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The company 3M entered the foreign market built on different principles that emphasized the importance of local expertise. These principles included; ‘first in defeat others’ (FIDO) which means taking advantage of the market ahead of other firms and that the business model should develop its products in the market, so as to learn different ways of managing the business overseas. Another principle is that of “make a little, sell a little,” which means that a company enters a market on a small scale, with a single product, for a modest investment. 3M company uses branding as an entry point in other countries so that they can test the market, like in Chile,where they entered the market with a basic first aid kit, and where the first ever Post-It-Notes were exported to in 1981.
3M prefers a low risk mode as they first test a market with a single, branded product before deploying their full range in different countries so as to reduce the risks of losses. Other companies using this kind of strategy are clothes designer Gucci and Supreme, who bothinitially sell only one product in overseas countries to test the market.
Fox introduced Simpsons to the foreign market by partnering with giant brands in different countries, like Butterfinger and Burger King. This was done so that the show could gain more popularity. 500 companies were licensed to brand and produce Simpsons merchandise, as Fox believed that local companies were at a strategic advantagein understanding the local market. 96% of thesecompanies renewed their contract.
This entry into to the global market was by made possible through licensing, permitting companies to produce merchandise, and increasing the popularity of the Simpsons show. Fox also used a low control management style so that they could make sure the show was not overexposed or was used inappropriately by these companies in the global market.Other examples of companies that use this approachare Deloitte and the accounting firm Price Waterhouse Cooper, who license other companies into a partnership and allow the use of their brand.
Super 8 has been in existence in China since 1998, using the Howard Johnson brand through the Shanghai-based Berrate Development Group. However, in 2004, it announced that it would officially start franchising motels in China. Based on the lack of economy, middle and first class hotels in China, a potential opportunity to start franchising the Super 8 brand was discovered.
The entry mode that the Super 8 business used was that of branding with other companies in the same field. This business plan started in 1998 when Super 8 used the Howard Johnson brand name to start its business in China. The model was simple: 4 to 5 star hotels could be branded under Howard Johnson, 3 to 4 star hotels under the Days Inn brand and lastly 2 to 3 star hotels would have the Super 8 brand, which would help the company brand become more recognizable.
The company used a high control entry mode, where the focus was on the growing middle class market. This demographic is mostly domestic users. At the time, other hotel companies focused on serving and developing first class and luxury hotels. Super 8, however, saw that there was a gap in the market.
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