1) Develop six feasible strategies to minimize risk?
Partnership & strategic Alliances
Partnership & Strategic Alliances is an international entry mode involving a contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain way for a certain time to achieve a common purpose. With using this strategies we obtain reduced risk through shared cost reduce investment needed and seen as local entity. Based on the case study, we can see that its importance to have someone that well-known about the market. For the example is when Coe’s venture into Puerto Rico where that they failed miserably. They couldn’t find the right ...view middle of the document...
So they can monopoly the market.
There are so high probabilities to lose when doing internalization. It is because we are facing the others market that we didn’t have experience. So to avoid from lose so anything’s, we should to purchase some insurance. There are many insurance that can be purchase for the company to decrease risk when go abroad. The insurance can help Coe’s from losing their capital. For example, Coe’s have gone to Puerto Rico and they have lost in high. The store needed to be close even though only been operating 12 month only. Too many customers had skipped their payments and walked away with the products, and the store manager hadn’t been able to handle the massive amount of collections. So, to prevent the same thing happen when they want to open in Mexico, to should purchase insurance for their business. Maybe it will not cover all the loss at least it will not be affecting the share price.
Market segmentation is the basis for a differentiated market analysis. Differentiation is important. One main reason is the saturation of consumption, which exists due to the increasing competition in offered products like what will they face in future U.S market. Consumers ask for more individual products and services and are better informed about the range of products than before. As a consequence, market segmentation is indispensable. Segmentation includes a lot of market research, since a lot of market knowledge is required to segment the market. Market research about market structures and processes must be done to define the “relevant market”. The relevant market is an integral part of the whole market, on which the company focuses its activities. To identify and classify the relevant market, a market classification or segmentation has to be done. So they are always able to satisfy the needs of customers. Besides, good impression from the possible customers will be very helpful.
Same Bank Institution
Consider banking with an institution that has branches and a business presence both in the U.S and in the country where your business will do business. It is mean that, Coe’s need to use the same bank that he use their others country or at their home. When they use the same bank, their financial management will be easy and well-organized. The bank also can help Coe’s to keep safe in doing internalization. For the example, if Coe’s using HSBC as their bank institution to do all the transaction, they also need to use the same bank in others country. Same bank institution may help them to make their financial management easier and reduce their financial risk. Besides, the current relation will be better.
Liability Of Foreignness
Even though it is about negative things but firms can transform the liability into a relative competitive advantage through accumulation of tacit knowledge throughout managing foreign operations. Embedded and assimilated into the firm’s internal processes, strategies, and...