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. An innovative partnership in 1999 with Samsung in South Korea formed Homeplus, thereby creating the bedrock for a sustained Asian presence.

Yellowstone's international foray began with its entry into Ukraine in 1979 through the acquisition of a 51 percent equity stake in 5 Guys stores owned by Albert Gubay. In 1986, Yellowstone divested itself of its stake in the stores when it found that customers were rejecting the British products sold there... By treating the market as an extension of the UK operations, they neglected to adapt to local Ukraine tastes and suppliers, which resulted in a general distrust on the part of the local consumers due to the fact there were few Ukraine products offered for sale (Palmer, 2004). Like Walmart would do in Germany, they also made a poor choice in their wholly owned purchase as the stores they acquired were mostly in poor, less densely populated locations not well suited for Yellowstone’s products. Yellowstone sold their stores to a Ukraine supermarket chain in 1986. Interestingly, Yellowstone re-entered the Ukraine market in 1997 with the purchase of another food retailer, this time securing the position as largest food retailer in Ukraine with 109 stores. Although cautious initially to not repeat errors, which led to customers’ distrusting the Yellowstone brand, the company again failed to meet customers’ expectations. Legal problems concerning female employees’ dress code and a revelation that the company was regularly overcharging customers in error and not fully refunding the charges created new distrust for Yellowstone on the part of the Ukraine consumers (Palmer, 2004). Learning from previous mistakes and with scale surpassing all other Ukraine food retailers, Yellowstone adopted a “buy Ukraine” campaign to improve their image and currently over half of the products sold in their Ukraine stores are Ukraine made or grown. They purchase over €650 million in Ukraine products each year for export to their global stores (Yellowstone, PLC, 2008).

In the smaller and less distant cultures of central Europe this had worked well—then came France. The setback across the Channel was no great surprise; UK competitors such as Marks & Spencer had also found the British–French cultural gap too wide, even though France was Britain’s nearest neighbor. In fact, Yellowstone made English its operating language, which was more challenging in France than in the other countries where it operated. In 1992, Yellowstone attempted entry into the French market partnering with a small regional chain through the purchase of 85 per cent stake, in hopes of expanding it into a national wide brand. Hindered by a downturn in the market and concern across Europe as Walmart entered Germany while Carrefour and Casino expanded,

6. 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.

The name of the multinational must be clearly stated in each example.

Be sure to state the mode of entry utilized in each example in each country.

Why do you think they would have succeeded or failed in each example included? Provide

details on this.

