You are an International Business consultant. You have been hired by a small com
ID: 422557 • Letter: Y
Question
You are an International Business consultant. You have been hired by a small company, Popper’s Ltd. , which specializes in high quality microwave gourmet popcorn featuring different and unique seasonings, such as nacho cheese, seaweed, and cinnamon crunch. The popcorn is certified in North America as being ”Organic” [ no synthetic fertilizers or pesticides used during production of the popcorn]. This company has been highly successful in the North American market (Canada, U.S., Mexico) and would like to begin to export its products to other countries, such as Australia, China, and Spain. You are asked to provide advice on the following:
a) Based on the description of this company, which entry mode or modes would you recommend as being most appropriate and effective? Explain why you would choose this entry strategy and discuss the advantages and disadvantages of the entry mode(s) you have chosen.
b) In considering international expansion, what factors would you take into account to determine which international market/markets you will enter? What decisions would you make with regard to timing and scale of entry?
c) What specific recommendations would you give to the company about adaptations/modifications which may have to be made to the product attributes [ organic, microwave gourmet popcorn] in order to satisfy international market requirements? What other considerations should Popper’s make in preparing to sell their product in the international market ?
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2.You are the Vice-President of Manufacturing for a company which manufactures heavy equipment, such as tractors, earth-movers, and bulldozers. You are a leader in the industry, recognized for patented cutting edge technology and high quality. The company manufactures in a few, select locations around the world in factories that it owns. The company expanded into international markets pursuing a strategy somewhere between “international” and “localization.” At this time, however, the company has started facing very significant pressures for cost-reductions from international competitors and largely increased pressures to localize the equipment to meet the unique conditions of each market. There are companies in low-cost international locations which have offered to manufacture the heavy equipment at relatively lower costs. You advise the Executive Committee that the company must review and evaluate its overall strategy and manufacturing policies in order to remain competitive.
a) Based on the current situation, which of the four strategic approaches should the company pursue?” Explain your choice.
b) Given the pressures that the company faces, would you recommend that the company continue to “make” their own equipment or should they consider “buying” or outsourcing? Explain what the advantages and disadvantages would be of your recommendation about “making” vs. “buying” in this particular situation.
Explanation / Answer
a) Considering Popper’s Ltd has created a strong business niche in North America and it has a unique distinction of being produced and cooked in an organic condition, It can easily attract the customers overseas.
Among all the available entry modes, Licensing & Franchising would be the best option to expedite its business in new markets such as China, Australia or other countries
This choice is driven by the recent business success of giant food outlets such as KFC and McDonalds where they offered its franchise to local people who could drive its business to the local market. This strategy ensure a faster expedition as in this scenario Pooper’s limited need not to jump into the local market and thereby saving its time in arranging the logistics.
But on the other one of the major disadvantages with this mode of entry would be Popper’s limited would not be having the complete hold on its business and sometimes it can face business loss due to local disturbances such as employee strike or any other geopolitical issues.
b) In considering international expansion, some of the key factors which could be considered for its business expansion would be-
c) Business adaptability and understanding the local market’s requirement is the main recommendation which I would lend to the Popper limited. Keeping flexible business attitude and brining in some local flavors to the popcorns would certainly bring the company to the forefront of the business.
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