Target Market and Global Strategy: KFC, Toyota, Nestle, Ford

This report examines the concepts of target markets, modes of entry, and global strategies, using KFC, Toyota, Nestle, and Ford as illustrative examples. The report explores how KFC utilized franchising to expand globally, Toyota's strategies in entering different markets through joint ventures and acq...Read More

Running head: Target market and global strategy 1
Competitive strategy

Target market and global strategy 2
Executive summary
Competitive strategy is the process to attain the competitive advantages in adequate
manner or preplanned. It is the report which has been made on two topics of “target market and
modes of entry” and global strategy as business model change. Target market is the segment
which helps to increase the sales. KFC and Toyota has been demonstrated to fulfill the
requirements of this topic. Global strategy as business model change has been described by
taking Nestle and Ford Company. It is the report which will be helpful for further studies
appropriately.

Target market and global strategy 3
Contents
Executive summary.........................................................................................................................2
Target markets and modes of entry.................................................................................................4
Food and beverage industry.........................................................................................................5
KFC..........................................................................................................................................5
Car industry..................................................................................................................................8
Toyota.......................................................................................................................................8
Global strategy as business model change.......................................................................................9
Food and beverage industry.......................................................................................................10
Nestle......................................................................................................................................10
Car industry................................................................................................................................12
Ford........................................................................................................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

Target market and global strategy 4
Target markets and modes of entry
The decision of participation in the market is global target markets and entrance modes. It
depends that how an organization deal with clients to make better customer relationship. The
option of consumers to serve in a specific country or region and with a specific culture dictates
how and how much company can accept or adapt the value proposal of the company. The
selection of target market depends on the affordability of companies (Jayawardhana and
Weerawardena, 2014). It is required for the company to make decision while entering into any
market and consider direct or indirect advantages of that market. It is required to analyze and
evaluate the different strategies because it is not necessary that one superior strategy for one
company, however, might have less possibility of following for another.
Figure 1: Participation in market
Source: (Shimamoto, 2016)

Target market and global strategy 5
This figure shows the dimension of different strategy while entering into the new market.
These strategies can be market segment, customer relationship and distribution services. It is
crucial for the company to take decision appropriately in the time of making strategies. These
decision should be covered with timing scale mode, communication mix and distribution
partners. There is number of options available to enter in the new market such as franchising,
licensing, Joint venture, partnership and direct exporting. It depends that which mode of entry
would be suitable for the company.
Food and beverage industry
KFC
KFC stands for Kentucky fried chicken that is situated in Louisville, Kentucky,
constitutes one of the few brands organizations in America. It is the success business over 5
decades. The target market of KFC is for those who are interested in Non-veg. the KFC has
grown enormously over the current years and recently it has more than 118 branches in all over
the world. Principally, it has 4,563 outlets only in China, 4,491 in US and rest 9,821 in al over
the world which is consider as the huge amount. The main menu of KFC is fried crispy chicken,
fries, burgers and fruit juices. The reason behind the success of the KFC is accepting the right
mode of entry that is franchising. The aim of KFC is to give delicious non-vegetarian food and
fun environment to the customers. The rapid and successful international expansion is done due
to accepting the franchising model. A franchise is the mode of entry which gave chance KFC to
expand its business easily at cheaper way. Franchising is the most advantageous option in
comparison of other market entry option because other option put control strictly over the
operations (Chotipanich and Issarasak, 2017).

Target market and global strategy 6
Figure 2: Branches of KFC in Kenya
Source: (Achola, 2016)
Franchises are outline to achieve the numerous purposes. It is the easiest mode in which
chance of potential risk is lesser. Also, it involves in venturing to new markets (Bashel, 2010). It
has been analyzed that in the year of 1990’s KFC entered in China by following the joint venture
mode. The initiate of KFC was as joint venture with Government Poultry Department in which it
had to face many issues. Afterwards, KFC partnered with the department of tourist to outline a
joint venture because they had sufficient funds.

