...University of Glasgow Adam Smith Business School International Business & Entrepreneurship Research Method MGT 5174 A Comparative Study of Entry Modes Adopted by Sainsbury’s and M&S in China Based on Resource-based View Theory Yuyu Xiong 2203873 07/24/2016 Word Account: 3013 Table of Contents 1. Introduction……………………………………………………………………..…3 1.1 Background ………………………………………………………………..…3 1.2 Research Questions …………………………………………………………..3 1.3 Research aim and objectives………………………………………………… 4 2. Literature Review ……………………………………………………………..….4 2.1 Timing ………………………………………………..…..4 2.2 Scale of Entry ………………………………..…..……5 2.3 Steps taken before choosing entry modes………………………………..…. 2.4 Entry Modes……………………………….……………………………..…. 2.5 Factors that influence the choice of entry mode…………………………..…. 3. Methodology…………………………………………………………………..….6 3.1 Research philosophy………………………………………………….………6 3.2 Research approach……………………………………………………………7 ...
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...Entering a specific market. These are smaller tier cities, Pittsburg of china. There is more money, even in second tier city. There is an opportunity, challenge. Lets likely to let go of their money, we like to save. We like to spend and going to debt for that. Are there subcultural issues? The whole thing about communism, materialism was not the highest goal ideology. DIY (do it yourself) dutch people get do it yourself. Do it yourself died in china. Electronics, they pulled out. So understanding the consumers and the difference between a dutch, chinees market. It’s a challenge for the company, there are al lot of things going on. A whole nother level of compleixity when you cross borders. A lot of uncertainty. Think about stratgegilcaally to handle these things. Currency risk, political risk, entirely different structure. Is The cost of doing business can be higher if there is a lack of trust. How to navigate these kind of difference is important how to make a profit. Because of these complexity, its interdisciplinary, we have political science and economics. I’m an lawyer, phd strategic management. That makes it interesting. Value creating opportunities. A lot of private companies, but also government. Coutry other than national origin. The firms that a going over boarder and impacting over border. It’s a holistic approach to international business. The level of analysis is often multinationals. There are a lot of different ways to own and control business across borders...
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...MODES OF ENTRY There are five modes of entry into the foreign market. They are- * Indirect exporting * Direct exporting * Licensing * Joint ventures * Direct investment Fiat ‘s mode of entry into the foreign market is through licensing. Licensing is a lower risk entry mode that allows a company to manufacture a product all over the world for global distribution. Licensing permits the company access to markets that may be closed or that may have high entry barriers. Polski fiat was sold in the countries of manufacture at low prices, with few taxes, while automobile imports were charged tarrifs at rates ranging from 50 to 100 PERFORMANCE OF FIAT SALES PERFORMANCE FIAT sold 23,551 vehicles in 2009 and registered an increase of 241% compared to the previous year sales which stood at 6,897 vehicles. It plans to sell 130,000 cars annually in India by 2014 FINANCIAL PERFORMANCE INCOME STATEMENT: 10-YEAR SUMMARY DATE | SALES | EBIT | DEPRECIATION | TOTAL NET INCOME | EPS | TAX RATE (%) | 12/11 | 78.43 Bil | 2.88 Bil | 4.42 Bil | 1.76 Bil | 1.41 | 24.40 | 12/10 | 47.25 Bil | 928.36 Mil | 3.93 Bil | 185.67 Mil | 0.15 | 68.70 | 12/09 | 43.04 Bil | 135.63 Mil | 2.68 Bil | -441.14 Mil | -0.36 | 435.00 | 12/08 | 78.44 Bil | 2.88 Bil | 3.89 Bil | 2.12 Bil | 1.71 | 21.30 | 12/07 | 77.07 Bil | 3.65 Bil | 3.70 Bil | 2.57 Bil | 2.36 | 25.90 | 12/06 | 68.25 Bil | 2.16 Bil | 3.69 Bil | 1.40 Bil | 1.29 | 29.90 | 12/05 | 61.29 Bil | 2.98...
