Internationalization of a local business in Bangladesh

Submitted By:
Name ID
SK. Atika Rohin Trishila 2020825
Monera Bhuiyan Mim 2021155
Pritom Das 2010458
Tandra Chakrabarty 2021965
Walid Bin Kamal 1910145
MD Naimur Rahman Nayeem 1821616

Submitted To:
Course Instructor Dr. Safayet Rahman
Course ID INB301
Section 3
 Letter of Transmittal

7th August, 2022

Dr. Safayet Rahman
Course Instructor, INB301
School of Business
Independent University, Bangladesh
Subject: Internationalization of local business in Bangladesh
Dear Sir,
We submit herewith the attached report on “Internationalization of a local business in
Bangladesh”- Which is “Export plan of locally produced fruit ‘Lychee’. The following report
was prepared by the knowledge that we have gathered from the course “International
Business”.

While dealing out this report, we gave our best to maintain the highest of potentials in terms
of writing, collecting information and data analysis. Additionally, while making this report
we followed all the instructions and there are some references which are taken from different
sources to simplify our report and make it as informative as possible.

We would be thankful if you place your perceptive judgment on our effort. However, we will
be glad to explain if there is any discord that may arise. We hope you find this report
satisfactory.

Sincerely,

Team Pirates.
 Acknowledgement

Our respected faculty, Dr. Safayet Rahman Sir deserves our greatest gratitude for guiding us
throughout the report with numerous consultations. He happily welcomed all our obstacles
and confusions regarding this report. We are extremely thankful to our honorable faculty who
took the interest on our report and supported us till the end. Our journey with him in this
course has been truly a worthwhile learning experience.

At the same time, we acknowledge and value the efforts of the team members who have put
their dedication and sincerity upon successfully completing this assignment, without their
contributions it would have been an incredibly difficult job to accomplish. We the group
members have spent considerable amount of time and put effort into designing this
International Business assignment. We hope and firmly believe that our faculty will be
pleased with the work we are presenting with.

Thank You.
 Executive Summary

Bangladesh is a small country with big opportunities. The opportunities are high especially in
the international market. For our term project, we’ve decided to globalize our popular locally
produced fruit lychee. We selected three countries based on the potential market. These are
France, Belgium, and the Netherlands. Out of these countries we selected France to be our
final market to sell lychee because of its regulatory, economic, political, and social aspects.
We decided on exporting as an entry mode because it seemed most profitable in France’s
market. We also followed the “Standardize globalization strategy” out of the four basic
strategies to do business in this foreign market as there were already some competitors. If we
follow all the procedures accordingly, we will be able to expand our business in other
countries.
 Table of Contents

Contents
Internationalization of a local business in Bangladesh..........................................................................1
Letter of Transmittal..............................................................................................................................2
Acknowledgement.................................................................................................................................3
Executive Summary...............................................................................................................................4
Table of Contents..................................................................................................................................5
Product Identification:........................................................................................................................6
Selected product...............................................................................................................................6
About Lychee...................................................................................................................................6
Lychee production in Bangladesh:.................................................................................................6
Lychee production in Bangladesh..........................................................................................................8
Country Selection & Evaluation.............................................................................................................9
An appropriate entry mode.................................................................................................................14
Choosing the best strategy for internationalization............................................................................16
Lychee's business system:...................................................................................................................18
Conclusion...........................................................................................................................................19
Reference............................................................................................................................................20
Product Identification:
Bangladesh is pretty rich in lands. Almost all kinds of crops and fruits grow in the rich lands
of Bangladesh. Many of them are sold in foreign countries and many of them don’t. But
almost all of them have the potential to be sold in profit in foreign countries

Selected product
Every year Bangladeshi farmers grow a large number of fruits in our country. Mangoes,
Jackfruits, lychees, Banana, pineapple, watermelon are some of the vastly produced fruits in
our country. Mangoes, Jackfruits, and some other popular fruits in our country are already
exported in the foreign markets and bring money for our country. But Lychee is not sold in
foreign markets as much as it should. So, we decided to internationalize lychee from our
country. It showed potential in the international Market.

