4. After the Otto Group failed in its first effort to enter the US market with Spiegel, why would it try again? 5. How does this latest effort to enter the US market differ from its prior attempt? Opening Case: The Invisible Global Retailer and Its Reentry into USMarketsWhich corporation owris 123 companies, operates in twenty-seven countries, and has been in the mobile-phune business for over a decade? Il you dori't know, you're not alone. Marny people haveri't heard of theOtto Gruup, the German retailing giant that's second only to Amazon in e-commerce and first in theglobal mail-order business. The reason you've likely never heard of the Otto Group is because the firmstays in the hackground while giving its brands the spotlight. This strategy has worked over the company'salmost eighty-year history, and Otto continues to apply it to new moves, such as its social media site, Twofor Fashion. "They are talking ahout fashion, nont about Otto, unless it suits," explained Andreas Frenkler,the company's division manager of new media and e commerce, about the site's launch in 2008. Thesite is now one of the top fashion blogs in Germany and is an integral part of the retailer's marketingstrategy.Leading through Passion, Vision, and StrategyToday, the Otto Group consists of a large number of companies that operate in the major economic zonesof the world. The Otto Group's lines of business include financlal services, multichannel retall, and otherservices. The financial services segment covers an International portfollo of commercial services along thevalue chain of retail companies, such as Information-, collection-, and receivable-management services.The multichannel retail segment covers the Otto Group's worldwide range of retail offerings: goods areImarketed across three distributionn channels-catalogs, e-commerce, and over-the-counter (OTC) retail.The third segment combines the Otto Group's logistics, travel, and other service providers as well assourcing companies. Logistics service providers and sourcing companies support both the Otto Group'smultichannel retail activities and non-Group clients. Travel service providers offer customers travelofferings across all sales channels. Unique to the Otto Group is the combination of travel agencies, directmarketing, and Internet sites. The combined revenue of these three ventures is growing rapidly, evenSaylor URL: http://www.saylor.org/baaksSaylor.org357during the global economic downturn. The travel service revenues for 2010 were 10 billion euros, or about$12 billion.Even though it operates in a variety of market segments, business ideas, and distribution channels-not tomention its regional diversity-the Otto Group sees itself as a community built on shared values. Otto'spassion for success is based on four levels of performance, which together represent the true strength ofthe Otto Group: "Passion for our customers, passion for innovation, passion for sustairability, andpassion for integrated networking." Each one of these performance levels is an Integral element of theOllo Gruup's guikling principle and self-image.Future growth is guided by the Otto Group's Vision 2020 strategy, which is based on achieving a strongpresence in all key markets of the three largest regions Europe, North America, and Asia. In dolng so,the Otto Group relles on Innovative concepts in the multichannel business, on current trends In e-commerce, on OTC retail, and on developments in mobile commerce. In keeping with that vision, its focusfor near-term expansion is on expanding the Group's strong position in Russia and increasing marketshare in other economic areas, such as the Chinese and Brazilian markets. Investment options in coreEuropean markets are continually being reviewed to strengthen the multichannel strategy. As a globaloperating group, Otto aims to have a presence in all major markets and will continue to expand OTCretailing. In 2010, for instance, the Otto Group continued to develop its activities in the growth markets of Centraland Eastern Europe. Through takeovers and the acquisition of further shares in various distance-sellingconcepts, including Quelle Russia, the Otto Group has continued to build on its market leadership inRussian mail order. A further major goal for the future is to expand OTC retail within the multichannelretail segment, making it one of the pillars of Otto alongside its e-commerce and catalog businesses. Thefoundations of value-oriented corporate management are reflected in the uncompromising customerorientation evident in business activities with both end consumers and corporate clients.The strategy envisages targeted investments that provide the Otto Group with "Best in Class" businessmodels. Otto not only draws on an excellent range of customer services as the basis for its success in itscore business of multichannel retailing but also offers an array of retail-related services for its corporateSaylor URL: http://www.saylor.org/booksO 000Saylor.org358clients. In the future, the company is looking to expand these services, moving beyond its core business.The buying organization of the Otto Group has been repositioned under the name Otto International andis now a firm fixture in the world's key sourcing markets. Otto International's corporate clients stand tobenefit directly from the market power of the Otto Group while providing the volumes to make their owncontribution to its growth.The US Market Reentry InitiativeGermany remains the Otto Group's most-important regional sales market, followed by France, the rest ofEurope, North America, and Asia. In the United States, Otto set up a greenfield division called OttoInternational and quietly launched Field & Stream 1871, a brand of outdoor clothing, outerwear, footwear,and accessories, in 2010. The products are available only on the Field & Stream e-commerce site. Asalways, the Otto name is almost nowhere on the site, being visible only on the site's privacy policy page.Industry experts thought it surprising that Otto launched the clothing line because it had previously leftthe US market after its acquisition of Eddie Bauer's parent company, Spiegel, failed in 2009.Still, the Otto Group has received much acclaim for its innovations in the retail arena. For example,according to a Microsoft case study, Otto was the first company (1) to use telephone ordering, (2) toproduce a CD-ROM version of its catalog in the 1990s (to deal with slow dial-up connections), and (3) tobuild one of the largest collections of online merchandise, at http://www.otto.de. 1 So the Otto Groupmay have other innovations planned for Field & Stream. But the US fashion market is saturated withcompetitors. As WWD reported, Otto may do better to focus on growing its own retail brands and utilizingits impressive in-house manufacturing and logistics divisions, which are now Otto's fastest-growingsegment. Otto could use these divisions to build other retail operations-–while keeping a low profile, ofcourse.

