SK Telecom, a famous Korean mobile operator is trying to expand its market to the U.S. and China since the domestic market is about to be saturated. SK Telecom is having preliminary talks on the deal with other companies, considering various scenarios and tapping opportunities, such as buying Virgin Mobile USA so that they can combine it with Helio, SK's own US mobile service. SK has approached Sprint Nextel last November but was rejected even though Sprint Nextel had been offered $5 billion investment.
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There are several ways for a company to expand to the global market. Some common tactics are: (1) exporting, transferring goods to other countries for sale; (2) licensing, selling the right to produce and sell a brand-name product; (3) franchising, letting others use the companies name and operate by giving certain amount of money; (4) joint-venture, agreement among two or more companies to pursue common business objectives; (5) Greenfield venture, creating a wholly owned foreign subsidiary. SK may choose any strategy they would like to but what they really need to consider is their outside forces as well as inside forces. U.S. as well as China has very different sets of regulations, culture, and so on.
The best way that I think is to do joint-venture. The companies that joined together would be able to cover up their weaknesses, what each of the company lack. In the case of U.S., SK can cover up as if they are not from one of the Asian countries until their company’s image and status is settled. In the case of China, it would be even greater to join with other company since Chinese are more to trust Chinese company than foreign companies. Even if they M&A with local companies, it would be better to use something similar to joint venture or Greenfield venture.
20500419 Entry #10