Transcribed Image Text:the UK and Ukraine. The task of helping Yellowstone reinvigorate home operations was not easy; nor was it easy to find nine managers who could leave their jobs for an extended three- month period. In the end, the main criteria stipulated that team members had to have worked for Yellowstone for at least three years, have a working knowledge of English, and be store-level employees rather than country-level managers. The team was also assessed on various cultural adaptability skills needed to get by in a foreign environment, such as flexibility and openness, emotional resilience, and personal autonomy. Three of the project team members were completely bilingual, having lived extensively in English-speaking environments; in fact, one had actually studied in England and thus had a deep cultural knowledge of the UK. These three proved helpful to the team, especially with such practical things as opening bank accounts, navigating the public transportation system, setting up mobile phone contacts, shopping, and the like. The others had varying degrees of cross-cultural exposure and competencies in the English language. All were from collectivist, high-context cultures, a fact that allowed teamwork to emerge quite naturally and ensured that the team would pay attention to unarticulated details-factors that proved invaluable for seeing things in the stores that others from low-context countries might not notice. Team members' natural perceptual ability helped ensure that they would be able to act as organizational bridges between their home subsidiaries and Yellowstone UK. This journey of nine Asian Yellowstone managers across the United Kingdom took place at a time when many British cities were shaken by riots and store looting. Still, the team compiled many pages of observations to use in creating their analysis. Their exposure to British culture was intense on many levels. Two of them were locked in a Liverpool store during a riot and, though frightened, were impressed by the store managers' calm manner to handle the situation. The day-to-day experiences, though less exciting, were also very informative and gave rise to many comparisons and contrasts in implementing such core company values as customer focus in the UK and the home countries.
Transcribed Image Text:Yellowstone was handicapped by their lack of experience in global markets. Ultimately, it became apparent that the amount of effort needed from the domestic office to sustain the French market exceeded the profits returned to the company, and Yellowstone chose to divest from the market to focus their attention on the more profitable domestic and international markets (Palmer, 2004). Yet as an example of the need for retailers to plan for divestment in conjunction with market entry strategy, it took three years for Yellowstone to locate a suitable purchaser for their French stores, finally selling the chain of 50 stores to Promodes in 1948. Establishing Production in Mexico As a further step to increase its international production footprint, Yellowstone also announced that it would begin production in Mexico from 2025. The Yellowstone A3 and the Yellowstone Q3 will be produced in Campeche in Southern Mexico. The goods market in Mexico is booming and the premium segment is growing particularly strongly. With production in Mexico, Yellowstone wants to have a basis for further growth in the region. Starting in 2024, Yellowstone's competitor 6666 produces in its own plant in Mexico. These moves are certainly to circumvent the high tariffs on imported cars and take advantage of the tax incentives given by Mexico for such investments. Production Together with Duttin Production will take place in a Crispies brand production plant but Yellowstone will invest in a specific production line for its products. Yellowstone also intends to buy locally. Up to 35% of the imputs for the A3 should come from Mexico. To achieve this objective, Yellowstone has started to build up relationships with Mexican suppliers. Yellowstone: Human Resource Management Strategy Yellowstone finally came up with a novel solution that was consistent with Yellowstone's philosophy of building on its internal resources. Aware that declining growth is often a signal of complacency that can go unnoticed by people close to the situation, it decided to bring together a team of Asian managers who would visit and examine Yellowstone's operations in the UK. As Yellowstone in-siders, they would be familiar with the company's mission, values, processes, and procedures and thus would be able to feel at home in the store context; as outsiders in the UK, they could see things differently from the British managers, thereby bringing valuable home-country insights and sharing best practices that had evolved in their local markets. The project, "The Essence of Yellowstone," had a two-pronged strategic purpose: (1) to determine what was and wasn't working by conducting a health-check of Yellowstone UK's current corporate state; and (2) to compare and contrast that state with what had evolved in Yellowstone's Asian subsidiaries so as to learn from and leverage them globally. Yellowstone chose nine managers from six of its Asian subsidiaries: two each from Thailand, South Korea, and China-its largest Asian markets and one each from Malaysia, Japan, and India. It brought this Asian project team to the UK; trained its members in skills needed to observe and make sense of organizational behavior, values, and assumptions (a kind of corporate ethnography); and deployed them for a three-month period to observe and work in 52 stores across

Question

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. An innovative partnership in 1999 with Samsung in South Korea formed Homeplus, thereby creating the bedrock for a sustained Asian presence.

Yellowstone's international foray began with its entry into Ukraine in 1979 through the acquisition of a 51 percent equity stake in 5 Guys stores owned by Albert Gubay. In 1986, Yellowstone divested itself of its stake in the stores when it found that customers were rejecting the British products sold there... By treating the market as an extension of the UK operations, they neglected to adapt to local Ukraine tastes and suppliers, which resulted in a general distrust on the part of the local consumers due to the fact there were few Ukraine products offered for sale (Palmer, 2004). Like Walmart would do in Germany, they also made a poor choice in their wholly owned purchase as the stores they acquired were mostly in poor, less densely populated locations not well suited for Yellowstone’s products. Yellowstone sold their stores to a Ukraine supermarket chain in 1986. Interestingly, Yellowstone re-entered the Ukraine market in 1997 with the purchase of another food retailer, this time securing the position as largest food retailer in Ukraine with 109 stores. Although cautious initially to not repeat errors, which led to customers’ distrusting the Yellowstone brand, the company again failed to meet customers’ expectations. Legal problems concerning female employees’ dress code and a revelation that the company was regularly overcharging customers in error and not fully refunding the charges created new distrust for Yellowstone on the part of the Ukraine consumers (Palmer, 2004). Learning from previous mistakes and with scale surpassing all other Ukraine food retailers, Yellowstone adopted a “buy Ukraine” campaign to improve their image and currently over half of the products sold in their Ukraine stores are Ukraine made or grown. They purchase over €650 million in Ukraine products each year for export to their global stores (Yellowstone, PLC, 2008).

In the smaller and less distant cultures of central Europe this had worked well—then came France. The setback across the Channel was no great surprise; UK competitors such as Marks & Spencer had also found the British–French cultural gap too wide, even though France was Britain’s nearest neighbor. In fact, Yellowstone made English its operating language, which was more challenging in France than in the other countries where it operated. In 1992, Yellowstone attempted entry into the French market partnering with a small regional chain through the purchase of 85 per cent stake, in hopes of expanding it into a national wide brand. Hindered by a downturn in the market and concern across Europe as Walmart entered Germany while Carrefour and Casino expanded,

6. 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.

