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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.

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