Waston Market Entry

Topics: AS Watson, Strategic management, Developing country Pages: 9 (977 words) Published: December 10, 2012



1. Company Background 2. Scope of Business & Reason for International Operation

3. Strategic Goals & Choice of Entry Mode
4. Alternative market entry modes 5. Problems and challenges associated with different entering options in different location 6. Conclusion 7. Reference


Company Background

Watson's (Your Personal Store) or Watson's is part of the Health and Beauty retail and consumer division of the Hong Kong-based A.S. Watson Group

 

1828  Open a canton Dispensary in Guangzhou, China 1841  Operations extended to Hong Kong and founded Hong Kong Dispensary

  

1851  Dr. Alexander Skirving Watson joined the company as a Manager 1862  Name A.S Watson began to significantly outstanding its business … Present  Located 10,000 stores worldwide, presence in 33 operating markets over the Asia & Euro Countries.


Scope of Business

Main Scope: Retail & Manufacturing

spans health & beauty chains, perfumeries & cosmetics, grocery, consumer electronics, wine, and duty-free  
Health & Beauty Division

A.S Watson Group

Food & Electronic & GM division

Manufacturing Division

World’s largest health & beauty retailer Asia's leading health & beauty retailer. Asia Watsons Nuance-Watson Europe Kruidvat Trekpleister ICI Paris XL Rossmann Superdrug Marionnaud Drogas The Perfume Shop Asia ParkNShop Fortress Watson’s Wine Cellar Great Food Hall TASTE Food Galleria GOURMET Boutique style Find food hall Asia Watsons Water Mr Juicy Sunkrist Juices Shanghai Sparkling Watson’s cordials Cyrstal Spring Teas Watson;s Sarsae Europe Powwow Aquad’or Aqua System Selda/Bebagua Mistral Vimax

Europe Badaracco


Strategic Goals

Growth Strategy:

Expending to mature potential market (High growth potential countries…)

1) Mix of Market Penetration (expend network into existing market)

2) Market Development (Internationalization)



Reasons for international operation

Growth Watson look to international markets for growth. Introducing new products internationally can expand a company's customer base, sales and revenue.

Employees Watson go international to find alternative sources of labor. Watson look to international countries for lower-cost manufacturing, technology assistance and other services in order to maintain a competitive advantage.

Resources Watson go international to locate resources that are difficult to obtain in their home markets, or that can be obtained at a better price internationally.

Watson go international to broaden their work force and obtain new ideas. A work force comprised of different backgrounds and cultural differences can bring fresh ideas and concepts to help a company grow.


Watson go international to diversify. Selling products and services in multiple countries reduces the company's exposure to possible economic and political instability in a single country.



Reasons for entering Malaysia Market

acquisition of Apex Pharmacy Sdn Bhd (Apex Pharmacy) from Apex Healthcare Bhd (AHB), a Bursa Malaysia main board-listed company strategic move to further strengthen Watsons retail presence in health and beauty in Malaysia strategic move will strengthen our presence in Malaysia by expanding the total number of Watsons stores to over 100, resulting in an immediate and significant growth in our market share benefit consumers through competitive pricing and a wider selection of merchandise, made possible by the greater economies of scale


Choice of Market Entry Mode (Foreign Acquisition)



Access to target’s local knowledge

Uncertainty about target’s value
Difficulty in “absorbing” acquired assets

Control over foreign operations
Control over own technology

Infeasible if local market for corporate control is underdeveloped

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