The Davis Service Group: An Entry Strategy: Expansion Strategy

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Businesses worldwide nowadays have been expanding their business sphere beyond national borders to reach new markets in other attractive countries. While doing business abroad can provide a multinational with new, exciting, and profitable markets, there are, however, a number of challenges inherent to operating in a foreign market that should be accounted for when formulating an entry strategy. For instance, they must consider whether to merge with another company, take over it, or just make a greenfield investment.

In order to eventually see their foreign venture succeed, multinationals should be very careful in examining the entry strategy and the aimed market itself. In doing so, there are many types of expansion strategies that are commonly
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d.). As the company was growing to eventually reach a 17, 000 employee staff with annual sales amounted to £820,000 000, it was becoming a conglomerate serving in different markets (The Time 100, n. d.). In the process, in 2001 they covered three other UK-based fillials—Sunlight (hiring sheets); Eliott (building systems for temporary office space; and HSS ( tool hire)-- all of which were leaders in their respective markets with Sunlight being strongest contributor in terms of revenue generation or turnover (The Times 100, n. d.). As the Davis Service Group was becoming stronger in a rather saturated (matured) domestic market, they sought to expand their scope abroad. And in the following year, 2002, The Davis Service Group acquired Berendsen, a European multinational in in the Linen Industry as well with its presence in the major European countries. The acquisition of Berendsen by the Group was a success, and that success can be explained through 2 important factors, which are the strong financial position of the Davis Service Group and the opportunities for further growth that a unified Europe presented. At that time, the bottom line of the Group was doing very good financially allowing it to draw £150, 000 000 from their existing happy and optimistic shareholders to…show more content…
d.). This led the Davis Service group to attract a wide range of contracts across European countries where it operates as it joined its filial Sunlight to Berendsen on what was a horizontal integration since those two was unified at exactly the same stage of production and in the same market: Textile market (The Time 100, n. d.). So, the free market movement allowed the Davis Service Group to grow horizontally. Also, even before the Davis Service Group took over Berendsen, it was growing tremendously until the domestic market became more mature leaving no more room for additional growth. And growth was later achieved when Sunlight was joined with Berendsen in an inorganic manner. Also, the best practice adopted through the collaboration and reciprocal learning between Sunlight and Berendsen; the new management built on existing resources and knowledge base rather make a greenfield

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