Describe Management Market Selection and Foreign Entry Mode (Essay Sample)
Pret a Manger (which means “ready to eat” in French) is a British fast food restaurant chain known for its very friendly staff and relatively healthy food. While the majority of its restaurants are in the U.K., it also has a heavy presence in the eastern United States. While the restaurant is successful in the U.K. and in American cities such as New York and Chicago, it has had only limited success in other countries so far. In 2002, it tried to expand to Japan in a joint venture with McDonald’s, but ultimately this venture failed and it withdrew from Japan by 2004. Now it is currently entering China with restaurants in Hong Kong and Shanghai. Clearly, Pret a Manager is intent on international expansion, but given its failure in Japan, it of course needs to carefully plan its expansion strategies.source..
Market Selection and Foreign Entry Mode
Market Selection and Foreign Entry Mode
With globalization characterizing the current environment for businesses, entry into foreign markets has become a way for firms to grow. Pret a Manger currently has operations in cities in Britain, the US, France, and in Shanghai and Hong Kong (Chaudhuri, 2015). It is evident that the company has experience in the international market including Asian countries. Pret a Manger managed to enter China successfully, and as noted by Junqian (2014), the company managed to do this through targeting young office workers with its sandwich and hot soups with no additives or chemicals. The organic ingredients used in the food products of the company have contributed significantly to its success in the country. The reviews in dining guides websites in China show the company has been successful in meeting the demands of customers.
This success in the Chinese market can be transferred to a new destination, South Korea. The Pret a Manger has already set foot in China, and it has proved successful so far. Therefore, it is time to seek opportunities in newer markets. South Korea offers a potential market that Pret a Manger can consider starting operations in. According to Kluyver (2012), companies seek to enter foreign markets for growth, knowledge access, efficiency and competitive advantage. Therefore, the Pret a Manger is set to realize these benefits if it enters South Korea. However, the company failed with its entry strategy into Japan. This shows that entering a new market is not an easy undertaking and it is important for the company to plan well to limit the chances of failure. The fact that it has successfully entered the Chinese market can encourage the firm to go forth in seeking opportunities in new Asian markets. In this case, given that South Korea is in the region, there are aspects of culture that are similar to the Chinese market.
There are a number of factors that make South Korea a potential market for the products of Pret a Manger. As mentioned above, Pret a Manger already has experience in one of the Asian markets, China. This would thus make it easier for the company to enter the market as it understands the aspects that characterize the culture in the region. As mentioned by Junqian (2014), hot soups that matched the need in the Chinese market contributed to the success of Pret a Manger in the country. This strategy can also be applied in the South Korean market. However, the company has to take into account the recent trends in the market in regards to the growing taste for chicken. According to Straits Times (2016), eating chicken is firmly integrated into the culture of the nation. Therefore, as Pret a Manger prepares to enter South Korea, it has to consider integrating chicken into its menus. The Korean market has also experienced many consumers considering fast foods. As noted by research by Euromonitor (2017), the qualified meals accompanied with lower costs compared to other food categories are what attract the consumers to fast food. As seen, the South Korea offers a potential opportunity that is worth exploring by Pret a Manger. Entering the market will put the company in a better position to conquer other Asian markets.
Mode of Entry
The choice of entry mode is a crucial st...
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