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: Advantages and Disadvantages of International Market Entry Strategies
: Advantages and Disadvantages of International Market Entry Strategies
Foreign market entry plan
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Executive Summary:
Rubbermaid, a dominant American company, was known in the 1990s for its Little Tikes brand name in the commercial playground market in addition to being an innovative company. Rubbermaid noted an opportunity to extend its Little Tikes brand name through the acquisition of successful, privately owned companies who also competed in the commercial playground market. The company had the resources and core competencies to carry out this strategy and become the market share holder internationally. To accomplish this strategy, the company acquired four companies in 1993. The companies included two American based companies, Omni of California and Iron Mountain Forge of Missouri, and two foreign based companies, Ausplay of Australia and Paris Playgrounds of Canada. Acquiring these companies would allow Rubbermaid to become a leader in both the traditional, outdoor playground market and capitalize on an emerging opportunity in the market for soft-modular, indoor play.
Rubbermaid’s strategy included consolidating manufacturing and standardizing processes and software among the newly acquired businesses to adhere to one way of operating and doing business. In addition, Rubbermaid also reorganized its internal structure into two different divisions, the newly acquired businesses all grouped together. Rubbermaid faced many challenges following the acquisition of the companies and in carrying out its strategic vision for dominating the commercial play market. The two major problems the company faced were a lack of communication across units and failing to realize that changing the way already successful businesses operate could be extremely detrimental. The strategic initiatives the company laid out were not properly commu...
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...away from this strategy as it attempted to streamline processes and consolidate operations. Attempting to streamline processes and consolidate operations was Rubbermaid’s biggest downfall in its strategy. The acquired businesses were each successful on their own prior to the acquisition. If Rubbermaid had allowed the companies to operate independently as sub-units of Rubbermaid and simply brand each company’s products with the Little Tikes name, many of the problems faced would have been bypassed. Thus, the company should have placed a greater emphasis on marketing and branding across the units rather than on operations and manufacturing. This would have allowed the company to easily leverage its brand name, compete in diverse markets, and continue to generate profits to expand its reach in its vision to become a leader in the world market for commercial play sets.
Lowe’s grew through strategic choice by heavily focusing on key functional areas involving research and development (R&D), marketing, and logistics. Lowe’s important R&D investments included the creation of two prototype stores. The first prototype with 147,000 square feet catered to large markets and the other with 120,000 square feet catered to smaller markets (Rouse, 2005). Lowe’s used these store prototypes to help guide their continued growth and store placement. The prototypes also aided the company in designing future stores more efficiently with respect to energy and sustainability (Lowe’s Companies, Inc., n.d.). Furthermore, Lowe’s marketing strategy concentrated on attracting new customers and enhancing current customer satisfaction. To bring new customers to the store, Lowe’s engaged in a pull marketing strategy (Wheelen & Hunger, 2012). The com...
Cate Reavis prepared the case study, which this review is based, under the supervision of Professor David McAdams. It was published in MITSloan management review in January 2008. The article looks at how DeBeers became a superpower in the diamond trade in the 1900’s. How this position as challenged in the late 1990’s and how DeBeers used key strategic management tools to overcome these challenges to become the superpower it once was.
In 1958, Alex Grass incorporated Rack Rite Distributors, Inc. Grass opened Rite Aid’s first store, through Rack Rite, in 1962, as a Thrift D Discount Center, in Scranton, Pennsylvania. 1963, Thrift D Discount Center became a drugstore chain when they opened five more stores. In 1965, the Thrift D Discount Center expanded to five northeastern states by quickly acquiring and opening new stores. In 1966, the first Rite Aid store opened in New Rochelle, New York. 1976, they introduced seventy Rite Aid private label products. The next year, 1968, they changed their name, officially, to Rite Aid Corporation and started trading on the American Stock Exchange. Then, two years later, in the beginning of the 1970’s, they moved to the New York Stock Exchange. Again, two years later, 1972, they had been operating 267 stores in 10 states. 1981, nine years later, they became the third-largest retail drugstore chain in the country. In 1983, they made over $1 billion in sales. In 1987, their twenty-fifth anniversary was celebrated and they, by then, had 420 stores in 9 states and Washington D.C., as well as Pennsylvania, where they started their business as a Thrift D Discount Center, in Scranton. Their market had greatly expanded and they had passed the 2,000-store mark to become the nation’s largest drug store chain in terms of store count. Eight years later, in 1995, they acquired Perry Drug Stores, the biggest chain of drugstores in Michigan. It was their largest acquisition to date. By then they had operated nearly 3,000 stores. That same year, Martin Grass succeeded his father Alex Grass, as Chairman and CEO of Rite Aid. The year after that, they had grown out to the West Coast and the Gulf Coast, adding more than ...
This goal of this analysis is to shadow some light on K-Mart and Target and with the help of extensive research. In this analysis we can find out what each company can do, where they lack and what has to be done in order to keep the company profitable and alive. Thus, we will try to look at the Target wholly and then it will identify a successful business strategy and thus show that the strategy has moved the Target into one of such leaders in the industry. When we will take a look at K-Mart and then we will move on the identification of a failed business strategy and then show that the strategy has been holding this company at the back. After that we will try to perform a cross- case analysis by contrasting and comparing the case studies on the points of difference and the parity. This will help us in looking at a side by side difference of a SWOT analysis and also the five force analysis.
What we conclude from our research that there’s no single organization free from facing complications and difficulties. Each and every organization face few or many strategic problems. Johnson & Johnson had a problem with one of their products, and they were smart in handling that problem to keep the company on the safe side without letting it effect it negatively. It is very important to act quickly to fix the problem before many consumers notice.
