Case Study Aol: Lost in Translation Essay

1290 Words Dec 12th, 2011 6 Pages
Fachbereich Wirtschaft

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Case Study
Lost in Translation: AOL’s Assault on Latin America Hits Snags in Brazil

Identify the controllable and uncontrollable elements that AOL encountered in entering the Brazilian Market!

When entering a foreign market, as AOL entered the Brazilian Market, certain rules and regulations have to be followed. In case of AOL the controllable and uncontrollable elements are playing a significant role.
The main problem of AOL’s strategy in Brazil was the insufficient research about typical country terms and condition. Controllable elements, such as product, price, promotion and the channels of distribution have to be adapted to the target market.

AOL (America
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• Product Innovation: A new product is developed, specifically for the foreign market.

AOL has chosen the straight extension way, to enter the Brazilian market.
The strategy cracked at the point that they assumed their highly successful US product would be a fast selling item in Brazil too, but that proved to be one of their main mistakes. Instead of the straight extension strategy, they should have employed the product adaptation; to meet the cultural differences and consumer needs.
AOL with his product “America online” created a success story for their domestic US market. Having success in the domestic US market, does not automatically apply for success in foreign market business strategies. Before encountering foreign markets as Latin America, Asia or Africa, companies who are in the global business arena (in our case AOL) should have researched the foreign cultural differences first, before choosing an entering strategy. The correct implementation of cultural differences is often the key for success in foreign markets strategies. If a business strategy works out in the USA, it doesn’t mean automatically that the same strategy will be successful in the Latin American market such as Brazil, Argentina and Mexico.

Another difficulty in the Latin market to be taken into account is language. AOL entered the Latin market in Spanish although in one of the main countries, Brazil, Portuguese is the national language.
To avoid those

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