Target Corporation - the Hypermarkets of Malaysia Retailing Industry

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The ownership and control advantage is also one of the reasons that Target Corporation should take Greenfield investment as entry mode choice. Based on Business Leadership Management (2013), the potential advantages due to company’s products differentiation, superior technology and knowledge, as well as the high-value brand name, can be enjoyed by Target Corporation’s management fully when entering Malaysia market via Greenfield investment. Any matching or relationship-building among multiple firms is not needed as management of Target Corporation do not need to share the ownership or corporate with the third party. Furthermore, the complicated situation of some agency issues occur due to multiple independent parties involved in an ownership structure can be avoided via Greenfield investment because Target Corporation can enjoy fully control in decision-making. (Federico, J. D. & Alan, C. S., 2013). Shortly, the ownership advantages can be enjoyed by Target Corporation’s management alone.

Prevention of specific knowledge and technology leakage to the third party is another reason that for using Greenfield investment as entry mode. (Qiu, L. D. et al., 2011). In other words, Greenfield investment is preferred when entering a foreign country in order to protect particular firm-specific knowledge assets and technology from leakage to other firms. (Olivier, B., Katariina, H., and Pehr-Johan, N., 2007). With this characteristic, Target Corporation’s management may be more confidence when conducting business in Malaysia hypermarket retailing industry and tend to transfer more resources from headquarter to this wholly-owned subsidiaries. (Beata S. J., & Mariana, S., 2006).

In addition, Greenfield investment provides benefit to Target Corporation in the perspective of corporate culture by building a new affiliate company and implanting new culture into the company. This action can prevent any organizational conflicts from happening due to indifferent culture among the workers from different countries. (Wang, A.W., 2009). High consistency also can be achieved between headquarter and all its subsidiaries. Matters such as some significant skill and knowledge that difficult to learn and articulate are much easier to be embedded into a new company. In sum, all the workers under Target Corporation will achieve some degree of similarity and consistency in their working environment.