Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
¶ … Growth Strategy
Market Entry Strategy
There are a number of different options for the market entry strategy. These include licensing, joint venture and direct investment. For Target there are a number of considerations to make. First, the company just utilized the direct investment strategy in Canada, buying the real estate assets of a large chain of discount stores that went under. This move gave Target a large real estate footprint with which to work. Theoretically, that should have helped the company with things like economies of scale, but instead it was too big for Target to manage and the company suffered massive stockouts that may have set it back in that country years (Shaw, 2014). Target can view this one of two ways -- either it learned something from the experience and can enter the UK market most effectively via direct investment, or it should avoid direct investment and find a joint venture partner.
A joint venture gives Target the expertise to operate in the UK market, thereby flattening the learning curve. The downside is that Target, while sharing the risk, shares the rewards as well, and there is no guarantee that the JV partnership...
An alliance might help with certain things, like distribution, while allowing Target to handle the retailing side of things. However, the cost leadership strategy that Target follows demands that it exercise a high level of control over its supply chain -- it is risky to allow an alliance or joint venture partner have control over critical elements of the business model.
It is recommended, therefore, to utilize the direct investment strategy. The question then is what form that should take. Target was lucky enough that Zeller's the failed Canadian discounter, fell into its lap, allowing Target the opportunity to get large store spaces in anchor positions at a discounted price. It might have this luxury in the UK as well, if it is willing to wait. The reason for that is that right now in the UK there is a brutal supermarket war that could open the door for one of the weaker competitors in that market to sell out to Target, handing the American company some prime high street real estate to work with. Already food producers in the supply chain are going out of business and it is only a matter of time before a large…
References
Bermingham, F. (2014). Supermarket price war killing British food producers. International Business Times. Retrieved November 29, 2014 from http://www.ibtimes.co.uk/supermarket-price-war-killing-british-food-producers-1476283
QuickMBA. (2010). Foreign market entry modes. QuickMBA. Retrieved November 29, 2014 from http://www.quickmba.com/strategy/global/marketentry/
Shaw, H. (2014). Bare shelves and out-of-stock items at Target's Canadian stores 'unacceptable', says interim CEO. Financial Post. Retrieved November 29, 2014 from http://business.financialpost.com/2014/05/21/target-still-struggling-to-rebound-from-botched-canadian-expansion-and-hacker-attack/
UK Assessment This report discusses the market attractiveness of the United Kingdom. In particular the report explores the attractiveness of the Vodka segment of the Spirits industry. The industry has experienced a tremendous amount of growth in recent years and is not the fastest growing segment of the industry. The industry also employs thousands of people in the UK. Our report found that most of the Vodka that is sold in
(Minford; Walters, 2004, p. 306) (xii) Competition to the U.S. dollar: In the likelihood of UK joining the EMU and adopting the single currency, the threat posed by the only international competitor to the U.S. dollar, the euro, would become real. Therefore, the U.S., at least would not encourage such a move and witness a downturn to its currency, the only true international currency. (Minford; Walters, 2004, p. 306) However,
Target in the UK: Economic factors to consider for Target in the United Kingdom The American general retailer Target is considering expanding into the UK in the near or far future. The UK has several potentially attractive features for the American retailer, namely an English-speaking populace and recent GDP growth. "The Bank of England forecasts that Britain's economy will grow by 3.5% this year, which would be its best rate of
Market Entry Challenges in Asia Many companies want to move into Asia, but there are market entry challenges that have to be faced there. Still, Asia represents a very important and profitable market for many companies, and it is not unusual for these companies to draw major profits from their overseas operations. EBay, however, has many problems in the Asian markets, and has struggled with these issues in the past (Chan,
N.D.P.16). Indirect Investment Options The indirect investment option avails itself of two avenues: licensing agreements or branch or representative offices. "Foreign companies with patents, trademarks, or other intellectual property are free to enter into licensing agreements with local companies. Licensing has the advantage of limiting a foreign company's exposure, since the company need not set up an office or a joint venture" (Price Waterhouse Coopers. N.D.P.18). The branch or representative office
DOMINO'S PIZZA UK Domino's Pizza UK Domino's Pizza Domino's pizza PESTLE analysis This section focuses on the UK's political, economic, social, technological, legal, and environmental factors influencing the operations of Domino's pizza. Political Multinational firms in the fast food industry must adhere to particular political requirements like regulations of national minimum wages, which affect their costs. Quality and hygiene regulations vary between countries and influence the quality of items offered by companies such as Domino's pizza