1. INTRODUCTIONDespite the numerous challenges operating a business in the foreign country pose, more than ever before businesses have continued to expand their operations globally. This is because many are seeking opportunities that will help them grow their businesses in terms of market share and revenue generation. This trend however, has been accelerated with the liberalization of the global market and removal of trade barrier which in the past have hindered penetration into foreign markets (Tsang, 2004). The purpose of this study is to carry out critical analysis of the move by an Australian company into the Poland market.
Charcoal BBQ Chicken is a well-established business with over 300 stores in Australia and has a mature experience in the ‘roast chicken’ business and also a good revenue base. The business also has expertise in delivering quality services (Blanchard, 2011). Further, with a large business presence, the company has managed to develop their experience by managing numerous stores and using strategies in the market. This report will first provide a critical overview about Poland through a PEST analysis, and then Porter’s Five Forces will be demonstrated in order to better analyze the country’s market attractiveness for the firm.
This detailed analysis about operation management for the firm to operate the business in Poland and some ownership strategies will be introduced. Finally, a summary will be provided and some suggestions for the firm’s expansion will also be given. 2. CRITICAL OVERVIEWPoland is located in central Europe at 52 00 N, 20 00 E between Eastern and Western Europe, and encompassed by Germany, Belorussia and Ukraine which as shown in the map below. This country is also the most populated Eastern European country with a total population reaching 38,510,960 in 2006 providing a large consumer market (Euromonitor International, 2012).
In order to attempt to determine whether Poland is a suitable country for the Australian Charcoal BBQ Chicken to operate in, the analysis will entail consideration of five factors including politics/legislation factors, economic factors, social/culture factors, technology factors and environment factors, which can have an influence on the company’s ability to deliver in the new market (Blanchard, 2011). This PEST analysis model will be used to demonstrate how various forces in society are likely to affect the business.
2.1 Politics/legislation FactorsBeside the country's strong economic growth and central location, Poland offers a large consumer market and improved regulations for investors. Poland’s investment laws as of 2012 are transparent and foreign investors have the same rights as local investors, the Polish Information and Foreign Investment Agency (PIFIA) also provide assistance to foreign investors (Economic Freedom Act, July 2004). Furthermore, according to indices on Ease of Doing Business by the World Bank, there were large improvements in investor’s protection rankings in Poland, this led to rise to 33rd in 2006 from 43rd place in 2005 according to Euromonitor International (2012).
The other legislation that is likely to affect business is employment. The country’s employment policy is that foreign investors would only be allowed to operate in the country as long as they give opportunity first to the local populations (PKF, 2012). This may limit the business in terms of skill and expertise in case there is shortage in the local market.