Entry into Netherlands Bicycle Lights Market - Essay Example

 As a company that deals with the manufacture of bicycle lights, we have decided to go global by expanding our business operations to the Netherlands, which presents the best opportunity for our lights.

We have chosen the Netherlands because the country has perhaps the largest number of bicycle users as their mode of transport. The Netherlands has a population of 16,652,800 people and about 15,500,000 bicycles (Shahan, 2014). This translates to about 1.11 bicycles per Dutch. Research also shows that about 27% of all trips are made by bicycle. On average, each Dutch covers about 2.5 km per day on a bicycle. However, since safety is paramount, we intend to introduce state-of-the-art bright bicycle lights, which would be placed on the front of the bicycle to enhance vision, and red lights at the back.

Against the backdrop of the continued growth of bicycle use in the Netherlands, we have decided to take advantage of the high demand for bicycle lights in the country by entering the market. Although there are a variety of entry methods that ‘A company can use to enter the Dutch market, we have opted to use a joint venture as the best entry method, considering the Dutch legal requirements and the advantages of the joint venture. The company has already identified a company with which to form a joint venture in the Netherlands.

The company is called Royal Dutch Gazelle, which is the leading bicycle manufacturer in the Netherlands today. We chose to form a joint venture with Royal Dutch Gazelle because of a variety of reasons. Firstly, Royal Dutch Gazelle is a well-established brand in the Netherlands and, therefore, forming a joint venture with it will enable our bicycle lights to receive a warm reception among the Dutch. Secondly, a joint venture with the Dutch company will help the company share the risk of entry (Brady, 2010).

Company A will also benefit from the joint venture with Royal Dutch Gazelle because it will result in sharing of knowledge and expertise, thereby helping in the development of the company in the Netherlands. Additionally, because of the strict Dutch laws regarding the entry of foreign companies, it became appropriate that we form a joint venture with a Dutch company to enable company A to avoid legal hurdles. Although company A will benefit a great deal from entering the Dutch market through a joint venture, the major disadvantage is that company A will have to share profits with Royal Dutch Gazelle, which it intends to form a joint venture with.

The other disadvantage of forming a joint venture is that disagreements may arise about how the joint venture should be managed, notes Brady (2010). Since the Dutch market is very attractive for the bicycle lights that company A intends to offer, the company will use a waterfall strategy. The waterfall strategy will also be applicable since the Netherlands already has strong competitors that make bicycles and their parts. In this regard, the company intends to commit fully to establishing a leadership position in the Dutch bicycle light market by pouring all the company resources into the market.

 In this respect, the company will differentiate itself as one that provides a solution to the common problems associated with regular bicycle lights. Instead of being made using glass, the bulbs will be made of a unique composite that does not easily break on impact. The bulbs will also be more energy efficient, eco-friendly, and much brighter than the regular ones apart from being incorporated with tiny solar chargers. In addition to product differentiation, the company will be successful by riding on the reputation and extensive distribution network of the company with which it will ally.