Yellowdig Week 3 post

Prompt:

This week Professor Peloso discusses various generic entry strategies used by multinationals to enter foreign markets. One way gain a better appreciation of these strategies, and their respective pros and cons, is to find examples of firms using a specific strategy to enter a foreign market and to analyze the advantages and disadvantages of using that particular strategy.

For example, in the HBSP Coursepack reading, “The CEO of Heinz on Powering Growth in Emerging Markets,”( which you will be reviewing in Week 5), the CEO states that in most cases, his preferred strategy for entering emerging markets was to acquire local companies marketing similar consumer products. I think this mode of entry makes sense, not just for Heinz (famous for its ketchup and mustard), but also for other marketers of consumer products. In order to be profitable in emerging markets, multinationals ultimately need to produce locally to lower production and input costs, because they will typically need to charge lower retail prices to emerging markets consumers in order to penetrate the market. Acquisition of a local company provides ready access to local production facilities and wide distribution. If a multinational were to enter a market on its own (i.e., through greenfield operations) it would take a lot more time to achieve wide distribution, especially in emerging markets, where the distribution infrastructure can be quite different from those in developed countries. A potential disadvantage of this entry strategy: good local companies may not be available for purchase, or the multinational may have to pay a premium to acquire the local firm.

Just need a 40 word minimum of examples