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International Strategy of B&Q - Assignment Example
The annals of business history report that for every successful market entry, about four entries fail. Inexperienced start-ups suffer some of these disappointments, but so do many sophisticated corporations (Horn et. al., 2005). Therefore, the choice of entry mode constitutes one of the most critical decisions for international strategy success…
B&Q is the number one DIY retailer in Europe and the third largest in the world, with more than 60 stores opened internationally, including B&Q Beijing, which is now the largest B&Q store in the world.
Based on literature a firm has to make two initial decisions for facing internationalization process, i.e. equity and non-equity entry modes (See figure 1). Entry mode is an institutional arrangement that makes possible the entry of firm's products, technology, human skills, management or other resources into a foreign country (Root 1994). On this level, the key issues when making a decision on entry modes are those that refer to the macro-level factors of the target country, such as country-risk, cultural differences or potential for growth (Pan and Tse, 2000). The influence of these factors on the choice of entry mode will show up in the commitment of resources that the firm is willing to undertake in the international market and the strategic flexibility they wish to maintain in order to face up to unforeseen changes in the environment (Pan and Tse, 2000).
On the second level of analysis, managers would do well to evaluate the different modes of entry, taking into consideration the degree of ...