization helps the MNCs in developing the new competitive advantage both domestically and new global target markets (Almontaser and Gerged, 2024).
Additionally, internationalization helps the organizations in acquiring new technologies and knowledge through international markets. This provides the opportunity of learning new skills, developing new and improving existing products that leads high profits and thereby helps in building as well as sustaining competitive position over rivals. On the other hand, it has been argued by Singh, (2022) at the time of expanding the business at international level companies is also encountering the challenge of tax competition. Generally, each and every countries have own rules and regulations in relation to tax. For the growth and successful operation in the new market, MNC needs to follow all the policies, rules and regulations in relevant to tax and tariffs. In case, MNC’s are not complying with the tax regulation then they will be accountable for punishment and penalty as well as negatively impacts on their overall growth and operations.
Improving brand image is another reason for MNC’s for operating the business operation in the home country as well as other countries in all over the world. Expanding the business process at global level helps in providing opportunity to MNC to strengthen the visibility and brand image. According to the perspectives of Huang et al, (2024) reaching out internationally is beneficial for the companies because it helps in bringing credibility to the brand and enhances the confidence of potential customers from which they are likely to make purchase. In addition to this, internationalization allows companies to expand the network of partners and improving the brand image which provides the new opportunities to operate the business process successfully. As critically argued by Liesch and Welch (2024), economic volatility is another big challenge that is faced by the companies at the time of operating the business operation at global level. The risks of enlarging the business at global level also account for the economic volatility in the diverse parts of the world. Additionally, economic uncertainty can have an immersive influence on the profitability and market decisions. For instance: Fluctuations in the currency can have direct impact on the profit margins because the customers are likely to spend less on the purchasing of any items.
Increasing business growth is another reason of MNCs to go internationalize. Increasing growth is one of the main objective of the company so internationalization helps in achieving this by hiring the skilled and talented people, using updated and latest resources as well as adopting the emerging technologies like AI, machine learning etc. Additionally, with the help of emerging technologies, MNC’s are competent to provide the unique and innovative products to the customers in order to increase their satisfaction and enhance experience which leads high business growth (Leonavičienė and Burinskienė, 2022). If the businesses are continuously growing then it helps in standing out in front of the competitors and increases profitability as well as sales by developing the reputed position in the market.
Internationalization is considered as one of the significant process of tailoring goods and services as well as operational offerings for the entry and growth into global markets. The chosen organization for this report is Tesco which is one of leading Retail Company of UK and operating around 13 countries. This report includes analysis of the domestic market, strategy to internationalise and mode of entries in Sao Paulo, Brazil where Tesco can expand the business operation. Expanding the business in Brazil will be advantageous for Tesco because it is the fifth-largest country in the world and seventh largest by population.
The market of UK’s retail sector is rapidly growing in which positively impacts on the growth and development of Tesco. In 2024, the GDP rate of the UK was 1.08% which higher than previous years so it helps in increasing the spending of consumers to purchase the products that increase profitability and sales of Tesco (O’Neil, 2024). On the other hand, in 2024 the employment rate of the UK was 74.8% which is less than 2023 i.e. 74.9% which directly impacts the productivity and profitability of Tesco (Clark, 2025). Apart from this, the population of UK is increasingly at rapid rate which is beneficial for Tesco to attract the customers to make purchase which leads to increase productivity and profitability.
For expanding the business in Brazil Tesco will implement various theories such as process, network, international entrepreneurship and electric paradigm. Network is considered as one of the significant theory that will need to implement by Tesco to expand the business within Brazil successfully. According to this, the process of internationalization is identified by the development of formal and informal relationships with the network participants such as suppliers, customers, government, competitive firms etc., in the international markets in order to gain admittance of external resources (Do, Nguyen and Shipton, 2023). At the time of expanding the business in Brazil, Tesco will need to build the relationships with the participants that help in accessing the resources within time for manufacturing products to attract the consumers.
