Essay on Comparing PR Expansion in Developed and Emerging Markets: Pernod Ricard's Innovative Strategies

Compare and contrast how PR expanded in its major developed country markets (such as Germany) and emerging markets (such as India).

Pernod Ricard introduced innovative ways to venture into the Indian market. It entered India through the acquisition of Seagram (Jensen & Zamborsky, 2018). Upon entry, the company sort ways to strengthen its market base and came up with strategies such as a 90-minute film christened after the blended whiskey make Seagram's Imperial Blue with a captivating tagline 'Men Will Be Men.' The film received undeterred perceptibility in the cinemas and led to the company's market position (Jensen & Zamborsky, 2018). Expansion in the Germany market by Pernod Ricard involved Greenfield operations. Greenfield companies have been essential to the PRGs approach of starting and getting into markets (Jensen & Zamborsky, 2018). It is the strategy the company applies when entering a mature market such as Germany. Greenfield Venture is a system of entering an exchange with the formation of a new exclusively possessed subsidiary in a modern republic by building its amenities from the bottom up (Jensen & Zamborsky, 2018). This entry allowed Pernod Ricard to expand in Germany without the help of another business.

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North America and Western Europe are PR's current vital markets. Which region should be PR's next priority target? (Eastern Europe; Central and South America; Africa/Middle East; Asia/Oceania) Why?

PRs next priority target should be the Asia/Oceanic region. This is because the part has played a vital role in its global strategy. The company underinvested in the area, and from the graphs shown, the products are not doing wrong, and there is excellent growth potential in the region. Japan, New Zealand, and Taiwan have shown great potential as the consumption rates have increased gradually since its inception (Jensen & Zamborsky, 2018). Additionally, the rest of the markets such as Thailand, Pakistan, South Korea, Indonesia, and Malaysia have been on a steady trend since 2015, which implies that with a good strategy, the growth could be remarkable in these regions.

In which of these regions should the company expand mainly by acquisitions? In which areas should the company expand primarily by Greenfield operations? Elaborate and explain why.

Eastern Europe - Acquisition

Eastern Europe is a mature market for PRG; as a result, the acquisition of competitor companies would work to expand the market. There must be existent well-established companies PRG can acquire to grow its market base in Eastern Europe.

Central and South America- Acquisition

This is a market PRG has already gained entry and established subsidiaries; as a result, the Greenfield operations would not be a useful expansion strategy. The PRG can now only expand the market through the acquisition of competitor brands to increase their customer base.

Africa/Middle East- Greenfield operations

PRG has shown an increased growth rate in this region. However, the market is not developed, and the area is not industrialized. Therefore chances are high; there are no well-established brands PRG can acquire to grow its market base. Thus, the Greenfield operations would be best suited for the region.

Asia/Oceania- Acquisition

Generally, Asia and Oceania region is a developed market. From the history of However, from the account of PRG, it incorporates acquisitions commonly in developed highly industrialized markets. Since for acquisitions to be active, there needs to be pre-existing well-built resources and products that are probable to obtain.

Discuss whether the Cuban venture should be considered a joint venture or an acquisition. Consider the difference in definitions.

The Cuban venture is a joint venture. A joint venture is a cooperation between two organizations like PR and Jose Arechabala had collaborated (Jensen & Zamborsky, 2018). An acquisition, on the other hand, refers to the procurement of a corporation (Jensen & Zamborsky, 2018).Evaluate based on the data in Tables 2 and 3 2, which entry mode has been the most profitable at the subsidiary (country) level? (Table 2 shows the results of the F-test in Excel, where we test whether the two samples have the same variance, whereas Table 3 shows the results of the t-test where we test whether the two samples have the same mean.) Do your findings meet expectations about the advantages and disadvantages of different entry modes? What are the limits to this analysis? Is it conclusive enough to state whether one entry strategy is the best?

From the results in the table, the acquisition model proves to be more efficient than the greenfield operations. The t-value of acquisition is significant when analyzing the profit margin percentage, which shows there is a substantial difference in the means of the acquisition and greenfield operations strategies. The F value of the acquisition in the profit margin table is higher than the critical value, which shows that the profit margin of the acquisition entry mode is significant.

The results do meet my expectations of the advantages and disadvantages of the entry modes. T-test limitations comprise of those concerning the scale of measurement, the use of random samples, and the normality of data spreading. It is not conclusive enough to state whether one entry mode is better than the other since markets are different, and the test uses assumptions that might also be limiting in different markets.

References

Jensen, C., & Zamborsky, P. (2018). Conviviality evaluated: Market entry and expansion strategies at the Pernod Ricard Groupe. SAGE Publications: SAGE Business Cases Originals.