International market expansion

Question 1

What is market expansion about?

Answer 1

‘When to go where’

Its about timing and time between entering markets.

Question 2

Market expansion strategy concerns?

Answer 2

+ Defining the overall level of resources and commitment to respective markets.
+ Select the rate of market expansion over time.

Question 3

Overall, what expansion strategies are there?

Answer 3

Ayal and Zif (comes out of academica) - Diversification/Concentration and segment&countries matrix

Hollensen, Waterfall vs. shower appraoch

Question 4

What is the difference between the Waterfall and Shower approach?

Answer 4

Waterfall:take one country first, then next, so on
Good when experiental knowlegde is needed to go into other markets and the firm does not have many resources yet. But costly and more time consuming.

Shower:take all countries at the same time. Favirable when same consumer segments and when the firm poses a first-mover-advatange. Less fav. when little knowlegde within expansion.

Real world are often a mix. Best strategy depend on risk, sunk costs..

Question 5

Explain Ayal and Zif’s frameworks’

Answer 5

Basic:
Concentration and diversificaiton:

Concentration: slow, gradual rate of growth
Diversification: fast rate of growth regarding markets served.

Detailed considerations:

1. Market segments within national markets
2. Allovaiton of effort

Question 6

Draw concentration/diversification graph

Answer 6

Y = Number of markets served
X = Time

Green line = optimal number of markets served.

Question 7

Draw the country/segments martrix. Link segments to the business canvas.

Answer 7

X = segments (concentration, diversificaiton)
Y= Contries
(concentration, diversificaiton)

Question 8

Draw the allocation of resources (Market expansion)

Answer 8

Insights from the Uppsala model (Johanson & Vahlne) …the debth of firms’ internaitonal network

-> The establishment chain.
X = time
Y = Market knowlegde commitment, efforts and resources

Question 9

Explain some of Ayal and Zifd factors affection the strategy..

Draw the sales-response function (concave and S-curve)

Answer 9

Sales response function:
Y = sales
X = effective marketing effort

Concave vs S-curve

Further:
Market factors, company factors, product factors and marketing factots

Question 10

How do diversified MNE’s expand entry ?? Do they go with depth or breath and why?

Answer 10

Hutzschenreuter, T., Kleindienst, I., Günther, C.,

Expand by breath = number of different business the MNE is active in the respective countryu

Expand by depth =
Number of subsidiaries per business in the respective country

Question 11

Which authors on this?

Answer 11

Waterfall/Shower = Hollensen

Diversification/concentratin = Ayal % Zif

Breadth vs. depth
= Hutzschenreuter, T., Kleindienst, I., Günther, C.,