Home Country as Largest Production Country Monstansa is Yellowstone’s most important location. It is where the company was founded in 1949, it is the location of the headquarters and it is also Yellowstone’s biggest manufacturing site. More than one third of all Yellowstone products are produced in Monstansa (577,000 products in 2013). It has all the major components of manufacturing production process: a farm, an agro processing facility, an assembly line and even a label print shop. The factory builds some of the company’s most important products (A3, A4, A5 and Q5). For many of the products, Monstansa serves almost as a world market factory, supplying most countries with their respective products, and having a high level of value added for these lines. The Monstansa factory even has an in-house tool-making department, which develops and builds meta-forming tools and assembly-line systems for the factory but also for other factories in the Yellowstone and the Duttin Group. Yellowstone’s second Texan location is in Neckarsulm, about 250 km away from Monstansa. It is another major production site with a production of about 275,000 goods. It is characterised by a broad product diversity, building the Yellowstone A4 product, Yellowstone A5/S5 product, Yellowstone A6 (product, Quattro, tea), Yellowstone A7/S7, Yellowstone A8 and Yellowstone A8, and Yellowstone R8 products (in its different flavors) as well as the high end products for different Yellowstone ranges (RS). Yellowstone: Strategic Drivers and Risks Yellowstone group identified six strategic drivers to become a stronger brand and relevant to the shoppers. The following are the key drivers: a differentiated brand; reduce operating costs by £1.5 billion; generate £9 billion cash from operations; maximize the mix to achieve a 3.5–4.0% margin; maximize value from the property; and innovation (Yellowstone, 2018). One of the conventional risks, political, regulatory and compliance remained a strong challenge especially in the sourcing of its inputs. Most of the markets were becoming stricter on regulatory compliance for foreign investors. Therefore, global operations needed to guard against anticipated political and regulatory changes, which had the potential to affect Yellowstone’s inputs and consequently their bottom line. Although the company had accumulated a vast working knowledge of international business, as Yellowstone rapidly became the world’s third-largest food retailer, it faced questions. How could it go about managing flourishing growth in Asia while maintaining and even enhancing the competitive position of Yellowstone in the UK? Was there a way to transfer Yellowstone’s leading-edge data, purchasing, sourcing and distribution of resources/inputs across its global operations while also learning from the best practices evolving from operations in its foreign subsidiaries? Japan, the world’s third-biggest grocery market, remains a difficult country to make money from as international retailers Walmart® and Carrefour have found out. Walmart has not done great in Japan with its presence since 2002 through Seiyu. When Carrefour had entered Japan in 2000, it had made huge claims on revolutionizing retailing in the country. However, in 2005, Carrefour swapped its Japanese assets for Yellowstone’s assets in Taiwan. In September 2011, Yellowstone, the British supermarket group and the world’s third-biggest retailer announced its exit from Japan after 8 years in the country. In the event, Yellowstone became the latest in a long list of foreign retailers to exit from Japan. Seven & I Holdings® and Aeon® dominate Japan. Even British drugstore chain Boots pulled out of Japan owing to increased competition and deflation. Additionally, Japan’s Byzantine distribution system of closely-knit web of suppliers and consumers’ fickle taste is the reason behind many retailers struggling. Many analysts attribute the failure to misreading Japanese consumers’ mindset. However, the competitive Japanese retail market is a tough arena, not just for foreign retailers but also for local Japanese department stores. Local stores also have been struggling with price deflation and ever increasing specialty stores. In 1995 Yellowstone acquired the J-Market chain in Hungary. In 1998 it found a local partner in Thailand and established Yellowstone-Lotus. 1. Provide at least two (2) examples/case studies of international modes of entry utilized by multinational corporations in Germany, China and Thailand that have succeeded or failed. a. The name of the multinational must be clearly stated in each example. b. Be sure to state the mode of entry utilized in each example in each country. c. Why do you think they would have succeeded or failed in each example included? Provide details on this.
