The British coffee chain Costa Coffee is recognized globally. The headquarters of the business are in the British city of Dunstable. The company initially opened for business in 1971, and since then, it has grown to 32 nations around the world. It has branches in India, Malaysia, Jordan, and Indonesia. The business serves clients in many different markets by offering them an array of items. Sandwiches, burgers, hot and cold coffee, and baked goods make up the items sold by the business (Wojciechowska, 2015). The group is also operating in Oman and the United Arab Emirates alongside China. As a consequence, the company may act as a case study for contrasting and comparing the business environments of rich and developing countries (Wojciechowska, 2015).
Many of the top firms in the world, especially those with offices in North America, Europe, or Japan, agree that internationalization is their most significant issue. Based on Hidalgo et al.’s research from 2020, it has become considerably harder over the last decade for these companies to come up with plans for global growth and select suitable countries with whom to do commerce. Even though this is the case, the vast majority of businesses remain devoted to their conventional approaches, which prioritize conventional approaches for market expansion while still accepting regional variations. As an outcome of this, a significant amount of large companies are having difficulty devising strategies that are effective in developing nations (Fuentes-Sols et al., 2019).
Several businesses that would have benefitted from entering the emerging markets did not. Since the early 1990s, the newly formed market has been the globe’s most rapidly expanding market for goods and services. Developing manufacturing as well as service hubs in nations with low labour costs and an abundance of skilled workers is a means for businesses to save costs (Cirera & Muzi, 2020). Western companies’ long-term success is out of reach unless they develop methods of incorporating emerging-market suppliers into their worth chains. Still, despite the reduction of tariffs, the widespread accessibility of the Internet and satellite television, and the rapidly evolving physical structures, CEOs cannot assume they are able to function in emerging countries in the same manner they do in advanced nations. This is because there is a substantial disparity in market structure quality between nations (Mishakov et al., 2021). This study aims to examine the differences between how industrialized and developing nations conduct commerce.
Research Rationale
As a consequence of increased globalization, businesses worldwide are looking for ways to enhance their revenue by entering untapped areas. The expression “developing nation” describes nations that are actively working toward that goal. Since then, multiple multinational corporations have given preference to work in developing countries (McKenzie, 2021). McDonald’s, KFC, and Costa Coffee are among the many instances of multinational corporations that have opened locations all over the world in an effort to grow their earnings. The problem of whether or not businesses in both developed and developing countries behave differently stays, nevertheless. McDonald’s has been unable to supply its customers abroad with its regular fare. In addition, KFC has attempted to enhance its employees in numerous countries using various recruitment methods (Mishakov et al., 2021).
Thus, the matter of whether or not there is an important distinction in the way business operates in nations that are developing remains a matter of debate. For most British businesses to thrive worldwide, they need to be cognizant of these distinctions (Fuentes-Sols et al., 2019) and adjust their strategies and strategies appropriately. The objective of this research is to evaluate the variables peculiar to doing commerce in countries that are developing and how they might impact an organization’s entire strategy for performing business. The objective of this investigation is to examine Costa Coffee’s operations in nations with low incomes by employing the business as an illustration. The company has a presence in Brazil, China, and India, three of the world’s biggest developing nations. Research on the distinctions between developing-country firms and those in advanced economies can be guided by analyzing Costa Coffee’s leadership and company strategies (Cirera & Muzi, 2020).
Research Scope
There are significant legal disparities in nations with high and low incomes, particularly in areas essential to conducting company. These involve, amongst others, the ability to create a company, trade over boundaries, obtain capital, and renegotiate contracts. A business pursuing development can choose to concentrate on either a developed or emerging market according to a number of variables associated with business and international trade (Mishakov et al., 2021). Just a few instances involve concerns about culture, technology, and currency. Entrepreneurs who succeed in developing nations require an in-depth knowledge of the marketplace. For the most part, countries that are developing lack a solid infrastructure foundation and an extensive range of growth in the industry. In fact, additional efficiencies that new market-creating technologies may bring about are essential to the achievement of businesses (McKenzie, 2021).
It is easy to have a presumption that the manner in which companies operate in rich and less developed countries will differ because of infrastructure inequalities. The company atmosphere of advanced countries is conducive to productivity. However, countries that are developing can create particular challenges for large companies since they might not have the financial backing needed to implement cutting expenses technological solutions (Coduras et al., 2018). This research aims to determine how much-advanced economies vary from less-developed countries in terms of economic development. Analyzing these differences could prove difficult for the investigator if the purpose of the investigation is not readily apparent. This study addresses a single British firm that has a presence in countries that are both developing and developed.
