Question

1. 20Something entered the U.K. market by opening two massive retail stores. What are the possible financial advantages and disadvantages of entering a market in such a manner?
2. The company lost a great deal of its worth when it was forced to write down its U.K. assets after a few years of operation. What could the team have done to mitigate this risk?
3. In the year prior to its U.K. launch, the company spent more than anticipated due to the rising cost of the GBP over the USD. What strategies could assist with protecting against currency fluctuations in the future?
4. 20Something’s new strategy is to enter the European market with scaled-down stores. In what ways does this strategy lessen the financial risk to the company?

Answer 1

Ques 1

The financial advantages and disadvantages of entering a market in such a manner are as fllows :

Advantages :

- When you set up your own store , your clients will pay attention to you more in the event that you have a established a local presence. This is especially obvious if your items require expert after-deals administration and first hand look and feel of the products like retail store.

- On the off chance that you utilize a joint venture, you will have the option to share the risk. You will likewise profit by your accomplice's nearby information and notoriety. In the event that you work alone, all benefits from the venture remain yours alone.

- A nearby auxiliary organization offers constrained risk if things turn out badly. It is likewise simpler to extend than a nearby office.

- It gives a chance to expand your protected intellectual rights and brands in different markets

- Overall in the short run there may be challenges but in the long run it will benefit.

Disadvantages :

- This alternative may require huge investment in assets, and includes more prominent authoritative and administrative weights than different ways to deal with entering abroad markets:

- You should comprehend corporate, work and assessment law in the new market, and utilize neighborhood laywers to support you.

- You may need to rebrand the business to draw in neighborhood consideration and cultural aspects or if your current business or item name has an alternate significance in the new cultuer.

- Costs will be high if things turn out badly.

- You need to take all the risks yourself these include , financial , legal , regulatory and compliance risks.

- There are significant lawful and budgetary ramifications engaged with setting up an abroad business.