Exam Possible Answers Flashcards
(16 cards)
Political
- legal instability
- poor ease of doing business
- judiciary concerns
- macroeconomic instability
Socio- cultural
- consumer behaviour
- perception of foreign business
- trust and relationship building
- cultural preferences
Entering the market: Step 2
Market considerations:
- conduct thorough market research and stakeholder analysis
- choose urban hubs with strong middle class growth
- consider smaller “express” formats for lower-cost market penetration
Entering the market: Step 3
Risk mitigation:
- ensure legal safeguards and clear contracts with local partners
- currency hedging to manage foreign exchange risk
- lobby for policy reform through business chambers and trade accounts
Reasons to exit:
- currency volatility and economic instability
- premature entry which means the entry strategy used initially was not properly planned
- the businesses experiencing sustained losses
- ethical reasons
- increased competition and low consumer spending
Risks associated with exit:
- reputational damage among consumer and other brands
- loss of market share to competitor who fill the gaps
- legal and contractual obligations with suppliers, employees and leases
- loss of long-term opportunities
Guidlines for managing exit
- clear and transparent communication with all shareholders
- honour all supplier and employee obligations
- decision to exit is a well thought out one and aligns with their long term branding
- explore options to sell to a local partner through franchising or going into a joint venture
- try migrate customers most likely to an online space so as to not lose all all customers in the exit
Promotional mix
- advertising: local radio, TV, and digital ads that focus on value, affordability, and community empowerment.
- Sales Promotion: discounts, loyalty cards, and bundle deals.
- Public Relations: Host community events and partner with local suppliers and NGOs.
- Digital Marketing: Social media campaigns with local influencers
- Personal Selling: Train staff to provide high-quality, culturally aware service.
Entry strategies:
- licensing
- Franchising
- Joint ventures
- Strategic alliances
- Foreign Direct Investment
Licensing
the licenser offers some property rights to a licensee in exchange for royalty fees
- navigate around import barriers or get access to a new market
Franchising
gives rights to aspects of the business in exchange for royalty fees and other fees such as membership fees
- maximise the winning business formula with minimum investment needed
Join venture
A single country entry strategy with partners which could be local, foreign ownership of a newly created business entity
- most viable way to enter foreign markets especially in emerging markets because it reduces financial risk
Strategic Alliances
Partnership between two or more organisations to achieve strategically beneficial goals that are mutually beneficial
- allow a company to take advantage of new opportunities it would otherwise miss out on
Foreign direct investment
a stake in a company or project by a foreign entity
- all forms of FDI requires extensive research before entry as it is the most risky and expensive entry strategy
Place mix
- Retail Store Locations (Physical Distribution)= urban areas and high-traffic malls and transport hubs
- E-Commerce and Online Delivery= user-friendly online shopping platform and partner with local delivery services and click and collect
- Partner Networks= Collaborate with local convenience stores or kiosks and partner with fuel stations
Product Mix
- Localised Product Selection= balanced mix of local and imported goods and Support local farmers and regional tastes and cultural preferences.
- Private Label Products= affordable Shoprite-branded products and quality assurance
- Product Innovation= ready-to-eat meals and meal kits and seasonal or festive product ranges
- Packaging and Labelling = clear, multilingual labels and appeal to environmentally conscious
