Wenzel's: Market Entry Strategies for Germany & China

This report examines Wenzel's, a UK-based bakery, international expansion strategies, focusing on entering the markets of Germany and China. It begins by outlining the company's background and target markets, considering factors such as market knowledge, financial states, and competition. The report analyzes the product offerings, particularly the challenges of selling confectionery items in China versus Germany, where bakery products are more popular. It discusses market entry strategies, including direct exporting, licensing, franchising, and greenfield investments, with a justification for the selection of greenfield investments due to increased control. Furthermore, the report addresses the marketing mix in a global context, covering product adaptation, pricing strategies, distribution channels, and promotion tactics. The conclusion highlights the suitability of franchising as a cost-effective and low-risk market entry strategy for Wenzel's.

International entrepreneurship

INTRODUCTION
 International entrepreneurship can be defined as approach or process which is
utilised by business to enter into new market
 Current assignment will explain various market entry strategies that can be
implemented by Wenzel's to enter into China and Germany successfully

Company information
 Wenzels The Bakers Limited was established in 1975 located in London, UK.
 It has become the favourite brand amongst the local areas in London and now
the organization is planning to expand its business by opening 100 more stores
in the upcoming years in other locations..

Target market
 Wenzel's planning to target two overseas markets one is inside
the EU i.e. Germany and other is outside EU i.e. China.
 There are some factors which need to be kept in mind before
entering in the new market such as knowledge about location,
financial state of the location and market competition.
 To target market inside the European territory, Wenzel can
establish its store in local market of Munich, Germany as it is
the best location for production and a suitable testing ground
for any international markets.

Product
 Wenzel is specialized in selling breads, cakes, flour and sugar confectionery.
 It will be challenging for Wenzel to sell these products in China as the
consumption of confectionery items are less although there will be competition
as compared to Germany as the people in Germany love bakery products and
confectionery items specially biscuits. So, chances of making more sales are
slightly greater than the China.

Competition and opportunities
 The competition is decreasing in German baked goods industry as number of
companies are operating from home. Therefore, it will give opportunity to Wenzel to
set up and make its position in the region. It will provide opportunity to the company
to increase its growth potential.
 There are public funding services which helps in financing the investment projects by
bank loans, private equity and they provide incentive related labour in which
operational costs get reduced for new businesses.

Effectiveness of market
 China has a population of 1.3 billion and area larger than the US. Foreign manufactured goods
and services has a huge potential market in China, to access these opportunities can be
extremely challenging for the foreign companies.
 China has a variety of individual sub-markets which is defined by demographic, economic and
cultural characteristics. To analyse the marketplace more carefully Wenzel can follow the
PESTLE model to get the external factors of the country like political, social etc. Wenzel need
to think carefully about which geographical location will be best to target and the effective way
to enter to any foreign market is to identify the best location to target which is specific.

Cont.…
 The culture system of China has core value of etiquette and politeness. They
respect their elders by bowing down their heads to the senior people. They
have good business relationships.
 They have potential marketing implications such as brand loyalty, consumer
behaviour and promotion activities which can effective for market
segmentation

Market entry strategies
There are several market entry strategies that can be
implemented by Wenzel’s to enter into new location these
are explained as below
 Direct Exporting
 Licensing
 Franchising
 Greenfield Investments

Direct Exporting
Selling of product directly into the market with the help of agents and
distributors by establishing sales program.
 Benefits: It will help in developing the business with greater flexibility in the
foreign market which can improve the marketing efforts. Understanding of the
marketplace will get better. Customer will give faster feedback on the
performance and quality of the product in market.

Licensing
 It is a type of strategy in which arrangements are made where a company
transfer the rights to using of product and services to the another company.
 Benefits: It helps in increasing passive incomes and reduce risks for both the
parties.

franchising
 . This strategy is good for entry in market for both Germany and China. Wenzel
can have benefit with this strategy by expanding its business locally and
globally.
 Benefits: It will help to reduce risks of business failure by franchising. The
products will already have a brand name in the market, so there is no need for
market testing. The franchisor will help in setting up the business and also
advertise and promote the brand and will provide support in running the
business.

Greenfield Investments
 In this type of strategy requires a great investment on buying the land, building
the facility and operating the business in a foreign market.
 Benefits: The company who uses this strategy to enter in the foreign market
can have a direct control over the manufacturing and selling of the products
and services. It will provide company the power to change pricing on products
which can be adapted to the needs of local market. For e.g. Starbucks, Coca
Cola and McDonald's have used this strategy to enter the foreign markets.

Justification
 Wenzel's can use these strategies to enter an international market and the best
strategies it can use is greenfield investments as it will help in increased
control and will reduce the intermediary costs and it will create a direct entry
into the economy of a foreign country,
 the only disadvantage is higher investments but if investing in right place will
increase its business values and will have a greater profit in the future.


Marketing Mix in Global Market
In order to enter into new market company has to implement effective marketing mix strategies.
These tactics can support Wenzel in establishing itself in Germany and China.
Product: Wenzel needs to consider culture, taste of people of China and Germany and
accordingly it has to provide products in these locations. Product must have quality and firm
has to make changes in its product style or size for competing with other organisations or
competitors.
Price: Wenzel can implement skimming pricing strategies
Place: Wenzel should take support of direct distribution channels, this would give better results
and will support in generating more sales in both these countries
Promotion: As Wenzel is planning to enter into Germany and China, for that it would take
support of social networking sites

CONCLUSION
 From the above study it can be concluded that use of franchise market entry
strategy can be suitable as this would help in establishing the branch in new
location in cost effective manner.
 In addition, less risk is associated with franchise thus, company can opt this
option to enter into new market successfully

References
 Narayan, A., 2019. Service portal for connecting inventors and entreprenuers
with the investment community. U.S. Patent Application 15/721,347.
 Munther, R.and et.al., 2017. Business Model Adaptation and International
Opportunity Recognition in SMEs: Evidence from the Finnish Cleantech
Sector. In ISPIM Conference Proceedings (pp. 1-16). The International Society
for Professional Innovation Management (ISPIM).