Since World War II, the world has notably changed regarding the exchange of goods, people and capital across the world. This is called globalization. In order to be able to compete in a global scale, firms have developed different ways of entering international markets.
What are the main foreign entry methods and their advantages and disadvantages?
To explain these aspects, PepsiCo can be used as a good example as it used to expand itself three strategies to tap new markets.
First of all, it made a Joint Venture, then proceeded to a company acquisition and finally made license agreement.
[...] The risks of entering this market were quite high. PepsiCo had to face a changing of culture and be aware of the changing trends, the changing of legislation, the currency and rates fluctuation. The advantages of a company acquisition are mainly about the competitor. As Sandora was already known and used in Ukraine, they got less reaction from the competitor, they avoided barrier to entry, and had a high speed access to resources. But a company acquisition is also very expensive and can generate a fear from the employees if they are not informed of the changing of style and head of management. [...]
[...] In November of the same year, they bought the 20% left. According to entrepreneur.com, a company acquisition is purchase of one corporation by another, through either the purchase of its shares, or the purchase of its assets”. The goal of PepsiCo was to enter an unknown market for them: Ukraine. For that they needed to find a company already well implanted in the market. Sandora is a market leader in the high growth juice category. It produces half of the total juice volume consumed in Ukraine. [...]
[...] This way PepsiCo can extend Ready-To-Drink range and enter eleven more countries including Taiwan and Korea in Asia, some countries in Europe and South Africa. The consummation of RTD in Asia is in extension and tea is seen as a traditional drink which makes this market favorable for PepsiCo. In other countries, this was seen as a healthy beverage and was hold in esteem by consumers. On the one hand, the advantages of such an option are mostly concerning the poor risks of the strategy. [...]
[...] (2000), Joint Venture in health care: an antitrust analysis, Chicago, American Bar Association, p.5 Ocean Spray www.oceanspray.com “Ocean Spray and PepsiCo form strategy alliance”, online, available from http://www.oceanspray.com/news/pr/pressrelease104.aspx, accessed on PepsiCo, www.pepsico.com, (2009), History”, online, available from http://www.pepsico.com/Company/Our-History.html, accessed on Quick MBA, www.quickmba.com, (2007), “Foreign market entry modes”, online, available from http://www.quickmba.com/strategy/global/marketentry/, accessed on Spethmann B., Promo www.promomagazine.com, (2006), “Ocean Spray harvest crans in cities; piggybacks pepsi distribution”, online, available from http://promomagazine.com/eventmarketing/oceanspray_pepsi_101106/, accessed on Wilkof N.J. and Burkitt D. (2005) Trade Mark Licensing, London, Sweet & Maxwell Ltd., p.1 Compare and contrast strategies for entry into named International markets. Explain the advantages and disadvantages of THREE different market entry methods, illustrating the market entry methods with examples of companies that have adopted different market entry methods into named international markets. [...]
[...] International Marketing: PepsiCo Since World War II, the world has changed increasing the exchange of goods, people and capital around the world. This is called globalization. In order to be able to compete on a global scale, firms have developed different ways of entering international markets. What are the main foreign entry methods and their advantages and disadvantages? To develop these points, PepsiCo is a good example as it used to expand itself three strategies to tap new markets. First of all, it made a Joint Venture, then proceeded to a company acquisition and finally made license agreement. [...]
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