This case analysis is designed to encourage you to conduct an analysis of a fore
ID: 351612 • Letter: T
Question
This case analysis is designed to encourage you to conduct an analysis of a foreign market entry mode decision for CorePower Yoga, the Colorado headquartered company. Studies have found Yoga’s meditation treatment effect to release stress among adults and children. Yoga studios are burgeoning in USA due to this and other facts, and CorePower Yoga has become the national’s largest yoga studio chains.
Assume that CorePower Yoga Founder Trevor Tice plans to expand into foreign markets and builds yoga studios around the world. The first country the company wants to go into is China. You are hired as a marketing consultant to evaluate the opportunities for CorePower Yoga in China and propose the best entry strategy into China. You will write a memo to the top management of CorePower Yoga regarding the following issues.
What is the best way to enter the Chinese market? Evaluate and explain the key environmental factors in China that the company needs to consider.
Which of the foreign market entry mode(s) would work best for CorePower Yoga? Explain your position.
What would you advise, and why?
Explanation / Answer
What is the best way to enter the Chinese market? Evaluate and explain the key environmental factors in China that the company needs to consider
Yoga classes is upcoming trend among the China's youth who are suffering from a very stressful life and according to research yoga is attended mainly by women between the ages of 20-35. The classes focus on the physical aspects of Yoga which includes yoga asana, although there is a growing interest in the traditional literature behind these and the Corepower yoga techniques by the company would be like fresh breath among the youth but should approached with a proper financial and marketing plan.
With the growing popularity of Yoga in China due to lifestyles of people, there is a growing interest in the business of Yoga being setup by local population . Owning a CorePowerYoga studio carry prestige and status. A number of individuals in China are leaving high-power positions to open Yoga studios. Already existing yoga center in China which are a great hit are YogiYoga Center having a Yoga studio chain, with 17 Yoga studios in Beijing, and may others in major cities around China. They have already formed a subsidiary brand, Blue Lotus Yoga, which is designed to appeal to those who prefer a more simplified form of Yoga with the same well-trained teachers, but at less cost per class.
So corepoweryoga would be hit with having looked some factors in this Industry.
Which of the foreign market entry mode(s) would work best for CorePower Yoga? Explain your position?What would you advise, and why?
1.The 12th Foreign Capital Five Year Plan in China also emphasized a focus on emerging industries, such as energy, environmental, information technology, biotech, advanced equipment manufacturing new materials, new energy vehicles, healthcare and service sector industries
2.The Company Law Amendments (2013)promoted the government’s “lenient entry, strict supervision” policy, as it was known, and consisted of several major changes.
3.Inbound FDI into China must also abide by the “Three Basic Laws”, or the three regulations that govern foreign ownership entry into China: the Law on Wholly Foreign-Owned Enterprises (The “WFOE Law”), the Law on Sino-Foreign Equity Joint Ventures (the “EJV Law”), and the Law on Sino-Foreign Cooperative Joint Ventures (the “CJV Law”). The WFOE Law has governed the formation of wholly foreign-owned enterprises (“WFOEs”), which are entities that are 100% foreign-owned
4.The U.S. and China have been engaged in negotiations on a bilateral investment treaty since 2008. Significant progress has been made, and in April of 2016 the terms of a potential treaty were nearly complete. While the substance of these negotiations is not within the public domain, it was reported that the final obstacle was the production by the Chinese Government of a Negative List that was acceptable to the U.S. Government.
Having studied these policies the best way to enter would Wholly Foreign-Owned Enterprises but with proper studying the law running behind these.and having a proper collaboration with some local player to satisfy their legal requirements.