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...| ------------------------------------------------- Question 1: should Ikea change its mode of entry? In IKEA’s history two different modes of entry were used. Both were met with big success and allowed IKEA to enter new markets very easily, and in a secure way. In the 70’s and the 80’s the IKEA’s method as mode of entry was simple: try to establish a link with a supplier in the host country before opening a retail outlet through company-owned subsidiaries. This direct mode of entry was used to enter European and North American markets and it worked well to develop IKEA concept (without any adaptation) in these countries. Then IKEA looked for an expansion by franchising, an intermediate mode of entry where the franchisor was in charge of R&D, production (sub-contractors), marketing, centralized control and the franchise in charge of sales and services. There is a drastic selection in researching people interested in opening an IKEA franchise. Solid financial background and high experience is required to be authorized to develop IKEA concepts. After the acceptance, IKEA headquarters were very careful and really controlling the activities of the franchisees. The only freedom for them was to adapt some products and methods to the local market. Franchising was a very good way for IKEA to transpose its concept, its name and its reputation. These traditional modes of entry was fully tried and tested, with the big accomplishment we known, in Europe and Northern America...
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...Assessment Support Pack SCQF level 8 02 fro .7 5. 66 .1 34 International Purchasing and Supply — H2X3 35 80 www.sqa.org.uk © Scottish Qualifications Authority 2013 SQ A Published by the Scottish Qualifications Authority The Optima Building, 58 Robertson Street, Glasgow, G2 8DQ Lowden, 24 Wester Shawfair, Dalkeith, Midlothian, EH22 1FD C hi na Fi le The information in this publication may be reproduced to support SQA qualifications. This publication must not be reproduced for commercial or trade purposes. This material is for use by teaching staff only. do w nl oa de d Publication date: April 2013 Publication code: H2X3 35/ASP001 by ce nt re _3 00 54 m on 10 /1 0/ 20 14 08 :4 0 Introduction This Assessment Support Pack incorporates assessment templates for both Higher National and National Qualifications (other than CfE) and can be used in a variety of ways including, for example: to generate evidence which demonstrates that learners have achieved all Outcomes and Knowledge and/or Skills for the Unit as exemplification of the standard of performance expected of learners achieving the Unit, ie as a benchmark to help centres develop an appropriate assessment for the Unit to give teachers/lecturers/assessors new ideas as a staff development tool Security and confidentiality The information in this publication may be reproduced in support of SQA qualifications. Where the publication...
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...2015 | | | | Name, initials: | Meyer, JonasExchange Student fromMaastricht University | | For assessor only | | ID number: | Glasgow ID: 2185941MMaastricht ID: i6054474 | | 1. Content | | Study: | Development of International Business | | 2.Language structure | | Course code: | MGT 4060 | | 3.Language accuracy | | Tutorial number: | Wednesdays, 9-11am | | 4.Language: Format& citing/referencing | | Course Coordinator: | Dr Valerio Cerretano | | Overall: | | Writing assignment: | Essay | | Assessor’s initials | | Your Glasgow email address: 2185941M@student.gla.ac.uk Table of Content 1. Introduction 2 2. Motives of International Business 2 3. Forms of International Business 3 3.1 Equity Entry Modes 3 3.2...
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...Entry Mode Strategy for Jollibee into Australia Table of Contents Executive Summary 2 Introduction 4 The Jollibee Phenomenon 4 Overseas Expansion and Modes of Entries 4 Company Analysis 5 Values – Mission – Vision 5 Distinctive competence 8 Foreign Market Analysis 9 The Australian Economy 9 Legal and Political Environment 9 Entry mode selection 11 Conclusion and recommendations 14 Reference list 17 Executive Summary Jollibee Foods Corporation (JFC) is a highly successful Philippines’ based food services company that operates over 1,700 stores locally and internationally. JFC has developed its international business over three distinct strategies. Its corporate strategy is one of related diversification into the fast food, restaurant and bakery sectors of the food industry. Its international business strategy focuses on establishing market share by acquisition, joint venture and franchising, often by initially targeting high Filipino population centres, and also in differentiation by localizing their menus to suit various cultural tastes in all their overseas markets (Jollibee 2009a). JFC has successfully adopted a transnational strategy being able to combine the benefits of global scale efficiencies in its regional management business model with the benefits of local responsiveness by adapting for local tastes. It depends on an integrated network and teamwork to drive the needs of the marketplace and the need to be competitive...
