市場進(jìn)入戰(zhàn)略的商務(wù)管理dissertation
12-09, 2014
進(jìn)入方式是當(dāng)一家公司進(jìn)入新市場所制定的一種基本的決策，因為不假思索的進(jìn)入市場這一選擇約束了公司的生產(chǎn)與銷售戰(zhàn)略。隨著經(jīng)濟(jì)全球化的發(fā)展，大多數(shù)的跨國公司都把目光集中于新興市場，比如巴西，中國和印度。這一做法的主要原因是新興市場有著能夠形成高利潤和投資機(jī)會的潛力。新興經(jīng)濟(jì)體的主要吸引力就是其對于生活消費品的需求量正快速的增加，并且有著很高的經(jīng)濟(jì)增長速度。這些新興市場國家對于外商直接投資也有著更大的吸引力。因此，全球大多數(shù)的跨國企業(yè)都試圖進(jìn)入新興經(jīng)濟(jì)體的國內(nèi)市場，從當(dāng)?shù)剌^低的生產(chǎn)成本中獲取好處。所以，跨國公司一直以來都設(shè)法發(fā)展不同的戰(zhàn)略和新的業(yè)務(wù)來完成他們的期望。
由于產(chǎn)業(yè)結(jié)構(gòu)，體系和宏觀經(jīng)濟(jì)的不斷變化，新興經(jīng)濟(jì)通常都十分的不穩(wěn)定。這種不穩(wěn)定性為有靈活戰(zhàn)略來應(yīng)對變化和抓住新商機(jī)的跨國公司提供了巨大的競爭優(yōu)勢(邁耶，克勞斯，特倫，2006)。作出正確的市場進(jìn)入戰(zhàn)略將會影響到跨國公司的表現(xiàn)以及其他的市場戰(zhàn)略。因此，企業(yè)將會一直選擇正確的進(jìn)入戰(zhàn)略來幫助實現(xiàn)其目標(biāo)。
The mode of entry is a fundamental decision a firm makes when it enters a new market because the choice of entry automatically constrains the production and marketing strategy of the firm. With the globalization of economies most of the MNC’s (Multinational companies) are focuses on entering in to large emerging markets like Brazil, China and India. The major reason for this is emerging markets have the potential of generate high profitable businesses and investment opportunities. The major attraction of emerging economies is their rapidly increasing demand for consumer goods and the high economic growth. Also these countries are more attractive to FDI (Foreign direct investments). So that most of MNC’s are in the world attempt to access the domestic markets and to take the advantage of the low local cost of production in the emerging markets. Therefore MNC’s always try to develop different strategies and new business models to fulfil their expectations.
Emerging economies are normally highly unstable due to the regular changes in industry structure, institutions and macro-economy. This instability provides a huge competitive advantage to the MNC’s with the tactical flexibility to face the changes and grip new business opportunities (Meyer, Klaus E. & Tran, Yen Thi Thu 2006). Making the correct entry strategy will impact the MNC’s performance and the other marketing strategies as well. Therefore firms will always try to choose the correct entry strategy which helps to achieve their objectives.
Factors affecting the mode of entry
There are several internal and external factors will affect when choosing an entry mode to the emerging markets. These factors are as follows.#p#分頁標(biāo)題#e#
Market size and growth
Risk of doing business
Government rules and regulations
Competitiveness of the environment
Local Infrastructure
Internal capabilities and resources
Market size and growth
Market size and growth is one of the key identifier of entry choice decisions make by the firms. Large scale markets justify main resource commitments in the form of fully owned subsidiaries or joint ventures.
Risk of doing business
When selecting an entry mode risk is a very important factor to be concerned. Mainly the risk is relating to the economic and political environment of the emerging markets that may impact the firm’s business activities.
Government rules and regulations
Government rules and regulations will directly impact to the MNC’s entry choice decision. Different type of trade barriers will restrict the firm’s entry choice decision. Hence before enter in to the emerging markets; MNC’s should carefully analyze the government’s rules and regulations.
