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International Market Entry Strategies (Licensing (Pros and Cons (Can…
International Market Entry Strategies
Licensing
Pros and Cons
Can reduce risk and be effective way to finance International expansion.
Your licensing agreement may restrict any future activities, or reveal information to a possible future competitor.
Strategic Alliances
Pros and Cons
You can share costs and utilize member strengths.
There's risk of conflict between partners, not to mention the creation of a future local or international competitor.
Joint Ventures
Pros and Cons
Can be a good way to penetrate international markets while reducing risk.
There's always the possibility of conflict between partners, and potential loss of control by one of the parties.
Can allow you to access the international distribution network of the entities you've partnered with.
Franchising
Pros And Cons
Low cost, Low risk, Allows you to use your own knowledge and know-how of the local culture to enter the market.
You're obligated to continue to support the franchisee after the initial transfer of property is complete.
Wholly Owned Subsidiaries
Pros and Cons
You have complete control over the day-to-day operations in markets overseas, while at the same time acquiring valuable processes and technologies.
It requires substantial resources, so the exposure to risk is high.