...The Strategy of International Business The chapter reviews basic principles of the strategies available for globally expanding businesses, it also reviews the different ways in which a business can maximize their profit while maintaining a well planed and followed expansions/global strategy. One important fact is to focus on the main objective of any firm; “Maximizing shareholder value” any strategy is mostly designed and built around this objective. To evaluate and review the strategies presented in this chapter two current events are visited at the end of the paper; Nokia’s cost reduction strategy and Hollywood’s Global Expansion strategy. Hollywood for one is focused on the global market and the ability to successfully expand through these markets, since 1980s as mentioned by Jeff Kleeman the executive producer of “The Change-Up” (Lang, 2011) Hollywood were targeting the global market but now they are more focused on the how rather than just the revenues from these global markets. Nokia’s global strategy on the other hand is aligning workforce with site operations. Nokia is one of the successful telecommunication companies worldwide with more than a billion users worldwide. (Nokia Corporation, 2011) Chapter Summary The Strategy of International Business chapter reviews some basic principles of international business strategies and how these strategies can be used to profit from international expansions. The chapter defines strategy as “the actions managers take...
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...International Expansion Strategy for Lenovo Company Table 1. Introduction 2 2. Motives of international expansion strategy of Lenovo 2 3. Determination of target market 4 3.1 Macro environment factor 4 3.2 Characteristic of Lenovo Company 6 4. Market entry mode 7 4.1 Exporting mode 7 4.2 Licensing and franchising mode 8 4.3 Joint Venture 9 4.4 Wholly owned subsidiary 10 5. International competitive strategy 10 5.1 Strategy clock model 11 5.2 Center identification 13 6. Challenges and suggestions 15 6.1 Challenges 15 6.2 Suggestions 16 7. Conclusion 17 1. Introduction In the current commercial economy, the global economy has changed rapidly in the near decades. Barrier of trade between the different borders has been not a headache for many multinational companies any more. What is more, in accordance with the data from WTO, the increase of multinational trade is becoming more and more dramatically in comparison with the global output. (Liu, 2005) As a result, it is suggested that current economic system is transferred to be more globalised, integrated and interdependent. Thus for many enterprises or just like your company Lenovo, to have a plan on the international expansion strategies is of the essence. 2. Motives of international expansion strategy of Lenovo Lenovo, which was found in 1984 with 11 engineers gathered in a boardroom in China, has achieved unbelievable success since its foundation. However...
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...Henry E. Jerkins Columbia Southern University International Business Professor Yvonne Balbin February 23, 2013 1 1. What is Burger King’s core competency? How does it relate to its chosen strategy? Burger King's core competency is the fact that they are the world's largest flamed-broiled fast food restaurant hands down. Simply put, Burger King's core competency means that they are more competent than their competitors when it comes to producing that type of goods and services. In addition, Burger King stands firm on its core competency of being the best at what it does when it comes to producing hamburgers and flame-broiled fast food. As a result of this strategetic move, it has positioned itself in becoming one of the markets leaders in the fast food restaurant industry. Further, it core competency is based upon its desire to set itself apart their competitors by way of differentiating their products. The differentiation of Burger Kings products are accomplished in two ways as it relates their competitors. First thing to consider is the manner in which the hamburgers are prepared, which is the flamed-broiled method. Secondly, is the various options that is afforded to the customers on how they would like to have their hamburgers prepared. The process has been the means that has allowed Burger King to become one of the market leaders in the industry. 2. How would you explain how Burger King has decided to configure...
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...Assessment ONE. Individual Case Study Report (40%) MKT 3130 Coursework Aldi and Lidl: International Expansion of Two German Grocery Discounters Source: Ghauri, P. & Cateora, P. 2010, page 566-571 With a worldwide annual sales volume of €3.7 trillion in 2007 and an average annual sales growth of 2.7 percent during the past ten years, the grocery retailing industry can be considered as one of the world’s key economic sectors. Over the past decades, grocery discounters such as Aldi and Lidl have strengthened their position in the grocery retailing industry – especially in Germany and Europe. With their no-frills approach, they have led to significant changes in the industry and have challenged many companies which operate other store formats,’ such as supermarkets or hypermarkets. In this context, a Financial Times report on international retailing noted in 1995: ‘The spread of the discount format has been particularly disruptive to Europe’s grocery retail industry and has driven retailers to examine cross-border markets’. The Grocery Discount Format The key terms describing a grocery discounter are ‘minimalism’ and ‘efficiency’, which are integrated into all business areas. In fact, grocery discounters’ ambitions are to sell quality products at the lowest price possible. To realise profits in spite of the low prices, grocery discounters reduce their costs to a minimum and attempt to generate high volumes of sales through a limited product range of fastmoving items...
