Business strategy
The business strategy that we recommend is International strategy.
Companies adopt an international strategy by expanding into foreign markets by taking products first produced for the domestic market and selling them internationally. The international model relies on local subsidiaries in each country to administer business as instructed by headquarters. The subsidiaries would have freedom to adapt products to local conditions as well as to set up some light assembly operations or promotion programs. Overall, ultimate control resides with managers at the headquarters as they best know the basis and potential of the company’s core competencies.
We choose international strategy as this strategy has low cost and risk as money would not be needed to be spent on researching and developing new products to customize to local needs. Furthermore, Osim already has a strong brand identity and a strong reputation so it would be recognised as good in the eyes of the population in Vietnam and people would expect the same level of quality of the brand Osim in Vietnam as compared to other countries. With a good reputation, it would be easier to market Osim products in Vietnam.
Pressure for local responsiveness is also low as consumer tastes and preferences for massages chairs are roughly the same worldwide. Massage chairs do not need to be differentiated as ultimately massage chairs are used to serve the same purposes which are to relieve stress and tension of the user. Furthermore, the Vietnam government is taking efforts to make it easier for foreign investors to invest in Vietnam by relaxing the requirements and regulations needed to enter Vietnam. By doing this, there would be lesser trade barriers to enter Vietnam and this further decreases the pressure for local responsiveness.
Pressure for cost reductions is also low as consumers have low switching