Aims and background
Choosing an appropriate market entry mode is an important decision-making process for international businesses when they expand their business to foreign markets. Appropriate decision on entry mode is more likely to occur when solid analysis of the firm’s and the target markets’ situation are in place. By studying a real world case, this assignment is designed to help you consolidate your understanding on entry modes, the environment analysis associated with entry modes, and the strategic consideration behind entry mode choices. This activity also aims to sharpen your analytical skills and abilities for problem analysis and solving.
Procedures and questions:
1. Choose a real company from an automobile (car) industry which is involved in international business.
2. Identify an entry mode that has been used by the selected company when expanding its car business to a foreign market location. The identified case should be from 1990 and onward.
3. Answer all of the following questions:
Question 1) Is this entry mode appropriate for the target foreign market? Why? Answer this question by analysing:
• Strategic Consideration: a) Is this entry mode in line with the company’s then strategic direction? why?; b) Do you think the level of control, risks, return and integration associated with the entry mode is appropriate for the company’s strategy?
• Environmental factors: PESTEL Analysis of the foreign market location. You only need to analyse any 3 PESTEL factors that you think are most related to your case. Note you must analyse how the entry mode suits these 3 PESTEL factors.
• Whether the timing of entry and the scale of the entry are appropriate? Why
Question 2) Based on above analyses, what recommendations would you make to improve this entry?