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Different market entry strategies (Sales & Production Subsidiary…
Different market entry strategies
Sales & Production Subsidiary
Advantages
High control
Use of others expertise
low product complexity
Disadvantages
High Risk
Low flexibility
High Costs
Direct Export
Advantages
low costs
low risk
high flexibility
Disadvantages
demand uncertainty
low control
intense competition
Joint Venture
Advantages
Shared risk
joint financial strength
Possible only means of entry
Disadvantages
Don't have full control
partners may have different views
Possible to recover capital
Licensing/Franchising
Advantages
opens door to low risk manufacturing relationships
capital not tied up in foreign operation
option to buy into partner
Disadvantages
Licensees become competitors
limited form of participation
potential returns from marketing and manufacturing may be lost
Partnering
Advantages
can take a lot of different forms
2 heads are better than one
limited external regulation
Disadvantages
each partner liable for the debts
Loss of assets if partner leaves
Risk of disagreements
Buying a Company
Advantages
Immediately be considered local
help get around government regulation
already have an established customer base
Disadvantage
Can cost a lot
Have to do A LOT of research