Market evaluation and entry

7/18/2019 Market evaluation and entry

http://slidepdf.com/reader/full/market-evaluation-and-entry 1/21

Market Evaluation and Entry

02-07-2015 Rojers P Joseph- IIM Rohtak 1



?




est uy• !he lar"est #onsu$er ele#troni#s retailer in the %ri#k and $ortar

se"$ent – In &'( it is kno)n *or #usto$er servi#e and lo) pri#es

• +pril 2010, est %uy entered the & $arket throu"h a J. /)ith

arphone arehouse

• 3pened 11 stores at out-o*-to)n lo#ations4 !ar"et, 200 stores %y201 in Europe

• losed the stores in the & in 2011- 6osses, 200 $illion

• $ajor reasons *or the *ailure, – /1 Europe in 2010( /2 3ut-o*-to)n lo#ations( / Ele#troni#s /han"e in

shoppin" ha%its in the & – 3ther reasons,

• 'tron" #o$petition - 8i9ons and o$et

• Poor %rand re#o"nition

• hat #ould est uy have tried instead o* e9itin"?

– Marketin" push?02-07-2015 Rojers P Joseph- IIM Rohtak



'ession o%je#tives

• !o understand #o$pany strate"ies *or se:uen#in" the

penetration o* #ountries

• !o e9a$ine the $ajor opportunity and risk varia%les a

#o$pany should #onsider in de#idin" on international

e9pansion

• !o understand so$e tools that help de#ide )here to operate

and ho) to enter

02-07-2015 Rojers P Joseph- IIM Rohtak ;



Modes o* $arket entry

6i#ensin" E9portin" <ran#hisin"

ontra#t

$anu*a#turi

n"

Joint

ventures and

strate"i#

allian#es

<8I

Least Amount of commitment, control, risk, and profit potential Most




12-=

Market entry, '#annin" I$portant in*or$ation

• 3pportunities,

– 'ales e9pansion, E#ono$i# and de$o"raphi# varia%les

–

Resour#e a#:uisition, ost #onsiderations

02-07-2015 Rojers P Joseph- IIM Rohtak



12-7

Market entry, '#annin" i$portant in*or$ation

• road #ate"ories o* risks that #o$panies $ay #onsider,

– ultural>de$o"raphi#

– Politi#al

– Monetary

– o$petitive

– atural disasters>eather




8isneyland in Paris•

!o %e pro*ita%le the park needs a%out 15 $illion visitors ayear – .isitors in 201;- 1;@1 $illion, 6osses A a%out B150 $illion

– <e)er visitors *ro$ <ran#e( 'pain and Italy and %usiness trips #ounted*or the %i""est drop

• riti#s du%%ed the resort a C#ultural herno%yl@C

• &n*avoura%le <ren#h la%our la) and plannin" re"ulations – 8ress #ode *or 8isney look

• 8isastrous la%our #ost esti$ates – E9e#utives had esti$ated la%our #ost )ould %e 1D o* their revenues @

In 12(

– the true *i"ure )as 2;D and in 1 it in#reased to a )hoppin" ;0D@

–

!hese la%our #ost per#enta"es in#reased Euro 8isneylandFs de%t• o$petition

– Par#+steri9( <ran#e4 <utoros#ope( <ran#e4 8isneyland( &'+

• 6o)er )inter sales in Paris due to $ore rainy days in a $onth

02-07-2015 Rojers P Joseph- IIM Rohtak G



han"in" pattern o* disaster losses in El 'alvador

• El 'alvador is one o* the )orldHs $ost e9posed #ountries(

alon" )ith the rest o* entral +$eri#a and the ari%%ean@

GG@7D its land area is #onsidered to %e at risk o* disasters( and5@;D o* its population lives in e9posed areas@ Its lo#ation

$eans the #ountry e9perien#es in#reasin"ly *re:uent #li$ate

e9tre$es@ In just three years( El 'alvador )as a**e#ted %y *ive

e9tre$e #li$ati# events@ – /!ropi#al 'tor$ Ida in 2004 !ropi#al 'tor$s +"atha( +le9 and

Matthe) in 20104 and !ropi#al 8epression !)elve-E in 2011

– !he #ountry )as hit %y t)o stron" earth :uakes in 2001@

'our#e, li$ate and 8evelop$ent no)led"e et)ork /8( May 2012




12-10

3pportunityARisk Matri9




o) IkeaHs strate"ies di**er in Europe and hina

Europe China

'our#e, usiness today( July =( 201




o) IkeaHs strate"ies di**er in

Europe China

'our#e, usiness today( July =( 20102-07-2015 Rojers P Joseph- IIM Rohtak 12



aier in India




uestions

1 hy did aier enter India? hat did it plan to a#hieve in thene) $arket?