Additionally, according to this theory the network relationships are relied on knowledge, mutual trust and commitment to each other. Apart from this, adoption of this theory will be useful for business because it helps in determining and assessing the potential customers, partners and rivalries in the different markets (Surdu, Greve and Benito, 2021). By mapping and evaluating dynamics and network structure, Tesco will be able to identify the gap, threats and opportunities and then devise strategies to enhance the network performance and position. This strategy will assist Tesco in promoting the commitment, trust and learning among the network partners to improve its adaptation, innovation and efficiency. To expand the business in Brazil, Tesco needs to lay emphasis on the globalisation response. Selected organization will not apply the strategy same as UK in Brazil due to the diverse culture and system.
Before expanding the business at global level it will be important for the organizations to analyse the status of market. Analysing the market helps in gaining the success and run the business operation successfully (Morrish and Earl, 2021). For enlarging the business operation into Brazil, Tesco needs to analyse its market through PESTEL model. This model helps in determining the influence of external forces such as political, economic, social, technological, environment and legal on the business operation of Tesco at global level.
Political: Brazil enjoys strong economic and political relationships with the United States. Both the countries are sharing the common commitment to international peace, sustainable economic growth and security which will assist Tesco in operating the business successfully.
Economic: The GDP rate of Brazil is continuously increased from past years. In 2024, the GDP of 2.18 trillion U.S dollars and it will be predicting to increase in the future (O’Neil, 2024). Therefore, expansion of business in Brazil will be beneficial for Tesco because it helps in growing and developing the business operations.
Social: In 2024, the total population of Brazil was 212.54 million people and it will be increased in the future (Sanchez, 2024). It will be beneficial for Tesco to expand the business in Brazil because it helps in attracting the wider customers which leads high profitability and sales.
Technological: Brazil is also technological country, so to expand the business successfully Tesco will need to adopt emerging technologies to produce innovative and unique products.
Environmental: To protect the environment and safeguard the health and well-being of customers, Tesco will need to emphasis on producing eco-friendly and sustainability products which leads to increase profits.
Legal: For expanding business operation successfully in Brazil, Tesco will need to follow all the rules and regulations of legislations legally which are introduced by government.
Entering into the global market is not an easy task for the companies to enlarge the business operation. Licensing, exporting, foreign direct investment (FDI), joint venture, franchising etc., are the various modes of entry in the international market (Calheiros-Lobo et al, 2023). Tesco is well-know and leading retail multinational company so it will be easier for them to expand the business process within Brazil. Selected organization has strong image and reputation in the market so it can enter into the Brazil’s market through joint venture (JV) easily. In addition, joint venture is a commercial enterprise in which two or more companies are merging their resources in order to gain competitive advantage over competitors. Due to strong brand image and reputation of Tesco, the retail companies of Brazil will be ready to merging their resources with it to run the business successfully at global level.
In addition, selecting this entry mode will be beneficial for an organization because it helps in increase resources and capacity, produce economies of scale, and drive innovation as well as gaining make significant investment in emerging and updated technologies to provide innovative admittance to the new markets and distribution networks (Chan, Tetteh and Nani, 2022). By combining the resources with other companies, Tesco will and unique products to the customers which lead to increase growth, generate profits and develop brand image. On the other hand, due to joint venture with other companies in Brazil, Tesco may face the challenges of vague objectives, restricting flexibility, culture clash, lack of communication etc. To overcome these disadvantages, Tesco will need to recruit local people who have knowledge of culture and understand language as well as use communication channels to communicate with the participants.
For expanding the business operation at global level it will be important for the companies to lay emphasis on the effective leadership. It helps in directing and motivating the employees to perform the tasks in an effective manner. To operate the business in Brazil by merging with other companies, Tesco will need to adopt democratic leadership style. Adoption of this leadership style will be beneficial for the organization because it encourages the people to participate in the decision-making process by sharing their view and perspectives effectively (Devi and Subiyantoro, 2021). For running the operation at global level it is important for the leaders to have effective skills. For the growth and development of Tesco’s joint venture in Brazil, it will be important for the leaders to have various skills such as negotiation and resilience. Leaders with good negotiation skills have capability of building respect and confidence among people and in the market.
