Forta's International Expansion to Bugaria and Its Downsides

Strategic Theme Capstone: GB
Name Course Instructor Date
Read the Michael Porter article "Competitive Advantage of Nations" and the "Forta Furniture" case (both from the Harvard case/readings packet).(1) Based upon your calculations, which of the 8 alternatives presented in Exhibit 1 is best?(2) Explain the potential downsides of that alternative.(3) Does Sweden, home to IKEA, have a competitive advantage in furniture? Explain why. What does that imply for Forta?
Answer the following prep questions:(1) Based upon your calculations, which of the 8 alternatives presented in Exhibit 1 is best?
It is Forta is best for international expansion to Bulgaria with a branded entry. Forta needs to consider whether to expand to Poland or Bulgaria, whether the entry strategy is branded entry or private-label entry. Forta branded entry in Bulgaria is forecasted to reach 1% market share in the first year, then, 3% in year two, and 4% in year three for a total of 8% market share (Quelch & Easwar, 2019).(2) Explain the potential downsides of that alternative.
Branded entry into Bulgaria will expand the company’s reach, but there are 11 companies that hold a 70% market share including national companies (Quelch & Easwar, 2019). However, excise taxes and the market make it a challenging environment for international brands. T...