Executive Summary:
This assignment occupies with the challenges of market entry strategies in saturated market, especially in the fashion industry. A new market entry needs a specific prepar-ing. Many environmental tasks of the investment have to be cleared before entering a new market. The right combination of market entry strategies help to succeed such a huge investment. Exporting, licensing, franchising, joint ventures and direct investments are some possibilities how a market entry strategy can look like but finding the right strategies for the given market situation is a difficult issue. Every strategy has ad-vantages and disadvantages which have to be considered if the investment should lead into a success. And as already mentioned, a saturated market is not a usual market, it has specific challenges which have to be managed. A market entry in a saturated market can only be successful if the company wins market shares from other competitors and the challenge is to find out how this can work. The Adidas Group showed how they could enter the US sports fashion market which is a saturated market, too. The company used a mix of the named strategies to win market shares in the host-country. And that is the way how to manage these challenges; every market entry in saturated markets has to be planned carefully and all influencing factors have to be considered. There is no general roadmap either every market entry needs its own map developed.
Table of Contents
1 Introduction
2 Problem Definition
3 Objectives
4 Methodology
5 What is a saturated Market?
6 The Need for Market Entry Strategies
7 Preparing a Market Entry Strategy
8 Market Entry Strategies and their Challenges
8.1 Exporting
8.2 Licensing
8.3 Franchising
8.4 Joint Ventures
8.5 Direct Investment
9 Strategy Challenges for saturated Markets
10 Business Case - Adidas Group
11 Results & Conclusion
Objectives and Core Topics
This paper aims to identify and evaluate effective market entry strategies specifically tailored for saturated markets, with a focus on the consumer goods and fashion industry. By analyzing theoretical frameworks and a practical business case, the study provides insights into how organizations can overcome entry barriers and secure competitive market shares.
- Analysis of market entry strategies in highly saturated environments.
- Evaluation of the challenges and risks associated with market expansion.
- Assessment of the role of market research and strategic planning.
- Investigation of various entry modes: exporting, licensing, franchising, joint ventures, and direct investment.
- Case study of the Adidas Group and their strategic approach to the US sports fashion market.
Excerpt from the Book
8.5 Direct Investment
At least, direct investments are a very capita-intense way to enter a new market and it also carries high risks. However a direct investment through acquisition or building up own production lines can be profitable if the business works. One mainly reason for direct investments in host-countries is the control of the business strategy. Also higher profits can be generated using this market entry strategy. There exist two main forms of direct investments; the Ground Up Strategy or Greenfield Strategy and the Acquisition Strategy. The Greenfield Strategy defines that the company builds up its production plants in the host-market. It starts from the bottom and build up a completely new firm with all departments needed in the new market. The Acquisition Strategy on the other hand, defines a market entry by acquiring a foreign company. In that case the new company can use the assets of the acquired firm. Customer relationships, production lines, communication systems and the brand could be used for entering the market. With an acquisition, competitors can be eliminated before getting in a real competition. Summing up, this market entry strategy offers the possibility to keep the total control over its business and can lead into higher profits. But it also carries risks, because if the market entry fails, the costs of that experience are very high and can bankrupt a company.
Summary of Chapters
1 Introduction: Provides an overview of market globalization and the necessity of strategic planning for international expansion.
2 Problem Definition: Highlights the difficulty of entering saturated markets due to limited growth potential and competitive barriers.
3 Objectives: Outlines the goal of finding successful entry strategies for the fashion industry using the Adidas Group as a model.
4 Methodology: Explains the structured approach of defining terms, reviewing strategies, and analyzing a specific business case.
5 What is a saturated Market?: Defines saturated markets as environments where demand is fully served, requiring growth through stealing market share.
6 The Need for Market Entry Strategies: Discusses the complexity of international investment and the necessity of organizational coordination.
7 Preparing a Market Entry Strategy: Details the indicators of market potential and the importance of SWOT analyses in the preparation phase.
8 Market Entry Strategies and their Challenges: Examines various entry modes including exporting, licensing, franchising, joint ventures, and direct investments.
9 Strategy Challenges for saturated Markets: Explains that no single strategy guarantees success, necessitating situation-specific analysis.
10 Business Case - Adidas Group: Analyzes how Adidas utilized a combination of sponsoring, licensing, and acquisitions to succeed in the US market.
11 Results & Conclusion: Summarizes that successful market entry in saturated sectors requires a tailored mix of strategies and continuous marketing.
Keywords
Market Entry Strategy, Saturated Markets, Consumer Goods, Fashion Industry, Adidas Group, Exporting, Licensing, Franchising, Joint Ventures, Direct Investment, SWOT Analysis, Greenfield Strategy, Acquisition, Market Share, Global Marketing.
Frequently Asked Questions
What is the primary focus of this work?
This assignment focuses on the challenges associated with entering saturated markets, specifically within the consumer goods and fashion industries.
What are the central themes of the paper?
The central themes include the definition of saturated markets, the importance of strategic planning, various entry modes (like exporting and acquisitions), and the influence of environmental factors.
What is the main objective of this study?
The primary goal is to determine effective market entry strategies that allow companies to gain market share and succeed despite existing competitive saturation.
Which scientific methodology does the author employ?
The author uses a structured analytical approach: defining key terms, reviewing theoretical entry strategies, and conducting a qualitative business case analysis of the Adidas Group.
What topics are covered in the main section of the paper?
The main section covers the definition of market saturation, the necessity for strategic preparation, detailed descriptions of specific entry modes, and the practical application of these strategies through the Adidas case study.
Which keywords characterize this paper?
Key terms include Market Entry Strategy, Saturated Markets, Fashion Industry, Acquisition, and Competitive Strategy.
How does the Adidas Group represent a successful strategy in a saturated market?
Adidas succeeded by utilizing a mix of strategies, including extensive sponsoring, acquiring a key competitor (Reebok), and signing long-term exclusive licensing deals with major sports associations.
What role does the acquisition of Reebok play in the analysis?
The acquisition is highlighted as a strategic move to immediately gain market presence and eliminate a competitor, which is a common tactic for growth in saturated markets.
Does the author suggest one "perfect" strategy for all saturated markets?
No, the author concludes that there is no universal strategy; success depends on the specific market situation and requires a unique, carefully developed plan for every entry.
- Arbeit zitieren
- Diplom-Kaufmann (FH) Johann Gross (Autor:in), 2013, Market Entry Strategies for Saturated Markets, München, GRIN Verlag, https://www.hausarbeiten.de/document/230486