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...and Fitch: International expansion external and internal analysis Name Here Business Mgmt Name Here Date Here Executive Summary This case study was identified to examine why international sales volume of Abercrombie and Fitch have increased over the past three years and to recommend further international expansion to increase sales volume. The research draws attention to the fact that in 2009, the US stores generated 81.2% of Abercrombie and Fitch’s net sales. The shares of international stores and direct-to-consumer net sales were very small in comparison. Over the next two years the US stores decreased net sales percentages while net sales increased. Further investigation reveal that the US market shrinkage in terms of overall company net sales percentage coincided with the increase in international sales and direct-to-consumer sales and the overall company net sales percentage over the same time period. Since the economic downturn in the US economy in 2008 the disposable income for Abercrombie and Fitch clients appeared to decrease. Additionally individuals were utilizing disposable income for other items such as technology, cell phones and other gadgets. These two items appeared to be the major causes of the decreased company percentage in net sales of Abercrombie and Fitch in the US. During the same two year period the international stores and direct-to-consumer net sales increased dramatically. This was an increase of 342% for international stores and...
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...Foreign Market Entry and Diversification Georgia Jefferson Strayer University Abstract This paper will discuss and identify the trends in global beer markets. It will discuss how Modelo’s International expansion was made possible by building strategic partnerships with experienced distributors in local markets. The paper will focus on how Modelo should enter in the foreign market and what is the best strategy. Modelo will face many challenges from his competitors and make the decision whether the company should diversify the business to promote growth. Identify and discuss the trends in the global beer markets. The global beer markets have four main trends and they are consolidation, international expansions, mergers and acquisitions. Consolidation with the beer industry broadens the area of sales and exposes brewers to more opportunities for growth of its company. Expansion of any company can be a positive attribute to overall success for the most obvious reason, revenue. The trend of breweries expansion might be credited to the very expensive initial startup cost of a brewery. In this area of the beer industry having more than one area of cash flow assists with the maintaining the fluctuating price of resources. (Thompson, Strickland III, & Gamble, 2009) International expansion can be a major attribute to a company’s success through seeking proficient production efficiencies. Some beer companies will produce their beer within its country than export...
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...SUMMARY Komatsu Ltd. is operating in challenging market conditions that are made more complicated by the centralized production and operations strategy and the variability of the currency markets, particularly the value of the Japanese Yen. To combat these challenges, Komatsu has replaced CEOs, changed their corporate focus from “Beat Cat” to the three “G”s – “Growth, Global, Groupwide”. Key issues identified in the case are Komatsu’s approach to international expansion, organizational structure and localizing management, and product diversification. Komatsu was at crossroads on how to most efficiently and effectively leverage cost savings and expertise in local markets, from production to sales & marketing, and still maintain their reputation of product quality. They were in need of an organizational restructuring that would support this new international business model, which also included ensuring key management would be heavily involved in this new expansion. At the center of all of this, Komatsu was also diversifying its product lines and growing revenue from non-construction/mining businesses. How can Komatsu achieve its Three “G”s focus given these challenges? Our proposal covers three possible strategies that Komatsu could leverage to improve operations and business performance, in light of the aforementioned challenges. First, to better control its international expansion, Komatsu can shift its expansion strategy from joint ventures to mergers & acquisitions...
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...| International Business Strategy Report | Mac’s in South Africa | | 4/2/2012 | | Introduction Mac’s Convenience Store Inc. is the largest operator in all of Canada. They offer popular food products and are operated by Couche-Tard. After dominating the Canadian market, Couche-Tard decided to further their market expansion into the United States market and became the second largest convenience chain in North America. Mac’s is such a successful operator simply because they are able to tailor their products and services to the local tastes and needs of the market. Also, Mac’s strong financial position and ability to create value for its shareholders, has increased its feasibility of expanding into the global market. International expansion into South Africa is a promising opportunity for Mac’s. However, South Africa has encountered numerous political barriers from the development of the Apartheid System in 1948 to1994, where non-white inhabitants were stripped of their rights. This unstable environment inhibited their ability to remain competitive and attractive on a global scale. A revolution occurred, as South Africans currently reside in a democracy, and business affairs are expanding through the current development of the Grand Free Trade Area (seeking to improve trade relations). International business can be conducted in a similar manner to Canadian business exchanges due to the newly established legal system, minimized corruption, and strictly regulated...
