Entry Strategy Into the German Market Term Paper

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Strategic Planning for Market Entry

Barriers to Entry

Market Challenges

Trade Barriers

Standards

EU Regulations

Conformity Assessment

Product Certification

Accreditation

Market Entry Strategy Selection

Franchising

Joint Ventures/Licensing

Licensing

Agents, Distributors and Trading Houses Agents

Distribution and Sales Channels

E-Commerce

Germany

EU Regulations

Strategic Alliances, Licensing and Franchising

Joint Ventures

Foreign Direct Investment

Finding the Right Partner

Negotiating a Partnership Agreement

The Agreement Checklist

Have the salient points of the agreement been agreed upon in principle?

Participants and their Roles

Negotiation Baselines

Section 10: Managing International Business Operations

Exit Strategies

Conclusion

Introduction

In this work, the case study of Tesla Motors has been taken as an example to understand the strategies of international businesses with particular attention to Germany. The work begins with exploration of strategies pervasive in international markets with close attention to entry issues. The various forms of foreign investments and business like Greenfield, acquisitions, mergers, and Joint Ventures are explored (Lymbersky 2008, p.7) in the said context of the target of Tesla motors in the automobile sector in Germany.

Section 1: Strategic Planning for Market Entry

The main strategy adopted by companies like Tesla Motors looking to expand operations inland as well as in foreign locations is by being innovative, economical, and giving more value for money. However, the critical questions that need be answered are: is it worth to be a pioneer in these rapidly changing times? Or is it better to let others make the move first and then improvise, learning from the mistakes others commit ?How much lead would you concede by holding back? What steps would ensure market share with newer entrants trying to slice into your market? If you choose to follow suit rather than taking the lead, what strategies are most beneficial? (Kalyanaram & Gurumurthy 1998, p.1; Benjamin Levi, 2006) Tesla Motors' mainstay is its innovativeness. Radical changes in conveyances are sought by this company and it strives to take the industry to the next level. Strategic planning in accordance with the rules and regulations in Germany need to be addressed with due diligence, lest it falls short of expectations.

Scientific studies present that typically, pioneers in the industry comes with a considerable along with permanent market-share benefit over those following the leaders. Tesla can choose to take lead in the auto industry with its pioneering efforts, as Germany offers bountiful of opportunities for exactly this innovative spirit. However, late entrants can still succeed simply by adopting exclusive positioning along with advertising and marketing methods. Innovators mostly, when they reach the settled phase, usually take a dominant stance. At times, they allow complacency to seep in, and thus may not be able to respond swiftly enough to changes in the demand value of the industry as well as those of the customers. This is another important consideration that Tesla Motors should be alert about. Relatively new entrants can easily reap the benefits of vacuum thus created in the demand-supply domain left unexploited by the ageing innovators, or even adopt revolutionary solutions to address such gaps (Kalyanaram & Gurumurthy 1998, p.2; Das, 2012).

Market entry strategies (Rao, 2011)

Strategic Planning for Market Entry

Competing methods are usually dependent on the ambient market environment and the placement along with services/product profile with the existing players. By means of adding a product at the lower price compared to the established players, latecomers can easily bring in new customers would you not have access to or else bought this kind of item an in essence, expanding the whole industry. Tesla can, to begin with, adopt the strategy of a reduced price tag as it may result in switching of loyalties to newer products. However, this tactic will probably result in lessened margins for that fresh entrant balanced with various other players already in the market, unless of course the new entrant's cost connected of manufacturing is fairly economical. Businesses can easily remain competitive if they innovate and Tesla Motors are nothing if not innovative. The actual advancement could be a changeover or even incremental. One type of incremental advancement is usually an enhanced version of the existing product. The enhanced product can easily remain competitive immediately with existing goods, or even it is usually targeted for a smaller segment within the existing industry. Such innovative products can occasionally bring in new customers that are not the actual focus on for that existing goods and services. As products become fully developed in the base markets, organizations usually venture into more attractive foreign sectors (Kalyanaram & Gurumurthy, 1998).

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Regarding Tesla Magnetic motors, proper entry into Germany then, seems apt. The German financial system is amongst the largest markets worldwide, and it contributes to growth of the EU and, makes up a lot more than one-fifth of EU Gross Domestic Product. Germany is the United States' biggest European investor along with being the 6th biggest industry regarding America's exports. Germany's "social market" financial system largely ascribes to free-market rules, yet having a sizeable penetration of authorities legislation along with good interpersonal welfare programs (Chapter 1: Doing work in Germany, n. d). Going international seriously isn't really the only way out'. At times the risks of venturing abroad may not result in anticipated returns financially. Emphasizing on existing markets where a firm has good command, can easily actuate lesser amount of high risk and faster profits. This is completed simply by repositioning the actual goods and services by way of advertising and marketing, appearance and the like (Gru-nig & Ku-hn, 2011; Kalyanaram & Gurumurthy 1998 p.7; Peng, 2014).

Those that are most successful industry entrants usually are the ones that innovate goods of top quality along with contemporary trends. Tesla Motors can take advantage of the fact that Germans usually are tuned in to the technological advancement along with higher engineering visible in American goods, such as desktops, software, electronics, medical equipment and healthcare products, synthetic products, and automotive sector. Germany includes one of the best accesses to the internet within the European Union along with the latest gadgets and services in the multi-media, high-tech and posits as a wonderful, happening market in the industry as more and more Germans sign up for internet access. A number of farm goods likewise stand for large potential customers as long as American products are concerned. Selling price isn't actually the actual deciding factor for German clients given their aptitude for quality products and that, then bodes well for Tesla magnetic (Chapter 1: Doing Business in Germany, n.d).

The German industry is not centralized and varies from state to state as the requirements differ ever so significantly. Those players that seek and reap success consider regional variances when considering strong countrywide presence. Local awareness and experience is a main virtue for just about any industry strategy, considering that the key opposition for the majority of American ventures are home-based businesses with a command over the market. U.S. businesses can easily compete this with higher quality products and pricing coupled with dedicated after-sales support through locals. However the German tax structure is rather complex and needs detailed study that Tesla would do well to pay attention to at the outset. Regarding investors, Germany's fairly higher duties along with complex duty regulations may well constitute an impediment, although discounts, allowances along with write-offs make the taxing structure globally competitive (Chapter 1: Doing Business in Germany, n.d).

Section 2: Barriers to Entry

Market Challenges

There are a few obstacles officially that need to be addressed by all American firms and by extension to Tesla seeking to venture into Germany. This is partly wrought by the acceptance of German government's adherence to the CAP (Common Agricultural Policy) adopted by the European Union and as also by the restrictions imposed on certain American Biotech products for the farm sector. Germany has emphasized on the EU Commission to dilute the strictures and by extension on regulatory norms and inspire innovativeness to engender competitiveness in the EU states. The Merkel government opines that Germany needs reforms, which is easier said than done given the complex state of affairs there. The structure in Germany leans towards local businesses and could the regulations could prove to be daunting to foreign players seeking to invest there. Safety or environmental standards, are taken rather strictly making American access to markets there an imposing task hence, U.S. firms, like Tesla that want to enter Germany would do well to be aware of the testing and certifications that apply to their products and follow them strictly. These standards are adopted largely from German regulatory bodies and applied across EU member states. (Chapter 5: Trade Regulations, Customs and Standards, n.d).

Trade Barriers

The American companies need to be well bred with the regulations applicable across EU and specially Germany before they consider setting up business there. There are many complex and confusing set of rules to be followed in Germany and the standards vary from those that are prevalent in the U.S. Tesla should be aware of the fact that the implementation of.....

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