...type of strategic alliance in that a new business entity is created that is legally separate and distinct from its parents. A primary advantage of a joint venture is that the venture can have a broader purpose, scope, and duration compared to other types of strategic alliances. Moreover, joint ventures tend to be more stable than non-joint venture strategic alliances. Joint ventures in which there is shared management or that are managed by one parent may have difficulties because there may be a tendency to try to please management from the founding companies rather than focusing on what is best for the joint venture. In contrast, non-joint venture strategic alliances are useful because they allow participants to focus on a particular project, yet do so without creating a new entity. Furthermore, non-joint venture strategic alliances can help firms overcome short-term hurdles. The basic benefits partners are likely to gain from their strategic alliances are ease of market entry, shared risk, shared knowledge and expertise, and synergy and competitive advantage. Strategic alliances can ease market entry because they allow firms to overcome barriers such as entrenched competition and hostile government regulations and/or reduce the cost of entry. Strategic alliances can also enable firms to reduce or control exposure to risk. Firms can gain knowledge and expertise via strategic alliances, as well as synergy and competitive advantage. In theory, strategic alliances should...
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...CHAPTER 9. STRATEGIC ALLIANCES 1. One reason why firms might want to pursue a strategic alliance strategy is to exploit economics of scale. Exploiting economies of scale should reduce a firm’ costs. Does this mean that a firm pursuing an alliance strategy to exploit economies of scale is actually pursuing a cost leadership strategy? Why or why not? Yes, firm pursuing an alliance strategy to exploit economies of scale is actually pursuing a cost leadership strategy , according to the transactions Cost Theory, firms enter into strategic alliance in order to reduce their production and management cost. It is shown clearly that the movement collaboration between firms in industry is because there is a need to complement their short comings and weakness and to reinforce the competitive advantage of the collaborating companies and to promote in order to maintain a competitive market. They also need to reduce cost though the cooperation in different tasks and projects, to solve technical or financial shortcomings to be able to conduct the main task or project and to ensure large access to the market, export or enter in a new sector on which large investments are required. HAL dari internet 2. Consider the joint venture between GM and Toyota. General Motors have been interested in learning how to profitably manufacture high-quality small cars from its alliance with Toyota. Toyota has been interested in gaining access to GM’s U.S. distribution network and in reducing the political...
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...Vol. 5, No. 1 International Journal of Business and Management International Market Expansion Strategies for High-Tech Firms: Partnership Selection Criteria for Forming Strategic Alliances Øystein Moen (Corresponding author) Norwegian University of Science and Technology (NTNU) Department of Industrial Economics and Technology Management N-7491 Trondheim, Norway Tel: 47-7359-3505 E-mail: Oeystein.Moen@iot.ntnu.no Ottar Bakås SINTEF Technlogy and Society, Department of Industrial Management N-7465 Trondheim, Norway E-mail: ottar.bakas@sintef.no Anette Bolstad Norwegian University of Science and Technology (NTNU) Department of Industrial Economics and Technology Management N-7491 Trondheim, Norway Vidar Pedersen Investment Office Nordic, Telenor Nordic Finance Snarøyveien 30, N-1331 Fornebu Tel: 47-9823-2599 E-mail: vidar.pedersen@telenor.com Abstract Newly established, technology-based firms entering international markets often have limited resources in terms of capabilities, time, and capital. As a consequence, these firms often use entry modes characterised by low resource commitment, including partnership agreements (strategic alliances). This paper, investigates which partner selection criteria that are important for this group of firms when they are selecting partners. Based on case studies of three Norwegian firms targeting the UK market, five selection criteria have been identified as important (trust, relatedness of business, access...
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...MGW3401 – STRATEGIC MANAGEMENT Tenfold™ Organic Textile Case Analysis Report Lecturer: Dr Chong Yit Sean, Esther Tutor: Dr Tan Seow Kian, Sharon Cheok Huei Chun (24826200) Teoh Tong Aik (26094193) Florian Navintach Zeorelli Samerawickreme (24729833) Clement Marsha (25342754) Habiba Almahrooqi (25384589) Table of Contents Executive Summary 1.0 Introduction 1.1 Purpose of the report 1.2 Company information 1.3 Assumption 1.4 Methodology 1.5 Purpose of Report 2.0 Strategic Analysis 2.1 SWOT ANALYSIS 2.1.1 Strengths 2.1.2 Weaknesses 2.1.3 Opportunities 2.1.4 Threats 2.2 Main issues 2.2.1 Issue 1 2.2.2 Issue 2 3.0 Evaluation of Alternative Strategies 3.1 Alternative 1 3.2 Alternative 2 4.0 Implementation 5.0 Conclusion 6.0 Reference list 7.0 Appendix Executive Summary Tenfold™ Organic textile is a company that provides naturally dyed organic cotton products to consumers, manufacturers and retailers. Tenfold attracts its customers by being an environmentally responsible organization that produce apparel using eco-friendly and chemical-free dye. The purpose of this report it to analyze the strengths, weakness, opportunities and threats of Tenfold in order to address the main issues that the company can improve. Furthermore, using academic journals, two alternative strategies will be discussed to improve and enhance the organization’s strategic position. The first issue that Tenfold faces...
