2 Companies int - int business PDF

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Organization 1: Company chosen = IKEA

1: Which method(s) of entering foreign markets did this company adopt? Firstly, IKEA is known internationally for its low prices and creatively designed furniture purchased on a daily basis by millions of consumers throughout 300 different stores worldwide. In 1998, IKEA’s method of forming a joint venture was an obligation due to the interests of government. IKEA currently employs the wholly owned subsidiary mode of entry, however on the other hand, IKEA also implements the franchising strategy in some countries to manage minority stores. The franchisees who allowed using IKEA’s concept and trademark to run business have to pay 3% of revenue back. 2. What might be their reasons for choosing this method? Explain briefly? Throughout the first period, to meet the regulations and interests of laws, it was inclined to form a joint venture, which gradually served as a good platform for IKEA to understand how they are going to approach the market, comprehend the needs of consumers, and familiarize their strategy to that particular market. The exclusively retained subsidiary strategy clarifies that majority of stores’ operations, administration, its furniture design and assembly plants are supervised by INGKA Holdings. For the instance, IKEA has stretched the retail market in India, now preparing to invest 900 million to create a wholly own subsidiary in India. Since the culture and value is different in every country, IKEA committees evaluate the country’s local market and its future expansion opportunities before go in and therefore had also decided to enforce the franchising strategy within their operations. Organisation 2: Company chose = 1: Which method(s) of entering foreign markets did this company adopt? Australian Skin Clinics is a company that began operating in 1996. In 2011, the company decided to establish their first franchised clinic in Queensland, followed by an expansion into the state of Victoria with another successfully operating franchise. It’s primary method of entering foreign markets is depicted by franchising, and a merger in 2016 with Hairhouse Warehouse and Ella Rouge beauty. 2. What might be their reasons for choosing this method? Explain briefly. The franchising method of expanding into international markets is depicted by the fact that they were willing to extend their reputation and showcase their products and services abroad, giving them a competitive advantage. It had enabled them to diversify their range of services through dominating in markets where competitors don’t exist. Moreover, by choosing to merge with two other companies in 2016, this ensured and secured for them a monopolistic market, as competitors were limited considering the merger. It had also enabled them to expand their range of goods and services, which eventually saw a rise in profit margins....