- Acomb Tyres want to become international
Acomb Tyres want to become international
Objectives and Criteria
This report seeks to explore options for the expansion of SME's
wishing to become international. It considers the Stage Model
(including exportation, manufacturing and direct investment) and
the Network model (considering strategic alliances and distribution
channels) as among the most significant amongst the strategic
literature. This is followed by recommendations for Acomb
Tyres to expand to France and justifications for this choice.
Finally this brief offers strategic advice as to how Acomb
Tyres should enter France, resources needed and any problems they
may face. Ultimately this report suggests that exportation
through a distributor, leading to establishing a second
manufacturing plant is the best option for Acomb Tyres.
Expansion Strategies for SME's
However, if management are committed to a long term strategy,
they must be willing to except some loss of power as the business
grows further from its base. Alternatively, one of the
partners could manage the development themselves. Manolova et
al (2002) suggests that human factors are massively important to
the success of expansion strategies. Stating that all SME's
will face financial hardship during expansion, management skills
could have the potential to override these issues. For example,
"business skills, international orientation, perceptions of the
environment and demographic characteristics" all impact upon the
success of a company's expansion strategy (Manolova et al
2001). The most significant advantage of the move to France
is not only the new market that it represents but also the
opportunities to expand further into EU countries. This area
of free trade which is continuously expanding is an ideal
opportunity for Acomb Tyres, particularly with the agriculture
based countries such as Turkey developing their technology and
close to joining the EU.
Ultimately, France is an excellent expansion option for Acomb
Tyres, particularly if they begin by exporting through established
distributors before building their own manufacturing plant.
This is the strategy which is strongly recommended as it is takes
into account Acombs lack of experience in France and offers a slow
programme in which issues can be dealt with promptly.