Case Study: Market Entry Strategy

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3.1 Market Entry Strategy
Company should choose a suitable market entry strategy before they decide to enter into India. It is crucial for company to evaluate costs, benefits, and risks through analyzing merits and demerits of modes of entry. In appendix, table 1 compares five modes of entry in advantages and disadvantages. From the table, foreign direct investment (FDI), one of the five, is the most reasonable business mode for MNCs which can reduce financial risks and create business promotion (Griffin and Pustay, 2013). Graph 3 shows that there was a dramatic growth in cases to a peak of $43.4 billion in 2008 before it witnessed a quickly fall to $27.43 billion in 2010, and then increases sharply from 2010 to 2011. Over the following year,
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To start with, incompatibility among joint partners is one of major factors causing failure. It refers to differences in culture or objectives can give rise to different level of conflicts and poor performance (Le, 2010). For instance, Danone Group has disagreement with Britannia Industries on marketing strategy, brand management, and intellectual property more than one year. Finally, these two companies terminated cooperation relationship and Danone compensated for Britannia $170 million (Leahy, 2007). Britannia disagreed that Danone had registered same brand in other countries and did not inform them, which against Indian Law. On the contrary, Danone disputed with Britannia’s version of event because they had already told the situation. Hence, incompatibility of partners would cause conflicts, loss of money, bad performance, even…show more content…
Economic growth gap between Indian states may trigger national instability and political changes. According to modified law, multi brand retailing only allowed to be opened in the city with more than 1 million, but merely 53 cities match this criterion (SAINI, 2013). It indicates that Indian government wants to protect local retailers by restricting foreign retailers to reduce competitiveness. Some large foreign retailing firms are directly influenced on decline of profit, even shutting down such as Wal-Mart. Wal-Mart announced to terminate joint venture with Bharti Enterprises due to strict and complex management of overseas investment (MMR, 2013). Regardless of India government advocates market liberalization, there are still political changes following economic circumstances. Therefore, changing circumstances is also a big challenging for ABC

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