Competitiveness of the environment
The competitive nature of the local market is another factor which impacts the firm’s entry strategy to the emerging markets. There might be some local firms exists in emerging markets with a good customer base. Therefore this firm’s competitiveness will directly affect to MNC’s operations in that particular country.
Local Infrastructure
The local infrastructure refers to country’s transport, communication and distribution network. If the local infrastructure is week in the country MNC’s has to bear additional costs when enter in to that market.
Internal Capabilities and recourses
Internal capabilities and resources will be a critical factor when choosing an entry strategy to an emerging market. If the firms are equipped with internal capabilities and resources, it will be very easier for the firms to start up operations in the emerging markets.
Different type of entry strategies used by the MNC’s
There are different types of entry strategies available for MNC’s to enter in to foreign market. MNC’s can choose any of below entry strategies or some combination of those strategies to enter emerging markets. Entry strategies can be broadly classified in to two categories.
Strategic alliances ( Collaboration)
Standalone Entries
Standalone entries are done by the firms which think that they have enough capacity in taking capital risk and willing to get the knowledge associated with the new markets over the time. The main drawback of this strategy is that it will take long time period to establish local market position and lack of market knowledge can lead to significant errors in the business operations. On the other hand this standalone strategy has advantages such as high degree of control over business operations, quality and intellectual properties (Accenture 2011).#p#分頁標(biāo)題#e#
Most of the time none of any firm would like to share business or profit that expects from any markets. Generally firms are forced to form strategic alliances when entering in to new markets. Capacity to take risk, experience about the market and technology will affect strategic alliance decisions. The nature of the strategic alliance normally depends on what complimentary resources the western company is looking for in its local partner (Prater, E 2001).These strategic alliances can be divided in to following types.
Exporting
International Licensing
International Franchising
Contract Manufacturing ( Out Sourcing )
Joint Ventures
Exporting
Exporting is the straightforward and less risky method for a MNC to begin its global expansion of businesses. This can be done directly, when the firm develops its own relationship with the customers in the emerging markets. Also it can be perform indirectly via international intermediaries. Direct exporting involves high risk and effort when compared to the use of intermediaries. However it allows firm to learn fast on doing business abroad and helps to create good long term relationships with the customers. The use of intermediaries arises when the firm doesn’t have enough experience on international business and face difficulties in finding proper marketing channels. Intermediaries will provide the expertise knowledge for the firms to conduct their businesses in an efficient manner. They also provide assistance in handling official documentation and logistic services (UNIDO 2006).
International licensing
Licensing is an effective way for a company to expand its operations to overseas. Licensing symbolize deeper level of assurance to internalization and high risk when compare to exporting. Under a licensing agreement the licensor or the company allows a foreign MNC, designated as licensee, to use its intellectual property assets such as trade marks and patents, for the purpose of manufacturing and sale of the firm’s products. Licensee has to pay a royalty for the rights granted by the licensor. This royalty is normally pays as a percentage of the licensed products. With the licensing method, it is not necessary to for the firm to invest in the foreign country. The licensee will take care of all marketing and administration activities in that particular country. However there might be some disadvantages such as income will depend on the licensee; licensee can be a potential competitor etc. (UNIDO 2006)
International franchising
Franchising has been known as an effective way for firms to internationalize and broaden their business activities worldwide. In some instances franchising can be treated as a certain form of licensing. However in contemporary context, licensing and franchising are considerably different concepts. Under the franchising, franchisor (Owner of the business) allows another company in a particular country or franchisee, to replicate the business according to the same concept and quality standards. The franchisor will provide all product specifications, marketing plan, technical knowledge and staff training. As a market entry strategy franchising has so many advantages. MNC’s can expand their business overseas with a minimum amount of investment. Mostly franchisor can use the franchisee’s knowledge of the local marketplace because they have a better understanding of local customs and laws. On the other hand the major drawback of the franchising is the lack of control over the franchisee’s operations in that particular country. Also if the franchisee has less global reputation, it is very difficult to find a franchisee or partner in the foreign markets. In some instances franchisors has to introduce products which suits to the culture of that particular country. As an example Mc Donald’s has introduced Maharaja Burger in India as most of the people are vegetarians.#p#分頁標(biāo)題#e#
Contract Manufacturing (Out Sourcing)
Under the contract manufacturing the MNC come to an agreement with local firm to produce or assemble the parts of the products or some times even the entire product. The marketing of that product is still doing by the MNC. Low cost is the principal motivation factor of the contract manufacturing. The MNC’s can achieve significant cost savings by sourcing the products in a low wage country. In general, the countries of choice are locations that have comparative labour cost advantage. Also cost savings can be achieved through low energy and material costs in the particular country. Contract manufacturing will help the firm to focus on their core competences such as product development and design. The major problem with contract manufacturing is that it’s offer less flexibility to respond to unexpected market demand changes.
