The research explores the global

challenges that are confronting Food

industry in UK, one of the most
renowned bakery chains, and proposes
strategies to address them.
Namel
TABLE OF CONTENTS
TABLE OF CONTENTS........................................................................................................................................... 2
1 INTRODUCTION............................................................................................................................................. 3
2 THE BACKGROUND OF FOOD INDUSTRY IN THE UNITED KINGDOM:...................................4
3 THE CHANGING GLOBAL LANDSCAPE:................................................................................................ 5
4 THEORY OF INTERNATIONALIZATION:.............................................................................................. 6
5 GLOBAL LANDSCAPE CHALLENGES:..................................................................................................... 7
5.1 Supply Chain................................................................................................................................7
5.2 Economic uncertainty:.................................................................................................................7
5.3 Geopolitical risks:.........................................................................................................................7
5.4 Increasing competition & rapidly changing consumer preferences:............................................8
6 GLOBAL LANDSCAPE OPPORTUNITIES:.............................................................................................. 8
6.1 Supply chain & expanding to new markets:.................................................................................8
6.2 Technological advancements:......................................................................................................9
6.3 Sustainability:..............................................................................................................................9
6.4 Innovation:.................................................................................................................................10
7 CONCLUSION AND RECOMMENDATIONS:....................................................................................... 10
8 REFERENCES:............................................................................................................................................... 12
1 INTRODUCTION
The global business landscape is constantly changing, and it is essential for businesses
to stay up-to-date with the latest trends and factors that impact their operations. In 2023,
businesses face a myriad of challenges and opportunities that can have a significant impact
on their success. This assignment will critically evaluate the changing nature of the global
landscape for international business and examine how it presents challenges and
opportunities for an industry or sector of choice. Specifically, this paper will focus on the
UK-based company, Greggs, and analyze how it is affected by the changing global
landscape. The paper will explore the various trends and factors that are shaping the global
landscape, including technological advancements, sustainability, globalization, and
geopolitical risks. By examining these factors, this assignment will identify the challenges
and opportunities that companies in the food industry face, and provide examples to
support the analysis. Ultimately, the goal of this assignment is to develop critical thinking
and scholarly understanding of the subject area while providing valuable insights for
businesses operating in the international market.
2 THE BACKGROUND OF FOOD INDUSTRY IN THE UNITED KINGDOM:
The food industry in the United Kingdom is a major contributor to the country's economy,
employing over 3.9 million people and generating £121 billion in gross value added in
2019 (Defra, 2021).

Food processing is a major part of the UK food industry, with companies ranging from
small artisanal producers to large multinational corporations. The sector includes activities
such as meat processing, baking, confectionery production, and beverage manufacturing
(Food and Drink Federation, n.d.). Many countries cap the prices of critical goods and
services, such as food and health care. Such constraints affect firms’ marketing and
profitability (Cavusgil et al., 2019).

Food retailing in the UK is dominated by a few large supermarket chains, including Tesco,
Sainsbury's, Asda, Greggs and Morrisons, although there are also many independent
retailers and specialist food shops. The sector has undergone significant changes in recent
years, with the growth of online shopping and the increasing importance of convenience
stores (Food and Drink Federation, n.d.).
3 THE CHANGING GLOBAL LANDSCAPE:
According to Deresky (2022), globalization refers to the interdependence of the business,
politics, trade, finances, and technological environment around the world. That
interdependence has come to shape the modern world and when it comes to economic
globalization, we define economic globalisation as the growing interdependence of
locations and economic actors across countries and regions (Collinson et al., 2020). The
global landscape refers to the overall economic, political, social, and environmental
conditions and trends that impact businesses operating internationally (Cavusgil et al.,
2014). The changing nature of the global landscape requires businesses to be agile and
adaptable in their strategies to remain competitive and successful in the global market
(J.Morrison, 2016).

Technological advancements, such as automation, artificial intelligence, and the internet of

things, are transforming the way businesses operate and compete (Schwab, 2022). Climate
change and sustainability are also becoming more critical issues, with governments and
consumers demanding more environmentally responsible practices from businesses
(United Nations, 2021).
According to Ghemawat, the business world is currently in a state of "semi globalization,"
where only a small percentage (10-25%) of economic activity is truly global (Deresky,
2022). This view suggests that there are still significant barriers to global trade and that
many businesses operate primarily in local or regional markets.
4 THEORY OF INTERNATIONALIZATION:
The theory of internationalization has been extensively studied by scholars over the years.
Johansson and Vahlne (1977) proposed the internationalization process model, which
emphasizes the importance of knowledge development and increasing foreign market
commitments. Root (1994) discussed different entry strategies for international markets,
including export, licensing, franchising, and direct investment.

