Strategizing Entry into the International Market : Once a company has decided to
ID: 390294 • Letter: S
Question
Strategizing Entry into the International Market : Once a company has decided to enter the global marketplace, it must select a means of market entry. Four general options exit:
1. Exporting- is producing products in one country and selling them in another country.
2. Licensing- is a relatively sophisticated arrangement where a firm transfers the rights to the use of a product or service to another firm.
3. Joint ventures- are a particular form of partnership that involves the creation of a third independently managed company. It is the 1+1=3 process. Two companies agree to work together in a particular market, either geographic or product, and create a third company to undertake this. Risks and profits are normally shared equally.
4. Direct investment- The biggest commmitment a company can make when entering the global market is direct investment, which entails a domestic firm actually investing in and owning a foreign subsidiary or division.
Assume you work for one of the following companies:
1. Philadelphia Soft Pretzel Factory
2. Rita's Water Ice
3. Tastykake
Pick two countries to enter with your company and discuss and defend your market-entry strategy. Write 200 words.
Please write in your own words and don't copy from anywhere. Please write the link what you use for writing.
Explanation / Answer
Let us select the two countries as England and Turkey.
Philadelphia Soft Pretzel Factory: In England, the strategy to begin the business will be through direct investment (set up stores). This is due to the similarity in culture between the two countries and (somewhat) similar food habits. In turkey I would enter through a joint venture. The cultural differences may be difficult to maneuver without a local partner and this should tackle that challenge.
Rita’s water Ice: Rita’s water Ice is an extremely perishable product. It needs to be made and consume quickly. However, this also provides an easy way to create the solution and send it across to local partners. Thus the best and most convenient option for both England and Turkey will be to use Licensing. This can be done using a franchise model where I distribute license and the material to replicate water Ice.
Tasktykake: The product of Tastykake is similar to FMCG (fast moving consumer goods). They do manufacture products that are sold in retail chains across the country. Due to this, the organization has sufficient experience in supply chain management and distribution. Naturally, entry strategies such as Licensing, Joint ventures, and Direct investment may be too cumbersome and fall outside the company’s comfort zone. The recommended entry strategy for both England and Turkey will be exporting the product. However, in order to find value, it may be necessary to manufacture the product at a lower cost country.