Nikola Motors: a case study in bundling as a market entry strategy

2019 ◽  
Vol 42 (1) ◽  
pp. 59-68
Author(s):  
Heejin Woo ◽  
Jake Grandy
Keyword(s):  
Business Model ◽  
Market Entry ◽  
Manufacturing Industry ◽  
Resource Limitation ◽  
Hydrogen Fuel Cell ◽  
Heavy Duty ◽  
Content Type ◽  
Novel Technologies ◽  
Heavy Duty Truck ◽  
Entry Strategy

Purpose By introducing how a young entrepreneurial firm leverages bundling as a market entry strategy, this study aims to suggest a way that a relatively vulnerable startup can secure its position from a threat of resource-rich established competitors. Design/methodology/approach The authors conducted a qualitative investigation into Nikola Motors, a Class 8 heavy-duty truck manufacturer based in Phoenix, Arizona. The analysis revealed the underlying mechanisms that allow a startup to effectively enter a market through bundling in the truck manufacturing industry. Findings Nikola Motors Co. uses a bundled business model in commercializing hydrogen-power technology used for heavy-duty truck manufacturing. Instead of focusing on a single product, Nikola’s business model created an ecosystem surrounding hydrogen fuel-cell electric heavy trucks, including hydrogen fueling stations, maintenance service and leasing. By leveraging partnership with players in other areas, it overcomes the resource limitation as a relatively small firm. Originality/value Startups seeking to disrupt markets with novel technologies risk losing their competitive advantage to imitation by more resource-rich established firms. This study examines a novel approach to a bundled business model that can be effective for relatively resource-poor new companies. It suggests practical implications on how firms which are relatively in a weak position compete with established incumbents.

Serendipitous opportunities, entry strategy and knowledge in firms' foreign market entry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mikael Hilmersson ◽  
Martin Johanson ◽  
Heléne Lundberg ◽  
Stylianos Papaioannou
Keyword(s):  
Market Entry ◽  
Foreign Market ◽  
Ordinary Least Squares ◽  
Experiential Knowledge ◽  
Foreign Market Entry ◽  
Learning Theories ◽  
Content Type ◽  
Entry Strategy ◽  
Regression Tests

PurposeFew researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models ignore the role of serendipity in the opportunity discovery process. The authors provide a nuanced view on international opportunities by developing the role of serendipitous opportunities in the foreign market entry process. The authors develop a model integrating the notions of serendipity, entrepreneurial logic, experiential knowledge and network knowledge redundancy. From the study’s model, the authors condense three sets of hypotheses on the relationships among experiential knowledge and entry strategy, network knowledge redundancy, entry strategy and serendipity.Design/methodology/approachThe authors confront the study’s hypotheses with data collected on-site at 168 Swedish firms covering 234 opportunities, and to test the hypotheses, the authors ran ordinary least squares (OLS) regression tests in three steps.FindingsThe results of the study’s analysis reveal that experiential knowledge and network knowledge redundancy both lead to a logic based on rigid planning and systematic search, which in turn reduces the likelihood that serendipitous opportunities will be realized in the foreign market entry process.Originality/valueThis is the first study that develops a measure of opportunities that are the outcome of serendipitous events. In addition, the authors integrate network and learning theories and internationalization theory by establishing antecedents to, and outcomes of, the entry strategy.

“Testing the water” – prior-online market entry in China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sina Hardaker ◽  
Ling Zhang
Keyword(s):  
Market Entry ◽  
Consumer Preferences ◽  
Academic Research ◽  
Chinese Market ◽  
Conceptual Approach ◽  
Content Type ◽  
Strategic Response ◽  
Organizational Challenges ◽  
Entry Strategy ◽  
Online Stores

PurposeThe paper aims to investigate the new market entry strategy of the international grocery retailers Aldi Süd and Costco in China; analyzing if and how their prior-online market entry reflects a strategic response to organizational challenges in the Chinese market, which is a pioneer in the use of digital technologies and the provision of digital services.Design/methodology/approachThe article identifies major challenges faced by international grocery retailers in China and discusses these with the help of the conceptual approach of embeddedness. The paper is based on expert interviews with senior executives of the two international retailers and other retail specialists and consultants.FindingsThe prior-online market entry by Aldi Süd and Costco represents a strategic response to organizational challenges that have to be faced in an increasingly challenging and highly digitalized Chinese market. Prior-online market entry allows the two retailers to experiment with the unique and heterogeneous Chinese market and build network and territorial embeddedness to facilitate the establishment of the physical store network. Both retailers utilize online stores to build relation and network with suppliers and customers and to understand Chinese consumer preferences. Yet, the localization strategy of Aldi Süd and Costco vary greatly.Originality/valueGrocery retailers' prior-online expansion strategy has not yet been the focus of academic research. In regard to global grocery retailers, such as Aldi Süd and Costco, previous research argued that they were prepared to accept a lower expansion speed in order to expand at minimum risk and cost and mainly in countries which are regarded as having higher cultural proximity. The paper reveals the potential of the prior-online market entry strategy to change the internationalization behavior of grocery retailers. In addition, it contributes to the understanding of the evolution of market entry strategy into advanced digital economies in the coming new decade.

