Topic: Lessons learnt: An investigation of the failed (or successful) attempt of a Multinational Enterprise to operate successfully in another country
This is your opportunity to develop research and report writing skills, and to apply to a real scenario some of the concepts and theories discussed in the lectures and tutorials. You can select a multinational company of your choice or write a report on one of the following.
Home Depot in China
With the Chinese economy in the midst of a growth spurt and the housing market following suit, 2006 seemed liked a good year for U.S.-headquartered DIY giant Home Depot to enter China. It was not until they had opened 12 stores that they realized the Chinese didnt really like DIY. Unlike the Western world where renovating your home is considered a bit of a hobby, some countries have a tendency to see DIY as a sign of poverty. By 2012, Home Depot had shuttered its stores and taken a US$160 million after-tax hit in the process.
Walmart in Germany
Like Home Depot, U.S. big box retailer Walmart failed to take into account cultural nuances in particular personal space when it opened up shops in Germany in 1997. The chain opened 85 stores in an attempt to tap into the countrys lucrative discount department market. But with intricate labour laws, restricted business hours and rows upon rows of regulatory red tape, the market was harder to crack than the American retail giant anticipated. In 2006, Walmart pulled out, at a cost of US$1 billion.
Starbucks in Australia
Massive U.S. coffee chain Starbucks entered the Australian market in 2000. Unfortunately, local coffee shops dominates the Australian coffee market and for those prone to visiting chains, Starbucks proved to be too expensive. In 2008 Starbucks closed 61 stores at a reported $143 million loss.
Mattel in China
In March 2009, Mattel opened a giant 36,000-square-foot store with six floors, a staircase lined with 875 Barbies and a Barbie-themed bar in the midst of Shanghais flashy retail district. Unfortunately, in a culture that stresses skill building and educational toys, Barbie was not popular. Within two years the store was closed.
Tesco in the US
For U.K.-based grocery chain, convincing American consumers to shop at its Fresh & Easy seemed like a done deal. And a few years earlier, the brand could have found success selling its fresh supermarket meals to the growing local and organic consumer base. But Tescos Fresh & Easy opened the doors in 2007, on the edge of a recessionary cliff when American consumers appetite for food spending was declining. Five years later, Tesco announced it was abandoning its American dream and closing its nearly 200 stores on the west coast. The failure cost the British chain nearly US$1.8 billion.
Your report needs to include an executive summary of your findings, an introduction to your report (including the rationale for writing about your chosen angle; what are you going to cover, and in what order), an analysis of the relevant factors leading to the failure of the enterprise (e.g., entry strategy; risk assessment; market analysis, HRM, etc.), a discussion of the exit strategy, a conclusion and recommendations.
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