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Market entry options : Chery Cars China - Essay Example

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Market entry options : Chery Cars China

distributorship 12 b. internet sales 13 8.2. Strategic Alliance 13 9. Timing of entry 14 9 Conclusion 15 10. References 16 Executive Summary This study focuses on modes of entry and strategies appropriate for Chery Cars. Chery Cars, an automotive company from China, is contemplating on globalization as strategy for expansion. Chery has started exporting in 67 countries and has established 7 factories in six countries. Its future plan is for an expansion in the United States. Suggested entry modes for entry to United States are exporting and joint ventures. The advantages and barriers of each strategy are presented. Export to U.S is timely because of improving economy, the need to change age old cars to newer models of light vehicles, and demand is more than the supply. Market entry options for Chery Cars to U.S. I. Introduction Multinationals target new geographical places as their products reached maturity in their home base or to augment efficiency. They are looking for more lucrative markets to sell their products. As such, many companies are giving attention into the emerging economies as future markets. They have to work out for a strategy to avoid total phase out or to gain more productivity. Introduction of these products to a new market will open up opportunities and give a new breath for the product. Ford has redesigned its Mustang, a ’60 icon, hoping to attract buyers from China and Europe (Ponchard, N, 2013) Ford has brought its cars to China through a joint venture. Other automotive dealers and heavy equipment manufacturers are also focusing on new markets. Today, principal automakers such as General Motors, Ford, Toyota, Volkswagen Daimler-Chrysler operate in global competitiveness. Advances in technology have allowed growth in the distribution system that led to globalization. . For instance, Japanese technology through its innovativeness in production, modified U.S. manufacturing of automotives. Practices of the most dynamic manufacturers are to invest in production facilities in the emerging markets. They do this either by mergers, consolidation, or partnership, a trend that is going on in automakers in order to expand.(Business Reference Services, 2004). For example, there were mergers between Volkswagen-Lamborgini; BMW-Rolls Royce, Chrysler-Mercedes Benz; Renault-Nissan-Fiat and Mazda-Mitsubishi and Kia-Volvo. Mergers of this sort are done to improve positioning in the market. Overview of the automotive industry in the U.S. a. American car culture. Economic analysts from the United States are perturbed about the changing behavior of the Americans on its car culture. Studies showed Americans are reconsidering its relationship with their cars. Several economic factors brought about these changes. The National Museum of American History (n.d.) fosters these changes are due to environment pollution that led to regulations on automobile pollution, gas shortages and changes in lifestyle. Suddenly, from big cars, American saw smaller cars beautiful. In mid-70s American’s preference for the roomy appearance of big cars changed to smaller ones. Economy made sense because of recession, gas shortages and high oil price, Americans saw the need for smaller cars. Lifestyle changes also brought changes. Lowy, Joans (2013) argued that there are more women drivers now because of employment. Lowy stated that the levels of driving growth is declining since he saw the rate of teenagers getting drivers licesenses is low. ...Show more
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Cover page GLOBAL MARKETING STRATEGIES M3X9086 Market entry modes: Chery Cars Submitted by: Your name Professor BA Business Portfolio International Business December 2013 Table of contents 1. Executive summary 3 2. Introduction 4 3. Overview of the U.S. car market 4 a…
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