Case Study 1: When joint ventures go wrong

* What is International Marketing?

* Marketing is a tool used by the organizations to help them to direct their goods and services to
consumers in order to make profit. Marketing is used both in domestics and internationally and
the difference between them is that international marketing is that the process takes place in
more than one country. International market is various and can provide a lot of profitable
opportunities. However, this diversity could complex international marketing operations,
requiring the coordination of a variety process in order to be successful.

* Most of the time, the basic marketing principles are applicable to all markets around the
world. The only difference is that you should be capable of applying those principals in
environments that you are not used to dealing with.

* Many of the issues international marketers face are outside of their direct control, so they
need to be prepared to adapt their strategies to cope with unfamiliar situations and problems.

Q1: What are the factors that a multinational firm should consider when deciding to use a
joint venture as a market entry strategy for a developing country?

* PESTEL Analysis:

* Political factors
* Economical factors
* Social factors
* Technological factors
* Environmental factors
* Legal factors

* Political factors refers to the government policy such as the degree the degree of intervention
in the economy and what goods and services do the government allow and want. You should

always look at the stability of the government, mode entry regulations, trade policies and
taxation system.

* Economical factors content the disposable income of buyers, inflation, interest rates,
unemployment rates and credit accessibility.

* Social factors as the demography of the country, distribution of wealth and educational levels

* Technology factors is related to how innovative is the society and their usage to and access
to the technologies

* Environmental factors you should take care of the environmental laws such as waste disposal
waste, environmental protection laws, energy consumption regulations
* Legal factors as employment and competitive regulations, health and safety

Q1: What are the potential benefits and risks in taking this course of action? (contd.)

* The main pros of Joint ventures:

* Allow companies to gain capacity and expertise

* Gives the opportunity to small companies to develop
* Sharing of risks with the venture partner
* Customer satisfactory (they are reached)

* The disadvantages of a joint venture:

* It takes time and efforts the find the right partner to build the economical relationship with.
* Shared profits
* The joint venture goal may not be clear to all participants
* Failure

Q2: Develop an outline international marketing strategy for a joint venture between
Danone, a French multinational food company, and a food producer from a developing
country. Explain which companies would be responsible for providing the leadership and
decision-making for the various activities detailed

* The Company

* Gulf and Safa diaries Gulf and Safa Dairies Abu Dhabi Specialized in the production Dairy
and Juice Products such as Fresh Milk from Fresh Cow Milk and Laban Up, Yoghurt, Flavored
Milk, Labneh (something like cheese but more sour), Cream from Recombined Milk and
Halloumi Cheese from fresh Goat Milk. We do have a wide range of juice products, which are
made from Fresh Fruit Pulps.
* They own three brands, Laban-UP, Sterilac and Safa.

* The selected product is child yoghurt mash up products and will be sold in the United Arab
Emirates (UAE) and through the gulf society, which includes Saudi Arabia, Bahrain, Oman,
Kuwait and Qatar.

* Product strategy

I. The product is going to be 100% natural and organic

II. Its one of a kind in the area (some shops import)
III. Yoghurt products are widely used in the area of the Arabian Gulf.

* Pricing strategy

I. The prices will be affordable to all types of societies

II. 10% more of packaging for the same price for limited time
III. Very competitive prices not only to organic products but also to market prices.

* Promotion strategies

I. Advertisements on television, Page on Facebook and twitter accounts to assure to be reached

to the clients
II. Stands in Hypermarkets in diary sections and free samples to the crowd
III. Same method used as competitors

* Distribution strategy

I. The port selected is going to be AL-Marfa Port in Abu Dhabi area because the company has a
branch there and for the facility of access and the ease of documentations required and for the
low taxation on customs.
II. Transportation will be by ships cargo (FOB destination)
III. Few documentations needed and are easy to do

* Leadership and management

I. Danone and Gulf&Safa have contracted a joint venture between the two companies, for the
production of chilled organic yoghurt with different flavors in the area of the Arabian Gulf.
II. The Joint venture will benefit from the giant Danones worldwide expertise in quality and
product innovation and Gulf&Safa leadership and distribution capability in yoghurt in the United
Arab Emirates.
III. Danone will own 30% and Gulf&Safa will own 70% of the new joint venture in the United
Arab Emirates.
IV. The Management of Gulf&Safa has been sustained since 40 years and they have a wide
experience in the yoghurt field in the area and Danone will assign experienced senior executives
to join the top management team, assisting Gulf&Safa to further upgrade its management
capability.

Case study 2: Lego

Q1: Critically evaluate the branding strategy that Lego pursued in its effort to re-establish
itself in the global market since 1998, identifying its future options.

Q2: Develop an outline international marketing strategy for Lego based on your preferred
strategic option.

Case study 3: Merry Management Training

Q1: Why did this promising business relationship go so badly wrong?
It is obvious that the Merry Company did not spend a lot of time to find a reliable partner to
develop their business in the Middle East Market. The Merry Management Company did not
analyze the various criteria which are usually used to find a good business partner. These criteria
are:
Allocate time and resources to find a suitable agent: the alliance between the Merry
Company and Ala-Meer has been made very quickly.
Ensure that there is sufficient advice and information transfer in both directions: it seems that
the communication between the two companies was very poor, especially about the payment
method. This lack of communication has been the source of the end of the agreement which
linked the two companies. The Merry Company finished by losing the control of Ala-Meer
Company. The Merry Company loosed a lot of money because of that bad situation.
Q2: How could Merry have protected their business in the Middle East more effectively?
The first solution for the Merry Company would have been to find a more suitable partner in the
Middle East, by seeking more time a good local partner. IT would have been important for the
both companies to share with the Ala-Meer Company a better communication plan, to ensure
that the both parts agree on all the parts of the business plan, such as the payment method. This
disagreement was at the origin of the end of the partnership. The other solution for the Merry to

protect their business in the Middle East would have been not buy creating an alliance but by
performing a company acquisition towards AlaMeer.
Company acquisition has a lot of advantages:

Increased value generation, increase in cost efficiency and increase in market share.

Increased revenue and can reduce the cost of capital.

Increased value generation for the company.

Gaining cost efficiency.

Tax gains.

Q3: What lessons can be drawn from this case regarding cross-cultural negotiations?
The most important lesson that can be drawn from this case is that it is very important to watch
carefully the laws of the overseas country before to establish an important partnership with a
local company. Moreover, in the case of this partnership, the agreements between the both
companies were very vague. The agreement about the percentage of the incomes due to the
Merry Company is very unclear. Communication between the two partners is another big issue
regarding cross-cultural negotiations. The both parts misunderstood each others about several
crucial points about their own business partnership.