Unit 12 Strategy, Іноземна мова

Unit 12 Strategy

Vocabulary

In order to be able to discuss the issues you need to learn the concept and definition of strategy and the related terms. For this purpose you can use the following information resource: 

http://quizlet.com/12893597/ib-business-

and-management-business-organisation-

and-environment-18-change-and-the-management-

of-change-flash-cards/

Language focus: check up your knowledge of one of the strategic market entries at 

http://www.english-test.net/esl/learn/english/

grammar/ai554/esl-test.php

Reading

1. Read about the modes of entry into the foreign market. In this extract just two of them are described. Use the information resource to read about nine more modes of entry and define the advantages of each of them:http://www.partnersinternational.com/articles/foreign-market-entry.html

Foreign market entry

Explanation and processes

The business world of today calls for expanding sales and profits in order to achieve ever-increasing earnings.  Business owners and managers must look for any available opportunities to keep their market share and expand into new markets.  What happens when their local market becomes saturated?  The savvy leader is inclined to search abroad for any and all potential new markets for their product or service.  New markets offer the possibility of increasing total revenue and/or decreasing the costs of goods sold, thereby increasing profits.  Entering new markets may also allow a company to follow its existing customers abroad, attack competitors in their home markets, guarantee a continued supply of raw materials, acquire technology or ingenuity, diversify geographically, or satisfy the stockholder’s desire to expand.

In many cases, with many companies, it is survival. There simply isn’t enough domestic demand to keep many firms in business, without going overseas.

Once management has made the decision to expand and has determined the target market or markets, the next question is obviously, “how”.  Selecting a mode for entering or expanding in a foreign market is one of the most crucial strategic decisions that can be made by a company.  Weighing all factors and choosing the proper mode of entry can result in huge competitive advantages, while making a poor decision can lead to the demise of the company.

Often, international people without the knowledge base or the necessary contacts are tasked with “going international.” 99% of the time, they will fail.

Foreign market penetration can be done by a variety of different methods; each possibility should be assessed before the process begins.

Following is a comprehensive list of various modes of entry that can be utilized when entering or expanding in a foreign market.

1. ACQUISITIONS: purchasing an existing company.

PROS:

1) Established market

2) Skilled workers available (often not found through normal employee search)

3) Licenses are “grandfathered” in

4) Goodwill

5) Technology, clients, and vendors are instantly acquired

6) Negotiations usually take place on top level, target handles licensing and compliance

7) Instant branding

8) Reduction of competition

9) Increased knowledge base

CONS:

1) Hidden surprises?

2) Which employees are politically connected, and with whom?

3) “Favors” and concessions are assumed

4) Bad will

5) Technology often outmoded, vendors usually chosen for reasons besides merit

6) In many nations, employment continuance becomes conditional for the deal

7) Branding often not part of HQ’s ideals

8) Often expensive, and time consuming to complete an acquisition

9) Blending of corporate cultures

10) Necessity to train local management, and HQ’s management

11) Potential tax and legal problems

Things to consider:

• Half the merged entities never achieve their projected financial and market goals.

• A merger may mean short-term cash, but not necessarily future stability.

• Existing business problems, synergy problems, staff problems

• Buying an overvalued company

• How should you finance the acquisition – cash or stock?

2. GREENFIELD INVESTMENT: a project that starts with bare ground and builds up from there.  Coca Cola, McDonalds, and Starbucks are great examples of American companies that have invested in Greenfield projects around the world.

PROS:

1) Economies of scale and scope in production, marketing, finance, research and development, transportation, and purchasing.

2) Greater control in all aspects

3) Best long term strategy

4) commitment to market

5) Vendor financing often available

6) Work with authorities from the beginning

7) Control over your brand

8) Control over staff

9) Press opportunities

CONS:

1) Higher expense,

2) Competition in these markets can be difficult to overcome,

3) Entry into these markets can take years to happen.

4) Barriers to entry can be costly

5) Governmental regulations may put these multinational enterprises at a disadvantage in the short term.

2. Browse the internet and find the illustrations of successful or unsuccessful market entry by the companies.

Skills 1: Presentation techniques

Look through the presentation on the modes of entry at the following information resource:http://clt.astate.edu/gguha/Courses/IMktg/chap09pp.ppt.

• What modes of foreign market entry are mentioned in the presentation?

Grammar review

English prepositions

A preposition is a word governing, and usually coming in front of, a noun or pronoun and expressing a relation to another word or element, as in:

• She left before breakfast.

• What did you come for?

  (For what did you come?)

English Preposition Rule

There is one very simple rule about prepositions. And, unlike most rules, this rule has no exceptions.

Rule
A preposition is followed by a "noun". It is never followed by a verb.

By "noun" we include:

• noun (dog, money, love)

• proper noun (name) (Bangkok, Mary)

• pronoun (you, him, us)

• noun group (my first job)

• gerund (swimming)

A preposition cannot be followed by a verb. If we want to follow a preposition by a verb, we must use the "-ing" form which is really a gerund or verb in noun form.

Quick Quiz: In the following sentences, why is "to" followed by a verb? That should be impossible, according to the above rule:

• I would like to go now.

• She used to smoke.

Here are some examples:

http://www.bbc.co.uk/worldservice/learningenglish/

radio/specials/954_gramchallenge16/

http://esl.about.com/od/grammarintermediate/a/

nouns_prepositions.htm

http://esl.about.com/od/grammarintermediate/a/

prepositions_of_movement.htm

http://esl.about.com/od/grammarintermediate/a/

prepositions_of_time.htm

http://esl.about.com/library/grammar/

blgr_prep9.htm

For more information see Market Leader. Course book. Intermediate business English/ D.Cotton, D.Falvey, S.Kent: Longman, 2001 (p. 139) [1] 

Check your understanding of grammar and do the exercises:

http://www.bbc.co.uk/worldservice/learningenglish/

radio/specials/954_gramchallenge16/page2.shtml

http://www.bbc.co.uk/worldservice/learningenglish/

radio/specials/954_gramchallenge16/page3.shtml

http://esl.about.com/library/quiz/blgrquiz_prep5.htm

http://esl.about.com/library/quiz/blgrquiz_prep2.htm

http://esl.about.com/library/quiz/blgrquiz_prep3.htm

http://www.englishgrammar.org/common-noun-

preposition-combinations/

Skills 2: Decision-making

Watch the video “A Big Takeover in Media Market: Virgin Media Sold to Liberty Global for £15bn” and put down the major issues considered in them and the viewpoints mentioned. Use the information resource: 

http://www.tutor2u.net/blog/index.php/

business-studies/comments/a-big-takeover-in-media-

market-virgin-media-sold-to-liberty-global-for-15bn#extended

Watch the videos “Takeover insights: Kraft & Cadbury”, “Kraft & Cadbury – One Year On” and put down the major issues considered in them and the viewpoints mentioned. Use the information resource: 

http://www.tutor2u.net/blog/index.php/

business-studies/comments/takeover-insights-kraft-

cadbury-the-story-in-video-clips

Are there more advantages or disadvantages of the two takeover examples?

For more information see Market Leader. Course book. Intermediate business English/ D.Cotton, D.Falvey, S.Kent: Longman, 2001 (p. 94-101) [1]

Revision: check up your understanding and knowledge of the topic at 

http://quizlet.com/15563576/test/

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