Introduction Hyundai automotive distributors were established in 1967. The company has displayed a high level of commitment to southern Africa’s future from both an economic and political point of view. There are many different types of market entry strategies that may be implemented by a foreign firm in an emerging country. Amongst the most popular are: 1. Portfolio Investment; 2. Export 3. Franchising 4. Licensing 5. Shared Equity/ Joint Venture The initial market entry strategy implemented by Hyundai Korea was a joint-venture. However, after liquidation (1999), the new entry strategy for re-establishment was franchising. The aim of this paper is to show how Hyundai can reposition its operational strategy utilising a management …show more content…
For example, a joint venture can have a limited life span and only cover part of what you do, thus limiting both your commitment and the business' exposure. • In the era of diversification and consolidation, JV’s offer a creative way for companies to exit from non-core businesses. • Companies can gradually separate a business from the rest of the organisation, and eventually, sell it to the other parent company. Roughly 80% of all joint ventures end in a sale by one partner to the other. The Disadvantages of Joint Ventures • It takes time and effort to build the right relationship and partnering with another business can be challenging. Problems are likely to arise if: • The objectives of the venture are not 100 per cent clear and communicated to everyone involved. • There is an imbalance in levels of expertise, investment or assets brought into the venture by the different partners. • Different cultures and management styles result in poor integration and co-operation. • The partners don't provide enough leadership and support in the early stages. • Success in a joint venture depends on thorough research and analysis of the objectives. From the above discussion as well as the list of advantages and disadvantages associated with joint ventures it can be seen that Hyundai should
Large numbers of players are now fighting to eat each other over market share. In developing nation company’s like Mercedes & Audi are playing aggressively while BMW is not able to sustain in these markets. Another advantage for these car manufacturers is the support of number of loans available for the purchase of vehicles in developing
Being partners is not always easy, and it takes time and a lot of effort to build up a strong relationship between two companies. There are many uncertainties around partnerships, the partner can have a hidden agenda and have an opportunistic behavior (Aswathappa, 2010). The goal or objective for the partnership can be unclear and makes it difficult to know when they have succeeded. If there is an unbalance in the level of investment, effort or expertise the other partner can feel they are not getting what they expected.
On the other hand, the risk of disagreements between partners. People are expected to have different ideas on how to run the business. This leads to disputes, besides from harming the business, but also the relationship between partners. Secondly, the partnership provides unlimited liability, meaning each of the partners shares the financial risks and liability of the business. Lastly, since partners share profits equally. This may lead to arguments that some partners aren 't putting enough effort in the running of business, but still gaining the equal amount of rewards.
Many businesses and organizations may decide to form a joint venture. A joint venture involves establishing a third company (child), operated for the benefit of the co-owners (parents) (Pearce & Robinson, 2004). There have been many successful joint ventures among many businesses. Best Buy announced that they would be strategically forming a joint venture with Britain’s cellphone retailer, Carphone warehouse. The CEO of Best Buy stated that the joint venture between the two companies would be a financial gain for the company in the European market. This merger between the two companies are said to be a major factor that will differentiate the company from the competition (Washington Post, 2008).
Just as there are pros to joint ventures, there are also cons. The cons to entering into a joint venture are flexibility, technology transferred, employees, and loyalty to the U.S. partners (Hall, 1984).
Mercedes-Benz India Pvt. Ltd. is a wholly owned subsidiary of the German Daimler AG. It is founded in 1994, with headquarters in Pune, Maharashtra. The company has a commercial vehicle plant outside Chennai, which it is currently upgrading with an investment of €700 million. The passenger cars manufacturing plant is located in Poona, same as the headquarters.
Joint venture mode help the business to growth faster and increase productivity when the partner are efficient and skilled, thereupon the Mozal Company is efficiently, quality and safety
It is because through the joint venture, the company is more familiar with the situation of the company there. The negative outcome is that the management system different between the company. So it is hard to make a decision making. It is because there is different opinion of each person.
* there is an imbalance in levels of expertise, investment or assets brought into the venture by the different partners
Throughout this report there is a large emphasis on where Hyundai is in the market now. This will firstly be implemented in the situational analysis outlining the competitor and market analysis. It is obvious with over 30 years of Hyundai being in the business, not only do they have a large customer base but they also have a wide range of loyal customers that continually renew their car every few years.
This essay emphasises about the international market entry and three popular modes of entry provided with their influences and significance towards the growth of the organisations. In addition to, applications of these modes of market entry have been briefed by taking examples of existing organisations, strategies towards the choice of particular entry mode and its effects on organisation’s growth.
Market entry strategies can be divided into two broad categories: indirect and direct market. In choosing either of these, one should have analyzed the company in context using various analytical tools. The analysis should focus on the
During the years after market entry, therefore, the rate of change in the country-specific marketing capability of the firm is likely to be greater than the rate of change in the market environment, and firm effects may dominate market effects in shaping strategy. This is particularly important given the business context, in which the generation of new business is of prime importancerather than efficiency in managing a relatively stable business. This usually results in (a) entering the market via a partnership with a local distributor or other marketing agent rather than via a directly controlled marketing unit and (b) a relatively rapid sequence of changes to the marketing strategy (such as new product introductions or expansion of distribution) or to the marketing organization (e.g., taking over marketing responsibility from the local distributor).
Also it can do an alliance with a foreign partner or franchise the local firm. Below diagram illustrates many entry strategies to foreign markets in which author has selected ‘franchising’ as a market development strategy for ministry of crab moving to United Kingdom and Bangladesh.
Joint Ventures tend to be equity-based i.e. a new company is set up with parties owning a proportion of the new business. There are many reasons why companies set up Joint Ventures to assist them to enter a new international market: Access to technology, core competencies or management skills. For example, Honda’s relationship with Rover in the 1980’s. To gain entry to a foreign market. For example, any business wishing to enter China needs to source local Chinese partners.