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...Name: 馮光合 Student ID: M0414102 Foreign market entry modes 1. Exporting: Exporting is the process of selling of goods and services produced in one country to other countries. There are two types of exporting: direct and indirect. * Direct Exports The most basic mode of exporting made by a (holding) company, capitalizing on economies of scale in production concentrated in the home country and affording better control over distribution. Direct export works the best if the volumes are small. Large volumes of export may trigger protectionism. The main characteristic of direct exports entry model is that there are no intermediaries. Advantages: * Control over selection of foreign markets and choice of foreign representative companies * Good information feedback from target market, developing better relationships with the buyers * Better protection of trademarks, patents, goodwill, and other intangible property * Potentially greater sales, and therefore greater profit, than with indirect exporting. Disadvantages: * Higher start-up costs and higher risks as opposed to indirect exporting * Requires higher investments of time, resources and personnel and also organizational changes * Greater information requirements * Longer time-to-market as opposed to indirect exporting * Indirect exports Indirect export is the process of exporting through domestically based export intermediaries. The exporter has no control over its products in the...
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...Modes of Entry into International Markets (Place) How does an organization enter an overseas market? Background A mode of entry into an international market is the channel which your organization employs to gain entry to a new international market. This lesson considers a number of key alternatives, but recognizes that alteratives are many and diverse. Here you will be consider modes of entry into international markets such as the Internet, Exporting, Licensing, International Agents, International Distributors, Strategic Alliances, Joint Ventures, Overseas Manufacture and International Sales Subsidiaries. Finally we consider the Stages of Internationalization. It is worth noting that not all authorities on international marketing agree as to which mode of entry sits where. For example, some see franchising as a stand alone mode, whilst others see franchising as part of licensing. In reality, the most important point is that you consider all useful modes of entry into international markets - over and above which pigeon-hole it fits into. If in doubt, always clarify your tutor's preferred view. The Internet The Internet is a new channel for some organizations and the sole channel for a large number of innovative new organizations. The eMarketing space consists of new Internet companies that have emerged as the Internet has developed, as well as those pre-existing companies that now employ eMarketing approaches as part of their overall marketing plan. For some companies the...
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...Modes of entry into an International Business:- There are some basic decisions that the firm must take before foreign expansion like: which markets to enter, when to enter those markets, and on what scale. Which foreign markets? -The choice based on nation’s long run profit potential. -Look in detail at economic and political factors which influence foreign markets. -Long run benefits of doing business in a country depends on following factors: - Size of market (in terms of demographics) - The present wealth of consumer markets (purchasing power) - Nature of competition By considering such factors firm can rank countries in terms of their attractiveness and long-run profit. Timing of entry:- It is important to consider the timing of entry. Entry is early when an international business enters a foreign market before other foreign firms. And late when it enters after other international businesses. The advantage is when firms enters early in the foreign market commonly known as first-mover advantages First mover advantage;- 1. it’s the ability to prevent rivals and capture demand by establishing a strong brand name. 2. Ability to build sales volume in that country. so that they can drive them out of market. 3. Ability to create customer relationship. Disadvantage: 1.firm has to devote effort, time and expense to learning the rules of the country. 2.risk is high for business failure(probability increases if business enters a national market...
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...GLOBAL STRATEGYAND MULTINATIONALS' ENTRY MODE CHOICE W. Chan Kim* INSEAD Peter Hwang** Baruch College Abstract. This paper makes a case directed towards establishing the importance of global strategic considerations in choosing multinationals'entry mode. Specifically,it is our contention that beyond the environmental and transaction-specificfactors well established in the literature to affect the entry mode decision, we should also consider the strategicrelationshipa multinational envisages between its operations across borders in reaching this decision. After incorporating various global strategic variables into an eclecticframeworkof the factorsinfluencing entrymode the choice, this paper tests both the validityof the overall framework and the importance of each entry mode determinant in differentiating among entry modes. This is done based on ninety-six multinational managers' responses to a survey questionnaire concerning their entry mode decision experiences. The results suggest that an express incorporationof global strategicvariables into an analysis of the entry mode decision is warranted. This paper is concerned with the critical decision of multinationals' foreign entry mode choice. While existing studies have already identified a diversity of variables that influence this decision, in our view these variables can or essentiallybe collapsedinto one of two categories:environmental ftansactionspecific factors. Common to existing studies identifying these factors is their...
