In this exercise, we want to apply the four types of global strategy. Imagine yo

Question

In this exercise, we want to apply the four types of global strategy. Imagine your group works for Clif Bar (www.clifbar.com). Founded in 1992, the firm makes nutritious, all natural food and drinks for sport and healthy snacking. Clif Bar is a privately held company with some 200 employees. About 20 percent of the company is owned by the employees through an employee-stock-ownership program (ESOP). The vast majority of Clif Bar's sales are in the United States. The firm has some distribution set up in Canada (since 1996) and the United Kingdom (since 2007). As of 2013, Clif Bar sells its products via the website in six countries: Austria, Canada, Germany, Japan, New Zealand, and Switzerland.

1. Apply the CAGE distance framework to the six international countries where Clif Bar is operating. What is the relative distance of each to the United States? Rank the order of the six countries in terms of relative distance.

2. Can you recommend three or four other countries Clif Bar should enter? Support your recommendations. (depending on existing global strategy)

Explanation / Answer

Solution:-
1. Result of CAGE fraework as below

2. The result of the CAGE framework is as above. As per above, it is prudent to enter most of the above countires except maybe Austria where the distance is higher as per CAGE framework

3. Clif Bar can consider entering following countries:-

Canada
Mexico
India
The basis of suggesting these countries is geogrpahical & cultural proximity in case of first two countries. For India, the adminitrative proximity combined with common English language makes it an attractive proposition.

4. The firm should skim the market first in target countries through a joint venture with a local partner in those countries where the cultural, economic & administrative framework is stable and similar. By engaging a joint venture it will be able to handle the local nuances and mitigate the country risk to a certain extent without undertaking unnecessary exposure.

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