Market Entry Strategy from Ireland into the Germanic Cluster - Essay Example

In 2005, DVD unit sales became so dominant, resulting to the remarkable decline in VHS sales. In Germany, there was 9.5% increase in DVD sales in the same year (European Video: The Industry Overview. 2008). Film Production Industry: In 2007, the German film industry was optimistic to have a better year as far as movie exhibit and distribution is concerned. In a report from the Federal Film Board (FFA) in Berlin, the market share of German movies remained at 19.5% over the past three years (Germany Film Industry Upbeat Again. 2007). On the other hand, distribution of blockbuster hits such as Harry Potter and Spiderman III contributed much to the industry, garnering 6.6M and 3.1M respectively.

In home entertainment, the sales and rentals of video cassettes and DVDs reached 669-million-euro level during the first half of 2007. Germany’s Economic Condition: The tax policies in Germany allow foreign film production companies to enjoy huge profits, thus investors are able to write off the entire cost of producing a project. Profits come in the form of huge tax savings, and all the investors have to do is to find a German national to sell the rights of the film to. This is perfectly legal and is widely being done between Hollywood producers and local investors.

The best way to enter the German Market at this point is through Licensing. Through this strategy, Tyrone productions will essentially allow a local company to use the properties of the Licensor in producing its products. These products are usually intangible such as trademarks, patents and production techniques. The licensee pays a fee in exchange for the rights to use the intangible property and possibly for technical assistance. Licensing requires little investment on the part of the licensor, thus it guarantees more profits for Tyrone in the distributorship of its DVDs.

Furthermore, this scheme would enable Tyrone to take