Joint ventures
Nowadays joint ventures have proven that it is the most feasible way to enter foreign markets, especially merging markets. Under the joint venture, the foreign company agrees with local company to share equity and other resources to launch new entity in the host country. Basically joint ventures can be distinguished in to 3 based on the equity stake.
Majority ( More than 50% ownership )
Fifty- Fifty
Minority ( 50% or less ownership )
Huge infrastructure or high technological projects that required large amount of money and expertise knowledge generally involve multiple local and foreign partners. Another difference is between equity and corporative joint ventures. A corporate joint venture is a contract for the partners to collaborate. However this doesn’t involve any equity investments. As an example, one partner may contribute manufacturing technology whereas the other partner of the contract will provide the access to distribution channel. Corporative joint ventures are quite familiar for partnerships between well recognized MNC’s and local players in emerging markets. An equity joint venture is an agreement where the partners agree to raise capital in proportion to the equity holds. Joint ventures involve much more control over the operations when compared to other entry modes mentioned earlier. The local partner of the joint venture will bring positive contributions such as raw material, land, expertise knowledge on the local environment ( Legal and culture) and access to the local distribution network and the good relationship with suppliers etc.
Local collaboration as only successful entry strategy
Local Collaboration will help MNC’s to enter to the market in an effective way.MNC’s that can encourage and support collaboration will be able to control their dispersed capabilities and resources in joint ventures and other subsidiaries across the globe (Harvard Business Press 2010). Local collaboration allows western MNC’s to extend its competitive advantage in to more locations quickly and with reduced market uncertainty and cost. This enables firm to focus on developing core competencies through its resources. Another benefit is that the local partner can provide the knowledge of the local economic conditions or the product specific knowledge. Local collaboration will also help to overcome governmental constraints. Some emerging markets may prohibit or limit the involvement of western firms in certain industries or discriminates again foreign firms through high tariffs. However western firms will be able to overcome such obstacles through collaboration with a local partner. Local collaboration will also help to create a good customer relationship in that particular country with the existing reputation of the local partner. So that MNC’s doesn’t require allocating more funds for the marketing activities. Ultimately this collaboration has a potential to create a “win-win” situation where western firm and local player both get benefited.#p#分頁標(biāo)題#e#
Examples for local collaboration in BRIC countries
China
Nowadays china is known as most attractive business location in the world. Collaboration with Chinese companies has become a vital value creating strategy for many western companies. Western firms need to proceed in a different way than they would have invested in their home nations. There are significant political risk and cultural barriers can be seen in China and it is not that much easy for a western firm to start up a business in China (Caitlin Long 2009).
Due to the above reasons most of western firms have teamed up with local Chinese partners to start businesses. Western companies in different industries have started businesses in China through Joint ventures and alliances.
BorgWarner, a global supplier of vehicle parts and systems, make an innovative Joint venture in China to introduce its dual clutch technology .By partnering with 12 of largest Chinese automotive manufactures, BorgWarner was able to speed up acceptance of this technology in the Chinese market. The automotive manufactures each hold a small interest in the joint venture through an investment vehicle, while BorgWarner maintains a two-third stake. This joint venture enables BorgWarner to get quick marketplace acceptance in China (Deloitte 2011).
