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International Business Expansion Dnata

Executive Summary
Every day there are millions of consumers walking into airlines, from all around the
world for their travel needs, however it is more than the ambience of airline which brings in
people in such huge quantity to the flight, its the whole experience. This experience is actually
managed by Dnata who keeps the world in air. The company manages it all, from cargo handling,
ground issues, travel services and in-flight catering. They accompany a passenger during the
whole travel experience. The value system of Dnata is that the company is committed to not
only developing exceptional leaders who live in our values, but to building a culture where both
our people and the organization will prosper (Lewis, 2015).
Starting from a humble approach, now the company named Dnata has grown into being
the strongest Middle Eastern travel service provider. The company has not confined its growth to
Middle Eastern states; however it has expanded to all the major continents around the globe.
Dnata offers travel solutions ranging from leisure to corporate, destination and event
management and more, their aim is to continue to develop their offerings to ensure we all get the
best with Dnata, wherever we are located. Now Dnata is suggested to expand in USA market.

Country and Market Analysis

A detailed analysis and feasibility check is required to suggest Dnata to start its
operations in USA. USA can be seen as one of the fastest developing nations and one of the most
influential nations in international fronts on global level, and it can be a good opportunity for
starting a business for Dnata.
External Market/Industry Factors

The political factors strongly influence power of businesses, consumer spending,

controlling of business and regulations regarding the business. Due to the propagation of
economic reforms in 1991, the working dynamics for international companies has
improved and allowed investors to directly invest in the country (Lewis, 2015).
Considering the regulatory FDI regulations and controls and the bureaucracy
complications, Dnata can safely enter USA as a strategic alliance or joint venture with a
local firm, because by entering through a joint venture or strategic alliance the risk will

minimize and Dnata can save itself from any major loses.
In terms of economic analysis USA has been experiencing exponential GDP growth in

last few years, and its achieving continuous economic growth.

The Socio-Cultural factors, includes aesthetic beauty, language, attitudes and beliefs,
religion and etc. These socio-cultural factors are very important for Dnata, as the
company is very sensitive with regards to its ethical approach towards external and
internal stakeholders; it includes customers, suppliers, employees, creditors, distributors.
Dnata can be positioned as a sustainable business player because in USA young people
prefer international aspects, and they favor new businesses, because they are adaptable to

change.
In terms of legal framework, USA market is quite strong and positive. This can be
attributed to minimum or no corruption which is rising serious applauds for international
organizations. Dnata is not likely to face serious trademark and copyright threat in USA,
and can start business in USA without any of these concerns.

Competitor Factors
The fact is that competition in USA airline market highlighted by various factors, these
factors include, customer appeal, pricing, quality, aroma and service, comfortable environment,
sense of security. On the whole, Dnata has to face severe competition from ASU National Office,

Qantas Airways Limited and United Airlines, Inc. Since, there is a lot of competition in USA,
Dnata has to establish a sustainable competitive advantage to compete with its competitors in an
efficient way, and it is also important to survive in the competitive market of USA.

Marketing Mix & Staffing policy

Marketing Mix:

Products:
The company manages it all, from cargo handling, ground issues, travel services and inflight catering. They accompany a passenger during the whole travel experience. An
airline business is a very volatile and costly daily business and it demands a strong and
reliable partner on the ground; Dnata with its long-standing experience, always keep
things under control even in complex and contingent situations, Dnata also strive to attain
the highest safety and quality standards to satisfy their customers in the best possible
way.

Price
The companys goal in terms of price is really to reduce costs through efficiency and
most importantly the marketer needs to increase the perceived value of the benefits of its
products and services to the consumer. Dnata will be able to attract a number of
customers as it charges nominal prices from airlines and airports for which they offer
their expert services (Hinterhuber, 2008).