Target market and global strategy 7
Figure 3: Advantages of franchisee of KFC
Source: (KFC, 2015).
The first franchise territory was centered in the Xien, China. Currently it has number of
franchisee in all over the world and the average revenue of KFC is $942,000 annually. It earns
revenue from franchisees in two forms. That is service fees and rent. A Service fee is a fee which
is paid on the basis of monthly sales. For instance, if franchisee of KFC earns 40,000 dollars,
service tax should be paid at 5% of total monthly sales. It is the reason of growth of KFC’s in
smoothly manner. Another revenue form is rent. A rent is also paid as per monthly sales. It is
decides as per certain percentage of total monthly sales. Duration of franchise of KFC is 20 years
(KFC, 2015). As a franchisee, it offers advantages such as give access to nationally and

Target market and global strategy 8
internationally known products for instance, Cole slaw, KFC biscuits and many more and a
proven operating system which will be helpful to compete. The franchisee of KFC has more than
50 years and due to that support numerous programs helps to compete within the QSR and the
industry of Franchise.
Car industry
Toyota
Toyota is the big multinational company which produces cars, trucks and buses, with
headquarter in Japan. The target market of Toyota is those people who have great interest in
automobile industry. That is why the main focus of this industry is on demographic
segmentation. It has been analyzed that Toyota was one of the company which products were
imported. Joint ventures and alliances came in comfortable zone where Toyota collaborated with
PSA and Volkswagen. Miles argued that (2013),Toyota expand its business by acquisition or
merging factors of entry option and manufacture its cars in number of countries with effective
observing and controlling. Toyota initiated to export the new corona and corolla to Canada.
After that its expansion has increased and it started to expand its business in United States.
Toyota crown was one initiate Mosel which has arrived in United States. According the
development of its business in Thailand automobiles market, Toyota started joint venture with
one of the car manufacture of Thailand to become Toyota Motor Thailand. After getting success
via joint venture, Toyota established its own assembly plant in Thailand where it produced
various opportunities of job to the local indirectly (Kono, 2016).
Minicase: Tata Making Inroads Into ChinaChow (2008, April 28).

Target market and global strategy 9
Tata is the maker company of nano small car and developing a small car for china. The
platform for this car is being designed by the Indian Chinese team based. The alliance won the
project of making the car for china’s people at domestic level. Meanwhile, in 2009, Nanjing
Tata company started to supply the automotive interior products to Shanghai general motors
and Changan ford automobiles. In the same year, Tata started to supply its product in Europe as
well.
It has expanded its business globally and won the automobile industry by giving excellent
performance. In its bid become a $1 billion global automotive supplier in 2008. It was stated by
the chief executive officer of this company that We see wide potential in china and observe that
china is not the base of manufacturing but the window to the global market.
Global strategy as business model change
When a company determines to expand its business globally, it is required to take its
company’s business model apart and consider the impact of the expansion of global on every
part of the model. For instance, in the context of its value proposition, a company must choose
whether or not to transform the core strategies of company. It is the decision which is interlinked
to of what marketers wants to enter in the foreign market and why. Decision need to be made
about that how to organize and handles these efforts on global basis. The component of business
model is value proposition, value chain infrastructure, market participation and management
model. Value proposition is a business model which includes everything which can be offered to
its customers in a specific market. The market participation dimension refers the specific market
of a company to serve widely in abroad as well as domestically. It focuses the method of

Target market and global strategy 10
distributions and promotes it value proposition and promotion. The value chain infrastructure
dimension deals with the question of that what key capabilities and resources are required to
support the decide target market of the company. The sub model of global management describes
the choice of the company regarding a suitable organizational structure of global and the policies
of management. Competitive advantage has been increased due to innovation in business model
(Huo, Qi, Wang, and Zhao, 2014).
Food and beverage industry
Nestle
Nestle is the world largest food and beverage company with more than2000 ranging of
brands from global icons to local favorites. It is the leading company of the world for more than
140 years with the mission of “Good Food, Good Life”. The involvements of products in Nestle
are dairy products, baby foods, snacks, breakfast cereals, tea and coffee, chocolates and Maggie.
Nestle uses the strategy which associates the ration of amplify in income to utilize of food
products. It defines that the person do not required consuming a lot of time to make food; they
will automatically substitute for branded products. The strategy of nestle has been to penetrate
emerging markets early prior its competitors and create a substantial customer as per selling
products. Customization is considered as the major key to the global identity of Nestle which
refers that Nestle uses local ingredients and techniques that sounds the name of brand that is
identified globally.

Target market and global strategy 11
Figure 4: Nestle Strategy Roadmap
Source: (Nestle, e.d.)
Nestle has utilized it name of brand as strength to produce sales and to enhance its market
share that involves customization of its products for getting fit in the profile of target market. As
a strategy of penetration, Nestle used acquisition to enter in new international market. The
implementation of the strategy is equivalent with the planning of the strategy which aims to
execute locally. The growth of Nestle is done due to expand in Tomato Ketchup and noodles or
tofu. Along with that the strategies of Nestle is enhanced into 5 countries such as Syria, Dubai,
Turkey, Saudi Arabia and Egypt.