Foreign market entry through acquisition and firm financial performance

2018 ◽  
Vol 13 (5) ◽  
pp. 1348-1371 ◽  
Author(s):  
Andrews Adugudaa Akolaa
Keyword(s):  
Financial Performance ◽  
Absorptive Capacity ◽  
Market Entry ◽  
Parent Company ◽  
Foreign Subsidiaries ◽  
Acquisition Performance ◽  
Content Type ◽  
Entry Strategy ◽  
Parent Companies ◽  
Local Firms

Purpose The international market entry strategy by acquisition is one of the critical options for success in international business. The decision to acquire a local firm is expected to impact the post-entry financial performance of the local firm as the acquirers come with proprietary advantages to improve the overall performance of the acquired company. The purpose of this paper is to empirically examine the post-acquisition financial performance of acquired foreign subsidiaries and comparable unacquired local firms in Ghana to determine the effect of foreign acquisition on the financial performance of the local subsidiaries. Design/methodology/approach A quantitative approach was adopted in this study. A sample of 100 locally acquired and non-acquired firms were studied using purposive and convenience sampling method. The research adopted the propensity score matching and the differences in difference methodologies to determine the returns on assets (ROA) of non-acquired local firms and acquired foreign subsidiaries are compared one year pre-acquisition t1 to two years post-acquisition t2. Findings The results demonstrate a higher post-acquisition financial performance of locally acquired foreign subsidiaries in relation to their local counterparts in Ghana. Firms with pre-acquisition modernized ownership structures performed better than state-owned firms and firms with high pre-acquisition absorptive capacity outperformed firms with lower pre-acquisition absorptive capacity. The results also indicate that ROA for acquired local firms in the year of acquisition drops in relation to the year prior to acquisition Research limitations/implications A major limitation of this research is that the relative capability of the parent companies and experience in the transfer of knowledge to the acquired local subsidiaries was not considered. The real impact of the various multinationals would have revealed how the capability and competencies of the different parent companies whose subsidiaries this study considered in the paper make a difference in their performance. The study did not also consider the value of parent company participation in the local management of the acquired subsidiaries. Whereas some acquired firms had parent company staff participating in the local management, others did not have same, thus challenging the performance results without any control of this variable. The other limitation of this research is the fact that it did not also consider the experience of the parent company as a factor that can influence the performance of the subsidiary. The more experienced the parent company is in engaging foreign markets, the more likely the support for the subsidiary will result in higher performance as parent company brings previous learnings. Another limitation of this study is that it measures the financials only (ROA) and hence does not provide a 360° assessment of the subsidiary performance, which includes the operational and overall subsidiary effectiveness. This research has not empirically examined all aspects of foreign acquisitions in Ghana and thus has many aspects for future exploration that other researchers may focus on. The paper has not considered the experience and capability of the parent company to transfer technology, innovation and all the advantages of multinationals to the post-acquisition performance of subsidiaries. More experienced multinationals are most likely to transfer knowledge faster to subsidiaries than less experienced ones, thus likely to show better performance post-acquisition than the less experienced ones. The effect of this phenomenon has not been considered in this study. Parent company participation in the local management of the subsidiary can also make a difference in the post-acquisition performance equation but this has not been considered in this research. Some parent companies actively participate in the local subsidiary management as management support for the subsidiary. This might have some effect on the subsidiary post-acquisition performance but this study does consider this. Other researchers may want to look into this factor. Future researchers may also assess the differences in performance of subsidiaries that are wholly owned and partial owned in Ghana. The performance of Greenfield joint ventures and local firm acquisitions can also be studied. Practical implications Findings of this research has implications for firms using acquisition as foreign market entry strategy to inform the choice of local partners to select for acquisitions as pre-acquisition ownership structure and absorptive capacity of local Ghanaian firms impact post-acquisitions performance. Ghanaian firms also seeking to attract foreign investments into their businesses will also find the results useful as they organize to meet prospective acquirers’ expectations, for example, building their human capacity and ownership structures, developing export and ensuring debt rations to attract potential acquirers. Originality/value Acquisitions as an international market entry strategy continue to gain grounds with lots of research in the area. However, there is scanty research on post-acquisition financial performance, especially in the developing country context, and this paper fills that yawning knowledge gap by comparing acquired and non-acquired local firms in Ghana to determine if foreign acquisitions lead to better ROA.

