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International Business - Assignment

Mohit Mehdniratta (PGP02032)

Strategy for M&M to enter in Europe


Entering Europe is not an easy task for any Indian company as of current
condition. Europe is going through its worst economic crisis. Though whole
Europe is not facing this crisis, major economies like Portugal, Italy, Greece,
and Spain (PIGS) have been suffering with this contagious crisis. Therefore,
entering in Europe right now is like taking risk with high probability of failure.
According to theory of risk and return, high risk is indication of high return. It
means entering Europe can serve you high returns which would increase
your bottom line over a period.
M&M, an Indian conglomerate, is operating in 79 countries with 1,13,000
plus employees across globe. Group has presence in many businesses like
automotive, farm equipment, aerospace, IT, retail to leisure holidays. Group
has been changed its tagline from India is second to none to Rise. This
change shows basic strategy of M&M to enter in foreign market. Innovation
has been the part of group DNA, still they are facing problem of articulation
because of younger employees.
Strategy to enter in Europe for M&M can be crafted by analyzing Europe
market with the help of Where-When-How model.
WhereEurope is segregated in two part eastern and Western Europe. Each part of it
having different cultural, political, economic, and social conditions. I would
like to suggest to enter in eastern Europe.
Financial angle:
Eastern European countries like Poland, Czech Republic, Slovakia, Bulgaria
are not much developed country rather they are in high growth developing
phase. Therefore, land acquisition, labor, construction, and raw material cost
would be lower. hence, initial investment for M&M would not be high.
Producing in these countries and exporting them to highly developed
countries of Europe would be good strategy.
Demand:

Local competition would not be serious concern as these countries are in


developing phase. Market size would be including domestic and foreign
market.

Strategic:
Infrastructure is not a big problem like India so company can handle this
problem. There would be less industrial clusters as European countries are
open to all other European countries.
Socio political:
All European countries have political stability. Cultural barriers could be
problem for the company but they can solve it by hiring local employees.
WHENEntering Eastern Europe is safer now because these countries are less
affected by euro crisis and M&M can get first mover advantage if they select
business like Electric car manufacturing. M&M already has business of
electric car manufacturing based in Bangalore. They can use their
technology and competency to capitalize the operations in Europe.
HOWMode of entry for M&M is bit tricky task as they cant go for JV as there is no
European electric car manufacturer. Therefore, company has to form a
subsidiary through 100% FDI.
Application of above mentioned strategy can be substantiated by using 4 A
strategies for your product development in foreign market.
Adaptability: Their product should be manufactured according to local
demand and conditions.
Electric cars are in demand because of
environmental causes.
Availability:
Availability of product should be high by using different modes of
distribution.
Affordability:

Product should be affordable as they are targeting developing part of Europe


also.
Affinity:
Affinity of brand has to create by doing some promotion and social related
tasks.

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