Typology of strategies
Entry strategy:
When Wahaha wants to enlarge its investment in international market, which is India in this case, there are a variety of entry strategies which vary with objectives of the company concerned, cost and risk related and the degree of control. In economies where the risk factor is high, Wahaha prefer to adopt a low control entry strategy since the company does not take much risk to enter the new overseas market. The low control entry strategies that Wahaha could adopt include: directly or indirectly export by using an export intermediary, licensing, joint venture, mergers and acquisitions, and establishing a subsidiary of our own. For example, export intermediary include commissioned agents, distributors, trading companies, export management companies and countertrade (FAO 2009). Wahaha can get advantages of exporting, for example, manufacturing is home based so, it is less risky than overseas based, gives an opportunity to learn new overseas markets before investing, and reduces the potential risks of operating overseas. A joint venture with an established business may be the effective strategy to gain entry into a market since they already know the market well, have the distribution framework in place and less capital is needed (FAO 2009). Therefore, Wahaha can get the advantages of joint ventures give; such as, sharing of ability and risk to integrate the local in-depth knowledge with a foreign partner and joint financial strength. International joint ventures can be done through licensing or offshore production, which requires either creating our own facility or subcontracting the manufacturing of our product to an assembly operator (Dowling & Welch 2004).
International business strategy:
International business strategy of Wahaha leans towards their transnational orientation which seeks to combine the advantages of both a globally integrated strategy and a locally responsive strategy. As culture or tastes of India or the host market and specific market entry requirements differ from China to India, Wahaha would lean toward local responsiveness to tailor a specific strategy where needed. In addition, Wahaha would centralizes other functions and uses the same strategies, products, marketing throughout the world to gain economies of scale, relatively uniform markets in host countries, high development costs incurred if the product will be adapted to each country (Dowling & Welch 2004). Wahaha will take careful steps to invest in foreign countries to realize the internationalization of the company and to form a systematic and scientific management structure to ensure the healthy development of the corporation.
References
Food and Agriculture Organization of the United Nations (FAO) 2009, Market entry strategies, viewed 1 October 2009, http://www.fao.org/docrep/w5973e/w5973e0b.htm.
Dowling, P. and Welch, D. 2004, ‘International human resource management: managing people in a multinational context’, 4th edn, Thomson, London.