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...INTERNATIONALISATION OF THE SPANISH FASHION BRAND ZARA Carmen Lopez Ying Fan Brunel Business School Journal of Fashion Marketing and Management (2009), 13:2, 279-296 INTRODUCTION Zara is one of the world’s most successful fashion retailers operating in 59 countries. However, there is little research about the firm in English as the majority of publications have been written in Spanish. This paper seeks to address this gap in the literature by examining the internationalisation process of Zara. This study adopts an in-depth case approach based on extensive secondary research. Literature published in both English and Spanish has been reviewed, including company documents such as annual reports. The paper starts with a brief overview of the global textile and clothing industry, followed by the case study of Zara. The main part of the case examines the key aspects in the internationalisation of Zara namely: motives for internationalisation, market selection, entry strategies, and international marketing strategies. In the final section, comparisons are made between Zara and two of its main competitors, H&M and Gap. The global textile and clothing industry The removal of all import quotas in the textile and clothing industry from January 2005, involving the unrestricted access of all members of the World Trade Organization (WTO) to the European, American and Canadian markets is considered a key driving force in the development of the clothing sector (Keenan, et al., 2004). This...
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...INTERNATIONALISATION OF THE SPANISH FASHION BRAND ZARA Carmen Lopez Ying Fan Brunel Business School Journal of Fashion Marketing and Management (2009), 13:2, 279-296 INTRODUCTION Zara is one of the world’s most successful fashion retailers operating in 59 countries. However, there is little research about the firm in English as the majority of publications have been written in Spanish. This paper seeks to address this gap in the literature by examining the internationalisation process of Zara. This study adopts an in-depth case approach based on extensive secondary research. Literature published in both English and Spanish has been reviewed, including company documents such as annual reports. The paper starts with a brief overview of the global textile and clothing industry, followed by the case study of Zara. The main part of the case examines the key aspects in the internationalisation of Zara namely: motives for internationalisation, market selection, entry strategies, and international marketing strategies. In the final section, comparisons are made between Zara and two of its main competitors, H&M and Gap. The global textile and clothing industry The removal of all import quotas in the textile and clothing industry from January 2005, involving the unrestricted access of all members of the World Trade Organization (WTO) to the European, American and Canadian markets is considered a key driving force in the development of the clothing sector (Keenan, et al., 2004). This...
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...Advise a multinational firm on choosing an appropriate entry mode for internationalization. ➤ Advise a multinational firm on de-internationalization. 148 Global strategic development Opening case study Internationalization of a French retailer—Carrefour In 1960, Carrefour opened its first supermarket in France. In 1963, Carrefour invented a new store concept—the hypermarket. The hypermarket concept was novel, and revolutionized the way French people did their shopping. It moved daily shopping from small stores to enormous stores where customers find everything they want under one roof, in addition to selfservice, discount price, and free parking space. The first Carrefour hypermarket store was established at the intersection of five roads—hence the name, Carrefour, which means ‘crossroads’. Carrefour is the leading retailer in Europe and the second largest worldwide, with Exhibit A International development of Carrefour Year Country and mode of entry No. of stores (2009) 1969 1973 1975 1982 1989 1991 1993 1993 1994 1995 1996 1997 1997 1998 1998 2000 Belgium—Carrefour’s first hypermarket outside France Spain Brazil—Carrefour’s first hypermarket in the Americas Argentina Taiwan—Carrefour’s first hypermarket in Asia Greece Italy Turkey Malaysia China Thailand Poland Singapore Colombia Indonesia Japan 120 2,241 476 518 59 544 494 578 16 443 31 303 2 59 43 0 57(HM), 63(SM) 162(HM), 96(SM), 1,972(HD), 11(CS) 162(HM), 39(SM), 267(HD), 8(CS) 67(HM), 112(SM), 339(HD) HM 31(HM), 209...
