Module 4 – Case

Market Selection and Foreign Entry Mode

Assignment Overview

Pret a Manger (which means “ready to eat” in French) is a British fast food restaurant chain known for its very friendly staff and relatively healthy food. While the majority of its restaurants are in the U.K., it also has a heavy presence in the eastern United States. While the restaurant is successful in the U.K. and in American cities such as New York and Chicago, it has had only limited success in other countries so far. In 2002, it tried to expand to Japan in a joint venture with McDonald’s, but ultimately this venture failed and it withdrew from Japan by 2004. Now it is currently entering China with restaurants in Hong Kong and Shanghai. Clearly, Pret a Manager is intent on international expansion, but given its failure in Japan, it of course needs to carefully plan its expansion strategies.

Before writing your paper, make sure to carefully review the concepts of target markets and market selection from de Kluyver (2012) as well as the discussion of advantages and disadvantages of different foreign entry mode decisions in Carpenter and Dunung (2012) and Rajagopal (2009). Once you have finished reviewing the basic concepts of this module, do some research on Coupang. Below are a couple of articles to get you started, but news on Pret a Manger seems to change by the day so try to find some more recent articles in addition to reading these two articles:

Junqian, X. (2014, October 3). Pret a Manger prepares for sandwich battle. China Daily. [ProQuest]

Sanchanta, M. (2004, March 30). Pret a Manger retreats from Japanese market. FT.Com. [ProQuest]

Case Assignment

Suppose you have been hired by Pret a Manger to come up with an international strategic plan. Write a 4- to 5-page strategic plan for Pret a Manger that addresses the following issues:

1. What country or countries should Pret a Manger enter next (beyond the five countries they already operate in)? Explain your reasoning for this selection based on criteria from the background materials including de Kluyver (2012) and articles on Pret a Manger.
2. What mode of entry should Pret a Manger use to enter this country or countries that you chose? For example, should they use a joint venture, franchising, a greenfield strategy, etc.? Refer to the concepts from Carpenter and Dunung (2012) and Jeyarathmm (2008) in your answer, and cite some articles on Pret a Manger.

Module 4 – SLP

Market Selection and Foreign Entry Mode

For your final SLP, pretend that an American corporation hired you to write a report on whether or not they should enter the country that you have been researching for your Modules 1-3 SLP assignments. You have already done a lot of research on many of the cultural, financial, legal, and political aspects of doing business in your country, which you can use as part of your overall recommendation. However, you also need to consider other factors, such as the potential size of the market that your country has to offer. If your country has very few consumers, then it will not be a wise decision to enter the country no matter how strong the legal or political system.

One resource to use for your report is Michigan State University’s Market Potential Index (http://globaledge.msu.edu/mpi/2014). This index focuses mostly on various aspects of the size or growth of the consumer market in each country, which should provide some valuable information in making your recommendation. But don’t rely just on this index. Do some additional research on factors that you think make your country an attractive or unattractive market for an American company and use some of de Kluyver’s (2012) guidelines on country selection as part of your paper.

When you have finished your research, write a 2- to 3-page paper with the following information:

1. What are the positive aspects of your country that would make it an attractive market for an American corporation? Consider all of the main factors that you researched regarding your country for Modules 1-3 plus additional research for Module 4 on market potential.
2. What are the negative aspects of your country that would make it an unattractive market for an American corporation? Consider all of the main factors that you researched regarding your country for Modules 1-3 plus additional research for Module 4 on market potential.
3. Overall, what is your recommendation for the American company that hired you to write this report? Do the positives outweigh the negatives? Or vice versa? Explain your reasoning.

Start out this module with this introductory video on foreign entry mode strategies that explains the main concepts from Professor Mark Wolters of the University of Illinois:

Wolters World. (2012, October 25). Global market entry strategies explained [Video file]. Retrieved from https://www.youtube.com/watch?v=GSyYo4ph3hM

The first step to entering a foreign market is to decide which country to enter. The following chapter will give you a solid overview of the process of selecting a potential country to enter:

de Kluyver, C. (2012).
Chapter 5: Target markets and modes of entry. In Fundamentals of global strategy. Saylor Foundation. Retrieved from
https://saylordotorg.github.io/text_fundamentals-of-global-strategy/s07-target-markets-and-modes-of-en.html

After you’ve chosen which country you want to enter, you then need to decide how to enter the country. The following two readings will give you an overview of several foreign entry-mode strategies and benefits and risks of each strategy:

Carpenter, M., & Dunung, S. (2012).
Chapter 8.3: International expansion entry modes. In Challenges and opportunities in international business. Lardbucket Books. Retrieved from
https://saylordotorg.github.io/text_international-business/s12-03-international-expansion-entry-.htmlJeyarathmm, M. (2008). Chapter 12: Strategy in a global environment. In Strategic management (pp. 165-169).Mumbai, India: Himalaya Publishing House. [Ebrary. Note: You don’t have to read the whole chapter—just the last five pages.]

Case Assignment

Junqian, X. (2014, October 3). Pret a Manger prepares for sandwich battle. China Daily. [ProQuest]

Sanchanta, M. (2004, March 30). Pret a Manger retreats from Japanese market. FT.Com. [ProQuest]