2 hat )as aierHs entry strate"y in India? hat )as and )asnot )orkin" *or aier in India? hy?

8is#uss aierHs lo#aliKation $odel in India and other $arkets@

ere they di**erent? I* so( )hy?; +nalyKe the lands#ape o* IndiaHs #onsu$er ele#troni#s $arket@hat )ere the orean #o$paniesH strate"ies and ho) did thesei$pa#t the $arket?

5 Evaluate ra"anKaHs de#isions and a#tions@ hat )ere hisanalyses?

= o) #an aier sustain its "ro)th in India?

02-07-2015 Rojers P Joseph- IIM Rohtak 1;



uestions

/1 hy did aier enter India? hat did it plan to a#hieve in the

ne) $arket?• LEMMs $otives %ehind enterin" ne) $arkets

– +#:uire strate"i# assets

– &tiliKe lo) *a#tor #osts

– Inte"rate "lo%al produ#tion %ases and liaise resour#es )orld)ide

– apture $arkets )ith hu"e potential de$and, 6o) penetration

– !ake advanta"e o* relatively uni:ue and innovative produ#ts

– <avoura%le politi#al( e#ono$i# and de$o"raphi# environ$ent

– !ake advanta"e o* lo)er #ost and hi"her produ#tivity in ho$e $arkets

– 3ver#o$e late-#o$er disadvanta"es on the "lo%al sta"e

– onsolidate position in the "lo%al $arketpla#e




<ollo)ers outper*or$ pioneers

'our#e, I' onsultin"

02-07-2015 Rojers P Joseph- IIM Rohtak 1=



uestions

/2 hat )as aierHs entry strate"y in India? hat )as and )as

not )orkin" *or aier in India? hy?8id aier have #ountry spe#i*i# strate"y in India?

– E$phasiKed %rand value

– +dopted pre$iu$ pri#in" strate"y

• Issues? – 6o) %rand a)areness, 6a#ked enou"h +!6 $arketin"

– Missed the $ass $arket

– Ine**e#tive distri%ution

– Poor a*ter-sales servi#e

– +ny other issues?




uestions

/ 8is#uss aierHs lo#aliKation $odel in India and other $arkets@

ere they di**erent? I* so( )hy? – Neneri# produ#t o**erin" #o$pared to hina and the &'

– +ssu$ed Indian $arket is si$ilar to hinese

• la#ked $arket resear#h

!he InternationaliKation pro#ess $odel /Johnson and .ahlne( 177

• Market no)led"e in*luen#es o$$it$ent de#isions )hi#h dire#tly

in*luen#es urrent +#tivities that lead to Market #o$$it$ent• aier in the &' vs@ aier in India?

02-07-2015 Rojers P Joseph- IIM Rohtak 1G



uestions

/; +nalyKe the lands#ape o* IndiaHs #onsu$er ele#troni#s$arket@ hat )ere the orean #o$paniesH strate"ies and ho)did these i$pa#t the $arket? – !a9 %urden

– 3ver #apa#ity

– Pri#e )ars

– 6a#k o* support *or the se#tor

– 6o) "ro)th in de$and( esp@ in rural India

• as the orean #o$paniesH su##ess an a##ident? – 6N had a %otto$-up approa#h

– 'a$sun"Hs approa#h )as top-do)n

– oth spent heavily on RO8




uestions

/5 Evaluate ra"anKaHs de#isions and a#tions@ hat )ere his

analyses?• 6o) %rand a)areness

• 6i$ited produ#t pro*ile

• Pre$iu$ pri#in" strate"y

• eak distri%ution net)ork

• Poor a*ter-sales servi#e




uestions/= o) #an aier sustain its "ro)th in India?

– Is aier on the ri"ht path?

• Rise in turnover o* aier

– 2011, B15 $illion

– 2012, B 20 $illion

–

201, B250 $illion – 201;, 00 $illion

• +nythin" still $issin"?

–

Plans to ra$p up installed #apa#ity o* re*ri"erators *ro$ 10 lakh to 20lakh %y 201;

– In 201( the #o$pany introdu#ed 7 ne) produ#ts a#ross si9

se"$ents( in#ludin" +s( )ater heaters( re*ri"erators( #o$$er#ial

*reeKers02-07-2015 Rojers P Joseph- IIM Rohtak 21

Documents

Market evaluation and entry