Buy Vip

1. Wich are the main challenges BUY VIP faces in internationalization?

a) The company had to increase their capital for a proper growth, undertaking two venture capital companies (Bertelsman and Kennet Capital Brothers) to keep on the expansion idea for the business.

b) The main decision of choosing in what countries to operate for wich they made various market studies and finally decided by Austria, Portugal and Poland among others.

c) The expansion to the Nordic countries, was another one. It seemed at the beginning that the market would be similar but at the moment they decided to launch campaigns they noticed that they had to make them in 4 languages and that was going to delay significantly the introduction to this markets because of translation times. When they realized of that concluded that languages became a barrier and the effort to overcome this issue wouldn´t be worth focusing on at the moment.

d) To build the platform, they had to make the first technological development decision, wich was between three companies: NET, PHP and Java. They choose Java because was the one that represented less costs of investment.

e) To find the right manager to operate in the decentralized structure that Buy VIP had. They took three years to find the most appropriate person to run the company and to manage the team, important factor to get positive profits.

f) When Buy VIP decided to get into the german market, they had problems to obtain benefits, mainly because they choose an inappropriate management team in that hub.

The tool used to see this conclusions, was the SWOT analysis, shown below:

Strenghts

- Increased their capital with two ventures to get the expansion/internationalization goal

- Had presence in 9 countries

- Found proper HHRR

- Offers from 30 to 70% discount over market prices Weaknesses

- There wasn´t a reliable logistics operator to work in all countries at the same time

- The access of clients to the stores is limited because every client had to be invited or recommended by an old one

Opportunities

- Chance to grow in Nordic countries

- Improve positioning in Germany Threats

- Growth and internationalization of the leader, Vente priveé

- To operate in a market facing a recession economy like Spain

- The competitors are sending products to the rest of Europe getting portions of the target market

2. The leader in revenues, Vente priveé.com is mostly focused in France and faces 1b€ revenues in 2012. Is internationalization such a good idea? Why?

I think is a good idea because they held the first position on e-commerce sales in Europe and this business experience helped them to be successful later on in other countries (example in Spain they got a 45 million € in turnover).

In the other hand, Buy VIP in 2010 had a presence

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