The United Kingdom is host to the headquarters of Costa Coffee, an international business. The organization has an international presence, with operations located in nations that are both developed and developing. This offers an unusual chance for the researcher to assess the challenges and opportunities of doing business in these areas.
Research Objectives
Research goals play an essential part in the area of business study because they serve as a guide to assist the company investigator in focusing on what it is he or she seeks to achieve via various types of research. The research’s objectives ought to be straightforward and feasible so that an investigator avoids wasting time and energy finding out how to get started. Research objectives are essential not only for influencing decisions about gathering information and creating an acceptable study plan but also for directing the research project itself (Cirera & Muzi, 2020). The following represent a few of the things we want to accomplish with our study:
- To analyze the distinct business environments of resulting and developed countries.
- Examine how Costa Coffee employs various global business and leadership techniques to expand its business outside the United Kingdom.
- To find out about the possible challenges experienced by Costa Coffee and other large companies operating in developing nations.
- To be informed of the legal, economic, technological, and cultural distinctions among developed and developing nations that might impact Costa Coffee’s operations outside the United Kingdom.
Research Questions
The current investigation will take a look at the following research issues in an effort to offer answers that will assist the researcher in comprehending the possible impact of economic disparity between advanced and developing nations on business:
- What challenges do big companies encounter when setting up shops in markets that are emerging?
- What chances remain for multinational corporations to expand by operating in underdeveloped nations?
- To what degree does Costa Coffee have to modify its business strategies in developing countries due to the distinctive business conditions found there?
- What influence do differences in routine, technology, and culture play upon the United Kingdom?
Research approach
The research process involves a set of actions performed methodically to collect data, analyze that data, and present the results of the analysis. The method employed here depends on the particular study topic being asked. Inductive analysis is an inquiry approach in which one derives conclusions and develops hypotheses by examining and expanding from one’s previous knowledge (Cirera & Muzi, 2020). The inductive investigation may take many different shapes, the most prevalent of which involves looking at data for recurring trends and then hypothesizing about the reasons for them. No assumptions are made at the start of an inductive investigation as to what will be revealed. Since this is the case, once the investigation has begun, the researcher has complete control over where it continues. Because of this, we will be using an inductive method of study (McKenzie, 2021), which implies that the direction of our investigation will be determined by the facts and information we gather.
Data collection
Quantitative and qualitative data gathering are crucial for the research’s essential aims. Several distinct approaches exist for researchers to employ while collecting information. Gathering information may be performed in a variety of different ways, however, two of the most common and widely used methods involve gathering data from primary sources and gathering information from secondary sources. Because of an absence of resources and time, the current research is going to rely on previously collected data and information from various sources. Fewer people use primary data sources since more people have access to secondary sources. To achieve this, we will be collecting information for our study from published works written by other individuals (Coduras et al., 2018), such as research papers, trade magazines, and company annual statements.
Sampling Technique
Sampling is an essential component of research since it provides an understanding of the selection criteria employed for the data and resources used in a study, which benefits both authors and consumers. This emphasizes the vital role of the sampling process in research. There is an abundance of leeway for investigators to select from among multiple sample size tactics when deciding how to gather the data and data essential to a study. You might discover these alternatives under the “choices” subsection of the “choices” section. For the purpose of the current research, a method of sampling based on direct choosing at random will be utilized. This will show to be a successful sampling method, providing the researcher with assistance and guidance in determining and approaching the number of suitable samples for the study to be conducted. In addition, it will be a successful way of gathering the information needed to conduct the probe (Dvoulet & Orel, 2019).
Literature review
Services and goods that would otherwise be out of range for individuals in nations that are developing can be rendered accessible through equitable business. The population at large enjoys a higher standard of living, and local businesses enjoy greater earnings as an outcome (Yankovskaya et al., 2021). Launching or growing a business in a foreign country can be difficult due to cultural, linguistic, political, and economic disparities (Alhassan, 2022). Moving to a developing country is more difficult because of the nation’s inadequate facilities, impoverished population, and lack of well-trained personnel. Uncertainty in politics and concern about terrorism are further obstacles that businesses could encounter. Despite the challenges, developing nations could offer a special opportunity for startups. It has been argued that small-scale enterprises may grow their operations by taking advantage of inexpensive labour, an untapped market, and fewer regulations and rules (Dvoulet & Orel, 2019).