About Lychee
Lychee normally grows in subtropical climates where it is cool or dry for only a few months.
That is why it mostly grows in China, South–East Asian countries, and the Indian
subcontinent. A heavy tropical environment is also not good for lychee. Lychee is very
popular in Asian countries. It is also known as “Alligator strawberry” because of its red color
and bumpy skin. Though lychee is red on the outside like strawberry its inside is white. We
have to peel the flesh to eat it. It’s sweet and soft on the inside. It has a brown seed in the
middle of it. Lychee trees start producing fruits after 3-5 years of planting.

Lychee production in Bangladesh:

Bangladesh has a subtropical environment and is situated in Southeast Asia. So, lychees are
cultivated all around Bangladesh. But mostly in three hill areas of Bangladesh Rangamati,
Khagrachari, and Bandarban, and also in Jamalpur, Rajbari, Meherpur, Chapainawabgonj,
and Comilla. It is grown in May-June time Bangladesh when the market is filled with fruits.
It’s very popular among Bangladeshi people. At present, the total area under lychee
cultivation in Bangladesh is about 4,800 hectares and total annual production is about 12,800
MT and it is growing. There are many lychee variants in Bangladesh “Bombay”,
“Muzaffapuri”, “Bedana”. “China-3” are famous here. Among these variants “Bombai”
lychees are highly cultivated in Bangladesh. Because of the corona situation and cyclone,
“Amphan” farmers were scared of facing loss in 2020 as Lychees are high environment-
sensitive. Still, because of various government steps, farmers were able to make a profit.
Farmers are fear-producing lychee in large numbers because lychee plants are very sensitive
and might die for various reasons. If lychee farmers are trained properly lychee production
can be increased in significant number.

This is why we’ve chosen lychee to sell in a foreign market. Lychee is neither exported not
imported in our country. It is mostly sold in local markets. With proper training of the
farmers and correct business steps, Lychee can be easily sold in other countries with a huge
profit as most of the country’s environment is not suited for its production.
Lychee production in Bangladesh

Bangladesh is located in Southeast Asia and has a subtropical climate. As a result, lychees are grown all
throughout Bangladesh. But largely in Bangladesh's three hill areas of Rangamati, Khagrachari, and
Bandarban, as well as Jamalpur, Rajbari, Meherpur, Chapainawabgonj, and Comilla. It is cultivated in
Bangladesh during the months of May and June, when the market is brimming with fruits. It is quite
popular among Bangladeshis. At the moment, the total area under lychee cultivation in Bangladesh is
around 4,800 hectares, with an annual yield of approximately 12,800 MT that is increasing. In
Bangladesh, lychee varieties include "Bombay," "Muzaffapuri," and "Bedana." "China-3" are well-
known in this area. Among these varieties, "Bombai" lychees are widely grown in Bangladesh.Since of
the corona scenario and storm, "Amphan" farmers were afraid of losing money in 2020 because Lychees
are highly sensitive to the environment. Farmers were nevertheless able to earn a profit as a result of
different government initiatives. Farmers are afraid about mass-producing lychee because lychee trees
are extremely delicate and can die for a variety of reasons. Lychee yield may be significantly boosted if
lychee growers are properly taught.

This is why we decided to offer lychee in a foreign market. In our country, lychee is neither exported
nor imported. It is usually sold in small towns. Lychee may be readily sold in other nations with a large
profit if farmers are properly trained and business procedures are followed, as most of the country's
environment is not suitable.
Country Selection & Evaluation
To internalize a local business, it is very important to choose potential countries.
Selected 3 countries are –
1.France
2.Belgium
3.Netherlands

France
France, Western Europe's largest country, has traditionally served as a link between the continent's
northern and southern areas. Wide fertile plains occupy the majority of the north and west, making France
Europe's agricultural hub.