Place:
Place is seen as a distribution channel through which products are supplied to consumers
(Riaz & Tanveer, 2012). Suitable environment for entry of Dnata is big cities in USA.
The financial centre of USA is New York which had numerous international firms, so it is

a good starting point for Dnata. Currently, Dnata has intercontinental presence in Africa,
America, Europe, Asia, and Middle East. For instance, Dnata in Bahrain is a joint venture
company that extends total travel solutions by offering world class products and services
bringing Dnatas high standards of quality to yet more customers.

Promotion:
Promotion is a way through which a company communicate to the consumers about the
products and services they are offering, there are number of ways through which a
company can communicate to the customers, it includes advertisement, public selling,
direct marketing, indirect marketing, public relations and sales promotions. Dnata being a
premium brand does not do extensive promotion on TVs and big screens. However, the
company works on niche market segment and gets involved in a lot of customer
engagement and digital promotion.
HRM Staffing Policy
Human Resource Management (HRM) is defined as a formal systems designed for the

management of people within an organization. Human resource management has a number of

functions which includes, staffing, employee compensation and benefits, defining and assigning
work, and designing the job description of employees. Dnata excels at offering extraordinary
customer experience, along with creating a team of people focusing on community involvement,
human connections and celebration of cultures (Varma & Budhwar, 2013). The company is
committed to a culture in which diversity is respected and valued. Diversity at Dnata is focused
on accessibility (barrier free and ease of use), equity (justice and fairness) and inclusion (human

engagement and connection) (Cohn, Khurana & Reeves, 2005). In USA, Dnata must hire a team
of diverse individuals based on their competency (Lewis, 2015).
The safety vision of Dnata is to have a culture where all of our people possess the skills,
knowledge and confidence to work safely, feel respected, appreciated, encouraged, and are
engaged in helping everyone stay safe. Every employee at Dnata must be a committed and
focused person, has expertise or special knowledge to get the job done.
In addition, discrimination is not allowed in teams at Dnata, it's illegal to discriminate in
terms of age, knowledge, culture, gender, religion, color, cast, language, disability; behavior such
as telling jokes about particular culture or making comments about someone's personal life is just
not tolerated in Dnata. To ensure that there is no discrimination in the team, team leaders have to
be fair with every member of the team. Everyone is unique and everyone has the right to be in a
team if they have been selected and a right to give his or her opinion, suggestion, and to
participate in a decision making process.
Market Entry Strategy
Merging:
Merging is a process where two companies come together as a single company with and
intention to carry on the operations combined in future for further growth, and it is believed that
two companies are better together than competing individually. Merging is done with a view to
expand its operations usually beyond the boundaries which the company individually lacks in
experience or finance to carry, and of course to make more profits (Cavusgil, Knight,
Riesenberger, Rammal & Rose, 2014). This is usually done among those firms which are equal
in the assets/reputation of each respective firm. After Merger, the management will be
established combined. Since, both the companied will be equal in size, so no domination.

Acquisition:

Acquisition is a process where, one company (usually bigger than the targeted company)
purchases another companies assets/shares and the business operations of the company are
carried on by the Parent company under the name of the Parent company or with same existing
name. Usually this process with be carried through bidding process, those who bid the highest is
eligible to acquire the company (Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014). In
simple terms, the larger firm takes over the smaller firm. In Part acquisition, the parent company
purchases 51% or more shares of the other company, so that the decision making rest with the
company. Here the complete acquisition of the company will be taken placed.
ADVANTAGES OF MERGING AND ACQUISITION:
The advantages of Merging and Acquisition (M &A) are:

Merging and Acquisition (m &a) is tax-free; it reducing costs/ cost efficiency (here
applies the economy of scale); increase in share value of the company; and new market
invasion/scope. It also reduces the risk and companies can keep themselves secure with

any potential loses.

The companies who are entering in mergers and acquisition can do business more

effectively by merging their power and control over the market.

Synergy can also be achieved through mergers and acquisition which will result in

increased value efficiencies.

Through mergers and acquisitions both the firms can attain economies of scale by sharing

their resources.
Through mergers and acquisitions both the companies can reduce the risk of introducing
new techniques and practicing new technologies, they can experiment more and can
focus on invention and innovation.

