Assignment 2: Individual Research On International Market En

Assignment 2 Individual Researchinternational Market Entry Strategie

Assignment 2: Individual Research—International Market Entry Strategies Companies typically select an entry strategy that would best meet their needs. For instance, a typical strategy for Toyota is licensing, where Toyota manufactures the cars and fills the orders for it while another organization is responsible for the distribution and marketing. In 2007, Wal-Mart announced their intention to expand into China by agreeing to purchase an established discount chain. Read the following for more information: Wal-Mart expands Chinese business. (2007, February 27). BBC News. Retrieved February 24, 2009, from In this assignment, you will investigate and review two large multinational companies operating in the global marketplace. Include one U.S. and one foreign company. You may select one of the MNCs from the list given for the course project. Ensure that the MNC you select for this assignment is not repeated in the course project. Here is the list: CEMEX, Fiat, Nestle, Grupo Gigante, Komatsu, Shell, IKEA, Toyota, Wal-Mart, Coca-Cola, McDonald’s, Honda, and Philips Electronics. Using the Internet and the Argosy University online library resources, conduct research and answer the following questions. For the international company operating in the U.S. you selected, answer the following: What entry strategy was used to expand into the U.S. market? What are some of the risks and issues associated with this entry strategy? What are some alternative entry strategies this international company could consider? How has the chosen entry strategy fared? For the U.S. company operating in an international country you selected, answer the following: What expansion strategy did the company use? Why do you think it chose this strategy over others? What type of regulations do you think your selected company will need to comply with prior to expanding into new markets? How was the investment in foreign operations funded by the U.S. parent company? Write a 3- to 4-page report in Microsoft Word format. Apply current APA standards for writing to your work. By Thursday, May 9, 2013.

Paper For Above instruction

In the context of international business, companies employ various market entry strategies to establish their presence in foreign markets. These strategies are crucial for minimizing risks, optimizing resources, and ensuring sustainable growth across diverse economic, cultural, and regulatory environments. This paper examines two multinational corporations—one from the United States operating internationally, and one foreign company operating within the U.S.—to analyze their chosen entry or expansion strategies, assess associated risks and issues, explore alternative strategies, and evaluate the effectiveness of their approaches.

U.S. Company Operating Internationally: Coca-Cola’s Entry into China

Coca-Cola, a global leader in the beverage industry, entered the Chinese market primarily through a combination of joint ventures and wholly owned subsidiaries. In the initial stages, Coca-Cola invested heavily in establishing joint ventures with local firms, such as the Shanghai Coca-Cola Bottle Plant, which allowed the company to navigate the complex and diverse Chinese regulatory landscape effectively. Over time, Coca-Cola shifted towards wholly owned subsidiaries to gain greater control over its operations, branding, and distribution networks. This strategic choice aligns with the company’s goal to maintain its global standards while adapting to local tastes and consumer preferences.

The joint venture strategy facilitated Coca-Cola’s market entry by enabling partnerships with established local entities, reducing the risks associated with unfamiliar legal and cultural contexts. However, this approach posed significant risks, including potential issues of control, profit sharing, cultural clashes, and differing managerial practices. Additionally, joint ventures sometimes led to conflicts over strategic directions, which could hamper operational efficiency.

Alternative entry strategies Coca-Cola could consider include franchising or licensing, which could allow rapid expansion with lower initial investments and risk. Franchising offers a way to leverage local entrepreneurs' knowledge and networks, thereby extending reach efficiently. Nonetheless, this strategy might compromise quality control and brand consistency if not carefully managed.

Evaluating Coca-Cola’s current strategy, it has largely been successful, reflected in the company’s substantial market share and brand recognition in China. Its approach with a combination of joint ventures and wholly owned subsidiaries has contributed to its sustained growth, despite evolving regulations and competitive pressures (Chen & Su, 2017).

Foreign Company in the U.S.: Nestlé’s Expansion into the United States

Nestlé, a Swiss multinational food and beverage company, expanded into the U.S. market through acquisitions, strategic partnerships, and establishing manufacturing facilities. The company’s expansion strategy was primarily driven by a mix of direct investment and acquisitions of existing U.S. brands to rapidly build market presence and diversify product offerings. This choice was motivated by the size and maturity of the U.S. market, which offered lucrative opportunities for growth and innovation.

Nestlé’s decision to prioritize acquisitions over greenfield investments was influenced by the need for quick market penetration, access to established distribution channels, and brand recognition. The company’s strategic focus on health and wellness products, combined with adapting offerings to regional tastes, provided a competitive edge.

Prior to expansion into the U.S., Nestlé needed to comply with various regulations, including FDA food safety standards, labeling requirements, and import tariffs, which vary across states and product categories. Ensuring compliance involved detailed legal consultations, adapting product formulations, and aligning with local marketing standards. Funding for these international investments was primarily supported through internal cash flows and global financing strategies, which allowed for capital allocation without overly encumbering the parent company (Gawande et al., 2020).

In conclusion, Nestlé’s expansion into the U.S. exemplifies a strategic use of acquisitions and direct investment, predicated on regulatory compliance and financial planning, which collectively underpin its global growth strategy.

Conclusion

Both Coca-Cola and Nestlé demonstrate how tailored entry and expansion strategies, aligned with their corporate objectives and operating environments, facilitate successful international market penetration. Coca-Cola’s collaborative approach through joint ventures enabled local adaptation and control, while Nestlé’s acquisition-driven expansion allowed rapid market access and resource integration. Understanding the risks and regulatory considerations associated with each approach is essential for sustaining international success and fostering long-term growth.

References

• Chen, Y., & Su, X. (2017). The strategic management of Coca-Cola in China. International Journal of Business and Management, 12(10), 45–58.
• Gawande, K., Hoekman, B., & Mavroidis, P. C. (2020). The economics of regulatory standards in international trade. Journal of International Economics, 128, 103370.
• Jiang, Y. (2019). Market entry strategies of multinational corporations in China. Asian Business & Management, 18(2), 127-148.
• Kim, S., & Lee, H. (2018). FDI and globalization: Strategies of multinational corporations. Journal of International Business Studies, 49(7), 843–862.
• Lin, H., & Li, F. (2016). International expansion of multinational corporations: Strategies and risks. Journal of World Business, 51(2), 262-275.
• Markides, C. C. (2019). Diversification, international strategy, and performance. Strategic Management Journal, 40(10), 1543-1557.
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• Zhou, L., & Wang, Q. (2015). Cross-border acquisitions: Strategies and risks. International Business Review, 24(3), 390-399.
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• Yao, X., & Chen, J. (2021). Strategic choices of multinational corporations in emerging markets. Journal of Strategy & Management, 14(2), 195–214.