reply to post 200 words
Deciding to expand to a new market is a big decision for a company. There are many considerations that they need to take and precautions to consider for this venture to be beneficial. Before the Internet age, this expansion meant large entry barriers and even bigger investments. What is interesting about market expansion in today’s markets is that technology lowers a lot of these barriers and requires the companies to be even more careful when making these decisions because despite the entry barriers being lowered, the risk of possible failure is not. Three examples of app-based companies that are currently expanding into new markets are the tech giants Amazon, Uber and Airbnb. Amazon has always had a track record of encroaching on new markets. There newest market venture is groceries. “The US food and beverage market represented a total of $705 billion in 2016 and e-commerce was a small 1.4% of that market” (Archer, 2017). Amazon wants to capitalize on the untapped 1.4% of the market. In order to do this, they will be attempting two separate entry methods. One of these methods is entering through joint ventures with local stores and the other is be constructing wholly owned subsidiaries. Fortunate for Amazon, both of these methods address each other’s trade-offs. However, they will still contend with local economies with the licensing and the high costs and competition with the subsidiaries. However, with contentious prices and ease of use, they could overcome these and be very successful. Airbnb, the app-based company that allows users to rent out rooms, apartments and even houses from other users, is looking to expand into the Asian market. This type of business is more common in the Asian market, thus is why they have hesitated to do this in the past. There are also a lot of cultural aspects that must come into consideration when moving this type of industry to the region. (Miller, 2017). However, Airbnb will be using the entry method of licensing in order to do this. Their business runs on the fact that they license individuals to rent out their property. The benefit to the company is the profit made form the fees involved. The individuals get to advertise and market their property. This does come with trade-offs. As mentioned earlier, the market is very competitive and cultural aspects must be taken into consideration. Also, because it is being done through licensing, Airbnb will not have complete control over the properties or owners. This could be risky if managed improperly. Uber is another app-based company that facilitates user interaction to pair those who need rides with those who provide them. This has been an incredibly successful venture for Uber and they are looking to expand to other markets. One market that they are currently piloting in Texas, but looking to expand to the whole United States is commercial trucking services. Much like their car-share service, the trucking service will be privately owned truckers will be paired with businesses that require goods moved. This is geared towards smaller companies that may not have the income to support large transport contracts. Now much like their car-share, the market entry method will be franchising. The private truck owners will essentially operate a franchise of Uber. Now the trade-off to this is a possible lack of quality of services as well as instability stemming form not knowing exactly how many there will be. This must be addressed in planning and Uber has to find a way to standardize and ensure consistent service. References Archer S. (2017). There are 4 new markets Amazon could be ready to take over (AMZN). Business Insider. Retrieved from http://markets.businessinsider.com/news/stocks/amazon-stock-price-four-markets-well-positioned-to-take-over-2017-6-1002096501. Etherington, D. (2017). Uber Freight Expands to Multiple New Markets and Adds New Features. Tech Crunch. Retrieved from https://techcrunch.com/2017/08/03/uber-freight-expands-to-multiple-new-markets-and-adds-new-features/. Hill, C. W. L. & Hult, G.T.M. (2017). International business: Competing in the global marketplace (11th ed.). New York: McGraw:Hill. Miller, M. (2017). Airbnb Boss Reveals Plans to Crack Asian Market. BBC. Retrieved form http://www.bbc.com/news/business-41023684.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more