Blue-Collar Pet store is experiencing growth and development. As the CEO, I have consulted with other shareholders in light of expanding internationally. They have provided a way forward by deciding we expand through quantitative and qualitative research of entry strategy to international markets. In this report, we will explore and research strategic options and alternatives for our business, the implications of alternatives, and the proposed strategy in light of Venezuela and Japan. Secondly, it will recommend and highlight the action needed to succeed.
Strategic Options, Advantages and Disadvantages
Entering a new international market can be a complex process that requires careful planning and strategic decision-making. Here are some detailed strategic options and alternatives for entering a new international market as a pet store.
Exporting: Exporting involves shipping goods or services to an international market. This low-risk strategy allows us to test the waters of the new market without investing heavily. To export, we must identify the target market and establish relationships with distributors or agents who can help us navigate the regulatory environment. The advantages include; low risk because a business can test the market with less investment. It is time conscious because products enter the market quickly, and finally, it is flexible because it is easy to adjust the export strategy by observing the market demand. However, the disadvantages include; limited control over the distribution and marketing of the products to the target market. Secondly, competition is paramount because of already-established local brands. Finally, it would limit growth potential because scaling down the target market is difficult.
Franchising: Franchising is a popular strategy for expanding internationally as it allows us to leverage the knowledge and expertise of local entrepreneurs familiar with the local market. In a franchise model, we grant a license to a local entrepreneur to use our brand name, products, and services in exchange for a fee or percentage of the profits.
The advantages include low risk because it is possible to leverage the knowledge and expertise of local entrepreneurs without making a significant investment. Secondly, local knowledge aid in understanding the local market and culture. Thirdly, it is easy to scale by leveraging the resources and expertise of local franchisees.
The disadvantages include limited control because they operate independently, and their actions can affect the brand’s reputation. Secondly, cultural difference usually impedes establishment a successful franchise system. Finally, legal and regulatory challenges because it involves complex requirements based on the specific countries
Joint Ventures: A joint venture involves partnering with a local company to enter a new market. This strategy can help us overcome barriers to entry, such as cultural differences, legal regulations, and language barriers. A joint venture allows us to share costs, risks, and knowledge with a local partner.
The advantages include the availability of local knowledge because Joint venture partners deeply understand the local market, culture and regulatory environment. Secondly, risks and costs are shared with the local partner. Thirdly, Joint ventures allow the business to allow us to access local resources like, capital, technology, and expertise.
The disadvantages include, Joint ventures require collaboration and compromise, which can, in turn, result in losing control of the business. Secondly, cultural differences can challenge establishing a successful joint venture. Finally, Divergent interests and goals can lead to conflict between partners.
Licensing is a contractual agreement allowing another company to use our intellectual property, such as trademarks, patents, or copyrights, in exchange for royalties. This strategy is useful if we have a strong brand or product that is in demand in the target market.
The advantages include the license fee requirement is low. Secondly, it increases revenue by allowing ownership of intellectual property without owning a physical infrastructure. Finally, it increases access to new markets with high demand for a brand/product.
The disadvantages include, it can limit the control of the use of intellectual property depending on the licensing agreement. Secondly, the company’s quality and reputation depend on the license. Finally, it increases competitors from other licensees in the same market.
Direct investment involves establishing a subsidiary or acquiring an existing company in the target market. This strategy gives us complete control over our operations and allows us to tailor our products or services to the local market. Direct investment requires significant capital investment and carries a high level of risk (Glowik, 2020).
The advantages include it provides complete control over the operations in the target market. Secondly, provides flexibility because it is possible to tailor the business products and services to the local market. Finally, it is possible to increase significant revenue and profit growth.
The disadvantages include it is high risk because of the significant investment. For example, physical infrastructure. Secondly, it faces regulatory challenges because of the nature of the business. Finally, cultural differences may be witnessed during the company’s establishment.
E-commerce: E-commerce is an increasingly popular strategy for entering international markets, especially for pet stores. It involves selling products or services online to customers in the target market. E-commerce allows us to reach a global audience without physical infrastructure or a local presence (Glowik, 2020).
The advantages include low investment because of the capital required. Secondly, it is easy to access the global market. Finally, it is flexible in terms of product pricing and offers.
The disadvantages include cultural differences because of the global market available. Legal and regulatory challenges are the second difficulty because they vary from country. Finally, it highly depends on technology, a challenge (Skabelund, 2019).
Japan and Venezuela markets
As of 2022, Japan is ranked third largest GDP in the world. This means Japanese citizens have a very high consumer power compared to other countries. Japan boasts of having lost major industries in the world. Secondly, it has stability in the political world. The rules, regulations and compliance are highly observed in this country. Investing in physical infrastructure is relatively affordable, owing to the fact that of locally available raw materials. The demographics of this country are aging (Skabelund, 2019). Therefore, according to recent reports, the pet industry is growing due to a high level of dependency. Finally, Japan is leading in terms of research and innovation.