According to a report by the British Retail Consortium (BRC), internationalization has been
a key driver of growth for UK retailers, with international sales accounting for 9.5% of total
retail sales in 2019. The report also highlighted that internationalization has helped UK
retailers to access new markets, leverage their brand strength, and benefit from economies
of scale.

Greggs' 2020 annual report, the company has an international strategy that involves
expanding its business outside of the UK through franchising partnerships. According to
Cavusgil et al. (2019), a franchise is an arrangement in which a firm grants another party
the right to use its entire business system in exchange for fees, royalties, or other forms of
compensation. As of 2020, the company had established partnerships in Belgium and the
Netherlands, with plans to continue expanding into new markets in the future (Greggs,
2020).
5 GLOBAL LANDSCAPE CHALLENGES:
5.1 Supply Chain

Global Supply Chain refers to the interconnected network of businesses, individuals, and
organizations that participate in the creation and delivery of products and services
worldwide. It encompasses all of the activities involved in the production, distribution, and
consumption of goods and services, from sourcing raw materials to delivering finished
products to consumers (Bowersox et al., 2013).

Furthermore, protectionism can create uncertainty in markets and disrupt cross-border

investment and trade, leading to decreased economic growth and potential negative
impacts on businesses and industries (Bown, 2019).
The retail industry in the UK is heavily reliant on global supply chains to source products
from around the world (Fernie and Sparks, 2018). These supply chains are complex
networks of companies, individuals, and resources involved in the production and
distribution of goods, which span multiple countries and continents (Christopher, 2016).

5.2 Economic uncertainty:

Economic interdependence is partly driven by political events, and most importantly by

political stability. Stability of policies, and the creation and maintenance of the appropriate
environment, plays a significant role in promoting the appropriate environment for firms
to prosper (Collinson et al., 2020). According to a report by the World Bank Group, "the
global economy faces heightened uncertainty amid rising trade tensions, subdued
investment and heightened policy uncertainty" (World Bank Group, 2019). Economic
uncertainty can impact consumer spending patterns, which can affect businesses like
Greggs that rely on consumer demand. In addition, economic uncertainty can create
challenges for businesses in terms of budgeting, forecasting, and planning for the future.

5.3 Geopolitical risks:

According to Collinson et al. (2020), the relationship between politics and economics is
often interdependent, as evidenced by the ongoing tensions between the United States and
China, as well as the recent departure of the United Kingdom from the European Union,
commonly known as "Brexit." Changes in trade policies and geopolitical tensions can create
barriers to entry and disrupt supply chains, which can affect business operations and
profitability. According to a report by the International Monetary Fund (IMF), "geopolitical
tensions pose risks to the global economy" (IMF, 2020). The report cites tensions between
the US and China, Brexit, and social unrest in several countries as factors that could disrupt
the global economy. The rising geopolitical and geo-economic tensions are the most urgent
risk to global growth" (World Economic Forum, 2020). For example, Brexit and the US-
China trade tensions have created uncertainty and disruption for businesses operating in
those regions.

5.4 Increasing competition & rapidly changing consumer preferences:

A study by Li et al. (2019) analyzed the competitive landscape of the bakery industry in the
UK and found that competition has increased significantly in recent years.

Kim and Kim (2020) examined the impact of changing consumer preferences on the food
industry. The study found that consumers' preferences have shifted towards healthier and
more sustainable options, and that this shift has disrupted traditional food industry
business models and consumer preferences and expectations are constantly evolving, and
businesses need to adapt quickly to meet changing demands.

6 GLOBAL LANDSCAPE OPPORTUNITIES:

6.1 Supply chain & expanding to new markets:

Global supply chains offer numerous opportunities for international businesses. By

leveraging international sourcing and distribution networks, companies can access lower-
cost inputs, improve product quality and innovation, and expand their customer base
(Gereffi, 2018). International supply chains also allow businesses to mitigate risk and
respond to changes in the global market by diversifying their production and distribution
capabilities (Johnson & Turner, 2019). Additionally, global supply chains provide
opportunities for collaboration and knowledge-sharing among different firms and
industries, which can lead to increased efficiency and competitiveness (Sturgeon & Van
Biesebroeck, 2009). For example, Greggs can leverage its supply chain to gain a competitive
advantage in the global market. The company has a strong vertically integrated supply
chain, which includes its own bakery and distribution network (Greggs, 2021).

