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International Market Entry Strategies (Exporting: Marketing of goods…
International Market Entry Strategies
Exporting: Marketing of goods produced in one country to another.
Advantages:
Most Well Established Form of Operation in Foreign Markets
No Direct Manufacturing
Less Risky- Home Based
Reduces Risks Concerning Overseas Operation
Disadvantages:
Significant Investment
Lack of Control
Franchising: Allows the Use of a Suppliers Trademark & Distribution of Supplier Goods
Advantages:
Reduced Risk of Failure
Freedom of Employment
Products and Services are Vouched for/ Proven Worth
Trademark
Disadvantages:
Restrictions on how Business is Run
Cost may be Higher
Profits are Shared
Inflexible
Joint Venturing: 2+ Investors Share Ownership/Control over Property/Operations
Advantages:
Shared Risk
Financial Security- Joint Finances
Only Means of Entry in Some Countries
Disadvantages:
No One has Full Control
Impossible to Recover if Need Be
Partner Benefits
Contract Manufacturing: Retaining Responsibility of Marketing of a Product Whilst in a Foreign Country Under Contract
Advantages:
Lessens Risk of Investment in Foreign Countries
Production Facilities do not have to Commit Resources
Disadvantages:
Develops Potential Competitors
Less Control of Manufacturing Process
Mergers and Acquisitions: Expansion Strategy
Advantages:
Increases Market Power
Minimized Risks
Tax Benefits
Disadvantages:
May Lack Expertise of Unit
Units Acquired could have Problems
Counter-Trade: Largest Indirect Method of Exporting
Advantages:
Basis for Reciprocal Trade
Gives an Opportunity to Finance Export
Competition is Less Intense
Disadvantages:
Competitive Intensity- More Investment
Limited Market
Inconsistent