Developing countries with rapidly expanding economies are called “emerging economies,” and they have an active role in the global economy. Established economies with emerging markets can be separated from each other by an array of variables (Kapidani et al., 2020). Along with having a well-established regulatory structure, the characteristics of an established market include a developed economy, high per capita incomes, liquid stocks, markets for debt that are available to overseas investors, and a developed regulatory structure. A country’s market economy tends to grow increasingly interconnected with other nations all throughout the globe as the economy evolves (Yankovskaya et al., 2021). Options include an influx of FDI, an expansion of local credit and stock markets’ liquidity, and an upsurge in the volume of global commerce. It may provide innovative structures for budgeting and governmental regulation. Western-dominated discussions on entrepreneurship in nations that are developing gloss over topics like economic change and new markets, as well as the construction of social and political structures (Conde & Wasiq, 2021).
More than 300 million SMEs contribute as much as 40% of the GDP in nations that are developing. In order to improve their own lives and those of the people they serve, the women and men who lead and establish these entities generally do so with an emphasis on assisting others (Ordonez-Ponce & Weber, 2022). These medium-sized enterprises (or SMEs) engage an overabundance of people from backgrounds of poverty and can serve as the sole provider of many basic necessities in undeveloped or remote regions. This is usually the best option for farmers on smaller farms. In particular, women and young people benefit greatly by entering into business on their own and working autonomously (Alhassan, 2022).
Opportunities for the international market in developing countries
When a nation’s economy has some characteristics typical of a mature market, it is said to be a developing nation (Sharma, 2019). It can be challenging for foreign companies to handle expenses associated with hiring in advanced economies (Kapidani et al., 2020), which could pose difficulty for the majority of international businesses when it comes to regulating the price of their labour. The challenge of coping with high labour costs in advanced economies has become an important incentive for the globalization of the majority of companies. Businesses may find it more convenient to get cheap labour from developing nations, home to a significant share of the world’s population. Massive populations in nations like China and India are appealing to big business (Conde & Wasiq, 2021). However, these nations appeal more to foreign businesses due to their distinct currencies and low cost of labour.
Furthermore, economies that are expanding are often referred to as developing countries. The governments of these countries are investing efforts into improving their trade policies to improve global trade and, by extension, the economy (Ordonez-Ponce & Weber, 2022). Therefore, it is conceivable that trade challenges and constraints might grow to be less of a problem for companies. The regulatory framework that governs different companies in a nation is another important difference between developed and emerging markets. According to the study available, when it was written (Dvoulet & Orel, 2019), emerging nations emphasize the development of business-friendly regulations and laws.
Conforming to environmental laws can be challenging for companies in industrialized nations. However, it’s probable that developing nations might place a lower priority on environmental laws and more on increasing the number of business enterprises functioning inside their national borders to promote their economic growth (Li et al., 2021). Because of this, large companies may grow their operations in developing countries without complying with environmental standards (Hasheela-Mufeti, 2018).
Challenges for international businesses in developing countries
A country’s economic development is heavily influenced by political considerations. It has frequently been argued that the political climate in developing nations contributes to establishing an economic environment favourable to foreign trade. Several studies, however, suggest that emerging nations do not have a political environment suitable for the growth and success of international companies. Corruption, for example, may have a substantial influence in adversely affecting large corporations in countries that are developing. The political climate in developed countries is conducive to the growth and advancement of international businesses, as these countries have taken actions to reduce corruption and other actions that might jeopardize the viability of an international company functioning there (Sharma, 2019). It has been reported that corruption and political issues hurt developing nations’ economic structures by raising the price of imported products and services (Li et al., 2021).
Consumer behaviours are a representation of the disparities between a developing nation and an advanced nation in terms of convenience in conducting business. Consumers in developed nations have a greater amount of money for spending than those in developing nations. Deterding and Gros (2021) state that customer behaviour in the target market is one of the most significant factors for businesses deciding whether or not to expand into developing nations. While businesses in countries that are developing may likely manufacture goods at lower prices because of the low cost of labour, they might have trouble marketing such goods in markets that are developing due to diminished purchasing power or poor economic conditions. Some of the developing nations might implement trade regulations and policies that are hostile to international corporations. Governments in poor countries, say Deterding and Gros (2021), may want to limit trade with other nations to boost their own manufacturing and consumption.
According to the examination of the appropriate literature, business practices in the advanced nations and the twelfth twin states are quite distinct from one another (Sharma, 2019). Promoting typical products and services can be challenging for companies operating in nations that are developing since clients’ buying choices may be affected by their immediate environment. Therefore, companies that want to grow into rising countries have to first learn about the outside environment in such countries (Matthess & Kunkel, 2020). The surroundings may harm a company’s bottom line in states where the economy and governance continue to grow. According to the research reviewed, there are significant distinctions between developing a firm in a developed country compared to doing the same in a developing country. While conducting business in an underdeveloped nation is not without its risks, an effective business plan may assist in minimizing some of these hazards (Hasheela-Mufeti, 2018).
