A. One of the major decisions firms must take when considering internationalization is how to enter the international market. In other words, which entry mode or strategy to use. Briefly explain the three major modes of entering an international market. B. (i) Briefly explain 3 internal and 3 external factors firms must consider when deciding which entry mode to choose. (ii) Why is choosing the most appropriate market entry mode and development strategy one of the most difficult but important decisions for the internationalization of firms? (Major topic International market entry strategies benefits and disadvantages)
Müller Yogurts – entering the US market by Müller Quaker Joint
Venture
Müller is a multinational producer of dairy products, with headquarters in the German state of Bavaria. The company was founded as a family dairy farm in 1896 by Ludwig Müller. Müller is mostly well-known for its yogurts, and in this product area and it is the market leader in Germany and the UK, where its most well-known product is the ‘Müller Corner yogurt’. The name ‘corner’ is in reference to the design of the product.
In 2012 Müller yogurts entered the US market through a joint venture between PepsiCo and Müller. The name of the joint venture is ‘Muller Quaker Dairy’. The Müller Group has subsidiaries in the nearby European markets, such as the UK, Italy and Spain. However, in most export markets outside Europe, Müller mostly uses distributors for selling its yogurts to the grocery retailers in the different countries. One of Müller’s best-selling products in USA was the Greek-style yoghurt.
In December 2015, just two and half years after opening the US$206 million factory in Batavia, New York, PepsiCo (Quaker) and the Müller Group agreed to count their losses and exit their joint venture Muller Quaker Dairy. The plant was sold to Dairy Farmers of America (DFA).
After determining that the business was not meeting expectations in this competitive and dynamic marketplace, it was mutually agreed by PepsiCo and Müller Group that it would be in both companies’ interests to exit the joint venture. Following this decision, Müller also now concentrates its marketing efforts for yoghurts on other markets than United States.
Industry experts think that the Müller brand did not really resonate with US consumers. Among potential consumers there was not any perception of brand identity or connection to its name. The Müller packaging was very traditional, and it did not stand out on the retailers’ shelves. Chobani’s flip Greekstyle yoghurt product was perceived as superior in quality, and since the two competitor products were selling at the same price, Chobani always won.
Both Müller and Chobani sold thick, Greek-style yogurt with a higher protein content than traditional yogurt and were among one of the main companies to popularize this style of yogurt. Both companies promoted their products as healthy food. At the beginning of 2019, Chobani was no. 1 brand in Greek-style yoghurts.
Questions
A. One of the major decisions firms must take when considering internationalization is how to enter the international market. In other words, which entry mode or strategy to use. Briefly explain the three major modes of entering an international market.
B. (i) Briefly explain 3 internal and 3 external factors firms must consider when deciding which entry mode to choose.
(ii) Why is choosing the most appropriate market entry mode and development strategy one of the most difficult but important decisions for the internationalization of firms? (Major topic International market entry strategies benefits and disadvantages)
(iii) From the case above, what are the most important external factors that would influence Müller’s future sales of yogurts in the United States? (Major topic Motives and benefits of internationalization)
(iv) In most export markets outside Europe, Müller mostly uses distributors for selling its yogurts. Give two advantages and disadvantages each of using distributors.
(v) Why did Müller failed in the US market? (Major topic Internationalization in practice)
C. Briefly explain 3 advantages and 3 disadvantages for using export modes, compared with other entry modes?
(Major topic International market entry strategies benefits and disadvantages)
D. What is the difference between direct and indirect exporting?
(Major topic International market entry strategies benefits and disadvantages)
E. From the case above, Müller used joint venture with PepsiCo to enter the US market. What are joint ventures? Briefly explain 3 reasons why joint ventures are preferred by host countries as an entry strategy for foreign firms?
As per BartleBy's Authoring Guidelines, we can only answer the first three related questions in the given chronological order, students are requested to repost the rest set of the questions.
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