DISAVANTAGES OF MERGING AND ACQUISITION:

The disadvantages of merging and acquisition (m &a) are:

Monopolistic competition may arise; and less taxes, since the company can show more
loss in tax liability, if prior the sister company facing losses. To add on, in joint venture,
two or more companies come together and carry on operations in both or single of its
origin place. The profit and losses with is share as per the shares (Cavusgil, Knight,

Riesenberger, Rammal & Rose, 2014).

Mergers and acquisitions can result in the loss of potential employees and key workers. It
happens because employees do not feel comfortable in doing work under the changed
management and will also feel threats about job security and they will end up leaving the
organization. Organizations should take proper measure to retain their key employees by
providing them job security and comfortable working conditions, because if a key

employee left the organization the consequences will be damaging to the organization.
Flexibility is reduced when two companies get into mergers and acquisitions, which will
eventually affect the firms ability to compete with its competitors, and its competitors

will end up having a edge over them.

Mergers and acquisitions results as a disadvantage for customers, as it left the consumers

with less choices and consumers will have less substitute products.
Mergers and acquisitions can lead to disagreements and mismanagement, because two

different managements will form a single management which will lead to disagreements.
Shareholders will not like the idea of mergers and acquisition and the image of the
company will get affected.
Strategy for International Business Operations
There are four international business operations strategy that Dnata can choose from.

First of all, International organizations do not indulge in any foreign direct investments (FDI)
and become importers and exporters (Forsgren, 2013). They do not have any sales offices,
warehouses and staff in a foreign nation. In addition, the multinational organizations cross the

FDI threshold. Such firms directly invest in foreign assets. However these organizations indulge
in FDI in small number of countries, and they tend to focus on localizing their product offerings.
Global organizations invest in numerous states; however they have a single strong headquarters
which is generally situated in the home country (Schaffer, Agusti, Dhooge & Earle, 2011).
Global firms take advantage of homogenize products, low costs and their mantra is economies of
scale. Lastly transnational firms are the most multifaceted form of International business
presence. In this, a company invests in numerous countries, localize product offerings, have a
global headquarter along with numerous national headquarters.

Conclusion
To conclude, Dnata has evolved as a global premium airline service chain which is
considered as a status symbol by consumers around the world. The company is suggested to
expand its operations in USA as a joint venture with a local firm (Liu, Vredenburg & Steel,
2014). Starting from a humble approach, now the company named Dnata has grown into being
the strongest Middle Eastern travel service provider. The company has not confined its growth to
Middle Eastern states; however it has expanded to all the major continents around the globe.
Now Dnata is suggested to expand in USA market. The preferable mode of expansion is joint
venture with local company.

References

Cavusgil, S. T. , Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. 2014).
International business Pearson Australia.
Cohn, J. M.,Khurana, R., & Reeves, L. (2005).Growing talent as if your business depended on
it. Harvard business review, 83(10),62.
Forsgren, M. (2013). Theories of the multinational firm: A multidimensional creature in the
global economy. Edward Elgar Publishing.
Hinterhuber, A. (2008). Customer value-based pricing strategies: why companies resist. Journal
of business strategy, 29(4), 41-50.
Lewis, J. (2015). How the rebrand of dnata has impacted business performance and employee
engagement within the organization (Doctoral dissertation, Cardiff Metropolitan
University).
Liu, X., Vredenburg, H., & Steel, P. (2014). A meta-analysis of factors leading to management
control in international joint ventures. Journal of International Management, 20(2), 219236.
Riaz, W., & Tanveer, A. (2012). Marketing mix, not branding. Asian Journal of Business and
Management Sciences1 (11), 43-52.
Schaffer, R., Agusti, F., Dhooge, L. J., & Earle, B. (2011). International business law and its
environment. Engage learning.

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Varma, A., & Budhwar, P. S. (2013). Managing human resources in Asia-Pacific (Vol. 20).
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