Challenges of expansion to a foreign market

Document Type:Essay

Subject Area:Economics

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The U. K progressively also depends on healthy institutional assets, like their stable currency, an independent justice system, and a service industry that generates three-quarter of the country’s GDP. Traders and investors are often involved trying to understand the issues that force the market to fluctuate. The fact is that there exist numerous reasons, depending on the current state of the global economy, and investors still need to apply resolutions that daily impact the business. Corporate yields and news, political happenings, and overall market opinions all affect the three essential economic indicators of the United Kingdom. The Euro block economy expanded at the fastest pace in over six years in Q3. The need to look at the Euro block to analyze the economic conditions of the U.

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K arises from the fact that Europe conducts business as a block and if the whole block is performing well, then all its members are also experiencing favorable terms of trade. In 2018, the estimations provided conclude that the Euro area economy is likely to maintain its pace of growth because of a strong labor market and strong fixed investment. U. The most significant competitor in the selected market is Debenhams plc. Retailer. The multinational entity operates under a departmental store design in Ireland and the United Kingdom and Ireland with licensed outlets in various countries. Customers are provided with a variety to choose from, where they can shop for women, men and kid’s clothes, beauty, furniture, electricals, gifts and much more.

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Debenhams’s headquarters is in London, and the current CEO is Sergio Bucher. K manufacturers through the launching of a fresh ‘Made by Great Briton’s range. The launch was dubbed a campaign effort to help bolster domestic textile production and revive the UK clothing industry. Remember, working closely with internal designers does not limit its global competitiveness, but it is a way of producing goods and services that match with the tastes and preferences of the locals. Debenhams also currently relies on manufacturers from all over the world, including Africa, Asia, and Europe. Additionally, redesigning is another strategy it has adopted in its business war with competitors. The economy of the United Kingdom is classified as a mixed economy. Economies are classified as closed, mixed, or market, depending on the level of government and private entity involvement.

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A combined economic system is a combination of different types of financial policies. Both the private sector and government are jointly involved in dictating the economy, though the government exerts more control on a few key areas such as the transport and financial industry. A closed economy is characterized by total control by a central government. Fierce competition in the economy is ideal for consumers since they will quickly access quality products and services. Therefore, the expansion of Dollar general stores is likely to be received with excitement since the government will benefit with taxes and the employment of Britons. Lastly, in a mixed economy, the government can immediately intervene to correct market failures through consultations with the existing private entities.

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For example, the authority can speak and prevent larger companies from misusing their monopoly power. When the government acts to avoid such type of bullying, expansion is facilitated. In an economy deficient in funds coupled with high-interest rates, the amount of money in circulation reduces significantly thus citizen’s spending power is much lower. They only have money to spend on basic needs and not luxurious items such as those provided by Dollar general stores. The Bank of England is the highest bank in the United Kingdom, and started operations by the year 1694. Their task is to offer both fiscal and monetary stability for households and businesses in the UK. The role of the central bank on its economy has raised extra scrutiny since the BREXIT vote, where the economy was expected to slump because of harsher economic conditions for the locals.

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S. A and U. K have diverse workforces and job-skills. The U. K’s vote to exit the European Union is going to present an exchange risk uncertainty the country never expected. For them ensure a smooth transition into the new market, the best recommendation for Dollar stores is to seek an alliance with an already established but smaller retail shop in the United Kingdom. Strategic partnerships form a critical comparative advantage by reducing the market information challenge and ensuring that the stage is set for a focus on creating new products and technologies rather than distributing existing products and services. The other advantages of forming a coalition are that the technological exchange created will benefit both firms because the two countries have different levels of technical knowledge and capabilities.

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