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International Market Entry Strategies (Direct Exporting (Pro (Easiest way…
International Market Entry Strategies
Direct Exporting
Pro
Easiest way to enter foreign markets
Good for new companies who do not have enough funds to take risks
Con
Companies may not be able to customer communications as quickly as a local agent
Licensing
Pro
Firm provides assets to foreign company in exchange for royalty fees
Con
The company has to share their proprietary secrets with an outsider
Franchising
Pro
Does not require a large investment from the franchise
Con
Only works for a specific business such as a storefront.
How might a countries stage of development influence international market entry strategy?
The countries stage of development would have a large impact on it's international market entry strategy. This is because they many times do not have the means or the funding to offer as big of a deal as another country may be able to. It is important tho to note that this is not always only a negative thing because another country may still want to work with them over a more developed country because things are cheaper in underdeveloped countries.
How might the level of political risk influence international market entry strategy?
This can many times be a big issue between countries looking to do business together. Not only from an import and export standpoint but also in politics people could be upset when the United States does business with a country like Russia or North Korea because we don't want to exchange business with corrupt countries. The public could be upset about this.
How might the size of the company might influence this international market entry strategy?
Large companies may often times not take the same market entry strategies that a smaller company would. What benefits a smaller company may often times not be the best possible deal for a larger company. For example, direct exporting may be a good deal for a smaller company because they may not have the funds to take that risk but for a larger company licensing may be a better option.
How might social and cultural differences influence an international market entry strategy?
In 2019, I do not think this as a big of a deal as it may have been 30 years ago. Today we are able to easily gather a lot of research about a country pertaining to their traditions, what is important to them, how they do business, cultural differences, etc. This is important to be aware of and not go into any meetings blindly because it would be terrible to lose out on an opportunity because you offended them by not properly doing your research.