Social Aspect: France is regarded as a cultural hotspot. France has a

diverse pool of overseas investors in the commercial industry.
Furthermore, the country has one of Europe's greatest rates of
economic growth. Individualism is important to the French.
Furthermore, they have a low tolerance for ambiguity and
uncertainty. The Cartesian mode of thinking is respected in French
corporate culture, which follows a vertical structure.
Economic Aspect: France has a highly developed and free-market-
oriented economy that is known mostly for tourism, manufacturing, and medicines. It has the world's
seventh biggest economy in nominal terms by 2020, and the world's tenth largest economy in PPP terms.
According to the IMF, it is the world's 20th largest economy in terms of GDP per capita, with $39,257
in 2020. However, as a result of the global epidemic, France has seen one of the EU's worst contractions.
GDP growth fell by 19 percent in the second quarter of 2020, and 8.2 percent in the third quarter of 2020
as economic activity recovered. According to the IMF, economic growth will be 5.6 percent in 2021
before falling to 4.2 percent in 2022. Imports into France climbed by 2.8 percent, from 4.6 billion to
4.74 billion euros in June of 2021. Economic statistics of France,
Population 67.09 million

GDP  $2.93 trillion (nominal; 2021 est.)

$3.23 trillion (PPP; 2021 est.)

GDP growth 6.0% (2021)

GDP per capita $44,995 (nominal; 2021 est.)

$49,492 (PPP; 2021 est.)

Inflation  0.5%

Imports $1021.6 billion

Political Aspect: The French government is semi-presidential, with a President and a Prime Minister.
This implies that the Prime Minister is accountable to the French Parliament. It is a civil legal system,
which implies that legislation included in various codes take precedence over case law. The present
global and political backdrop defines France's advantages as a business and investment destination,
highlighting a number of critical elements to consider in rising markets. Prospects for investment are
ripening across all industries and sectors, implying that foreign investors have a window of opportunity
to participate in the world's fastest growing countries.
Cultural Aspect:France is one of the world's oldest nations and the most ethnically diverse country in
Europe. Throughout history, France has been a world leader in practically every facet of culture,
including food, winemaking, politics, philosophy, music, art, film, fashion, literature, and sports.

Belgium
Belgium is acountry of northwestern Europe. It is one of the smallest and most densely populated
European countries. Belgium is one of the most heavily populated countries in Europe and most people
live in urban areas.

Social Aspect: Belgium has a long and rich culture with an artistic
heritage. Belgium is a pragmatic culture. Also, they have a low
tolerance for uncertainty and ambiguity. They are very good
timekeepers and known for negotiation, compromise and common
sense. They appreciate clear facts and figures.
Economic Aspect: Belgium has a well-developed free-enterprise
economy, with service sectors accounting for the majority of GDP.
The chemical industry, the food and beverage industry, the pharmaceutical industry, and the fabrication
of basic metals and unfabricated metal products are strong areas of Belgian industry. According to
recent cyclical tendencies, GDP growth in 2019 was relatively high (+1.4 percent year on year,
compared to +1.5 percent in 2018), mainly to robust domestic demand (excluding inventory
movements). Despite the fact that Belgium's GDP growth rate is lower than that of the European Union
(+1.5 percent), it is catching up. In the first quarter of 2020, Belgian GDP declined considerably (-2.5
percent). Total inflation fell in the second quarter of 2020, mostly to decreasing energy costs and, to a
lesser extent, a slowing in service inflation. Belgium's GDP per capita, expressed in purchasing power
standards, according to Eurostat. Nonetheless, Belgium is one of the EU's richest countries, ranking
eighth, just behind Germany. Belgium's Economic Statistics,
 Population 11.54 million

GDP $578 billion (nominal; 2021 est.)

$623 billion (PPP; 2021 est.) 

GDP growth  5.4%

GDP per capita $50,103 (nominal; 2021 est.)