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...conflicting demands on a company. The sources of pressures for cost reductions and pressures for local responsiveness are explored. The discussion then turns to the different strategies that companies can pursue in the global arena. Four different strategies are reviewed in some detail—an international strategy, a multidomestic strategy, a global strategy, and a transnational strategy. The pros and cons of each of these strategies are debated. A link is made between the appropriateness of different strategies and the pressures for cost reductions and local responsiveness. It is suggested that the optimal strategy is contingent on the extent of pressures for cost reductions and local responsiveness facing a company. We then discuss the basic entry decisions a company faces when going international. In particular, we look at three basic decisions that a firm contemplating foreign expansion must make: which markets to enter, when to enter those markets, and on what scale? In the next section, which reviews the...
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...M2/MSc 2015-2016 Corporate (or Growth) strategy: Key questions? • Should the firm focus its activities on a specific market or diversify in several segments or sectors? • Should the firm limit its business to the local market or internationalize? • Which method of growth strategy should the firm choose? • organic development or • corporate, commercial, technical alliances with other stakeholders active in the business environment (clients, suppliers, competitors, R&D centres, academic units, …)? Key questions of Corporate strategy Why and how should the firm internationalize? International strategy analytical framework Location Advantage WHY? Outside-In approach HOW? Source: Exploring Strategy, 9th edition, Pearson, 2011 Inside-out approach Incentives and basic benefits of internationalisation Incentives Basic Benefits Extend a product’s life cycle Increased market size Gain easier access to raw materials Economies of scale and learning Opportunities to integrate operations on a global scale Location advantages To support strategic orientations! Opportunities to maximize the ROI (e.g. rapidely developing technologies) Get access to consumers in emerging markets Source: Ireland, Hoskisson and Hitt, The Management of Strategy, 2011 Outside-in approach: Internationalisation drivers Why going international? The YIP’s matrix (Inter-country compensation of competitive rivalry) Drivers...
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...ventures were hugely profitable as the Wahaha brand became a household name in China. In spite of these successes, the relationship started to deteriorate. After years of court battles, Danone finally pulled out of the JV and ended this partnership with Wahaha. Based on the case study, this essay will firstly analyze Danone’s market entry mode and limitations of this mode. Subsequently, this essay will discuss contributions of both Wahaha and Danone in this relationship. Finally, this essay will present reasons for the Danone-Wahaha dispute and lessons derived from this dispute. Danone’s market entry mode Danone entered the Chinese market selling consumer drink products, including fruit juice, dairy products and bottled water, all with Chinese joint venture partners who were market leading brands in China. A joint venture is a special type of strategic alliance, which requires establishing a firm jointly owned by two or more otherwise independent firms (Hill, Wee and Udayasankar, 2012). Danone and Wahaha in this case are the two strategic partners to establish joint ventures together. Danone chose to create joint ventures in china since this entry mode can allow it to effectively tackle pressures from local responsiveness and to share risks with local partners. Firstly, Danone needs a...
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...their own boundaries. The concept of strategic alliances has become widely used in the business language to refer to the types of partnerships agreements between two or more companies that pursue a clear strategic collaboration objective, with different levels of possible integration among the members. In today’s competitive global economy strategic alliances are a crucial option for achievement of competitive advantage. By developing strategic alliances, organisations can share their excess or complementary resources and capabilities so as to strengthen their position in the market and gain competitive advantage. When such alliances are effectively and efficiently managed the partnering firms can gain immensely towards mutual profitability. In any cooperative relationship trust is key for success. Where mutual trust and synergies exists, partnering organisations can benefit substantially from opportunities that can be exploited through maximum utilization of combined resources. On the other hand, where there is no trust, extensive monitoring systems become necessary to monitor each partners’ contribution and this results in increased cost of operations that ultimately hamper the competitiveness of the alliance. Definition A strategic alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent. Partners may provide the strategic alliance with resources such as...
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...manufactured. Today, however, the scope of international marketing has broadened and includes many other business activities. The activities of large department store chains include a substantial element of importing. When these stores search for new products abroad, they practice another form of international marketing. A whole range of service industries are involved in international marketing; many large advertising firms, banks, investment bankers, public accounting firms, consulting companies, hotel chains, and airlines now market their services worldwide. International marketing encompasses some activities that only indirectly result in international transactions. Entry Strategies Before a firm considers expansion into international frontiers, it must make three strategic decisions; which Markets to enter, when to enter these Markets and What will be the scale of entry. An international business can create in a market suitability of products for a market. It can also create in a market, a nature of indigenous competition which are not widely available and yet satisfies an unmet need. There is also a greater value translated into the ability to charge higher prices and increase sales volume more rapidly. The timing of entry by a firm into a foreign market becomes very important. Early entrants initiate a first mover advantage over the competition. This creates the ability of the firm to pre-empt rivals and...
