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International Expansion Plan

Question:

Discuss about the International Expansion Plan.

Answer:

Introduction

Enterprises have several reasons to expand in the global market. The rationale for international expansion is primarily due to the exciting overseas markets, new prospects, to enlarge the customer base and to achieve high growth potential. International expansion is termed to be a challenging process but can be fruitful if proper business strategy is applied by the business (Rothaermel 2015).

However, in this case, the international expansion plan is for the sports, leisure as well as tourism company Fisher sports GmbH in Austria. Although, this Australian company was established in 1942 but since then has been known for innovation as well as latest technology (Advantage Austria 2016). However, Fisher Sports has attained a market leader position in Nordic skiing but now it desires to expand in different markets to acquire new geographical market of different areas.

International Opportunities

Trends in the North America Sports industry

According to the organization position, the company wishes to expand in North America market where every year, the sports segment often receives large revenues when it comes to gate revenues, sponsorship, merchandising or media rights. The changes that is seen to be maximum is in media rights. The sports industry in North America have 35% television right deals with National Hockey League National Basketball Association and Major League Baseball.  According to Heitner (2015), streaming media has been allowing consumers to purchase specific content good which will grow from 14.6 million dollars in 2014 to 20.6 billion dollars in 2019 (Heitner 2015).

Initial Expansion of Fischer Sports GmbH

On the other hand, Fischer Sports have already expanded its manufacturing in winter and leisure sports in China such that the whole manufacturing unit has shifted to China with executive offices in Seattle. As a result, they have been growing and seeking contacts in different countries for partners in cooperation.

As seen the primary reason for the expansion in China was to increase the size of the domestic market to support efficient scales in the manufacturing facilities. Moreover, the Fis-Ski has been able to achieve the economies of scale in marketing as well as marketing opportunities such that profit per unit of skis and snowboards have increased in China. However, expanding the business in the developing countries helped in achieving competitive advantage on critical resources like raw materials, key customers and lower cost labor.

Conversely the macro and micro environment of the company will help in enabling a competitive advantage over the country such that the technological as well as economic factors remain favorable with the growing needs of innovation and price effectiveness.

International Strategy (Multidimensional)

An international strategy is applied in a business so that the scattered subsidiaries can act independently can even perform with least coordination from the firm. The three ways an international strategy can be beneficial for the Fischer Sports GmbH.

Firstly, a multidimensional international strategy will not acquire any involvement from the center such that the strategic activities taken in the developed area of North America will be executed independently on a global scale. Even more, the international strategy should have a bidirectional relationship with the local operations to meet the needs. Secondly, the product standardization with local business environment will help the company achieve responsiveness on the local operations (Hagen et al. 2012). Thirdly, this strategy will help Fischer Sports to gain competitive advantage in the Nordic skis, snowboards, Alpine skis and Twin tips in homogeneous modern skiing. However, this decentralized strategic and operations will tailor product to local markets. In addition, protected market positions needs to be established that not only accounts for industry segments but also local markets (Channon and Jalland 2016).

Effective Pricing

The company Fischer Sports will focus on right pricing strategy that will be effective in the international market.  However, the pricing strategy that will be developed for the expansion in North America will be the tailored pricing strategy to understand the local shopping behavior of the customers when it comes to sports industry (Sift Media 2014).

Modes of Entry

The mode of entry applied in this context will be based on the early development of expansion in a developed country segment. However, the strategy that would be beneficial for the Fischer Sports company would be licensing as it encompasses only low costs to expand. Although, the company did not used this strategy during expansion in China but it can prove to be beneficial when adopted in a developed segment. In addition, this strategy offers lower potential returns but involves licensees that can absorb risk. However, this strategy will be suitable as I involves to get different technology in skiing products which will not only attract the attention of the customers but will also help in ensuring patent rights, trademark rights and the know-how on processes and products (Twarowska and Kąkol 2013).

Strategic Outcomes

The outcomes of adopting this strategy with the mode of entry will help the company to achieve international diversification and returns which may decrease initially but will soon be established once the firm learns to manage the international expansion. However, the company will be able to adapt to the new knowledge into operations to sustain the innovation efforts in technology through effective pricing (Prahalad and Ramaswamy 2013).

Conclusion

To conclude, it can be said that though Fischer Sports GmbH is world’s largest producer of ski but to maintain it in the international expansion it had adopted different framework that is required in the business plan. However, the company had adopted the international business strategy to work independently with effective pricing. In addition, the licensing mode of entry adopted by the company will provide low return initially but will gradually get hold of the local North American market. Therefore, North America can provide a strong base to the Fischer Sports (Fis-ski) after China international expansion in manufacturing. 

References

Advantage Austria. 2016. Fischer Sports GmbH - Business Opportunities - Austrian companies- - advantageaustria.org. 

Channon, D.F. and Jalland, M., 2016. Multinational strategic planning. Springer.

Hagen, B., Zucchella, A., Cerchiello, P. and De Giovanni, N., 2012. International strategy and performance—Clustering strategic types of SMEs.International Business Review, 21(3), pp.369-382.

Heitner, D. 2015. Forbes Welcome. Forbes.com.

Prahalad, C.K. and Ramaswamy, V., 2013. The future of competition: Co-creating unique value with customers. Harvard Business Press.

Rothaermel, F.T., 2015. Strategic management. McGraw-Hill.

Sift Media. 2014. Pricing strategy is key to successful international expansion, according to retailers. 

Twarowska, K. and Kąkol, M., 2013. International Business Strategy-reasons and forms of expansion into foreign markets.

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