Please enable JavaScript.
Coggle requires JavaScript to display documents.
Market Entry Strategies, Joint Venture, Franchising, Licensing, Joint…
Market Entry Strategies
Advantages
Disadvantages
Joint Venture
Limits commitment and business exposure
Limited life span which only covers what a business does
Unequal involvement
Imbalance and culture clash
Diversion of focus from individual business
Franchising
Creates rapid market expansion
Provides labor and sales growth
Motivated management
Increased profitability
Licensing
It increases opportunities for IP theft
It is offered for a limited time and creates added competition in the market place
Reputation Risk in market
Limited timing
Joint Venture
Access to greater resources with specialized staff and technology
Shares risks with a venture partner
Brand Recognition
Economies of scale
Direct Export
Governmental restriction and high tax tariffs
Risk of exchange rate
Requirement of high degree of skills, time and investment
Licensing
It creates new business opportunities as well as opportunities for passive income
It creates self-employment opportunities and an easier entry into foreign markets
Risk reduction
Partnering
Flexible legal structure
Easy access to capital
Less regulation
Partnering
Chances of disagreement
Any partner can breach the agreement
Unlimited liability
Direct Export
No investment in new business:
Agreement to sell products
Global Coordination
Franchising
Cannot be managed as closely as employees
They may have different goals to the franchiser
Greenfield Investment
Increased investor control relative to investing in an existing local business
Opportunity to form marketing partnerships and avoid intermediary costs
Greenfield Investment
An extremely high-risk investment with high market entry cost
Government regulations that may prevent foreign direct investments