• How will the new operations fit with the firms global strategy?
• How will you manage the entry mode?
  • Provide rationale for managing the entry mode

Some questions I wanted to be covered: ? What is the company's expansion strategy? Is it conservative and focuses on control, or is it very bold and wants to expand rapidly and enter the market quickly? ? How does the new operation fit the company's strategy, from which aspects? Here it can be explained by combining the advantages and disadvantages of different entry modes. ? After choosing an entry mode, whether our competitive advantage comes from the company's own specific resources or capabilities, such as word of mouth, IP (Intellectual property) attractiveness, or local country-specific resources or capabilities. How can we ensure that our competitive advantage will not be reduced if we cooperate with a local company in a joint venture? ? How do we allocate management, cooperate in production or sales? How are resources used? How to bear the cost? How to distribute the profits?  Why enter the German market? After opening two directly-managed stores in London and Paris, Pop Mart wants to open an offline expansion in Europe to accelerate the layout of the European market. 2. How is Pop Mart accepted in Germany? For overseas business, Chinese and Asians are the main consumer groups, but the proportion of local consumers has gradually increased as the blind box culture has grown and become more well-known. Most consumers buy Bubble Mart for reasons other than the toy itself, but also tend to focus on the emotional value it offers. The ritual of constantly buying blind boxes and collecting the complete series brings a sense of ritual, the surprise of winning a hidden model, the satisfaction, and the circle of sharing and socializing of common hobbies. According to Syd, President and COO of Bubble Mart China, there are still great differences in various aspects, including the liking of different IPs, due to cultural preferences and aesthetics. For example, one of the most famous IPs "The Monsters" has been received quite differently in different overseas markets, including the Forest Concert series, in which the Tycoco skeleton image is popular in Mexico, where there is a culture of the undead, but has hit a wall in Europe. Therefore, Bubble Mart needs to provide products based on local aesthetics and culture for the German market. 3. Current situation of the German toy market? a) Market Analysis - Rapid growth in size, increasing demand from potential customers, rising population under 15 years old in Germany - The German toy market is expected to reach USD 19,109.4 million by 2023, accounting for 15.2% of the total German market. It is expected to increase in the coming years. With an expected CAGR of 7.8% over the next four years, the market is expected to reach $25,848.4 million by 2027. b) Industry Analysis The German toy industry is relatively dynamic, one of the largest of its kind in the EU, and attractive to many foreign toy manufacturers. Globalization promotes German consumers' exposure to different brands, and the 2023 International Toy Fair in Nuremberg, Germany, provides insight into toy market trends and trend highlights for the coming year. The main focus is around opening up new worlds and themes. Products of this trend encourage in-depth exploration of products from other countries, cultures and languages The German toy market is segmented into baby/preschoolers, art and designer toys, puzzles, cars, outdoor and sports, and electronics for teenagers. Distribution channels are divided into department stores, discount stores, and e-commerce Competitors are Mattel Inc., Lego, Hasbro, Inc, Ravensburger, Spin Master Corp. Vtech Germany does not have many competitors selling blind boxes. Pop Mart can quickly capture the market. Entry mode selection:

2. Use OLI Framework to analyze the International Expansion for Popmart

• Ownership advantage: POP MART already has 18 outlets and business operations in 23 countries outside China and has plans to reach a total of between 40 and 50 overseas outlets this year. POP MART has has extensive business experience in both Asian and European market. It has opened two directly-operated stores in Hong Kong and the experience can build the confidence for POP MART to operate in Germany. POP MART also has strong ability to develop differentiated products like ZIMOMO's opening limited edition that firstly designed and created for a specific country, France.
• Location advantage: In Germany, Revenue in the Toys & Games segment amounts to US$5.69bn in 2023 and the market is expected to grow annually by 3.52%, to US$ 6.76 Billion at the end year 2028. In 2020, Germany was the 2nd largest exporter of Toys in the world and there are large potential learning opportunities in the Toy market.
• Internalization advantage: input high resource commitment and high ownership to protect the IP

Use two dimensions to determine the greenfield investment rather than acquisition:

• Uniqueness of corporate culture:High
• Market growth rate:High

2. Therefore, we suggest POP MART choose the Greenfield investment entry mode to establish the wholly-owned subsidiary in Germany.

2. Greenfield investment:

Advantages: 1. Full control over foreign direct investment. 2. Freedom in establishing the overall strategy E.g., determine what sort of product or services it will sell, how to manage the operation and what is the marketing strategy. 3. Greenfield investments enable easier and more effective adaptation to the foreign market. The company can adapt both products and pricing to local conditions and has greater control over assuring product quality. Disadvantages:

2. high barriers to entry into foreign markets
4. firm need to undertake all the costs and risks. E.g., physical store & facilities construction costs

4. Operational issues related to greenfield entry mode

2. Where will you set the operation: enter into Germany
4. How will you distribute the products: major in offshore sales in the physical stores
6. How will you manage the operation: construct the wholly-owned physical stores & Exhibitions