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Marketing Entry Strategy (China (Wholly Owned Subsidiary (Level of Control…
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- Take higher risks then joint venture
- Because the risk is shared by more than one enterprise in a joint venture
- The parent enterprise at abroad will take the full risk by itself
- If the operation of business will take any failure, then the risk should be separated to be taken by different enterprise in the joint venture
- Controlled by the only enterprise
- The level control of wholly owned subsidiaries is higher then joint venture
- The entry mode of wholly owned subsidiaries will have more flexibility then joint venture and this is because of the ownership structure
- The most expensive method of entry mode for multinational enterprise to entry into foreign market
- Joint venture is set up and controlled by to 2 or more then 2 enterprise
- The relationship between the companies may be equal control or one of the enterprises takes more control towards business activities
- If the operation of business will take any failure, then the risk should be separated to be taken by different enterprise in the joint venture
- The degree of risk lower than wholly owned subsidiaries
- Russia is describe as the most dynamic retail market in the world.
- A first critical test of IKEA's expansion strategy was to be the Kazan store.
- Being very different from western condition this city would put to test IKEA's learning and processes and ability to position its retail proposition on a culturally different and difficult market
- The expansion strategy is based on a standardized concept that is adopted to a limited extent to different cultural settings
- The flexibility of joint venture is lower than wholly owned subsidiaries * Advantage of entry mode is unique competitive advantage and for the multinational enterprise is a better way of gaining local market knowledge
- Build the factory on a green field because no suitable target for acquisition in this region
- Total investment cost EUR 140 million
- 25% of funding was granted by the EU's " Innovative Economy Program"
- The factory was the largest foreign investment in Poland 2010
- Has an area of 20,187 km2 and has the lowest population density of the sixteen Polish voivodships.
- Offers an access to extensive forest resources.
- Land prices in here are relatively low in comparison to other regions in Poland.
- This region is famous for its forest resources and wood industry, several small and mid-size polish wood and furniture manufacturers are located there
- To achieve competitive advantage and to successfully compete against its rival worldwide, IKEA develop several resources and capabilities.
- Ownership Advantages
1) global brand
2) successful business model
3) company size and financial power
4) Know how an experience in international retail sector
5) Experience in product design
6) Experience in operating across cultures
7) Technology know-how in UT-HDF area
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