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...analyse opportunities for further expansion. One potential source of growth is represented by the chance of expanding its current business within Canada and Iran, through the retail or wholesale channels. One plus point of this strategy is that it would let the company to maintain the same organizational structure without introducing revolutionary changes, which would be costly to make. Indeed, focusing on these two markets would let the company to grow constantly and would allow the management to produce gradual changes to the organization alongside with its expansion. However, a potential downside of the strategy is given by the nature of the Tavazo business and the features of its products, which requires a direct link with the final customers. In addition, although the company has already established a business relationship with the distributors that show the best performances, the contribution of the wholesale channel remains quite low (12%). Therefore, in order to widen its market share and increase its profits, the company would have to invest its financial resources to open new stores in Iran and Canada. Indeed, the retail channel represents the 80% of the total business of the company and compared with the wholesale one it has a 5% higher margin. However, even through an expansion of the retail chain, focusing on these two markets would not give the company the opportunity to improve its customers’ base, which would be limited to the one already exploited and thus would...
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...Running head: TARGET: AN INTERNATIONAL BUSINESS EXPANSION CASE STUDY Target: An International Business Expansion Case Study Sarah Livingstone Mount Saint Vincent University Introduction The decision to expand into a foreign market should not be taken lightly. It can be a great way to grow your company, however, as demonstrated in the following paper, extensive planning is essential to ensure success. Entering Foreign Markets Companies entering foreign markets must decide where to enter as well as the timing and scale of entry. Determining which markets to enter must be analyzed in depth to assure relative long-term growth and profit. Wynne (2004) emphasizes, "Today's markets are knowledge-competitive and unforgiving. Companies must develop useful, first-hand market information before creating market penetration strategies"(Wynne, p.2, 2004). When these basic factors are overlooked, expansions can be catastrophic. Take for example Target's expansion into Canada. With the weakening American economy, Target set goals to expand into Canada. Canada was a promising market with ample opportunity for growth. This expansion was strategic for Target, whose ultimate goal was global expansion. Senger (2011) indicated, "Canada is the perfect test market for a first foray into international expansion: there is a mainly English-speaking population, Canada's close to existing supply chains, and its consumers already know U.S. brands." (Senger, 2011) However, despite the positive initiative...
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...CRH plc: Dimensions of Successful Corporate Strategy Global Business Strategy 1 - BUS-5024-0LA \ Table of Contents Introduction 3 Discussion of Chapter Readings and Theory 3 Chapter 5: International Trade Theories 3 Chapter 6: The Political Economy of International Trade 3 Chapter 7: Foreign Direct Investment 4 Chapter 11: Global Strategy 4 Chapter 12: Entering Foreign Markets 4 Introduction to the Case 5 Discussion of the Case 6 Definition of the Problem 6 Generation of Alternatives 6 Selection of Criteria 7 Choice of the Solution 7 Discussion of Implementation Plan 7 Strategy Implementation Assumptions 9 Strategy Directions Pursued By CRH 9 Corporate Parenting Roles Employed By CRH 9 CRH’s Acquisition Strategy and Its Contribution 10 How The Group’s Corporate Strategy Creates Value For CRH 10 Conclusion 10 References 13 Appendices 14 Appendix A 14 CRH plc: Dimensions of Successful Corporate Strategy Introduction Successful companies, these are companies that focus their efforts on strategic areas. To meet customer needs, the company must follow an overall organizational strategy. A good strategy helps to permanently preserve and strengthen the position of the target market, consistently meeting customer needs better than their competitors. The company's strategy, a way to focus on the target market segment, including that of their competitors. It is also an organization's plan, drawn up to gain a sustainable advantage over competitors...
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...BU5003 International Business operation Tutor Dr Neil Moore Assessment number G35691 Number of words 2015 Date 14/11/2012 Essay topic: “The decision to develop and grow business operations can be a daunting prospect for any galvanization. In particular, the decision to expand into overseas markets generates a broad range of challenges and issues. Using contemporary examples and concepts considered in this module discuss the challenges and issues faced by business organizations as they decide whether or not to internationalize their operations.” As a company expands, it begins to get itself involved in marketing programs that may not have been part of the original business plan. Businesses evolve, and plan change and a company may begin to realize that it needs to get involved in international markets. Obviously, it has a lot of benefits when a company enters into a foreign market. Expanding sales, acquiring resources and minimizing risk are the three principal operating objectives that why companies engage in international business. Normally, these three objectives guide all decisions about whether, where and how to engage to be international business. So in order to seek high sales and profits, gain global market share and reduce dependence on existing markets, it is inevitable for any companies to go abroad. However, it also generates enormous number of challenges and issues...
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