Which strategy and Why?
"X Beauty" manufactures organic skin care products. They sell and manufacture their products in Canada and now want to expand to international markets. They don't mind taking risks, they have capital and want to keep control and the most profits. They know a few local companies in strategic markets that may be interested in a partnership.
Strategic alliance or Joint Venture or Wholly Owned Subsidiary
True or False.
In a multi-domestic strategy the company focuses on local requirements within each of its markets. Cost and efficiency is not a priority.
True
International, Global, or Transnational Strategy:
Nestlé benefits from economies of scale through its global sourcing, manufacturing, and distribution networks. They have centralized research and development facilities that work on core product technologies, which are then adapted for local markets. They also adjust their marketing and packaging to resonate with local cultures and languages.
Transnational Strategy
Chef X is a famous You Tuber that has over 24 million followers world wide. He wants to take advantage of his international recognition but at a minimal risk and he doesn't have too much time to get involved.
Licensing
True or False.
Different cultures, preferences and business practices is an advantage of expanding into international markets.
False
Exporting or Licencing
Tostadas Charras is a Mexican company that produces Mexican snack products, particularly tostadas and tortilla chips, to markets with significant Mexican or Hispanic populations, as well as consumer bases interested in Mexican flavours. They use established distribution networks to reach retail stores, including supermarkets and smaller grocery outlets.
Exporting
Mr and Mrs X opened a very successful cleaning service for offices in Regina. They rapidly expanded all through western Canada opening several offices in strategic locations in which they have full control. Now, they have a huge investment opportunity to expand to the US market. They think they are not going to be able to handle full operations in the US, but at the same time they want international presence, they don't mind not having full control, but they want their service quality to be consistent.
Franchising
Is a tool that helps a firm gauge the distance that the target country is from the firm’s home country on four dimensions: cultural, administrative, geographic and economic.
CAGE Framework
MrBeast partnered with Moose Toys to create the MrBeast Lab toy line. In this deal MrBeast agreed to do promotion of MrBeast Lab toy line while Moose Toys produces and distributes toys world-wide and has the right of using the MrBeast brand and associated concepts.
Licensing
Bio X Clean, a company specializing in eco-friendly industrial cleaning products, has achieved significant success in Canada. They've developed a unique, biodegradable cleaning agent that achieves excellent results while minimizing environmental impact. Bio X Clean now aims to expand to Germany and France, where environmental regulations are strict and they have a high demand for sustainable solutions. They lack the resources and presence to penetrate these markets on their own. While researching about these markets they found two local well-knowned companies that have industrial cleaning products in their portfolio but non of them is eco-friendly.
Joint Venture
Which international strategy allows a company full own and control a foreign subsidiary, allowing
it to enter a new market independently without partnership or local ownership?
Apple and Beats Electronics is an example
Wholly Owned Subsidiary
MIDAS is an American auto repair company that uses two international strategies:
1.- They sell their brand name and business processes to local entrepreneurs in North America.
2.- In other international locations they also sell their image for products.
Franchising and Licensing
Grow X, a successful mid-sized agricultural technology company based in Canada, specializes in irrigation systems. They are now looking to expand internationally. Their target market is the agricultural sector in Indonesia, a region with a high demand for water-efficient farming solutions. However, Indonesia presents several challenges: complex regulatory hurdles, a distinct local business culture, and established local competitors with strong distribution networks.
Strategic Alliance
Mention two advantages of expanding to international markets
Access to new customers
Lowering costs
Diversification of business risks
Enhanced brand recognition
Bombardier Aerospace partnered with China for the production of regional jets. These strategy allowed Bombardier to access the rapidly growing Chinese aviation market while sharing the significant development and manufacturing costs.
Strategic Alliance