For Chemical Corporation, horizontal entry into the Vietnam market through a non-equity strategic alliance with independent distributers is our recommended course of action. We would enter into business cooperation contracts with interested distributers with the intent of creating a mutually beneficial relationship between distributers and the company. By pursuing this course of action, overall risk to the corporation is minimized in many ways, while at the same time providing a gateway to a new and potentially lucrative market. Specifically, risk is minimized through the lack of capital investments in new factories, new supply chains, or the development and creation of a subsidiary distributer.
Entry into the Vietnam market with Sports Corporation should be accomplished by opening up a representative office (FDI, Horizontal Entry). This representative office will seek out entrepreneurs who desire licenses to produce and distribute Sports Corporation products in Vietnam with the option to export. This strategy requires only a minimal investment in office space, employees, and associated logistics. Risk is also mitigated, because the company will not make any capital investments to enter the market. Licensing will ultimately allow for quick market entry by utilizing existing infrastructure to produce product and bring it to market rapidly.
Children Corporation should enter the Vietnam market horizontally through a processing contract (FDI). In order to safeguard the brand reputation, quality, and prevent counterfeit products from entering the market, controlling the manufacturing process from start to finish by leasing the needed infrastructure helps to protect the company’s interests. Entry into the market through this path plays to the strength of the company’s abilities to enter new markets and quickly gain share in any market that they enter.
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