$53,973 (PPP; 2021 est.)

Inflation 0.6%

Imports $473.1 billion

Political Aspect: Belgium is a constitutional monarchy with a king as head of state and a prime minister
as head of government. It is also a part of the Benelux Countries. The monarchy in Belgium is
representative, constitutional, and hereditary. Power shifts are determined by birthright. Priority is given
to the family's first son or eldest male. King Albert II ascended to the throne in 1993 and remains in
power to this day. It is a member of the European Union and a federal state with a civil law system.
Cultural Aspect:Belgians are separated into three groups depending on their language. The Flemings,
who speak Flemish (Dutch), live in the north, the Walloons, who speak French, and there is a tiny
German-speaking population in Liège.
Different customs exist in Belgium's many populations. A brief handshake is the customary Flemish
welcome, but a small kiss on the cheek is the Walloon greeting. Walloons also eat dinner later in the
evening than Flemish people. However, conversing while chewing gum or having one's hands in one's
pockets is considered impolite in most societies.
Art, music, and architecture are all important aspects of Belgian culture and history. The comic strip is
well-known, and both "Tintin" and "The Smurfs" originated there. Sports are popular in Belgium, with
soccer being the most popular.
Waffles, moules frites (mussels with french fries), and chocolate are three of Belgium's most popular
dishes.
Netherland
The Netherlands is a member of the European Union. Despite its geographical limitations, the
Netherlands has managed to become one of the world's largest and most prosperous economies.
Social Aspect: The Dutch society is quite contemporary and self-
sufficient. They believe in equality for all, yet they value individuality
over community. Agriculture, trade, and service industries are the key
job sectors in this civilization. They value residents because of their hard
work and earned talents. They have a long bargaining heritage, which is
carried on via tight and regular communication between trade unions,
employer organizations, and government.
Economic Aspect: The Dutch have a market economy. Regulations and taxation are two ways the
government influences the economy. They have long been recognized as merchants, and international
commerce now accounts for over two-thirds of the GDP. In terms of GDP, the Netherlands is the
world's 17th biggest economy. Its GDP per capita was predicted to be at $57,101 in fiscal year
2019/20, making it one of the highest-earning nations. The Dutch economy suffered as a result of the
global pandemic, but it rebounded in the second quarter, with GDP increasing by 9.7 percent. Exports
and imports both grew, suggesting the improvement of domestic demand. Netherlands economic
statistics,

Population 17.40 million

GDP $1.01 trillion (nominal; 2021 est.)

$1.05 trillion (PPP; 2021 est.)

GDP growth 3.0% (2021)

GDP per capita $60,461 (nominal; 2021 est.)

$58,003 (PPP; 2021 est.)

inflation 1.2%

Political Aspect:The Netherlands is a constitutional monarchy as well as a representative democracy.