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...Tesco – The Entry Strategies Content * Introduction……………………………………………………………………………….2 * Background of Tesco…………………………………………………………….......3 * Entry strategies………………………………………………………………………....4 * How did Tesco enter Hungary? ......................................................5 * Tesco’s entry strategies ……………………………………………………….…....6 * Tesco’s failure…………………………………………………………………….…..….7 * Conclusion…………………………………………………………………………….…..8 * References…………………………………………………………………………………9 Introduction Tesco is a very famous supermarket and it has stores all around the world(Clark 2008). There are a lot of entry strategies for one country to enter its brand to another country, so it is sure that Tesco and entry strategies can be combined together. This essay focused on the entry strategies that Tesco used to enter Hungary more than enter other countries. This essay introduced to you a few popular entry strategies, and explained why Tesco chose a particular entry mode to enter a country among all the possible choices. It also introduced to you what kinds of strategies Tesco had used to enter Hungary. The entry strategies do not always work, it sometimes failed. This essay also discussed Tesco’s failure, and the reason why caused Tesco’s failure. In other words, this essay is about introducing the entry strategies of Tesco. To make Tesco’s entry strategies as the topic, the first thing to do is to know Tesco very well. There are so many questions about...
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...the prevailing conditions in Australia are very different from those of Germany where Adidas is based. The difference is in terms of societal, political, and economical factors. Therefore, before the organization considers venturing in Australia, it is imperative that the company considers foreign market entry strategies. Since the company specializes in sports attire, it is only considerate that the sports culture of Australia as a foreign market to the company is studied well. In addition, company should consider both political and economical factors of the Australian society. Successful businesses are premised on sound politics and economic environments of countries where they are located. The favorable the politico-economical factors of a country the success of a business and the contrary apply. However, potential alliances are also important for foreign markets and are also part of entry strategy (Walter & Murray, 1988). The above factors affect and are important to the entry into foreign markets. For instance, political and economical factors play key roles in the foreign markets entry through factors that influence them. Licensing, which informs the key option for entry into an international market like in the case of Adidas, is influenced by both economic and political factors. For instance, licenses are part of legislations of a country. Legislations are generated through a political process and means. Therefore, political stability of a state is an important factor...
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...strategy. b. (Griffith, 2010) -necessary to understanding market segment convergence and its influence on global marketing strategy. - While market segments have often been viewed as having clearly defined boarders within a nation-state, the movement toward integrated markets due to globalization has created the need for conceptualizing market segments in new ways. - research suggests that the more dissimilar the country profiles, i.e., institutional environments, the more difficult it is to understand the requirements of the collection of operations and responses appropriate to local demands 2- Strategic Alliances (trading companies, piggybacking, export management co.) c. Whether cultural differences affect trust, commitment and cooperation in international B2B export channels and their foreign distributors. - Trust, commitment, cooperation are the main items of focus -Entering foreign markets is no longer just something to think about, but rather an action that must be taken without delay by more and more U.S. companies. (Mehta, 2006) -The use of such overseas distributors as an entry strategy for international marketing is usually quicker, less risky, and less capital- intensive than setting up joint ventures or establishing international subsidiaries to manufacture the products in foreign markets. () -Gundlach, Achrol, and Mentzer (1995) describe commit- ment in terms of three dimensions. The first is the input or instrumental dimension, which...
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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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...Chapter 13: Entry Strategy and Strategic Alliances TECHNICO Chose wholly owned subsidiary (agribusiness) 1. Enter into china … not prepared to let chinese counterparts exploit their technology 2. Avoiding technical and licensing agreement 3. No risk in allowing co to use licensing strategy and not using it well | Basic Entry Decisions OLI a) Location b) Ownership specific advantage c) internalisation-specific attributes (entry modes) 1) Which foreign markets? * Assessment of nations long run profit potential * Assess overall attractiveness of model * Suitability of product to that region * Nature of indigenous competitors 2) Timing of entry * Consider first mover advantages a) ability to pre-empt rivals and capture demand by establishing strong brand name b) ability to build sales volume before other entrants cost savings allow you to further cut your costs c) create switching costs that tie customers into products * first mover disadvantages a) pioneering costs: costs that firms have to bear that late entrants can avoid… eg cost of business failure b) research shows that higher probability of survival of an international business after several firms done so c) costs of promoting and marketing the product in a new market 3) scale of entry and strategic commitments * entering market on large scale involve commitment of significant resources; also provides rapid entry ...
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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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