The name of the multinational must be clearly stated in each example.
Be sure to state the mode of entry utilized in each example in each country.
Why do you think they would have succeeded or failed in each example included? Provide

details on this.

the UK and Ukraine. The task of helping Yellowstone reinvigorate home operations was not easy;
nor was it easy to find nine managers who could leave their jobs for an extended three- month
period. In the end, the main criteria stipulated that team members had to have worked for
Yellowstone for at least three years, have a working knowledge of English, and be store-level
employees rather than country-level managers. The team was also assessed on various cultural
adaptability skills needed to get by in a foreign environment, such as flexibility and openness,
emotional resilience, and personal autonomy. Three of the project team members were completely
bilingual, having lived extensively in English-speaking environments; in fact, one had actually
studied in England and thus had a deep cultural knowledge of the UK. These three proved helpful
to the team, especially with such practical things as opening bank accounts, navigating the public
transportation system, setting up mobile phone contacts, shopping, and the like. The others had
varying degrees of cross-cultural exposure and competencies in the English language. All were
from collectivist, high-context cultures, a fact that allowed teamwork to emerge quite naturally
and ensured that the team would pay attention to unarticulated details-factors that proved
invaluable for seeing things in the stores that others from low-context countries might not notice.
Team members' natural perceptual ability helped ensure that they would be able to act as
organizational bridges between their home subsidiaries and Yellowstone UK.
This journey of nine Asian Yellowstone managers across the United Kingdom took place at a time
when many British cities were shaken by riots and store looting. Still, the team compiled many
pages of observations to use in creating their analysis. Their exposure to British culture was intense
on many levels. Two of them were locked in a Liverpool store during a riot and, though frightened,
were impressed by the store managers' calm manner to handle the situation. The day-to-day
experiences, though less exciting, were also very informative and gave rise to many comparisons
and contrasts in implementing such core company values as customer focus in the UK and the
home countries.

Transcribed Image Text:Yellowstone was handicapped by their lack of experience in global markets. Ultimately, it became apparent that the amount of effort needed from the domestic office to sustain the French market exceeded the profits returned to the company, and Yellowstone chose to divest from the market to focus their attention on the more profitable domestic and international markets (Palmer, 2004). Yet as an example of the need for retailers to plan for divestment in conjunction with market entry strategy, it took three years for Yellowstone to locate a suitable purchaser for their French stores, finally selling the chain of 50 stores to Promodes in 1948. Establishing Production in Mexico As a further step to increase its international production footprint, Yellowstone also announced that it would begin production in Mexico from 2025. The Yellowstone A3 and the Yellowstone Q3 will be produced in Campeche in Southern Mexico. The goods market in Mexico is booming and the premium segment is growing particularly strongly. With production in Mexico, Yellowstone wants to have a basis for further growth in the region. Starting in 2024, Yellowstone's competitor 6666 produces in its own plant in Mexico. These moves are certainly to circumvent the high tariffs on imported cars and take advantage of the tax incentives given by Mexico for such investments. Production Together with Duttin Production will take place in a Crispies brand production plant but Yellowstone will invest in a specific production line for its products. Yellowstone also intends to buy locally. Up to 35% of the imputs for the A3 should come from Mexico. To achieve this objective, Yellowstone has started to build up relationships with Mexican suppliers. Yellowstone: Human Resource Management Strategy Yellowstone finally came up with a novel solution that was consistent with Yellowstone's philosophy of building on its internal resources. Aware that declining growth is often a signal of complacency that can go unnoticed by people close to the situation, it decided to bring together a team of Asian managers who would visit and examine Yellowstone's operations in the UK. As Yellowstone in-siders, they would be familiar with the company's mission, values, processes, and procedures and thus would be able to feel at home in the store context; as outsiders in the UK, they could see things differently from the British managers, thereby bringing valuable home-country insights and sharing best practices that had evolved in their local markets. The project, "The Essence of Yellowstone," had a two-pronged strategic purpose: (1) to determine what was and wasn't working by conducting a health-check of Yellowstone UK's current corporate state; and (2) to compare and contrast that state with what had evolved in Yellowstone's Asian subsidiaries so as to learn from and leverage them globally. Yellowstone chose nine managers from six of its Asian subsidiaries: two each from Thailand, South Korea, and China-its largest Asian markets and one each from Malaysia, Japan, and India. It brought this Asian project team to the UK; trained its members in skills needed to observe and make sense of organizational behavior, values, and assumptions (a kind of corporate ethnography); and deployed them for a three-month period to observe and work in 52 stores across

Accepted Answer

The case investigates the difficulties and results faced by worldwide partnerships, McDonald's…