It denotes that the monarch, the King, serves as the head of state. The country is still democratic,
though, since Dutch residents pick the prime minister. The cabinet is made up of the prime minister
and several ministries who rule the country and enact policies. The country is also regarded as the
least corrupt in the European Union. The country follows civil laws, which implies that judges must
adhere to precise legal regulations.
Cultural Aspect: The cultural life of the Netherlands is varied and lively. Dutch painting and crafts are
world renowned, and Dutch painters are among the greatest the world has ever known. The Dutch
themselves take great pride in their cultural heritage, and the government is heavily involved in
subsidizing the arts, while abjuring direct artistic control of cultural enterprises. Indeed, the long-
enduring tradition of Dutch freedom of expression has undoubtedly played a significant role in the
flowering of Dutch culture through the ages.Choosing France as the Main Concern for “Lychee”
Because of our geographical position, we will ship our product Lychee to France, where tariffs, quotas,
and protectionist laws will be lower than in any other country. Lychee is a unique fruit that is gaining
popularity in Europe. It is most common in France. Summer supply is significantly more restricted, but
it provides opportunity for nations such as Bangladesh. France is Bangladesh's most important
economic partner inside the European Union. Both nations have built strong economic ties and have
prosperous commercial collaborations. France is the fourth most important destination for
Bangladeshi exports, after only the United States, the United Kingdom, and Germany. Bangladesh
hopes to broaden the portfolios of French investors, assist French businesspeople, get market access,
and diversify its export baskets. Bangladeshi businesses are promoting their products at a number of
prestigious international fairs in France. From 2001 to 2011, the value of Bangladeshi exports to
France climbed steadily. They surpassed the billion dollar mark in 2008-2009. Despite the global
economic crisis and the European financial crisis, Bangladeshi items have always been appealing to
European consumers. So, if they can convince buyers that their product is healthy and sell it at a lesser
price, we have a big possibility to enter into the France lychee market. All of these benefits make it
easier and more advantageous for us to internationalize our firm and sell lychee to France.
 An appropriate entry mode
An organization can expand its services into a non-domestic market by using foreign market entry
modes. This paper aims to internationalize lychee as a local product in a foreign market. We will explore
traditional international entry modes for expanding services into a non-domestic market. In addition to
importing, international expansion is accomplished through licensing, franchising, joint ventures, wholly
owned subsidiaries, and turnkey contracts. Lychee can expand its market in three different countries
(France, Belgium, and the Netherlands). We have selected France as the best country for selling the
product among these three. So, exporting our product to France has been our choice.

Export: Exporting refers to the act of selling goods in foreign markets or outside the country by
producers or manufacturers. Through a variety of market access methods, a corporation in one country
can internationalize its product if it is able to manufacture or create items. Profit maximization is the
primary goal of any business. As a result, corporations need to carefully examine every sector for profit
potential if they are truly interested in maximizing profits. Lychee will benefit greatly from direct
exports. Reasons are-
i. It is not necessary for a product to establish a structural business in a foreign country in order to export.
The cost of setting up a business in a foreign market is much higher than that of exports. By exporting
directly, companies can make more money by lowering costs.
ii. Organizations can maintain control over their financial activities by utilizing the 'Exporting' approach of
lychee.
iii. The corporation has a lot more control over its overall operations when it exports. In this way, it is much
easier to control any internationalization operations than in any other way.
iv. Exporting is flexible because it is easier to cancel a contract than to close a foreign market or end a
company's structure. Additionally, it is more efficient and less time-consuming.
Besides, there are many reasons why we do not choose other entry modes for internationalizing in the
foreign market. The reasons are:
 In turnkey contracts, the contractor oversees every facet of the project for a foreign client, including
operational staff training. Because the project has little long-term relevance to the foreign nation and the
contract might create new rivals, this model has not been picked.
 Licensing is another method whereby a licensor grants conceptual ownership rights to a licensee for a
certain period of time in exchange for a royalty payment from the licensee. Since licensing is
advantageous for patents, innovations, formulae, techniques, designs, and other intellectual property, we
do not select this approach. Any form of product or service does not benefit from licensing.
Additionally, licensing has the drawback of not having the strict supervision required to accomplish
experience curve and geographic efficiency. Another drawback of licensing is that it limits a company's
ability to coordinate cross-national strategic efforts.
 The third entry mode is franchising, which is similar to licensing. A franchise is a type of franchising
wherein the franchisor not only transfers intangible assets to the franchisee, but also requires the
franchisee to comply with rigorous business regulations. Franchises have the disadvantage of limiting a
company's ability to collect revenues from one country and use them to fund competitive assaults in
another. A low resolution might also be difficult to perceive due to the distance between the company
and its franchisees.
 The next entry mode is a joint venture. In joint ventures, two or more autonomous companies are mainly
responsible for running the business. The reason we don't select this entry mode is that it is possible that
the company lacks the strict control needed to achieve experience curves or location efficiencies.
Additionally, joint ownership can lead to disputes and influence fights if aims and objectives change
over time.
 The last entry mode is wholly owned subsidiaries or foreign direct investments. Shares of the company
are owned by the company in this entry mode. Although this mode is good for setting up a new
operation, it also has some disadvantages. One of the biggest disadvantages of this mode is that the
company is responsible for the entire cost and risk of setting up overseas operations.
As a result of analyzing all these factors, we can conclude that there are many disadvantages and issues
associated with other entry modes besides exporting. Therefore, export is clearly the best choice for our
business when it comes to internationalization.
Choosing the best strategy for internationalization