scholarly journals Alipay entered Malaysia: a closer look at the new market entry strategy driven by Chinese tourists

2020 ◽  
Vol 12 (4) ◽  
pp. 561-577
Author(s):  
Boon Cheong Chew ◽  
Xiaobai Shen ◽  
Jake Ansell
Keyword(s):  
Market Entry ◽  
Technology Development ◽  
Service Providers ◽  
Secondary Data ◽  
Primary Data ◽  
Convenience Store ◽  
Validity And Reliability ◽  
Content Type ◽  
Chinese Tourists ◽  
Entry Strategy

Purpose This study aims to investigate the entrance of Chinese-based Alipay’s mobile-payment (m-payment) technology into Malaysia. Malaysia allowed this entry of the first foreign m-payment company because it would allow Chinese tourists spending while they are visiting Malaysia. It will view this entrance from a Malaysian perspective. Design/methodology/approach The views of Malaysian players (Bank Negara Malaysia officers, three Malaysian banks’ officers, Alipay-Malaysia officers, airport section manager, convenience store manager and airport store sales executive) were sought via qualitative interview concerning Alipay’s entry into the Malaysian market. Respondents who had relevant knowledge and/or were involved in Alipay m-payment technology development in Malaysia were contacted, while there remainder were obtained by snowballing. Secondary data was collected from Bank Negara Malaysia’s policy, three Malaysian banks’ reports, the Alipay-Malaysia public statements and the Airport and Convenience Store reports. Triangulation using primary and secondary data was used to safeguard the validity and reliability of the outcomes. Findings The entry strategy used by Alipay was different from those reported in previous studies. The establishment of Alipay-Malaysia was the first element of the “mode of entry” gaining pioneer status in Malaysia. The next stage was gaining support from Bank Negara Malaysia-Malaysian Central Bank and three Malaysian banks (Maybank, Public Bank and CIMB) through collaborative ventures with Alipay-Malaysia Sdn. Bhd., leading to acceptance nationwide by local merchants. The key driver of acceptance being Chinese outbound tourists in Malaysia. Research limitations/implications This case study was conducted during the early implementation of Alipay in Malaysia from 2015 until April 2019. During this period, there were challenges due to the lack of primary data. These were overcome by the support from the respondents and the secondary data. Practical implications This study contributes to insights from a different entry strategy that used tourism as a leading force. This can give guidance to other m-payment service providers or other countries as m-payment technology recipient about “market entry strategy” and “modes of entry” following Alipay’s approach. Originality/value To date, no study has been conducted to investigate the nature of Alipay m-payment in Malaysia. This qualitative study has examined the new phenomenon regarding how Alipay entered the Malaysian market. Moreover, this study can also contribute new insights into the existing theory of “market entry strategy” in terms of Alipay’s tourist-based approach.

Business model transfer mechanism

2019 ◽  
Vol 11 (1) ◽  
pp. 44-68
Author(s):  
Zhigang Li ◽  
Shining He ◽  
Jing Ning ◽  
Zhen Liu ◽  
Jingwei Zhang ◽  
...  
Keyword(s):  
Grounded Theory ◽  
Business Model ◽  
Model Theory ◽  
Manufacturing Industry ◽  
Business Models ◽  
Corporate Entrepreneurship ◽  
Influential Factors ◽  
Content Type ◽  
Model Transfer ◽  
Start Ups