The largest coffeehouse in the world the Star bucks entered to the China market in 1999 with different partners in three regions. For northern China, Starbucks has given permission to Beijing Meida Coffee to establish its brand. This firm is 90% owned by a Hong Kong based company. A leading Chinese dairy held the remaining shares. For Shanghai and eastern China’s Jiangsu and Zhejian provinces, Starbucks started a joint venture with the Taiwan based Uni-President group. At the initial stage Starbucks only held a 5% holding. In 2003 Starbucks increased it’s holding to 50% after paying $ 21.3 million to its partner. A similar arrangement existed for southern China region, which Starbucks entered through a joint venture with Maxim’s. The removal of restrictions on foreign investment in the retail industry at the end of 2004, due to China’s World Trade Organization membership, also enables Starbucks to expand its operations in China (Asia Times 2006).
India
India is considered as one of the fast growing emerging economies in the world. Recently Indian government has become more open towards foreign direct investment through liberalization and deregulation of the market place. Therefore most of western MNC’s are keen to expand their business to the Indian market. Western firms are tried to collaborate with local firms to gain the competitive advantage quickly in the Indian market.
One of the world largest fast food restaurants, the McDonald’s has entered to the Indian Market in 1996. McDonald’s has expanded their operations in India through two joint venture companies know as Connaught Plaza restaurants and Hardcastle restaurants. Macdonald’s has 50% equity holding each in both joint venture companies. Six years before to the opening of first McDonald’s restaurant in India, McDonald’s and its international supplier partners worked together with local partners to develop products that up to McDonald’s superior quality standards. Some part of this development project involved the transfer of state of the art food processing technology, which has enabled Indian local partners to improve their capacity to compete in today’s international markets (Dileshtare 2004). Therefore this local collaboration has caused McDonald’s to enter Indian market with out any high risk.#p#分頁標(biāo)題#e#
In 1980’s four Japan’s leading car manufactures enter to the Indian market. Toyota, Mitsubishi, Mazda and Nissan are the firms which entered India through joint ventures with Indian companies. This entrance has created a great opportunity for these firms to cater to the light commercial vehicle market in India.
Brazil
Brazil is known as the largest market in Latin America and the world’s fifth most populous country (IFM & Capgemini 2008). In present Brazil is considered as a more profitable invest location. Therefore lot of MNC’s try to expand their businesses to Brazil.
World’s most popular chicken restaurant chain, the KFC has entered to the Brazilian market in 2007. KFC started the business with an alliance with Brazil Fast Food Corporation. Therefore this alliance helped KFC to gain an extensive knowledge about the Brazilian culture and the market place (Anna Brewer 2012).
由于產(chǎn)業(yè)結(jié)構(gòu)，體系和宏觀經(jīng)濟(jì)的不斷變化，新興經(jīng)濟(jì)通常都十分的不穩(wěn)定。這種不穩(wěn)定性為有靈活戰(zhàn)略來應(yīng)對變化和抓住新商機(jī)的跨國公司提供了巨大的競爭優(yōu)勢(邁耶，克勞斯，特倫，2006)。作出正確的市場進(jìn)入戰(zhàn)略將會影響到跨國公司的表現(xiàn)以及其他的市場戰(zhàn)略。因此，企業(yè)將會一直選擇正確的進(jìn)入戰(zhàn)略來幫助實現(xiàn)其目標(biāo)。
The mode of entry is a fundamental decision a firm makes when it enters a new market because the choice of entry automatically constrains the production and marketing strategy of the firm. With the globalization of economies most of the MNC’s (Multinational companies) are focuses on entering in to large emerging markets like Brazil, China and India. The major reason for this is emerging markets have the potential of generate high profitable businesses and investment opportunities. The major attraction of emerging economies is their rapidly increasing demand for consumer goods and the high economic growth. Also these countries are more attractive to FDI (Foreign direct investments). So that most of MNC’s are in the world attempt to access the domestic markets and to take the advantage of the low local cost of production in the emerging markets. Therefore MNC’s always try to develop different strategies and new business models to fulfil their expectations.
