Assume you are part of a Strategic planning team for a U.S Company. Your company

Question

Assume you are part of a Strategic planning team for a U.S Company. Your company is considering strategic opportunities abroad and your task is to assess the possibilities of entering a foreign market.

1) Select a country or countries you think might be a target market for your product or service (Your choice) and why you selected that business?

2) what typed of entry strategy would you suggest and why? what criteria did you use to determine your strategy? What risks does your strategy entail, and are the potential rewards worth those risks

3) What adjustments might you have to make to your business to be successful with your new venture?

Explanation / Answer

1.) Country can be selected on a number of variables like the governance structure of the country, the market conditions, the tax structure of the country, stability of the economy, average return on investment, efficiency of the country in passing the laws and structures, efficiency in the investment, cost of borrowing, number of domestic players already present in the market of the country, the competition in the market, whether the market is already saturated or not. On the basis of these variables likely to enter into India and/or China because of the growth prospects and the consumer demands for foreign goods is very high. Entering into the retail sector would be the best bet in such a scenario where consumer's maximum income goes in spending in the retail sector. 2. Naturally in the above mentioned countries there will be already domestic players and there might be some foreign players. The best bet in this case for a entry route can be to enter into the market via acquiring some of the home company and expanding it further because you will get a certain base where you can act upon and then expand slowly into other areas. (Consider the Case of Vodafone buying Hutch to enter into India) 3. Adjustments will be regarding the governance structure in the country which will work more efficiently. The company has to look for whether a governance structure that will minimize their transaction costs. Their product line has to be suited to the market taken under. Their work culture and ethics are important benefit for the home country.

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