The primary goal of any business is to make a profit while providing excellent customer service. A
strategy refers to the actions that managers take to achieve the goal of a business. A manager can
implement one of four basic strategies in international business.

Global
Transational
Standardization
Strategy
Strategy

International Localization
Strategy Strategy

Global Standardization Strategy

This strategy should be used when there is a need to reduce prices but not a need to customize the
product for local responsiveness. This strategy should be used when the product is a global standard and
there are other competitors in the market.

Transitional Strategy

When cost reduction and local responsiveness are both under pressure, a company should pursue a
transnational strategy. This strategy is used when the product is not standard and there are numerous
competitors in the market.

International Strategy
This strategy should be used in a business when they don’t face the pressure to reduce their price or
customize their product according to the foreign market. This strategy is mostly for the early movers in
the market.

Localization Strategy

The product should be customized according to local responsiveness in this strategy. This can vary
depending on their preferences, culture, tradition, and so on. Price cuts should not be considered in this
case.
Lychee's business system:
Subsequent to seeing every one of the methodologies, we concluded that the technique we
ought to follow to sell lychees in France's market is the Global Standardization Strategy. As
lychee is a natural product its taste can't be changed and there could be no alternate method
for modifying this item. Thus, we can't answer nearby responsiveness. However, there is a
reality that France as of now delivers around 7800 tons of Lychees consistently. In this way,
there would be tension on us to decrease the cost. As the tension in decreasing cost and no
strain in neighborhood responsiveness requires a Global Standardization methodology, we
will follow that. France isn't climate amicable to lychees as much as Bangladesh. Thus, we
think will actually want to sell our lychee at lower cost than them. We will actually want to
catch more noteworthy portion of the overall industry and lift income assuming we apply
Global Standardization Strategy.
Conclusion
Bringing a locally famous organic product into unfamiliar market will not be simple. We
need to do promoting, efforts to tell individuals about our item. We need to enter the market
with a drawn out plan or we will not make due. We need to marked down cost and keep up
with great quality also create critical gain from this business. As we will send out our item,
we need to choose a dependable and solid specialist in France who will put forth legitimate
attempts to acquire piece of the pie in France. Lychee business has extraordinary potential in
France as a result of its developing clients there. In ongoing we can possibly turn into a
market head of lychee related item in France and grow our business to different nations.
Reference
What Is Lychee Fruit and How Is It Used? (thespruceeats.com)

LYCHEE PRODUCTION IN BANGLADESH (fao.org)

https://santandertrade.com/en/portal/analyse-markets/france/economic-political-outline
https://tradingeconomics.com/france/imports
https://www.focus-economics.com/country-indicator/netherlands/gdp
https://www.britannica.com/place/Belgium/Economy
https://saylordotorg.github.io/text_fundamentals-of-global-strategy/s07-03-entry-strategies-
modes-of-entr.html
https://www.horticulture.com.au/globalassets/hort-innovation/resource-assets/
hia007_hort_mediasummary_lychee_s2.pdf?
__cf_chl_captcha_tk__=pmd_3aNWsuE0jCp5MHhCgd1vvwtKwZAlJDK9OS8YFjKa78A-
1630254570-0-gqNtZGzNAyWjcnBszQil
Bangladesh lychee growers make profit despite COVID-19 pandemic (freshplaza.com)
Litchi Exotic Fruits, varieties, production, seasonality | Libertyprim