Use power point notes as guide when writing your 1. Cover letter and Application Letter 2. CV ( this is a resume, you can use any information)

EntrymodeofBringKrogertoAruba..docx

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Running head: ENTRY MODE OF BRING KROGER TO ARUBA 1

ENTRY MODE OF BRING KROGER TO ARUBA 2

Entry Mode of Bring Kroger to Aruba

Name

Institution

Bring Kroger to Aruba

Entry Mode of Mergers

Kroger has adopted an entry mode of mergers which is an important strategy of growing fast and earning income. This strategy has helped the company to achieve synergy and benefit from competitive advantage over its competitors. This entry mode has enabled Kroger to enhance industry consolidation and achieve geographic expansion into various neighbouring regions by adding new areas in its basket. It has facilitated the company to expand into new markets which has enabled them to achieve revenue growth. This mode of entry often involves the acquisition of new products or technology when the company doesn’t have enough resources to develop the product or technology (Ahammad, Leone, Tarba, Glaister, & Arslan, 2017). This is evident of the Kroger Company which acquired other companies most of which were its subsidiaries.

Management contract entry mode

Management contract mode of entry is whereby one company offers another organization with managerial expertise for a particular period of time in exchange of a sum payment or a continuous fee on a 4% of volume or sales value (Ivanova, M, Ivanov, S., & Magnini, V. P. (Eds.). (2016). This mode of entry is often adopted by utilities services and by developing markets that need assistance from more developed markets to manage various infrastructures such as water and transport management, lawn mowing and building management services. This mode of entry will help Kroger in that it will serve as a learning experience of lower risk to venture into the foreign market. In addition, this strategy is important because it will serve to help two companies whereby the home party is equipped with expertise and knowledge but lack asset which will be provided by the other company.

However, although management contract mode of entry will benefit Kroger through increased information and expertise, they are likely to suffer from risks associated with limited time span, enforcement based on the contract and delayed remuneration. Nevertheless, Kroger will opt for this mode of entry as opposed to the mode of mergers because the management contract will build sustainable relationships that are founded on trust. In addition, it will allow managers to exploit various international opportunities without experiencing any control on its physical assets.

References

Ahammad, M. F., Leone, V., Tarba, S. Y., Glaister, K. W., & Arslan, A. (2017). Equity ownership in cross‐border mergers and acquisitions by British firms: An analysis of real options and transaction cost factors. British Journal of Management, 28(2), 180-196.

Ivanova, M., Ivanov, S., & Magnini, V. P. (Eds.). (2016). The Routledge handbook of hotel chain management. Routledge.