However, the challenges of entering Japan market include the relatively small size of the country. Secondly, the country is highly competitive, and because of its uniqueness, they prefer their local brands. Due to their higher consumer power, they prefer value for money and high-quality products. Besides, they possess a strong network of rules and regulations, given that they are under a bureaucratic authority. Finally, they have a different management style of human resources and management.
It has been over a decade since Venezuela experienced a stable government that caters for the need of its citizens. Owed to these facts, political instability has caused the economic collapse in the country. The high cost of living embodied with inflation has led most citizens to revert to being content with being able to access basic needs. In this case, the government has imposed trade restrictions on investors willing to enter their market. Secondly, the high cost of labour and the inconsistencies of legal and political areas has caused the country’s business investors to decline (Skabelund, 2019). Finally, the country has a different cultural preference from the United States.
Proposed Strategy and Action needed
Given the disparity in economic levels of Japan and Venezuela, and the objective of our company, which includes the home market, local employment, local tax revenue, and conservancy of the natural environment, it is fundamental to choose the best strategy. In this case, the e-commerce strategy would benefit our company. Japan and Venezuela would benefit the company by using an e-commerce strategy (Chhatwal, 2023).
Entering the pet e-commerce market in Japan and Venezuela will be a challenging but rewarding opportunity. Below are some of the actions that will be needed to ensure a successful business.
Researching the Market. Conduct thorough research on the pet e-commerce market in Japan and Venezuela. We will understand the existing players in the market, their product offerings, pricing strategies, and their customer base. We will analyze the market trends and identify potential gaps or opportunities to tap into.
We will define our value proposition. Based on our research, we will define our unique selling proposition by identifying what sets our e-commerce platform apart from the existing players in the market. It could be our product range, pricing, customer service, delivery speed, or any other aspect that appeals to Japanese/Venezuelan pet owners.
Choosing our products. Deciding on the types of products we want to offer. It could be anything from pet food, toys, accessories, grooming products, and more. Researching the most popular pet products in Japan and what pet owners are looking for.
Setting up our website. BCreatinga is a user-friendly and visually appealing e-commerce website showcasing our products and value propositions. Ensure that our website is optimized for the Japanese/Venezuelan language and culture, with appropriate payment and delivery options (Chhatwal, 2023).
Building relationships with suppliers. By establishing relationships with suppliers who can provide high-quality products at competitive prices. We will ensure that the suppliers are reliable and can deliver products promptly.
Developing marketing strategies. Developing marketing strategies to reach out to potential customers. It could include social media marketing, email campaigns, influencer partnerships, and other digital marketing tactics. We will tailor our marketing efforts to the preferences of the Japanese/Venezuelan audience.
Providing excellent customer service. Ensuring that we provide excellent customer service to build customer loyalty. It could include offering prompt replies to queries, quick delivery, easy returns, and other measures that enhance the customer experience.
In summary, entering the pet e-commerce market in Japan/Venezuelan requires thorough research, a unique value proposition, a user-friendly website, reliable suppliers, effective marketing strategies, and excellent customer service. With a clear understanding of the market and a solid business plan, we can successfully establish our e-commerce platform and tap into the lucrative Japanese/Venezuelan pet market.
In doing so, local employment is one of the objectives. As United States business owners, entering the pet e-commerce market in Japan may not directly impact local employment. However, our business may need more employees to manage operations, marketing, and customer service if our business grows. It could create job opportunities in our local community (Glowik, 2020).
In terms of local tax revenue. The impact on local tax revenue will depend on the size and profitability of our business. If our business grows and generates significant revenue, we will likely pay more in taxes, which could contribute to local tax revenue. However, the impact on local tax revenue may be minimal if our business is small or not very profitable.
In light of the natural environment. The impact on the natural environment will depend on our business practices. IWe can minimize our environmental impact if we are mindful of environmental concerns and adopt sustainable practices, such as reducing waste and using eco-friendly packaging. However, if our business operations involve significant use of resources or contribute to environmental pollution, it could hurt the natural environment.
References
Chhatwal, G. (2023, February 23). How to develop a market entry strategy in Japan. Kadence. Retrieved April 24, 2023, from https://kadence.com/how-to-develop-a-market-entry-strategy-in-japan/
Glowik, M. (2020). Market entry strategies: Internationalization theories, concepts and cases. De Gruyter Oldenbourg.
Skabelund, A. H. (2019). Empire of dogs: Canines, Japan, and the making of the modern Imperial World. Cornell University Press.
(Skabelund, 2019).
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