Conclusion
In conclusion to this report, it can be stated that enlarging the operation at global level can be beneficial for organizations because it helps in increasing the market share, business growth and offers investment opportunities. Besides this, it can be inferred from the evaluation that by expanding the business in Brazil, Tesco would become able to maximize both sales and profitability
Attending the module related to internationalization was beneficial for me because it enhanced my knowledge and skills in relation to the different aspects. Before attending the module I didn’t have knowledge about the benefits of expanding the business at global level. After taking participation in the module I learned that enlarging of business in other countries are beneficial for the organizations because it helps in increasing profitability, sales as well as provides investment opportunities and increases the customer base. Additionally, I also learned about the various aspects of European Economic Community (EEC). I also learned that, this community is providing opportunities of single market, better jobs and movement of people from one area to another within the European country. I also learned that this community also has cons of high membership and problems with the policies of same country.
On the other hand, before attending the module I don’t have knowledge about the specific criteria which need to be followed by companies at the time of expanding the operation at global level. Thus, from this module I learned that, for entering into the international market concerned business units have to analyse the market status of country in which they are going to expand the business operation by evaluating the external forces. I also learned about the various strategies of internationalise such as process, network, eclectic paradigm and international entrepreneurship theories. Apart from this, I also gained knowledge about the entry modes such as franchising, licensing, joint venture, exporting etc., from which companies will easily enter into the global markets for operating the business operation successfully. Apart from this, through module I also learned about the reasons behind MNC’s are doing business at the international level. I gained the wide knowledge about the internationalization which will provide the opportunity to me to operate the business operation at the global level. I learned that expanding the business operation at the international level is beneficial for the organization because it facilitates better access of talents, increase sales and profits, customer base and improves competitive advantage over the rivals. On the other hand, operating the business at global level is not an easy task for the companies because they experience various challenges such as tax compliance, language and cultural barrier, legal & regulatory compliance, economic volatility etc that negatively influences the overall operations.
On the other hand, from General Enterprising Test (Get2) test it has been determined that I have entrepreneurial quality from which I will successfully operate the business at international level. I have ambition to build the innovative growing business in the future. Form this test I have identified that, I am occasionally enterprising person which means I am highly energetic, motivated and capability to do hard work (Get2 test, 2025). I have strong requirement for the achievement and use resources effectively & efficiently in order to accomplish the challenging goals and objectives. Additionally, I also have capacity of seeking out the opportunities for achievement and innovation from which I will manufacture unique and innovative products for customers in order to increase satisfaction and enhance experience of customers.
In this test, I score only 42% in the need for achievement it means I will need to do more hard work and commitment for operating the business at global level successfully. Additionally, I get medium marks in need for autonomy so to become a successful entrepreneur I will need to build leadership qualities to motivate and direct the employees effectively. On the other hand, in the context of creative tendency I score 67% which reflects I have capability of developing the innovative and creative ideas to build unique products. This quality will be useful for me because it will adopt emerging technologies effectively to make improvement and increase efficiency at work. In GET2 test, I scored 83% in calculated risk-taking which was higher than others. It means I am goal-oriented from which I will be able to accomplish all the goals and objectives successfully when operating the business at international level (Get2 test, 2025). I also have the quality of effective information management from which I will use the information to calculate probability whether the actions will be successful or not. In term of locus of control I have the capability to control over the experience and situation that affect the lives of people in organization.
Conclusion
In the end it has been concluded that, business operation at global level helps in gaining competitive edge over competitors and economies of scale which leads to enhance efficiency. EEC facilitates single market, free movement of people and better jobs and protection of workers. The MNCs are likely to do business at global level because it helps in increase profits and sales margin, larger customer base, more investment opportunities and improve competitive advantage. For operating the business at global level, companies can develop network theory. To operate the business in Brazil Tesco can enter through joint venture which helps run the operation successfully.
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