MAN304: Grants Toothpaste - International Market Entry Strategy Report

This report provides a detailed analysis of Grants Toothpaste's potential for international market entry, specifically focusing on Vietnam. The report begins with an executive summary and introduction, outlining the context of the assignment and the need for market entry strategy. It then delves into a literature review, evaluating the competitive landscape and Grants' advantages, such as the herbal components in its toothpaste. The report highlights Vietnam as the chosen market, supported by its large population, GDP, and political stability. Factors like brand loyalty and production costs are considered. The report also acknowledges risks like Vietnam's political structure. The report concludes that the Greenfield Venture is the most appropriate market entry mode. Finally, the report provides a list of references.

ISSUES IN INTERNATIONAL BUSINESS
ISSUES IN INTERNATIONAL
BUSINESS

ISSUES IN INTERNATIONAL BUSINESS
Executive summary
Grants a toothpaste company is seeking to enter a new market in a foreign
country. It has a choice of three countries and should choose the most
appropriate country to enter. It should also choose the best market entry
strategy. In the report is an introduction, literature review, conclusion and
finally a list of references form where the information was sourced

ISSUES IN INTERNATIONAL BUSINESS
Introduction
For a business to start operation in a foreign market, it should have a market entry strategy
od entering the marketing. However, to come up with the best entry strategy given the
various variations, a business should do thorough research on the target market.
Thus, Grants faces competition from other players like Colgate for consumers Unless a
company is a monopoly which only exists theoretically, it faces competition from other
players in the same industry

ISSUES IN INTERNATIONAL BUSINESS
Some of grants products include:
However, after careful review it was established Grants has a competitive advantage over rivals for
the following reasons:

ISSUES IN INTERNATIONAL BUSINESS
Grants toothpaste contains herbal elements such as eucalyptus which when swallowed aid
in digestion. Unlike other toothpastes which are mildly poisonous when swallowed,
Grants is thus quite suitable to young children who tend to swallow toothpaste while
brushing. Singh, Singh and Oberoi, (2016).

ISSUES IN INTERNATIONAL BUSINESS
Fluoride also causes brain/central nervous system damage in unborn babies.
Mohammadi, et al., (2017).
Unlike other toothpastes, Grants does not contain fluoride. Fluoride is a
natural occurring chemical which is when consumed in large quantities causes
skeletal fluorosis which is characterized by weak bones and painful joint.

ISSUES IN INTERNATIONAL BUSINESS
For the above stated reasons will be a major selling point for Grants and also a competitive
advantage over rivals.
After through research, it was established that Vietnam was the market country of choice for
the following reasons:
As at 2019, the Vietnamese population was estimated to be 97.43 million. This is quite a
large figure which represents a huge market that Grants can exploit.

ISSUES IN INTERNATIONAL BUSINESS
In terms of nominal gross domestic product (GDP) Vietnam is ranked 47th in
the world and 35th largest in terms of purchasing power parity (PPP). Griffin,
(2016). As of 2017, it had a GDP per capita of $ 2,343.12.
This means that the Vietnamese residents have a sizeable disposable income
which means that they can afford to buy toothpaste given that the product
cannot be classified as basic need or priority. Hardy and Ziliak, (2014).

ISSUES IN INTERNATIONAL BUSINESS
For any business to be viable and yield profits, political stability in the market
country is mandatory. Currently, Vietnam has a stable government for the past 20
decades thus providing a conducive environment to do business. Companies and
consumers are at liberty to interact and also do their production.
Political stability also sees the country have a stable currency thus making predictable for doing
business. Shenkar, Luo, and Chi, (2014).

ISSUES IN INTERNATIONAL BUSINESS
The Vietnamese currency is quite stable in the global perspective. Since the
Vietnamese is relatively stable, Grants cannot run into risks such as
transaction exposure which involves payment and receipt, that is; making or
receiving payments denominated in foreign currency. Hodrick, (2014).
The research also yielded the following reasons to be considered while also
considering the most appropriate market entry strategy.

ISSUES IN INTERNATIONAL BUSINESS
Brand loyalty is a consumer’s commitment to a particular brand. It was established
that in Vietnam, majority of the consumer base has no brand loyalty rather they tend o
spend on the cheaper products.
Hence, the board should consider a market entry strategy that will ensure Grants
products are relatively cheaper. Ahmed, et al., (2014).
 Production cost is quite low as there is surplus of labor which makes it cheap
according to the law of demand and supply. Thus, production in Vietnam would be
quite appropriate for Grants. Tran and Nørlund, (2015).

ISSUES IN INTERNATIONAL BUSINESS
 However, there were risks that were identified in doing business in
Vietnam and they are as follows:
Vietnam is a one-party state under communist rule. This means there is
little democracy. For grants to survive in Vietnam, it should steer of politics
so as not to rub the government in the wrong way. Vu, (2014).

ISSUES IN INTERNATIONAL BUSINESS
Vietnam values its culture as it is a collectivist country whereby the interest of
the community come first before individual or business needs. To ensure that
this problem is curbed, Grants will ensure that it gives back to the community
via community projects.

ISSUES IN INTERNATIONAL BUSINESS
Reasons for market entry mode are:
Political stability which means assets are safeguarded.
Low cost of production which lowers cost of doing business thus making Grants
products cheaper and thus compete favorably.

ISSUES IN INTERNATIONAL BUSINESS
Grants will take the following steps to implement the entry mode strategy:
Set out clear and concise objectives that are to be fulfilled at the end of the project.
Estimate the budget required and how to finance it.
Study the legal obligations to start a business and then fulfil them.
Identify the most appropriate staff or contractor to see the project through.
Ground breaking of the business project.

ISSUES IN INTERNATIONAL BUSINESS
Conclusion
Having considered all the variables, it has firmly been established that the
most appropriate market entry mode is the Greenfield Venture.

ISSUES IN INTERNATIONAL BUSINESS
References
Aharoni, Y., 2014. Coalitions and Competition (Routledge Revivals): The Globalization of
Professional Business Services. Routledge.
Ahmed, Z., Rizwan, M., Ahmad, M. and Haq, M., 2014. Effect of brand trust and customer
satisfaction on brand loyalty in Bahawalpur. Journal of Sociological Research, 5(1), pp.306-
326.
Griffin, K. ed., 2016. Economic reform in Vietnam. Springer

ISSUES IN INTERNATIONAL BUSINESS
Hardy, B. and Ziliak, J.P., 2014. Decomposing trends in income volatility: The “wild
ride” at the top and bottom. Economic Inquiry, 52(1), pp.459-476.
Hodrick, R., 2014. The empirical evidence on the efficiency of forward and futures
foreign exchange markets. Routledge.
Mohammadi, A.A., Yousefi, M., Yaseri, M., Jalilzadeh, M. and Mahvi, A.H., 2017.
Skeletal fluorosis in relation to drinking water in rural areas of West Azerbaijan, Iran.
Scientific reports, 7(1), p.17300.

ISSUES IN INTERNATIONAL BUSINESS
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Singh, K., Singh, P. and Oberoi, G., 2016. Comparative studies between herbal
toothpaste (dantkanti) and nonherbal tooth paste. Int J Dent Res, 4(2), pp.53-56.
Tran, A.N. and Nørlund, I., 2015. Globalization, industrialization, and labor
markets in Vietnam. Journal of the Asia Pacific Economy, 20(1), pp.143-163.
Vu, T., 2014. Persistence amid decay: The communist party of Vietnam at 83. In
Politics in Contemporary Vietnam (pp. 21-41). Palgrave Macmillan, London.