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Foreign markets Strategic Entry Options
Most large companies with their distributorship or licensing agreements in other countries often consider having their own subsidiaries or having licensing agreements that are long term in nature in foreign nations to enable them carry out their businesses. These business arrangements have their costs as well as their benefits and these may vary from one country to the other depending on the economic standards, the political situation and the human recourses available in the given country.
In the case study given herein, the acquisition of the Tokyo Tee subsidiary by the USA based clothing manufacturer will have related costs such as the lengthy and expensive process of doing the legal paper work involved in the acquisition of the subsidiary. The US firm will also have to meet hefty costs of the professional fees, the accountants, the solicitors and the surveyors. The US firm will also have to contend with the several months’ worth of working capital that will assist in the cash flow of the obtained subsidiary. If there are shortcomings in the subsidiary, the buying company will have to inject in large sums on top of the purchasing price...
The US company will also have the burden of either honoring or renegotiating any outstanding contracts or agreements that the subsidiary had before they purchased. The US Company will also have to invest in investigating any other possible reason why the company is abandoning the subsidiary apart from the obvious stated reason. The US based company, upon purchasing the subsidiary will also have the burden of revamping and retraining of the members of staff in order to come to the levels they desire since the standards in Tokyo may not be the same as those in the USA firm.
There are advantages that are also associated with the buying of the subsidiary, these include the fact that the groundwork for the establishment of the business shall have been made already. In the event that the US based would like to get financing for this particular subsidiary after buying it, then it would be easy bearing the available track record of previous businesses. The subsidiary will also be beneficial in that it shall have already created market for its products hence there would be no…
Foreign Market & Exporting, Importing Q1.Strategies of International Business It is difficult to conceive of a business today which can ignore the availability of e-commerce as a method of connecting with consumers on an international basis. Through a website, a business can easily advertise and make available a wide range of products specifically tailored to a specific country's needs, far beyond what could be available in a brick-and-mortar store recently opened
Foreign Market Entry Diversification Foreign Market Entry and Diversification Why Diversify? Diversification is expanding a company's current operations by adding new markets, products, services or stages of production to its current portfolio. It is all about entering a single or a series of new business lines that differ from its current operations (Cengage, 2006). Murphy Auto Company (MAC) is one of the largest luxury automobile company which wishes to diversify and enjoy even
In this sense, one could consider launching several new brands, specifically adapted to the South African market, created especially for it. Second of all, in the markets where SAB is a challenger, the main strategic objective is the increase of the company's market share. The current activity in this sense, with the acquisition of several important brands, seems to have delivered the expected results. As a pointer, it is advisable
This strategy of investing face-time has continued to scale extremely well in the U.S., yet has faced many challenges in other nations that value data, hard numbers and strong methodologies to validate the claims of products. One nations' buyers of cosmetics in particular, the Japanese, are more focused on the specifics of the how a product is produced and want to know in great detail what the ingredients are
Strategic Management The Case for Diversification Deltacom/Earthlink is facing a challenging operating environment. As a regional player in an intensely-competitive market, we face an uncertain future. We acquired Deltacom in order to facilitate future growth, but a quick look at our financials indicates that our growth has flatlined and our profits declined to almost nothing last year (MSN Moneycentral, 2013). One of the issues is that there was considerable overlap between Earthlink
Strategic Management Mission and Vision Brocade Communications systems "provides innovative network solutions that helps the world's leading organizations transition smoothly to a virtualized world where applications and information can reside anywhere" (Brocade.com, 2013). The company notes that "these solution deliver the unique capabilities for a more flexible IT infrastructure with unmatched simplicity, non-stop networking, application optimization, and investment protection" (Ibid). This is the company's description of its business, and is not specifically billed