The success of a business depends on the ability of the management to analyze the market trends, the culture of a country, its political climate and other external factor. This issue is particularly important when this company operates at an international level. The case of MyGym shows how an organization can increase its presence in various countries.
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While evaluating the market of a country, the management of MyGym considered such factors as benefits, cost and risk factors. At the initial stage, the management of this organization focused on those countries where the English language was spoken. This policy was adopted in order to reduce the cost of translating slogans or commercial.
Moreover, English proficiency was critical for hiring new employees. Therefore, in this way, they attempted to avoid extra expenses. Additionally, they paid attention to the culture, especially the way in which parents approached the education of their children. This factor was also critical for the success of the company.
Additionally, the company also made some considerations of the benefits that they would get from entering a new market. For instance, they strived to enter those countries in which customers could be familiar with their products and services. This strategy can be best illustrated by the company’s move to Mexico. This step was beneficial since the Mexicans already knew about MyGym. This is one of the details that can be identified.
Risk factors were also taken into account by the company during the scanning stage. The management focused on those internal and external factors that could undermine the work of the company. These risks can be related to the political climate of the country and vulnerability to economic hardships.
The strategies adopted by MyGym indicate that a company, which is planning to enter a foreign market, has to consider the risks during the scanning stage. In turn, the failure to do it can result into serious difficulties such as inability to capitalize its investment. The successful expansion of MyGym can be partly explained by the fact that the management developed an effective method of evaluating different countries.
MyGym used the multi-domestic generic strategy when venturing into the markets of other countries, especially when entering Mexico. The main peculiarity of this approach is that an organization attempts to adjust its products to the needs of particular clients, language, or culture. For instance, one can mention that the company translated its marketing materials into Spanish while working with Mexican clients.
Additionally, they established separate headquarters in this country. This branch of MyGym establishes the policies and gives directions that are relevant to the market of this country. This strategy helped the company to integrate into the new market since the local employees knew more about the peculiarities of consumers’ behavior. This is one of the issues that should be considered because it was vital for the success of MyGym.
At the very beginning, this organization did try to act as a transnational company. For instance, at the beginning, they thought that Mexican clients have no difficulty in using the English language. Nevertheless, the management understood that this strategy was not suitable because their services had to be adjusted to a particular market. This is the main argument that can put forward.
MyGym encountered many challenges when expanding into Mexico. In most cases, these difficulties were related to the culture of this country.
Their experience demonstrated that the elements of culture such as language, technology and education can hinder the growth of a company. As it has been said before, the first challenge was the language barrier. They had to translate their programs into Spanish in order to improve the experiences of local clients. Additionally, they also encountered challenges related to the education system in Mexico.
For instance, children had to stay in schools for longer periods and they could not attend the programs developed by MyGum. As a result, this company had to target the children who were still in school. This difficulty is one of the reasons why this organization had to adopt a multi-domestic strategy. However, this company was able to adapt to a new environment. This is one of their major achievements.
Technology was also a challenge during the expansion MyGym in Mexico. The level of technology in Mexico is not as good as in the United States. This is why the head office had to procure the equipment for every MyGym that was opened in Mexico. The main problem is that there was no local manufacturer that could supply this equipment to the company. Therefore, this issue proved to be a challenge during the set-up of the gyms.
Apart from that, the culture of Mexico also created some barriers that could have slowed down their expansion process. For instance, one should look at the celebration of birthdays in this country. A normal birthday party in the United States takes approximately two hours; in contrast, in Mexico it can take at least four hours. This difference affected the way in which MyGym programs were run in Mexico. Therefore, the management of MyGym had to overcome various obstacles while working in this country.
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One can say that the company used the non- equity entry mode in Mexico. Under this entry mode, MyGym proceeded to employ the indirect export process of their business activities to Mexico. This argument can be illustrated by the fact that they changed their strategy from a direct franchising to a domestic master franchise, which had to act as an intermediary.
Additionally, an office was set up in Mexico. Moreover, they employed local staff that would be responsible for translation and localization of the company’s services. However, the main office in the United States was still responsible for issuing policies and information to the master franchise in Mexico.
Additionally, the company used this entry mode because the locals were better able to gain the loyalty of clients. For instance, the translation of programs into Spanish could be much easier if it was done by staff from the host country Mexico.
On the whole, MyGym experience in Mexico highlights the importance of trusting local master franchise as opposed to a direct franchise which does not provide a bond with the locals. Furthermore, the master franchise creates synergy with the locals and they are more likely to respond positively to the company’s business activities. To a great extent, this strategy proved to be quite effective.
On the whole, MyGym CEO insists on the importance of examining a foreign market from different perspectives. One can say that this strategy was implemented because of the challenges that this company faced in Mexico. There were cultural, linguistic, and technological differences that forced them to change their operations.
The company was able to start smoothly in Mexico because they considered the needs of the local clients. This policy distinguished them from many other firms that attempted to apply the same strategy in various countries. Therefore, the issues discussed in this paper can be relevant to companies that operate in foreign countries.