The most striking trend in business today is the growing internationalization of markets worldwide. This is true for everything from airlines to automobiles, banking to burgers. Moving into International markets opens up new opportunities throughout the world for expansion and growth. Before deciding whether to operate internationally, a company must understand the international marketing environment. The international marketer must study the unique Economic, political-legal, technological and Socio-cultural environments that reflects the countries attractiveness as a market.
Literature review section looks at the increased globalization of world markets. A rationale for international trade is outlined, followed by an assessment of the factors that need to be considered before market selection and market entry can occur. An overview of current methodologies for market selection is briefly reviewed and illustrated later in great detail looking at how home grown company Old Town White Coffee (OTWC) Leveraging on its success in the Malaysian and Singaporean markets has done the preliminary screening and in-depth analyses considering a myriad of factors to accurately identify a destination for its initial international market entry. Once a company has decided to enter a foreign country it must determine the best mode of entry. Three popular market entry mode strategies along with the options for each are briefly explored.
Systematic evaluation of alternative market opportunities worldwide and the risks entailed in entering a given country is crucial. Hong Kong has been chosen as the international destination for OTWC to grown it’s business. Initial market entry will be through direct investment as this mode provides the highest flexibility to develop closer relationship with the government, customers and local suppliers allowing it to adapt its product to the local market better and for building its brand image in the host market. In its second phase the company plans grow its business adopting the franchise model. The target is to have 20 fully owned and 80 franchise outlets by 2015. Hong Kong is seen by the company as a gate way to enter the wider China market by 2012. The conclusion section will provide a short summary of the strategy adopted by OTWC for entering the international market 1.0 Introduction
“Doing business in a foreign market is no different; but then again, it is often more challenging and more difficult” (Brown, D. 1990). Global, political and economic liberalization have created tremendous opportunities and challenges for international marketers (Kotabe, M. 2005). Those foreign opportunities and intense competition in domestic markets have caused firms to consider entering international markets. Success in the new international order requires presence in markets worldwide and competition on a global scale. Some have even argued that firms that ignore the new reality of global markets will be devastated by their globally oriented competitors. Moving into international markets opens up new opportunities through out the world for expansion and growth (Czinkota, M & Kotabe, M. 2001). At the same time, lack of experience and of familiarity with conditions in international markets creates a considerable strain on management resources to acquire the knowledge and skills necessary to operate effectively in these markets (Cavusgil, S. Tamer, 1980).
After having had a considerable success in Malaysia and Singapore the management of a homegrown Malaysian company has decided to leverage on its strengths to devise a successful strategy for entering the international market to sustain its future growth.
1.1 The Company
The Old Town White Coffee, OTWC is the largest kopitiam restaurant chain in Malaysia. It’s headquarters is in Ipoh , Malaysia. The OLDTOWN story began in 1958, in Ipoh Town, It all started at the White Café – a classic coffee shop. The owner, inspired with a...