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Market Entry Strategies (Exporting image (Direct (advantages (more profit…
Market Entry Strategies
Exporting
Direct
advantages
more profit
shipment control greater
known customers
direct dealing with customers
direct contacts
rapid customer feedback
disadvantages
takes more funds
more time
personally accountable
Indirect
advantages
low risk to begin
low involvement to begin
limited liability
disadvantages
low profit
control lost on sales abroad
unknown customers
similar products possible
Management contracts
advantages
speed of implementation
not complex
more acceptable in some countries
disadvantages
public sector risks
limited gains
Licensing
disadvantages
control loss
dependence on licensee
product damage
damage of product reputation
advantages
greater market availability
retain ownership
move product rapidly
Franchising
advantages
expanding is cost effective
support in marketing
royalties from franchisees
acquiring talent for your operation
regulate growth
disadvantages
startup investment
minimal control
possible legal costs
regulation laws
Partnering
advantages
sharing the load
less funding
more revenue
better credit
positive management
tax advantages
easier to dissolve business
disadvantages
liability is unlimited
investment is froze
disputes
misuse of funds
Joint Ventures
advantages
lower investment
lower investment
understand country better
50/50 sharing
disadvantages
risk partner gaining control
conflicts between partners
Piggybacking
advantages
international experience unnecessary
quick entry into international markets
low investment commitment
disadvantages
less control
possibility of bad market
possible poor feedback
lower revenue
brand erosion
Turnkey Projects
advantages
proven business
eliminated risks
low rate of failure
inventory is usually included
established customers
disadvantages
high investment
can be restrictive
may have to have certain inventory/equipment
Greenfield Investments
advantages
flexibility
cost effective
disadvantages
entry barriers
resistance
unfamiliar
