Question

For this discussion, do a current international entry mode report on the company, Kellogg's. Remember there are 5 types of modes exporting, licensing, strategic alliances, acquisitions, and new wholly owned subsidiary. What entry mode(s) does Kellogg's currently use? How? Why?

Answer 1

Kellogg's uses the entry mode of Wholly-owned subsidiaries.

Wholly-owned subsidiaries Definition - This involves setting up a new business unit or plant in foreign country and controlling the operations by recruiting resources and implementing technology with all major business functions. Other ways to own Wholly-owned subsidiaries includes Acquisition which involves acquiring smaller firms which have already established operations in the country. This reduces significant capital costs for the firm which can expand the operations by increasing capacity.

Kellogg's has its own business units, manufacturing plants and distribution network to manufacture and sell the products to its consumers in various countries.

Through the entry mode, the firm has a greater control of its business abroad and can esure its brand name is protected in all aspects by maintaining the right level of quality. The firm can also have control over all major business functions like managing resources, implemntation of processes and technology, manufacturing and quality, distribution and sales.