Question

4.  After  the  Otto  Group  failed  in  its  first effort to  enter  the  US  market  with  Spiegel,  why  would it try again? 5.  How does this  latest effort to  enter  the  US  market differ  from  its  prior  attempt? Opening Case: The Invisible Global Retailer and Its Reentry into USMarketsWhich corporation owris 123 companies, operates in twenty-seven countries, and has been in the mobile-phune business for over a decade? Il you dori't know, you're not alone. Marny people haveri't heard of theOtto Gruup, the German retailing giant that's second only to Amazon in e-commerce and first in theglobal mail-order business. The reason you've likely never heard of the Otto Group is because the firmstays in the hackground while giving its brands the spotlight. This strategy has worked over the company'salmost eighty-year history, and Otto continues to apply it to new moves, such as its social media site, Twofor Fashion. &#34;They are talking ahout fashion, nont about Otto, unless it suits,&#34; explained Andreas Frenkler,the company's division manager of new media and e commerce, about the site's launch in 2008. Thesite is now one of the top fashion blogs in Germany and is an integral part of the retailer's marketingstrategy.Leading through Passion, Vision, and StrategyToday, the Otto Group consists of a large number of companies that operate in the major economic zonesof the world. The Otto Group's lines of business include financlal services, multichannel retall, and otherservices. The financial services segment covers an International portfollo of commercial services along thevalue chain of retail companies, such as Information-, collection-, and receivable-management services.The multichannel retail segment covers the Otto Group's worldwide range of retail offerings: goods areImarketed across three distributionn channels-catalogs, e-commerce, and over-the-counter (OTC) retail.The third segment combines the Otto Group's logistics, travel, and other service providers as well assourcing companies. Logistics service providers and sourcing companies support both the Otto Group'smultichannel retail activities and non-Group clients. Travel service providers offer customers travelofferings across all sales channels. Unique to the Otto Group is the combination of travel agencies, directmarketing, and Internet sites. The combined revenue of these three ventures is growing rapidly, evenSaylor URL: http://www.saylor.org/baaksSaylor.org357during the global economic downturn. The travel service revenues for 2010 were 10 billion euros, or about$12 billion.Even though it operates in a variety of market segments, business ideas, and distribution channels-not tomention its regional diversity-the Otto Group sees itself as a community built on shared values. Otto'spassion for success is based on four levels of performance, which together represent the true strength ofthe Otto Group: &#34;Passion for our customers, passion for innovation, passion for sustairability, andpassion for integrated networking.&#34; Each one of these performance levels is an Integral element of theOllo Gruup's guikling principle and self-image.Future growth is guided by the Otto Group's Vision 2020 strategy, which is based on achieving a strongpresence in all key markets of the three largest regions Europe, North America, and Asia. In dolng so,the Otto Group relles on Innovative concepts in the multichannel business, on current trends In e-commerce, on OTC retail, and on developments in mobile commerce. In keeping with that vision, its focusfor near-term expansion is on expanding the Group's strong position in Russia and increasing marketshare in other economic areas, such as the Chinese and Brazilian markets. Investment options in coreEuropean markets are continually being reviewed to strengthen the multichannel strategy. As a globaloperating group, Otto aims to have a presence in all major markets and will continue to expand OTCretailing. In 2010, for instance, the Otto Group continued to develop its activities in the growth markets of Centraland Eastern Europe. Through takeovers and the acquisition of further shares in various distance-sellingconcepts, including Quelle Russia, the Otto Group has continued to build on its market leadership inRussian mail order. A further major goal for the future is to expand OTC retail within the multichannelretail segment, making it one of the pillars of Otto alongside its e-commerce and catalog businesses. Thefoundations of value-oriented corporate management are reflected in the uncompromising customerorientation evident in business activities with both end consumers and corporate clients.The strategy envisages targeted investments that provide the Otto Group with &#34;Best in Class&#34; businessmodels. Otto not only draws on an excellent range of customer services as the basis for its success in itscore business of multichannel retailing but also offers an array of retail-related services for its corporateSaylor URL: http://www.saylor.org/booksO 000Saylor.org358clients. In the future, the company is looking to expand these services, moving beyond its core business.The buying organization of the Otto Group has been repositioned under the name Otto International andis now a firm fixture in the world's key sourcing markets. Otto International's corporate clients stand tobenefit directly from the market power of the Otto Group while providing the volumes to make their owncontribution to its growth.The US Market Reentry InitiativeGermany remains the Otto Group's most-important regional sales market, followed by France, the rest ofEurope, North America, and Asia. In the United States, Otto set up a greenfield division called OttoInternational and quietly launched Field & Stream 1871, a brand of outdoor clothing, outerwear, footwear,and accessories, in 2010. The products are available only on the Field & Stream e-commerce site. Asalways, the Otto name is almost nowhere on the site, being visible only on the site's privacy policy page.Industry experts thought it surprising that Otto launched the clothing line because it had previously leftthe US market after its acquisition of Eddie Bauer's parent company, Spiegel, failed in 2009.Still, the Otto Group has received much acclaim for its innovations in the retail arena. For example,according to a Microsoft case study, Otto was the first company (1) to use telephone ordering, (2) toproduce a CD-ROM version of its catalog in the 1990s (to deal with slow dial-up connections), and (3) tobuild one of the largest collections of online merchandise, at http://www.otto.de. 1 So the Otto Groupmay have other innovations planned for Field & Stream. But the US fashion market is saturated withcompetitors. As WWD reported, Otto may do better to focus on growing its own retail brands and utilizingits impressive in-house manufacturing and logistics divisions, which are now Otto's fastest-growingsegment. Otto could use these divisions to build other retail operations-–while keeping a low profile, ofcourse.

Accepted Answer

In the rapidly increasing world of globalization, it is impossible for any business to operate in…