A leading hospitality, real-estate development, and lifestyle company recently announced its plan to expand internationally through the use of strategic partnerships, and specified a new partnership...

Company Info
SBE is Hospitality, Real Estate and Entertainment Company found Sam Nazarian who is also
the CEO of the company. SBE primarily deals in various hospitality and lifestyle destinations
which mostly are developed and managed by their Real Estate groups. They’re primarily
centered in Los Angeles, California and come under the category Luxury Hotel business. Their
domestic expansions in near future include some top destinations in the country like New York,
Las Vegas, Miami etc.
Strategic partnership with firms having experience in local markets
When a company already well-established in its home country wants to expand to a foreign
country they look for strategic partners so as to get an entry point in that country. The company
wishing to expand would always look for such type of company in that target country who is well
experienced in the local market and have extensive knowledge and good networks. While
entering a foreign market, there are numerous government regulations and procedures to be
passed through and if the partnering firm has good experience and networks with government
related matters it will make the entry easier and smoother with regards to all the due diligence
required. A product which is popular in one country does not go on selling in another country
without having being modified and tweaked a little according to the host country’s customers.
The partnering firm knows and understands that country’s customers more better than the
company who wishes to partner. This would be extremely helpful because then the company
can position the products to their potential market segments in a much better way as they
already have a fair idea about them. For e.g., When McDonalds wanted to enter in Indian
Markets, they had to drop the option of Beef meat because for most of the locals a cow is
sacred. Hence the company should analyze such situations and do customer analysis in before
heading on to the country. They also have extensive knowledge about the market and
competitors. The global expansion would require a modification of business practices to best
suit in the foreign market otherwise there could be several backfires...