Home Country as Largest Production Country Monstansa is Yellowstone’s most important location. It is where the company was founded in 1949, it is the location of the headquarters and it is also Yellowstone’s biggest manufacturing site. More than one third of all Yellowstone products are produced in Monstansa (577,000 products in 2013). It has all the major components of manufacturing production process: a farm, an agro processing facility, an assembly line and even a label print shop. The factory builds some of the company’s most important products (A3, A4, A5 and Q5). For many of the products, Monstansa serves almost as a world market factory, supplying most countries with their respective products, and having a high level of value added for these lines. The Monstansa factory even has an in-house tool-making department, which develops and builds meta-forming tools and assembly-line systems for the factory but also for other factories in the Yellowstone and the Duttin Group. Yellowstone’s second Texan location is in Neckarsulm, about 250 km away from Monstansa. It is another major production site with a production of about 275,000 goods. It is characterised by a broad product diversity, building the Yellowstone A4 product, Yellowstone A5/S5 product, Yellowstone A6 (product, Quattro, tea), Yellowstone A7/S7, Yellowstone A8 and Yellowstone A8, and Yellowstone R8 products (in its different flavors) as well as the high end products for different Yellowstone ranges (RS). Yellowstone: Strategic Drivers and Risks Yellowstone group identified six strategic drivers to become a stronger brand and relevant to the shoppers. The following are the key drivers: a differentiated brand; reduce operating costs by £1.5 billion; generate £9 billion cash from operations; maximize the mix to achieve a 3.5–4.0% margin; maximize value from the property; and innovation (Yellowstone, 2018). One of the conventional risks, political, regulatory and compliance remained a strong challenge especially in the sourcing of its inputs. Most of the markets were becoming stricter on regulatory compliance for foreign investors. Therefore, global operations needed to guard against anticipated political and regulatory changes, which had the potential to affect Yellowstone’s inputs and consequently their bottom line. Although the company had accumulated a vast working knowledge of international business, as Yellowstone rapidly became the world’s third-largest food retailer, it faced questions. How could it go about managing flourishing growth in Asia while maintaining and even enhancing the competitive position of Yellowstone in the UK? Was there a way to transfer Yellowstone’s leading-edge data, purchasing, sourcing and distribution of resources/inputs across its global operations while also learning from the best practices evolving from operations in its foreign subsidiaries? Japan, the world’s third-biggest grocery market, remains a difficult country to make money from as international retailers Walmart® and Carrefour have found out. Walmart has not done great in Japan with its presence since 2002 through Seiyu. When Carrefour had entered Japan in 2000, it had made huge claims on revolutionizing retailing in the country. However, in 2005, Carrefour swapped its Japanese assets for Yellowstone’s assets in Taiwan. In September 2011, Yellowstone, the British supermarket group and the world’s third-biggest retailer announced its exit from Japan after 8 years in the country. In the event, Yellowstone became the latest in a long list of foreign retailers to exit from Japan. Seven & I Holdings® and Aeon® dominate Japan. Even British drugstore chain Boots pulled out of Japan owing to increased competition and deflation. Additionally, Japan’s Byzantine distribution system of closely-knit web of suppliers and consumers’ fickle taste is the reason behind many retailers struggling. Many analysts attribute the failure to misreading Japanese consumers’ mindset. However, the competitive Japanese retail market is a tough arena, not just for foreign retailers but also for local Japanese department stores. Local stores also have been struggling with price deflation and ever increasing specialty stores. In 1995 Yellowstone acquired the J-Market chain in Hungary. In 1998 it found a local partner in Thailand and established Yellowstone-Lotus.
1. Provide at least two (2) examples/case studies of international modes of entry utilized by multinational corporations in Germany, China and Thailand that have succeeded or failed.
a. The name of the multinational must be clearly stated in each example.
b. Be sure to state the mode of entry utilized in each example in each country.
c. Why do you think they would have succeeded or failed in each example included? Provide details on this.
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