The choices of entry modes for Superdrug’s and complications in India

According to Mehta(2009), one of the largest and fastest growing market is India and franchising has been successful for many year(WWL,2009). Meldonson and Bynoe(1995) noted that franchise business is a key feature because franchisee is committed by the business. Most of the foreign companies prefer franchising since India is vast and cultural diverse market. Compared to other part of the world, in India there is no need for franchisee-specific legislation (WWL,2009).Although some of the rules has to follow the foreign companies .For example, single brand has to pay 51  per cent of FDI and also foreign exchange regulation the foreign company has to pay franchisee fee, advertisement, trademarks .Even though well-known brand like McDonald , L’Oreal and Tony & Guy has marked their presence through franchise model in India(WWL,2009).Since Superdrug is largest international health and beauty retailers in Asia and Europe, it might be a good idea to go for franchising. Also, it’s a well-known brand and one of the leading beauty retailers in UK.







Besides, Superdrug’s will have option to control and since India is large emerging market, the company will go fast and well distribution its product without any high cost of constructing .Also, Anderson and Gatignon(1986) pointed out that, the key attribute to the entry mode is which firm has a control over its key marketing resources. Furthermore, Bonacrasi(1992) suggested that larger firms seems to have greater success since it has more resources. As Superdrug’s has more resources and its parent company is Watson , so it wouldn’t be a problem. Also , with franchising Super drug will have more control and they can choose the cities of India , where people are beauty conscious and they can afford .The north side of India   and the major cities are more conscious of their beauty and also the advertisements in TV mostly about the beauty product like Fair & lovely(Everyday Feminism,2014) On the other hand , Johnson and Tellis(2008) figured it out that , firm should enter into market like India ,  with great control and unique strength so that they can monitor success and failure closely. The company manufacture and parent  based in Hong Kong which has 2700 stores,  has been successful in UK and is one of the fast growing retail in UK (Google finance,2013).Moreover, its parent company based in ASIA ,so it does have a brief idea about the culture.

Furthermore, Johnson and Tellis (2008) pointed out that , at the entry mode high control strategies involves high commitment and also transaction cost theory suggest it involves higher cost. Pan and Chi(1999) suggested that Joint venture and wholly subsidiary  are higher cost entry mode and its riskier in India and also it needs higher investment .Besides , in 2013 Super drug already hit by operating loss of £1.8m(Cosmetic Business,2013)