Purpose Starting from corporate entrepreneurship, spin-off entrepreneurship and business model theory, this paper aims to examine the key influential factors and inherent mechanism in the process of business model transfer from parent enterprise to spin-off start-ups. Design/methodology/approach Grounded theory method is fit for constructing theoretical models, which can discover and interpret phenomenon and activities. According to the guidance of theoretical sampling and other core principles in grounded theory, this study extracts two parent enterprises named Haier and Phnix and lots of spin-offs derived from them. Findings This paper presents the theoretical framework that business models transfer from parents to spin-offs and probes into the embedding logic and connection relationship between factors and categories in this process, such as preconditions, incubation veins, business model elements, stripping mechanism and independent operations. Research limitations/implications Although this study is focused on the manufacturing industry, the main characteristics, comparative advantages, governance rules summarized from transfer activities of business model in spin-off entrepreneurship can also bring inspirations to both parent enterprises and spin-off start-ups. Originality/value Excavates process and mechanism of business model transfer from internal to external, extends the theoretical perspectives about existing related theories such as corporate entrepreneurship, spin-off entrepreneurship and business model theory and reveals new approaches and methods on business model design, which is different from the past way.

Rising above the competition

2018 ◽  
Vol 34 (5) ◽  
pp. 12-13
Keyword(s):  
Case Studies ◽  
Market Entry ◽  
Design Methodology ◽  
Reading Time ◽  
Cutting Edge ◽  
Epidemic Models ◽  
Content Type ◽  
Pertinent Information ◽  
Entry Strategy ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings There is currently no clear and extensive understanding of the necessary market entry strategy for platform businesses. This briefing looks at this using Reed’s law and epidemic models to understand the optimal way into market. Originality/value The briefing saves busy executives, strategists, and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

scholarly journals Sustainable Business Model Innovations in the Value Uncaptured Manufacturing Industry: Fitting Gains—Gain Creators

2021 ◽  
Vol 13 (10) ◽  
pp. 5647
Author(s):  
Burhan ◽  
Udisubakti Ciptomulyono ◽  
Moses Singgih ◽  
Imam Baihaqi
Keyword(s):  
Business Model ◽  
Environmental Quality ◽  
Manufacturing Industry ◽  
Design Method ◽  
Pairwise Comparison ◽  
Comparison Method ◽  
Value Proposition ◽  
Sustainable Business ◽  
Sustainability Index ◽  
Index Matrix

Increased manufacturing activity has an impact on environmental quality degradation. Waste generated from manufacturing activities is one of the causes. Previous studies have referred to this waste as value uncaptured. Minimizing value uncaptured is a solution to improve environmental quality. This study aims to reduce value uncaptured by converting it into value captured. This process requires a value proposition design approach because of its advantages. One of the advantages of this approach is that it can improve existing or future products/services. To do so, this research uses a case study of a furniture company. To implement a converting process, a sustainable business model is proposed to solve this problem. This business model combines several methods: value proposition design, house of value and the product sustainability index matrix. Recently, the existing value proposition problem-solving has been using the value proposition design method. This research proposed implementing a house of value to replace the fitting process. The questionnaire is developed to obtain various value uncaptured in the company. To the weight of the value uncaptured, this research utilized the pairwise comparison method. Then, the weights could represent the importance of jobs. Based on the highest weight of these jobs, the alternative gains would be selected. To provide the weight of the gain creators and value captured, the house of value method is developed. Referring to three pillars of sustainability, the value captured should be considered. This research proposed implementing a product sustainability index which in turn produces eco-friendly products. This study produces “eco-friendly products” as sustainability value captured. The sustainability business model could be an alternative policy to minimize the existence of value uncaptured.

scholarly journals Filling the void of family leadership: institutional support to business model changes in the Italian Industry 4.0 experience

2021 ◽  
Author(s):  
Marco Cucculelli ◽  
Ivano Dileo ◽  
Marco Pini
Keyword(s):  
Business Model ◽  
Industry 4.0 ◽  
Manufacturing Industry ◽  
Business Models ◽  
Institutional Support ◽  
Negative Influence ◽  
Positive Influence ◽  
External Support ◽  
Family Management ◽  
Family Leadership

AbstractWe examine whether the probability of innovating a company’s business model towards the Industry 4.0 paradigm is affected by external institutional support and family leadership. Industry 4.0 is the information-intensive transformation of global manufacturing enabled by Internet technologies aimed at reinventing products and services from design and engineering to manufacturing. Using a sample of 3000 firms from a corporate survey on the manufacturing industry in Italy, our results showed that family leadership has a significant positive influence on the adoption of Industry 4.0 business models, but only in terms of family ownership. By contrast, family management has a negative influence on the probability of adopting a new business model. However, this negative influence is almost totally offset by the presence of the Triple Helix, i.e. the external support by public institutions and universities, which counterbalances the lower propensity of family managers to adopt Industry 4.0 business models. This supporting role only occurs when institutions and universities act together.

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