Case Study Analysis: Otto Group
1. The non-German markets are important in the company’s strategy. The company is following the multichannel strategy. It is focusing attention on new emerging and promising markets particularly from Europe, Asia and North America. It continuously reviews its investment options for economically growing non German markets such as Russia and Brazil (Expansion abroad 2012). It has the vision of having presence in all the key markets of Asia, Europe and North America.
2. For the level of international expansion Otto group is maintaining, it has had to do strategic planning for international expansion, focusing on its direct marketing channels, internet and travel services. The development of multichannel strategy is the outcome of the plan of the company for international expansion under which it has to provide the complete package to customers across all the sales channels (Strategy 2012). It has had to assess all its strategic capabilities and resources along-with the assessment of the growing markets in the world.
3. The country entry modes that the firm appears to prefer are takeovers and acquisitions of the companies working in the target local market (Expansion abroad 2012). Most of its entry modes are similar which are takeovers and acquisition of shares in distance selling markets, but it also varies its entry modes, as it has done in US though opening own sales subsidiary.
4. Otto group failed in its first effort to enter the US market, but it would try again because it has brought out innovations in the retail arena. The in-house manufacturing and the logistics divisions of the company are the most growing segments of the group and it may use this segment along-with its innovations in its own retail brands to establish itself in the US market. Earlier, the focus was on entering the market through acquisition, but this time with its own resources and competencies, it could succeed.
5. The latest effort to make an entry in the US market is different from the prior one in terms of mode of entry. Earlier, the company adopted the mode of acquisition and entered the market by acquiring Spiegel, the parent company of Eddie Bauer. This time, the company has entered the US market by opening its own stores and launching the brand Field & Stream 1871 (Dishman 2010). It is different as it has entered now through its own sales subsidiary, while earlier it adopted the entry mode of acquisition.
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