Expansion to foreign markets is one of the ways in which companies increase their revenues. This expansion is normally preceded by analysis of that market and coming up with strategies to be used. The commonly used business strategy formulation method is SWOT analysis. Business strategies are aimed at improving a company’s competitive position or business unit within an industry or segment. Business strategies can be cooperative or competitive (Wheelen, 2003). Competitive strategies largely focus on costs and differentiation.
The various strategies that can be adopted to achieve competitive edge include cost leadership, differentiation, cost focus, or differentiation focus Jose Cuervo Tequila entry strategies This product is manufactured in the Mexican city of Tequila. This tequila is made from agave plant found in Mexico. Tequila is a premium brand targeted at the premium beverage market segment. Before introducing the product to the market, the main factors to consider are marketing, supply of the product and investment as well as control measures e. g. nter the market by acquisition, joint venture etc (Wheelen, 2003).
Given the fact that Jose Cuervo Company is a family owned business, the company may not have the resources to counter competitors in an advanced market like the USA. Therefore the company can grant license rights to other companies to manufacture market and distribute the product. In this way, the company can penetrate the market without investing substantial amounts of resources (Diageo Inc, 2009) Jose Cuevo tequila is a premium brand and therefore differentiation focus is the other strategy that the company can use.
This type of differentiation focuses on a particular group, segment or geographical market. Since the company makes premium brand tequila, differentiation focus strategy is another possible option that the company can adopt Exporting is the other market entry strategy that the company can adopt to enter the USA market. This strategy will require lower investment although to create awareness about the product, the company has to invest substantial resources on marketing Control and Evaluation.
This is the monitoring of corporate activities and performance results so that actual performance can be compared with the desired results. It typically involves determining what to measure, establishing standards of performance, measuring actual performance, comparison of actual performance with standards and taking corrective actions (Wheelen, 2003) Evaluation of the company’s strategies and operations can be done using performance measures such as return on investment, earnings per share, balanced scorecard, benchmarking etc.
In this way, the company can be able to tell whether it is performing as expected. The company can evaluate the performance of its target market by using the above measures Controls instituted by the company should be in line with its strategies so as to avoid conflicts that may hinder achievement of objectives. Controls should depict true picture by monitoring important events, being timely, short and long term. Therefore the controls set by the company should not affect its quest to penetrate the market (Wheelen, 2003).
Contingency plan In charting new territories e. g. a foreign market, the company should be able to take the necessary measures to ensure business continuity in case of uncertainties. This can be done through the development of a contingency plan. The first step is by identifying potential threats e. g. economic slowdown, changes in laws etc. Coming up with solutions e. g. by diversification or scaling back operations to reduce costs is the next step of a contingency plan (Wheelen, 2003).
Implementing the plan by instituting specific measures e. g. by investing in research to come up with new products and setting up a recovery team is the other step. The implemented plan should be tested and agreed upon by everybody in the company to ensure that it achieves the desired results The plan should be maintained by incorporating current conditions e. g. the company should include the current economic slowdown and its effects like lack of credit to the plan. This ensures that the plan is updated.