Carlsberg in Russia

Good Essays
Topics: Beer, Investment
Carlsberg in emerging markets

There are several ways a multinational company can enter an emerging market, a company can enter an emerging market using export, this option has a low risk and dows not require a large investment, however you lose the control over your product. Another way is licensing or franchising where you allow another company to manufacture or sell your product. The investment is low so there is low risk however you lose some control over the product or service, and you will only earn a royalty fee, the opportunity to earn a high profit is limited. A company can als enter the market using an strategic alliance with a local company. The advantage of this is that it will be able to use the local knowledge of the company. The disadvantage is that profits will have to be shared. This option has medium risk because the risk is shared with the other company. The option with the most risk is to make direct foreign investment, This will require the largest investment from all the options but will give you the full potential of profit, while retaining control. Carlsberg entered the market initially by a joint venture with the thai company chang beverages. The advantages was that carlsberg could use chang beverages leading position in the asian market to introduce their beer, they also shared the risk with chang beverages. The disadvantages where that the potential profit was lower since it would have to be shared with chang beverages. Another disadvantage is that they had to work together with chang beverages however due to disagreements carlsberg had to pull out of the joint venture.

One of the key marketing challenges a company faces is whether or not they should adapt their product to the local culture. Companies can follow One of 4 market entry strategies which are home replication strategy, global strategy, multi domestic strategy or transnational strategy. They will also ahve to think about which target group they want to reach in the new

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