Entry mode decisions, internationalization and global marketing - The case of French Cakes

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Entry mode decisions, internationalization and global marketing - The case of French Cakes

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Entry mode decisions, internationalization, french cakes, global marketing, analysis, factors, decision making, market, international, foreign, company, product, target market, internationalization process, externalization, indication, costs, risks, socio-cultural distance, direct export, cooperative export, indirect export, joint venture, franchising, licensing, hierarchical investment mode, direct investment mode, transaction-specific factors

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Abstract

When companies enter foreign markets, they make decisions about what kind of marketing and organizational setup to choose - these are called entry modes decision. The process of internationalization begins with the choice of foreign markets in which the company hopes to enter. In addition to proposing a marketing mix adapted to the target countries, the company must choose its entry modes and analyse various factors.

What are the 3 steps of the internationalization process for a company? What is to be considered at each stage?
What does French Cakes Ltd. produce ? Where does it sell its products?
Which options did French Cakes have to enter the UK market ?
What are the 4 characteristics of the internalization process (also called hierarchical or direct investment mode) ? Compare them with the 4 characteristics of the direct export mode.

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[...] Which options did French Cakes have to enter the UK market ? French Cakes can choose between externalization or internalization to enter the market. The internalization would imply that the company create a subsidiary in the UK for example including a sale and production site. The second option, externalization, would imply having an independent agent based in the UK who would be in charge of selling the products around the country. What are the 4 characteristics of the internalization process (also called hierarchical or direct investment mode) ? [...]

[...] The characteristics of direct export modes are as follows: - Low costs because no subsidiary is set up, no production, no hiring . - Low risk because it is little investment - High level of flexibility - Low level of control over how Mr. Thompson sells products (distribution channels, relationship to competition with commissions, etc.). Which entry mode did French Cakes finally choose? How did it make its choice and why? In the case of French Cakes, their first idea of a subsidiary is compromised. [...]

[...] The characteristics of the desired entry mode: French Cakes, not being able to afford to take a lot of risks, highlighted its desire to have a lot of flexibility to protect itself if the results are not positive. These wishes support the second option of using a British agent, a direct export mode. The systematic evaluation of the four sets of factors led to the recommendation of an appropriate mode of entry for French Cakes. Companies can choose or combine two different modes during their internationalization process to one or more foreign markets. What are the different modes of entry? [...]

[...] Entry mode decisions, internationalization and global marketing - The case of French Cakes When companies enter foreign markets, they make decisions about what king of marketing and organizational setup to choose - these are called entry modes decision. What is an entry mode decision? When a company decides to go into international markets, it is called internationalization process. It's a whole process that involves thinking about how the company is going to enter the target market. How does it relate to the rest of the internationalization process? [...]

[...] Analysis of external factors concerning the cake and dessert market in the United Kingdom: - Socio-cultural distance with France so having a partner who knows the country and its cultures is essential - The market is of a decent size and is growing - There are currently no barriers to the export of goods (possibly different from 2021 with Brexit) - Intense competition The assessment of external factors therefore revealed a trend towards externalization. Analysis of transaction-specific factors: The know-how and benefits of cake and dessert products are not considered difficult to transfer and explain to an independent partner, so the analysis of these factors also reveals a decision towards externalization. Finally, the systematic evaluation of factors led to the recommendation of an appropriate mode of entry for French Cakes. Companies can choose or combine two different modes during their internationalization process to one or more foreign markets. [...]

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