BUSN 110 E1
Writing Assignment 1
1. Briefly describe some of the general risks associated with global expansion (for any company selling a product) that are highlighted in the articles. How has the Internet changed the way companies expand into new markets and helped mitigate these risks?
There is always a risk when a company wants to expand and the risk can be greater when a company wants to expand globally. The risk over extending resources or investments can leave already established businesses in the United States stretched thin for resources or funds. The risk of the market not interested in the products that company offers can lead to loss in profits. The internet has helped greatly with the expansion of companies globally. They only companies to start offering their products in a global market with little investment and resources. Companies do need to negotiate rents, and labor wages, and local customs, Instead they ...view middle of the document...
Chinese consumers are also afraid that items bought online are not the real deal.
3. In addition to the ideas in the article, what are some of the ways that Neiman Marcus might overcome the cultural challenges discussed in question 2?
Neiman Marcus intends to offer the Chinese consumers education on their company online and marketing events. They plan on offering exclusive content to the Chinese consumer that includes behind the scene videos with insider information on the products being offered. They intend to put a tracking device on products shipped to China thus ensuring that items are swapped out for counterfeits. They are also sending a reusable gift bag that shows off the brand of the item purchased so the Chinese consumer can display their purchases while they are out and about.
4. What are the similarities and differences in the strategies that J.Crew and Neiman Marcus are using to expand globally?
Both companies plan to sell their products online. Neiman Marcus plans on being exclusively a online global market to China. J. Crew plans on opening actual stores in multiple countries abroad including but not limited to Japan and England. Neiman Marcus plans to target luxury shoppers where J. Crew plans on continuing where the same marketing strategies that use in the United States and Canada. J. Crew will not offer any extra benefits, exclusive content or tracking devices that Neiman Marcus plans on offering their consumers.
5. J.Crew had a bad experience in Japan and now indicated it wants to avoid partners. What are the advantages and disadvantages of partnering with another company to enter foreign markets? Hint: See Table 4.2 on p. 104 of the textbook.
One advantage of using a partner is the speed of entry in the market but that can lead to knowledge of local information. Another advantage for a franchise company that the costs and risks can fall on the franchisee but that can lead to the difficulty in control of quality of faraway franchise operations. Advantages for partners can have the benefit of having resources combined and shared costs and risks but leads to the disadvantage of having the business control being shared and the possibility of losing technology that was specialized to the company.