6.2 Technological advancements:

New technologies are only new until an even newer technology comes along. There have
been numerous waves of new technologies, each of which has contributed to an industrial
revolution, or, at the very least, to industrial evolution (Collinson et al., 2020). According to
a report by MarketLine (2021), advancements in technology provide opportunities for
businesses to improve their operations, increase efficiency, and enhance customer
experience. The rise of digital technologies and e-commerce platforms has created new
opportunities for businesses to reach customers in new markets and increase their sales
volume. For instance, Greggs UK could explore partnerships with online retailers or social
media platforms to reach a wider audience. This can help the company to expand its
customer base and potentially increase revenue. However, it is important for businesses to
carefully consider the implications of adopting new technologies, such as the costs of
implementation and potential risks associated with data privacy and security (Kshetri,
2018).

6.3 Sustainability:

As globalization stimulates rising living standards, concerned citizens focus on improving

their environment. Over time, governments pass legislation that promotes improved
environmental conditions (Cavusgil et al., 2019). By focusing on sustainable practices such
as reducing waste, using renewable energy sources, and sourcing ingredients ethically, For
example, Greggs can attract and retain customers who prioritize sustainability.

Deresky (2022) argues that executives who understand the interconnection between
environmental sustainability and profitability are implementing new policies and investing
in sustainable projects to benefit both the environment and their company's bottom line.
Like Greggs is addressing sustainability is by reducing its carbon footprint. In 2020, Greggs
set a target to reduce its direct carbon footprint by 25% by 2025, and it has already made
progress towards this goal by switching to 100% renewable electricity in all its shops and
manufacturing sites. (Greggs, n.d.)
 6.4 Innovation:

According to a study by Technavio (2021), innovation is a key driver of growth in the

bakery industry and consumers are increasingly interested in trying new and unique
products, which has led to an increase in demand for innovative bakery items. A key
objective in pursuing global market segments is to create a unique position in the minds of
target customers. Positioning is a marketing strategy in which the firm develops both the
product and its marketing to evoke a distinct impression in the customer’s mind,
emphasizing differences from competitors’ offerings. (Cavusgil et al., 2019).

According to a report by Technavio, a market research firm, the global bakery market is
expected to grow at a CAGR of over 6% from 2019-2023, driven in part by innovation in
product offerings. The report also notes that many bakeries are investing in new
technologies and equipment to improve efficiency and productivity, while also creating
new and innovative products to meet consumer demand.

One example of a bakery that has embraced innovation is the San Francisco-based bakery,
Tartine. Tartine has gained a reputation for its innovative approach to baking, using high-
quality ingredients and unique techniques to create new and exciting products (Tartine
Bakery, n.d.).

7 CONCLUSION AND RECOMMENDATIONS:

There are several recommendations that could help to succeed companies in food industry
in the future.

Focus on Innovation and Digital Technology to Meet Evolving Consumer Preferences:

Firstly, the company should continue to focus on innovation, particularly in terms of digital
technology and plant-based offerings, to meet the evolving preferences of consumers. This
could involve investing in mobile ordering and delivery services to meet the growing
demand for convenience among customers.

Assess Regulatory Differences in New Markets for Effective Expansion:

The company expands to new markets; it should carefully assess the cultural and
regulatory differences of each market to ensure that its products and marketing strategies
are appropriate and effective. This could involve partnering with local suppliers and
tailoring products to meet the specific tastes and preferences of each market.

Prioritize Sustainability to Reduce Environmental Impact and Maintain Reputation:

The company should continue to prioritize sustainability by exploring new initiatives to

reduce its environmental impact, such as reducing packaging waste and promoting
sustainable sourcing of ingredients. This could help the company appeal to
environmentally conscious customers and maintain its reputation as a responsible
corporate citizen.

Monitor and Respond to Global Landscape for Agility and Adaptability:

The company should continue to monitor and respond to the changing global landscape,
including geopolitical risks and economic uncertainty, to ensure that it remains agile and
adaptable in the face of any future challenges.

In conclusion, the landscape for international business is a dynamic and constantly

changing environment, influenced by various factors such as political, economic, social,
technological, legal, and environmental factors. Businesses must navigate this landscape to
remain competitive and successful in the global marketplace. Greggs is facing a variety of
challenges and opportunities in the changing global landscape of 2023. Economic
uncertainty, geopolitical risks, increasing competition, rapidly changing consumer
preferences, and the need to expand to new markets all pose potential risks and benefits
for the company. However, by focusing on innovation, carefully assessing cultural and
regulatory differences, prioritizing sustainability, and remaining agile and adaptable,
Companies like Greggs can position itself for success in the future.
8 REFERENCES:
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Created from ulster on 2023-05-06 09:44:40.

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http://ebookcentral.proquest.com/lib/ulster/detail.action?docID=7013923.

Created from ulster on 2023-05-06 10:24:41.

Collinson, Simon, et al. International Business, Pearson Education, Limited, 2020. ProQuest
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