Toys R Us Inc. revolutionized the toy industry more than four decades ago with its big-box, low-price stores. Toys R Us may be synonymous with toys, but also has its fastest-growing business in Babies R Us, which sells children's clothes, furniture and accessories. The company opened new stores and planned to build new additional Babies R Us stores.
It should capitalize on the cost-leadership strategy and improve its customer service to edge out Ace and steal a chunk of its market share. Lowe’s should also seek to negotiate for favorable contracts with the major Australian suppliers on a cost-advantage level and thus increase its bargaining power. Moreover, such a strategy would create an entry barrier for Australian start-up competitors who might seek to use their home advantage to outcompete
In 2002, CEO of Levi Strauss, Phil Marineau was faced with a tough decision: whether he should sell product at Wal-Mart. In the last five years, Levi-Strauss had lost sales and had to close US plants to move production to cheaper offshore areas. Levi's really needed to revive the brand image to gain back some lost sales and was using marketing to create new advertisements and product placement to broaden their target market. Levi's had tough competition on every level of the price-point spectrum, whether it be high end retailers like Diesel or Calvin Klein, middle vertically integrated retailers like Gap or American Eagles, and on the bottom, private-label brands like Wal-Mart and Target.
Poor organizational management, failure to innovate and adapt to the environment, and an outdated brand image have all contributed to Sears massive decline. By not setting a clear organizational strategy, executives of Sears strayed away from innovation, allowing for competitors to attract Sears loyal customers to their organization. In addition, the outdated brand image of Sears has failed to meet the ever changing customers of today’s society. Overall, there are many reasons that have led to the downfall of a once powerful retail giant.
Since brands depend on delivering a uniform, consistent product, global brands has traditionally adopted a “one size fits all” strategy (Crothers). Wal-Mart continues to expand internationally because it relates to other U.S global brands such as McDonalds. “ McDonalds grounded on one simple idea: provide desirable food and drink at low cost.”(Crothers 130). Wal-Mart’s strategy was almost the same to begin with. What they have in common is convenience and low cost. Its fast and quick just like McDonalds’. Customers at Wal-Mart can buy anything at one place and one time. It’s a superstore and everything you need is there. Customers do not need to leave to go to another store, which is why Wal-Mart is so successful. Smaller retail companies get replaced because they don’t have a chance with competing with Wal-Mart. A Wal-Mart store opening can destroy almost three local jobs for every two they cre...
BR was sold to Delta Foods in 1996 for US $2 billion. At this time, it was one of the largest fast-food chains in the world generating sales of US $6.8 billion. DF purchase of BR brought in a new cultural paradigm. DF is an individualistic, aggressive growth company with brands they believe are strong enough to support entry into new overseas markets without the need for local partnership. The DF strategy is one of direct acquisition and JV’s were not part of their strong suit. DF strategic implementation is based on hiring local managers directly or transferring seasoned managers from their soft drink and snack food divisions. The DF disdain for JVs is clearly reflected by their participation in only those JVs where local partnering was mandatory (e.g. China) to overcome regulatory barriers to entry. JVs had been the predominant strategy for BR which was unlike the DF outlook. Terralumen’s strategy was misaligned and out of sync with the DF strategy. This was unlike the complementarity that existed with BR’s strategy. This misalignment began to affect the JV relationship that had worked well with BR in the initial years. The failure of Terralumen and DF to recognize this fundamental cultural difference between their operational strategy styles i.e. Individualistic and Collectivism leads to their inability to proactively create steps for better alignment in the early period after acquisition, creating uncertainties and difficulties for both corporations. There is a lack of communication and virtually absence of trust between two new partners. DF appeared to be flexing its muscles in the relationship and using a more masculine approach compared to Terralumen’s more feminine approach. Both the corporations are strategically involved in a complex situation where they appear reluctant to address the issues at stake and move ahead together. The DF strategy of
Sears Holdings is a company built upon the heritage of Kmart and Sears stores, owner of many well-known brands, and is the provider of auto care and home remodeling. The company’s key operations are the stores in which it operates under the Kmart and Sears brands. Almost every state in the country has at least one Sears or Kmart store, and some U.S. territories also have locations. The company operates in the retail market, which is a highly lucrative industry, but has lost its ability to produce profits and to take charge as a leader in American
Organizational change is the altering of organizational structures and business strategy. As consumer preferences change, competition increases, and the economic environment fluctuates, business need to adapt to these changes to remain competitive. The management of Home Plus, a regional discount store, has proposed an increase of high-end products and a significant reduction in discount packaged goods. This is a change from the original business strategy in which the primary offerings were discount products. Before implementing the proposed strategy, Home Plus management must consider the benefits of the change and the consequences that may occur. As a member of the management team at Home Plus I disagree with the proposal to increase high-end
Companies all over the world varies but yet shares a common challenge, that is to solve problem not only effectively and efficiently but also creatively. The P-O-L-C framework which stands for Planning, Organising, Leading and Controlling plays a major role in both the company’s survivability and success. The SWOT analysis looks at both internal and external factors that can affect the Starbucks’s performance. The purpose of this report is to define and analyse how Starbucks respond and should have respond to the change of its external environment on the cofee market,This report will also identify and disscuss how The P-O-L-C framework and can help starbucks to compete and reduce the loss of their failing peformance in the Australian market and how SWOT analysis helps to define some externalities that can be a threat to Starbucks.
The main symptom and concern is that Scotts’ European sales had increased as expected, but margins had dropped, as well as synergies between the acquired companies were not working as expected. In addition, one of Scotts Europe’s largest customers was threatening to leave due to unacceptable service levels that might cause a domino effect to other large customers.