Skip to 0 minutes and 12 seconds Good morning everyone. So, today’s agenda is largely regarding the discussion of potential strategies for the international expansion of TADA Catering. We already have considerable ties of clothing manufacturing in Taiwan, Sri Lanka and Bangladesh and most recently we secured ties in India which is the source of the produce from a new vegan organic range. In my opinion, there’s only one viable option to increase our presence in Asia further, a greenfield operation. Agreed, such an innovative venture would certainly work well as a greenfield operation. Good, this way we’re sticking to what we know and we have overall control. We don’t want to get any other companies involved.
Skip to 1 minute and 0 seconds Exactly, we want to create a brand-new catering hub in Asia which will expand the reaches of our venture, that way we will have two hubs where we are able to distribute and sell our products from. Is that the general consensus of the board?
Potential strategies for TADA International
When companies go global, they may adopt different strategies.
One option may be through a franchise, whereby other organisations purchase the right to trade on behalf of the parent organisation in specific geographic areas.
Another could be a merger, where the parent organisation merges with another commercial entity or merges another entity with itself to trade in a new territory.
A third option could be a joint venture that sees the parent company and a local company operate together.
Finally, there could be greenfield operations, where the parent company replicates itself, either partially or completely, in the new territory.
The policies and plans of the parent company will have the most impact if it decides to start greenfield operations in a host country. This would involve making decisions on several aspects of HR, such as whether or not to recruit locally or deploy employees from the home country, what hierarchies need to be developed and in what proportion, as well as whether governance processes should be carried out in the home or host country.
Think about how expansion strategies are different for companies in different sectors.
From your knowledge of TADA International, which strategy do you think would be the most suitable for the company to adopt for its continued expansion? How would such a decision impact the company from an RBV?
A few examples could be:
- The fast-food industry (eg McDonalds, Starbucks or Costa)
- Retail supermarkets (eg Walmart or Tesco)
- Computer/phone/tablet manufacturing companies (eg Apple, HP or Dell)