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 Home Décor (HD)’s International Venture

In 1980, Home Décor was established as a partnership in Mumbai, India, and specializes in producing hand-knitted items, including door mats, curtains, table mats, wall decorations, and premium quality room mats using job production. Currently, the company employs around 250 loyal employees who are satisfied with their job and working conditions. Despite facing fierce competition from large multinational corporations, Home Décor distinguishes itself through its unique production system, exceptional quality, custom-made designs, and satisfactory sales and profit margins. Their objective is to increase market share by 8% within two years. The company's vision is to become a globally recognized design team dedicated to creating inspiring living environments.

According to a survey conducted by a private agency called Market Guru, there is a growing demand for Indian-made home decor items in American and European countries. As a result, Mr. Ham, the director and partner of Home Décor, expressed his desire to enter the international market. However, the marketing director, Mr. Tom, has concerns about the potential disruption to the company's current organizational structure and marketing strategies. He argues that instead of entering the international market, Home Décor should focus on Indian customers who are looking for unique designs. Additionally, international operations may require senior employees to relocate, and legal hurdles could put Home Décor's investment at risk. Although international expansion can provide brand exposure, more business opportunities through joint ventures and strategic alliances,  a huge investment is needed  for this international venture.

Question 1: Discuss whether Home Décor should enter the international market [ 10 marks]

Suggested answer

Home Décor (HD), a specialized hand-knitted home décor producer from Mumbai, is considering entering international markets  due to increasing demand for Indian-made home décor items in the US and Europe. ( Opportunity)However, there are internal concerns about the potential risks, including organizational disruption, legal challenges, employee relocation, and the need for significant investment.( Weaknesses). Hence, this response   will discuss the benefits and challenges of entering into international market.

 Entering the international market can be  considered as  Market development – Ansoff matrix offers a few benefits to HD like it helps a HD grow by selling existing products to new markets. It creates new revenue opportunities and spreads risk, making HD less dependent on one market.  However, specific benefits among are:

Increased brand exposure and global recognition: Expanding internationally would help HD achieve its vision of becoming a globally recognized design team, enhancing its brand value and prestige. ( force for change)

Growing demand for Indian home décor: According to Market Guru’s survey, there is a rising interest in Indian-made home décor in American and European countries, presenting a strong market opportunity for HD to boost its sales and market share ( force for change)

Opportunities for strategic alliances and joint ventures: –International expansion can open doors to partnerships with foreign businesses, enabling resource sharing, access to wider markets, and reduced entry risks ( force for change)

However, despite the benefits,  HD has to face a few challenges, such as:

Organizational and structural disruption:  Expanding internationally could disturb the existing smooth operations, possibly lowering employee satisfaction and creating management challenges ( force against the change)

High financial and legal risks: International ventures require large investments and may involve complicated legal regulations, putting HD’s financial stability at risk if not managed properly ( force against the change)

To evaluate the  benefits and challenges,  using Force Field Analysis, Home Décor’s strong foundation—skilled employees, a unique production system, and high-quality products—acts as a force for change, giving the company a competitive advantage in international markets. The growing international demand also supports its vision of global recognition, strengthening the case for expansion. However, significant forces against change include the risks of high investment costs, potential employee displacement, and disruption to current operations, which could impact long-term stability if not managed properly.  Based on this it can be concluded that, Home Décor should enter the international market, but in a cautious and phased manner. Initially, HD can target less risky entry modes such as exporting or forming partnerships with established distributors abroad rather than setting up its own operations immediately. This approach would allow HD to test the waters, gain brand exposure, and minimize investment risks before committing heavily.

 However,  the  case study( stimulus) does not provide detailed information about  expansion costs, target market demand, legal requirements,  logistics feasibility, and competitor analysis. Clear financial projections, risk assessments, and expected ROI timelines are essential to make a confident, strategic decision about entering the international market.