Emerging economies are normally highly unstable due to the regular changes in industry structure, institutions and macro-economy. This instability provides a huge competitive advantage to the MNC’s with the tactical flexibility to face the changes and grip new business opportunities (Meyer, Klaus E. & Tran, Yen Thi Thu 2006). Making the correct entry strategy will impact the MNC’s performance and the other marketing strategies as well. Therefore firms will always try to choose the correct entry strategy which helps to achieve their objectives.
Factors affecting the mode of entry
There are several internal and external factors will affect when choosing an entry mode to the emerging markets. These factors are as follows.#p#分頁標(biāo)題#e#
Market size and growth
Risk of doing business
Government rules and regulations
Competitiveness of the environment
Local Infrastructure
Internal capabilities and resources
Market size and growth
Market size and growth is one of the key identifier of entry choice decisions make by the firms. Large scale markets justify main resource commitments in the form of fully owned subsidiaries or joint ventures.
Risk of doing business
When selecting an entry mode risk is a very important factor to be concerned. Mainly the risk is relating to the economic and political environment of the emerging markets that may impact the firm’s business activities.
Government rules and regulations
Government rules and regulations will directly impact to the MNC’s entry choice decision. Different type of trade barriers will restrict the firm’s entry choice decision. Hence before enter in to the emerging markets; MNC’s should carefully analyze the government’s rules and regulations.
Competitiveness of the environment
The competitive nature of the local market is another factor which impacts the firm’s entry strategy to the emerging markets. There might be some local firms exists in emerging markets with a good customer base. Therefore this firm’s competitiveness will directly affect to MNC’s operations in that particular country.
Local Infrastructure
The local infrastructure refers to country’s transport, communication and distribution network. If the local infrastructure is week in the country MNC’s has to bear additional costs when enter in to that market.
Internal Capabilities and recourses
Internal capabilities and resources will be a critical factor when choosing an entry strategy to an emerging market. If the firms are equipped with internal capabilities and resources, it will be very easier for the firms to start up operations in the emerging markets.
Different type of entry strategies used by the MNC’s
There are different types of entry strategies available for MNC’s to enter in to foreign market. MNC’s can choose any of below entry strategies or some combination of those strategies to enter emerging markets. Entry strategies can be broadly classified in to two categories.
Strategic alliances ( Collaboration)
Standalone Entries
Standalone entries are done by the firms which think that they have enough capacity in taking capital risk and willing to get the knowledge associated with the new markets over the time. The main drawback of this strategy is that it will take long time period to establish local market position and lack of market knowledge can lead to significant errors in the business operations. On the other hand this standalone strategy has advantages such as high degree of control over business operations, quality and intellectual properties (Accenture 2011).#p#分頁標(biāo)題#e#
Most of the time none of any firm would like to share business or profit that expects from any markets. Generally firms are forced to form strategic alliances when entering in to new markets. Capacity to take risk, experience about the market and technology will affect strategic alliance decisions. The nature of the strategic alliance normally depends on what complimentary resources the western company is looking for in its local partner (Prater, E 2001).These strategic alliances can be divided in to following types.
Exporting
International Licensing
International Franchising
Contract Manufacturing ( Out Sourcing )
Joint Ventures
Exporting
Exporting is the straightforward and less risky method for a MNC to begin its global expansion of businesses. This can be done directly, when the firm develops its own relationship with the customers in the emerging markets. Also it can be perform indirectly via international intermediaries. Direct exporting involves high risk and effort when compared to the use of intermediaries. However it allows firm to learn fast on doing business abroad and helps to create good long term relationships with the customers. The use of intermediaries arises when the firm doesn’t have enough experience on international business and face difficulties in finding proper marketing channels. Intermediaries will provide the expertise knowledge for the firms to conduct their businesses in an efficient manner. They also provide assistance in handling official documentation and logistic services (UNIDO 2006).
