Foreign Market Entry and Diversification
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Write four to five (4-5) pages in which you follow these formatting requirements:
1. Create an argument for diversification of your business that will be presented to the board of directors or business investors.
2. Develop a strategy for diversification indicating the products and industries for the diversification and how synergies may be gained from the diversified activity.
3. Identify and discuss the foreign market that the company should enter and discuss the strategy it should use to enter the market.
4. Discuss the challenges that the company may face in the foreign market, and how it might respond strategically to minimize the impact of these challenges.
5. Create a scenario when it would not make sense for the company to diversify or expand into a foreign market. Provide support for your rationale.
6. Assess how the company will create a business environment conducive to ethical behavior.
7. Use at least four (4) quality academic resources. Note: Wikipedia and other Websites do not qualify as academic resources.
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Solution Summary
This solution discusses how diversification will help Ford through the US economic decline, how they should diversify in to smaller, less expensive and more fuel efficient vehicles, and how they may diversify into emerging asian markets. This solution is 1200 words and includes four references.
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1. Create an argument for diversification of your business that will be presented to the board of directors or business investors.
Ford Motor Company needs to diversify. As the decline in the US economy continues, there will be a decline in the demand for automobiles. Difficult economic conditions in the US and economic problems in the EU region has compelled Ford Motor Company to modify its strategy. The other reason why diversification has become inevitable is that there is higher level of competition from firms such as Toyota and General Motors. In this environment, Ford Motor Company must diversify to survive. The company has access only to a limited set of customers. Its pool of loyal customers has declined during the past five years and to ensure long term viability, Ford Motor Company must diversify. The present economic decline may be because of a temporary business cycle recession, but Ford Motor Company requires products that sell when the general demand is declining. Diversification will not only help Ford Motor Company survive but will help it grow. New products will help Ford Motor Company make more sales to the existing and new customers and expand into markets that would have been closed to it (1). At this point in time, diversification will help Ford Motor Company become more efficient. Ford Motor Company will gain by diversification through realizing synergies, will make use of its excess capacity, and can make better use of its brand (3).
2. Develop a strategy for diversification indicating the products and industries for the diversification and how synergies may be gained from the diversified activity.
Ford Motor Company should diversify into small cars. These cars should have low prices, high fuel efficiency and low maintenance costs. Currently, because of the high unemployment rate and declining incomes because of economic downturn, car buyers are seeking smaller and less costly cars. In addition, soaring fuel costs have motivated customers to buy cars that use less fuel ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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