Target market and global strategy 12
Figure 5: Business model design of Nestle
Source: (Nestle, e.d.)
The first model of Nestle defines the design flaw and possible clarifications. In the first
model of Nestle describes the flawed business design. To bring the competencies, Nestle focus
on sales and marketing department. The second model of Nestle defines the “should be” design
model which could be the clarification of the mentioned above model. Required competence,
value proposition, distribution channels and customer segment are necessary for the success of
the Nestle Company (Brouthers, 2013).
Car industry
Ford
Ford is the multinational car manufacture company of America which headquarters is
situated in Dearbon. Then global strategy of ford is increasing the demands of mobility

Target market and global strategy 13
environmental concerns, competition and strengthened expectations of customers. It is the
company that provides global strategy summer intern opportunities and requirements for its
employees. It provides the internship in the form of project oriented which should be able to deal
with real problems and challenges in the business. Over the course it helps to understand its
employees and interns to let them create a relationship of friends and attain exposure to
managers of the strategy team along with enhance the learning skill in the experience of the
culture of the ford industry. The business model of ford is unfolding. Ford started to import its
compact transit connect with turkey in 2009.a subcompact model ford fiesta, is introduced in the
market. In 2011, Ford changes the version of North American of the Ford with a European
derived model. The customer service of Ford is considered as the legendary care. The plan of
Ford brought various models in North America including B-max crossover which is based on the
platform of the Ford Fiesta. The main aim of ford is one ford one team one plan and one goal. It
follows this strategy and involves its employees in important decision and makes happier

Target market and global strategy 14
environment of the company through conduction various activities (Markides, 2013).
Figure 6: Plan of Ford
Source: (DaSilva and Trkman, 2014).
It is the image which defines the entire plan of ford based on one team, one plan and one
goal. Along with that the expected behaviors has been mentioned. It shows that the technical
skills, value of customers and employees, results and the concept of working together.
Competitive advantages of Maruti Udyog ltd.
Maruti udyog ltd is the world largest car maker. It has cumulative sales of 6 million vehicles. It
has more than 10 products which have ten variants. It is the company which decided its segment
as per the demand of the customers and their affordable capacity. Fairly standardized has been
set for technology of car manufacturing and MUL sourced it from Japanese company, Suzuki. In

Target market and global strategy 15
recent years, the manufactures of Indian car have had to take on the up gradations of
technological to confirm the emission norms of international as the Euro I and Euro II norm. The
usage of, just in time inventory system, stringent waste management and control reliable network
of suppliers and economies of scale are followed low cost strategy. Cost leadership brings
competitive advantages appropriately such as low initial investment, high labor productivity and
appropriate size of operations.

Target market and global strategy 16
Conclusion
It has been concluded that competitive strategy is very useful if company take it as per
demand of the market and as per capacity of the company. It is the report which is made on the
major two topics that target market and modes of entry and another topic is “global strategy as
business model change”. Food and beverage industry as well as car industry has been taken in
this report to fulfill the requirements of topic. It has been analyzed from this report that there is
various ways of modes of entry but company should choose them as per preplanning and
evaluation. As it has been observed that KFC has chosen franchise on the other hand the concept
of modes of entry for Toyota is joint venture. It has been evaluated that the business model of
Nestle and Ford Company is different so it is concluded that company should choose competitive
strategy as per capability of the resources and financial situation.

Target market and global strategy 17
References
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kenya , Doctoral dissertation, school of business, university of Nairobi.
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Firm Performance in Financial Development for Perspective in Coca Cola Beverages in
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customer satisfaction, International Journal of Quality and Service Sciences, 5(4), pp.395-414.
DaSilva, C.M. and Trkman, P., 2014, Business model: what it is and what it is not, Long range
planning, 47(6), pp.379-389.

Target market and global strategy 18
Huo, B., Qi, Y., Wang, Z. and Zhao, X., 2014, The impact of supply chain integration on firm
performance: The moderating role of competitive strategy, Supply Chain Management: An
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Jayawardhana, K. and Weerawardena, J., 2014, Conceptualizing the Role of Market Learning in
Social Innovation-Based Competitive Strategy.
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https://www.betheboss.com/franchises/kfc-corp.
Kono, T., 2016, Strategy and structure of Japanese enterprises, Routledge.
Markides, C.C., 2013, Business model innovation: What can the ambidexterity literature teach
us?, The Academy of Management Perspectives, 27(4), pp.313-323.
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