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...report on Modes of Entry into Foreign Markets. Sir, It’s been pleasure for me to submit my report on “Modes of Entry into Foreign Market”. This report contains the structure and material as instructed by you. I have tried hard to do my best and fulfill your expectation. The assigned work and the information gathering process involved with it gave me access to the areas, which I didn’t know before. However it is needless to say that, there may be some mistake in my organization, presentation and style. In completing the report I have tried my best in imparting ever available details of the, “Modes of Entry into Foreign Market” avoiding unnecessary amplification of the report. Thanking you, Yours faithfully Md.RazibulMatin ID. No: 801414091 EMBA Program Department of International Business University Of Dhaka. Table of Content SL NO. | TOPIC NAME | PAGE NO | | Letter of Transmittal | 1 | | Executive summary | 3-4 | Chapter-1 | Introduction | | 1.1 | Problem of Modes of Foreign Markets Entry | 5-6 | 1.2 | Rationale for Modes of Foreign Markets Entry | 6 | 1.3 | Scope and Objectives of the study | 6-7 | 1.4 | Methodology of the Study | 7 | 1.5 | Limitation of The Study | 7 | Chapter-2 | Literature Review | 8 | Chapter-3 | Modes of Entry into Foreign Market | | 3.1 | Market entry strategy | 9 | 3.2 | Market Entry Modes | 10 | 3.2.1-3.2.7 | Different Markets Entry Modes | 11-16...
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...Country Risk and Entry Mode Selection Political, legal and regulatory risks Political, legal and regulatory risks, for example, exchange and repatriation of funds risks of our host country, Japan includes the following: Marketers must attempt to comply with the host country’s laws and regulations and keep up with laws and regulations that change frequently. Some examples of Political risks include: War, Social unrest, politically motivated violence, Social conditions, corruption, labor costs and tax discrimination. The political impact on economic transformation includes deregulation, privatization, and the creation of a legal system to protect property rights. The legal risks include the rules and laws that regulate the host country’s behavior; property rights, private and public actions. International property issues include protection of property by law enforcement and product safety and liability. This also includes competitiveness and ethics. Social and cultural risks There are so many risks when conducting business in an Asian country that you must consider before you decide to conduct business overseas. One of the first things you must figure out is will our product need to be adapted for Asian markets. Some Adjustment is ok, but we would need to figure out if wearing rings is a big thing in the culture. We also should look at which colors and metals are best to use and which are most popular. Another issue that needs to be looked at is how accessible would...
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...EFFECTS ON ENTRY MODE DECISIONS OF MULTINATIONAL MANUFACTURING ENTERPRISES: A QUALITATIVE STUDY IDENTIFYING ISSUES FOR FURTHER RESEARCH IN THE AREA OF COUNTRY CONDITIONS AND THEIR IMPACT ON ENTRY MODE ALEX KOUZNETSOV, Melbourne Institute of Technology ASHELEY JONES, Melbourne Institute of Technology This study examines entry modes employed by foreign multinational manufacturing enterprises (MMEs) when entering Russia. This exploratory study focuses on country-specific conditions associated with the chosen entry mode - an important component in the consideration of overall entry strategy. Information from field studies representing 18 manufacturers – 10 directly manufacturing in Russia and 8 selling their products in Russia via representative/sales offices – was obtained by means of personal interviews with senior management in Moscow and constituted the primary qualitative data. Research questions are posed for further examination of conditions in Russia and the effects of such conditions on the entry mode decisions of MMEs. The study finds economic conditions to be the only important determinant of entry modes for large multinational manufacturing companies investing in Russia with other country factors playing no role in their choices. INTRODUCTION With the expansion of global business activity, the ability to analyze the key characteristics of potential host countries becomes increasingly important. The key to successful international market entry is an understanding...
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...focus on developin g a conceptual model of the influence of national culture on the entry mode decisions by combining two international business themes : the multi - national business perspective with the ho me and ho st country influences. The paper will be structured as follows: firstly, a short review of the theories used, more precisely of the hierarchical model of market entry modes and of Geert Hofstede’s model of five cultural dimensions of national culture , will b e provided . Secondly, a conceptual model will be developed, proposing that national culture influences choices between equity and non - equity, as well as within the equity category, but not within the non - equity category. Finally, several conclusions will b e drawn . A multi - national business perspective - The hierarchical model of m arket entry modes – When deciding to enter a new market, firms are confronted with a wide variety of different entry modes to choose from, taking into account their desired level of ownership and control, resource commitment and risk taking among others . Thus, entry modes choices are highly strategic decisions, assuming a trade - off between risk and return (Davis, 2006). According to Pan & Tse (2000), in order to better unders tand how firms decide between entry modes, a division between equity - based and non - equity - based modes proves useful....
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