International licensing
Licensing is an effective way for a company to expand its operations to overseas. Licensing symbolize deeper level of assurance to internalization and high risk when compare to exporting. Under a licensing agreement the licensor or the company allows a foreign MNC, designated as licensee, to use its intellectual property assets such as trade marks and patents, for the purpose of manufacturing and sale of the firm’s products. Licensee has to pay a royalty for the rights granted by the licensor. This royalty is normally pays as a percentage of the licensed products. With the licensing method, it is not necessary to for the firm to invest in the foreign country. The licensee will take care of all marketing and administration activities in that particular country. However there might be some disadvantages such as income will depend on the licensee; licensee can be a potential competitor etc. (UNIDO 2006)
International franchising
Franchising has been known as an effective way for firms to internationalize and broaden their business activities worldwide. In some instances franchising can be treated as a certain form of licensing. However in contemporary context, licensing and franchising are considerably different concepts. Under the franchising, franchisor (Owner of the business) allows another company in a particular country or franchisee, to replicate the business according to the same concept and quality standards. The franchisor will provide all product specifications, marketing plan, technical knowledge and staff training. As a market entry strategy franchising has so many advantages. MNC’s can expand their business overseas with a minimum amount of investment. Mostly franchisor can use the franchisee’s knowledge of the local marketplace because they have a better understanding of local customs and laws. On the other hand the major drawback of the franchising is the lack of control over the franchisee’s operations in that particular country. Also if the franchisee has less global reputation, it is very difficult to find a franchisee or partner in the foreign markets. In some instances franchisors has to introduce products which suits to the culture of that particular country. As an example Mc Donald’s has introduced Maharaja Burger in India as most of the people are vegetarians.#p#分頁標(biāo)題#e#
Contract Manufacturing (Out Sourcing)
Under the contract manufacturing the MNC come to an agreement with local firm to produce or assemble the parts of the products or some times even the entire product. The marketing of that product is still doing by the MNC. Low cost is the principal motivation factor of the contract manufacturing. The MNC’s can achieve significant cost savings by sourcing the products in a low wage country. In general, the countries of choice are locations that have comparative labour cost advantage. Also cost savings can be achieved through low energy and material costs in the particular country. Contract manufacturing will help the firm to focus on their core competences such as product development and design. The major problem with contract manufacturing is that it’s offer less flexibility to respond to unexpected market demand changes.
Joint ventures
Nowadays joint ventures have proven that it is the most feasible way to enter foreign markets, especially merging markets. Under the joint venture, the foreign company agrees with local company to share equity and other resources to launch new entity in the host country. Basically joint ventures can be distinguished in to 3 based on the equity stake.
Majority ( More than 50% ownership )
Fifty- Fifty
Minority ( 50% or less ownership )
Huge infrastructure or high technological projects that required large amount of money and expertise knowledge generally involve multiple local and foreign partners. Another difference is between equity and corporative joint ventures. A corporate joint venture is a contract for the partners to collaborate. However this doesn’t involve any equity investments. As an example, one partner may contribute manufacturing technology whereas the other partner of the contract will provide the access to distribution channel. Corporative joint ventures are quite familiar for partnerships between well recognized MNC’s and local players in emerging markets. An equity joint venture is an agreement where the partners agree to raise capital in proportion to the equity holds. Joint ventures involve much more control over the operations when compared to other entry modes mentioned earlier. The local partner of the joint venture will bring positive contributions such as raw material, land, expertise knowledge on the local environment ( Legal and culture) and access to the local distribution network and the good relationship with suppliers etc.