Conclusion
This research examined business practices in industrialized and developing countries. It can be hazardous to do business in a third-world country. However, some of the hazards may be prevented with a well-thought-out business strategy that accounts for the difficulties and possibilities when operating in another country. Before jumping in, companies looking to grow abroad should study their surroundings in developing nations. Growing into fresh markets needs an understanding of the particular challenges and opportunities of conducting business in a country that is still developing. Although developing into a developing country is filled with peril, the rewards may be significant. Successful market penetration into developing nations requires a grasp of the external environment and the implementation of an effective company plan. Furthermore, doing business in a developing country could offer in more established nations. Therefore, companies may guarantee that they succeed on their way to dominance worldwide by learning about the challenges and opportunities associated with developing into a developing country.
Reference
Alhassan, U. (2022). ‘E-government and the impact of remittances on new business creation in developing countries, Economic Change and Restructuring, pp. 1–34.
Cirera, X. and Muzi, S. (2020). ‘Measuring innovation using firm-level surveys: Evidence from developing countries, Research Policy, 49(3), p. 103912.
Honduras, A., Velilla, J. and Ortega, R. (2018). ‘Age of the entrepreneurial decision: Differences among developed, developing, and non-developed countries’, Economics and Business Letters,7(1), pp. 36-46.
Conde, M. A. and Wasiq, S. (2021). ‘Digital Transformation of Business Challenges and Issues in Developing Countries’, Journal of Information Systems and Digital Technologies, 3(1), pp. 65-73.
Deterding, M. & Gros, M. (2021). ‘The association between accounting information and share prices in developing countries: does corruption matter?’, International Journal of Economics and Accounting, 10(3), pp. 321–339.
Dvouletý, O. and Orel, M. (2019). ‘Entrepreneurial activity and its determinants: Findings from African developing countries, in Sustainable entrepreneurship. Springer, pp. 9-24.
Fuentes-Solís, R., Soto-Caro, A. and Paredes, D. (2019). ‘The Impact of Cooperation on Business Innovation in Developing Countries: Evidence from Chile in Latin America’, Journal of technology management & Innovation, 14(4), pp. 31-40.
Hasheela-Mufeti, V. (2018). ‘Current prospects and challenges of enterprise resource planning (ERP) adoption in developing countries, International Science and Technology Journal of Namibia, pp. 94–106.
Hidalgo, L. F., Rialp, J. and Urbano, D. (2020). ‘Are there really differences between social and commercial entrepreneurship in developing countries?: An institutional approach, in Handbook of research on smart territories and entrepreneurial ecosystems for social innovation and sustainable growth. IGI Global, pp. 306-325.
Kapidani, N., Bauk, S. and Davidson, I. E. (2020). ‘Digitalization in developing maritime business environments towards ensuring sustainability’, Sustainability, 12(21), p. 9235.
Li, D. et al.(2021). ‘Establishing a Sustainable Labor Market in Developing Countries: A Perspective of Generational Differences in Household Wage’, Sustainability, 13(21), p. 11835.
Matthews, M. & Kunkel, S. (2020). ‘Structural change and digitalization in developing countries: Conceptually linking the two transformations’, technology in society, 63, p. 101428.
McKenzie, D. (2021). ‘Small business training to improve management practices in developing countries: re-assessing the evidence for “training does not work”‘, Oxford Review of Economic Policy, 37(2), pp. 276–301.
Mishakov, V. Y., Daitov, V. V and Gordienko, M. S. (2021). ‘Impact of Digitalization on Economic Sustainability in Developed and Developing Countries, in Sustainable Development of Modern Digital Economy. Springer, pp. 265-274.
Ordonez-Ponce, E. and Weber, O. (2022). ‘Multinational financial corporations and the sustainable development goals in developing countries Journal of Environmental Planning and Management, 65(6), pp. 975-1000.
Sharma, E. (2019). ‘A review of corporate social responsibility in developed and developing nations, Corporate Social Responsibility and Environmental Management, 26(4), pp. 712–720.
Wojciechowska, N. (2015). ‘The factors for success and failure of corporate rebranding strategies: the coffee heaven/Costa Coffee case study’, Gospodarka Materiałowa I Logistyka, (12), pp. 31-40.
Yankovskaya, V. V et al. (2021). ‘The consumer economy and the pleasure economy: similarities and differences in developing countries in Industry 4.0’, International Journal of Trade and Global Markets, 14(4-5), pp. 507-515.
write