Multiple reasons can lead to the decision of a company expanding to a further and yet foreign market. Profit and growth goals, economies of scale or foreign market opportunities are just a few fundamental reasons. The aim of the present paper is to develop a realistic market entry strategy for Völkl Ski and Snowboard, to expand to the emerging country Argentina.
The goal within this development is to detect how the structure of the company and the conditions in the host country influence the decision for an optimum market entry strategy.The core question convoying the research and also underlining the aforementioned problem potential can be formulated as follows:Is it possible for Völkl to successfully sell high quality products in a yet small market in a country being situated in a drastic political and economic change? Besides the company’s interest in exploiting market possibilities there can also be problems or threats in the home market resulting in a pressure to expand.
For the process of the above named research question the first chapter of the paper implicates an introduction to the company Völkl, also identifying its state of internationalization. Further on the country Argentina will be analyzed by reference to the PEST approach. Additionally, the second chapter includes the study of the ski industry in Argentina, also revealing the strongest competitors in the market.
Table of Contents
1. Introduction
1.1 Statement of the problem and ambition
1.2 Literature Review
1.3 Research concept
2. Research methodology
2.1 Secondary research
2.2 Primary research
3. Introduction to Völkl
4. Strategic Analysis of Argentina
4.2 Economic environment
4.3 Cultural and social environment
4.4 Technological environment
4.5 Ski industry in Argentina
5. Market justification
6. Market entry strategy and distribution mode
6.1 Distributor strategy
6.2 Online sales strategy
6.3 Sales and retail strategy
7. Marketing strategy
8. Profit and loss calculation
9. Conclusion
Objectives and Topics
This paper aims to develop a viable market entry strategy for the ski manufacturer Völkl to expand its operations into the emerging market of Argentina. It investigates how local economic, political, and industry-specific conditions influence the selection of an optimal market entry mode, balancing the goal of high-quality premium sales with the risks of operating in a volatile, developing market environment.
- Analysis of market entry strategies for emerging economies.
- Evaluation of the Argentine PEST environment (Political, Economic, Social, Technological).
- Assessment of the ski industry potential in Argentina.
- Development of a distribution and sales framework (Direct export, Selective distribution).
- Financial feasibility study and risk-benefit analysis of the proposed expansion.
Excerpt from the Book
6.1 Distributor strategy
Within this strategy, research and development, production and the main part of the marketing stay in Germany, while exporting the goods to an independent distributor in Argentina. The distributor is a merchant, who purchases the goods on his own account and resells them for a profit to the local retailers.25 Völkl is in direct contact with him and participates down to the retail level, especially by marketing programs. This strategy is also applied for the snowboards being produced in China and afterwards being shipped to the distribution center in Straubing.
On the one hand this strategy provides several advantages like proficiency, fast exchange times, good business relations and market know-how through an experienced distributor. On the other hand, Völkl also has to deal with the challenges of a high dependence on the distributor, less profit and control, as well as currency and transport risks.26
Summary of Chapters
1. Introduction: Outlines the motivation for international expansion due to market saturation and defines the research question regarding Völkl's entry into the Argentine market.
2. Research methodology: Describes the qualitative research approach, which combines secondary data sources and a primary interview with a company representative.
3. Introduction to Völkl: Provides an overview of the company's history, its positioning as a premium brand, and its international setup.
4. Strategic Analysis of Argentina: Examines the external environment of the target market using the PEST approach and analyzes the specific dynamics of the local ski industry.
5. Market justification: Evaluates the potential for growth and the long-term opportunities for Völkl in the Argentine wintersports sector.
6. Market entry strategy and distribution mode: Proposes a direct export strategy combined with selective distribution and online sales to mitigate risks and ensure brand control.
7. Marketing strategy: Explains the ethnocentric marketing approach, focusing on the "Made in Germany" quality standard while adapting to local needs.
8. Profit and loss calculation: Presents a multi-year financial plan demonstrating the profitability and feasibility of the planned market entry.
9. Conclusion: Synthesizes the research findings, confirming that the expansion to Argentina is a realistic and promising strategic move for Völkl.
Keywords
Market Entry Strategy, Völkl, Argentina, Ski Industry, Distribution, Selective Distribution, Direct Export, Emerging Markets, International Marketing, PEST Analysis, Profit and Loss, Business Strategy, Premium Products, Brand Management, Economic Environment.
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on developing a strategic market entry framework for the German ski manufacturer Völkl to establish a presence in the emerging Argentine market.
What are the central thematic areas covered in the analysis?
The paper covers the political and economic environment of Argentina, the specific characteristics of the local ski industry, distribution models, and marketing strategies for premium brands in emerging markets.
What is the core research question addressed by the author?
The core question is whether it is possible for Völkl to successfully sell high-quality products in a small, emerging market that is currently undergoing drastic political and economic changes.
Which scientific methodology is utilized in this paper?
The paper employs a qualitative approach based on secondary data analysis, including market statistics and economic reports, complemented by primary research through an interview with a Völkl international marketing manager.
What topics are discussed in the main part of the document?
The main part includes a strategic PEST analysis of Argentina, an evaluation of the competitive ski landscape, the selection of an appropriate distribution mode, and a detailed four-year financial projection.
Which keywords best characterize this work?
Key concepts include market entry, selective distribution, emerging markets, direct export, and strategic brand management.
Why is the "Made in Germany" aspect crucial for this market entry?
The author identifies "Made in Germany" as a key competitive advantage for Völkl, as Argentine consumers place a high value on the perceived quality associated with German origin.
What role does the online dealer Blue Tomato play in the proposed strategy?
Blue Tomato is intended to serve as a partner in a parallel distribution structure, collaborating with local Argentine distributors to enhance market reach and efficiency.
Is the financial outlook for the expansion considered positive?
Yes, the profit and loss calculation indicates that Völkl would be profitable from the first year of sales, with a projected return on sales of over 20 percent.
- Arbeit zitieren
- Katja Steinhauser (Autor:in), 2016, What Makes For a Successful Market Entry Strategy and Operation Mode? The Company Völkl Expanding to Argentina, München, GRIN Verlag, https://www.grin.com/document/535727
