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Entering new markets abroad (Threats (Lack of knowledge, cultural…
Entering new markets abroad
Threats
Lack of knowledge
cultural differences
Exchange rate changes
import restrictions
increased risk of non-payment
increased transport cost
Methods to overcome
joint ventures
the risks of entering new marker abroad are being reduced
main limitations: profits shared
licensing
main limitations: quantity prob caused by an inexperienced license could damage brand
saves time and transport cost
international franchising
main limitation: management conflict between the 2 businesses
the foreign franchises are used to operate a business's franchise abroad
localising existing brand
there is still a common brand image for the business but it has adapted to local culture then increasing sales
main limitation: expensive to change packaging, pr and each marker the product is sold in
Examples of failed/successful international businesses
succesful international businesses
Apple
coca cola
failed international businesses
Taco bell
walmart
Opportunities
Trade barriers have been lowered in many parts of the world, making it easier and more profitable now to enter these markets
there is a wide choice of location to produce products and this encourages busiesses to sell as well as
home market might be saturated and these new markets give the chance of higher sales
market in other countries might have much greater growth potential than existing business