Local collaboration as only successful entry strategy
Local Collaboration will help MNC’s to enter to the market in an effective way.MNC’s that can encourage and support collaboration will be able to control their dispersed capabilities and resources in joint ventures and other subsidiaries across the globe (Harvard Business Press 2010). Local collaboration allows western MNC’s to extend its competitive advantage in to more locations quickly and with reduced market uncertainty and cost. This enables firm to focus on developing core competencies through its resources. Another benefit is that the local partner can provide the knowledge of the local economic conditions or the product specific knowledge. Local collaboration will also help to overcome governmental constraints. Some emerging markets may prohibit or limit the involvement of western firms in certain industries or discriminates again foreign firms through high tariffs. However western firms will be able to overcome such obstacles through collaboration with a local partner. Local collaboration will also help to create a good customer relationship in that particular country with the existing reputation of the local partner. So that MNC’s doesn’t require allocating more funds for the marketing activities. Ultimately this collaboration has a potential to create a “win-win” situation where western firm and local player both get benefited.#p#分頁標(biāo)題#e#
Examples for local collaboration in BRIC countries
China
Nowadays china is known as most attractive business location in the world. Collaboration with Chinese companies has become a vital value creating strategy for many western companies. Western firms need to proceed in a different way than they would have invested in their home nations. There are significant political risk and cultural barriers can be seen in China and it is not that much easy for a western firm to start up a business in China (Caitlin Long 2009).
Due to the above reasons most of western firms have teamed up with local Chinese partners to start businesses. Western companies in different industries have started businesses in China through Joint ventures and alliances.
BorgWarner, a global supplier of vehicle parts and systems, make an innovative Joint venture in China to introduce its dual clutch technology .By partnering with 12 of largest Chinese automotive manufactures, BorgWarner was able to speed up acceptance of this technology in the Chinese market. The automotive manufactures each hold a small interest in the joint venture through an investment vehicle, while BorgWarner maintains a two-third stake. This joint venture enables BorgWarner to get quick marketplace acceptance in China (Deloitte 2011).
The largest coffeehouse in the world the Star bucks entered to the China market in 1999 with different partners in three regions. For northern China, Starbucks has given permission to Beijing Meida Coffee to establish its brand. This firm is 90% owned by a Hong Kong based company. A leading Chinese dairy held the remaining shares. For Shanghai and eastern China’s Jiangsu and Zhejian provinces, Starbucks started a joint venture with the Taiwan based Uni-President group. At the initial stage Starbucks only held a 5% holding. In 2003 Starbucks increased it’s holding to 50% after paying $ 21.3 million to its partner. A similar arrangement existed for southern China region, which Starbucks entered through a joint venture with Maxim’s. The removal of restrictions on foreign investment in the retail industry at the end of 2004, due to China’s World Trade Organization membership, also enables Starbucks to expand its operations in China (Asia Times 2006).
India
India is considered as one of the fast growing emerging economies in the world. Recently Indian government has become more open towards foreign direct investment through liberalization and deregulation of the market place. Therefore most of western MNC’s are keen to expand their business to the Indian market. Western firms are tried to collaborate with local firms to gain the competitive advantage quickly in the Indian market.
One of the world largest fast food restaurants, the McDonald’s has entered to the Indian Market in 1996. McDonald’s has expanded their operations in India through two joint venture companies know as Connaught Plaza restaurants and Hardcastle restaurants. Macdonald’s has 50% equity holding each in both joint venture companies. Six years before to the opening of first McDonald’s restaurant in India, McDonald’s and its international supplier partners worked together with local partners to develop products that up to McDonald’s superior quality standards. Some part of this development project involved the transfer of state of the art food processing technology, which has enabled Indian local partners to improve their capacity to compete in today’s international markets (Dileshtare 2004). Therefore this local collaboration has caused McDonald’s to enter Indian market with out any high risk.#p#分頁標(biāo)題#e#
In 1980’s four Japan’s leading car manufactures enter to the Indian market. Toyota, Mitsubishi, Mazda and Nissan are the firms which entered India through joint ventures with Indian companies. This entrance has created a great opportunity for these firms to cater to the light commercial vehicle market in India.
Brazil
Brazil is known as the largest market in Latin America and the world’s fifth most populous country (IFM & Capgemini 2008). In present Brazil is considered as a more profitable invest location. Therefore lot of MNC’s try to expand their businesses to Brazil.
World’s most popular chicken restaurant chain, the KFC has entered to the Brazilian market in 2007. KFC started the business with an alliance with Brazil Fast Food Corporation. Therefore this alliance helped KFC to gain an extensive knowledge about the Brazilian culture and the market place (Anna Brewer 2012).
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