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International Market Entry Strategies - Coggle Diagram

- - - - employ as well as using cheap labor and raw material from the country in which it is operating
      - can implement good things and culture of other nations into its own country business and can reap benefits
    - - company does not have the full understanding of the markets in which company is trying to operate
      - political, legal and operational risks
      - Risk of Loss of Control - lose control over the operation of business happening in other countries as decision making is not centralized
  - - - Lead Country manages a geographical region
      - coordinates and stimulates sales in the whole geographical region
    - - Cultures could clash if region is too big
      - No big presence in any 1 country
      - Must be able to manage all subsidiaries
  - - - better managing pricing and distribution
      - Marketing is usually managed by the HQ to make sure the company image is consistent with the home domestic market
    - - High costs to setup
      - Failure is not an option as lots of capitol is involoved
  - - - Order-making and order-taking
      - branch is an extension of a legal part of a firm
      - medium step between the management of a sales force and the establishment of a physical presence abroad
    - - Profit is shared between HQ and Branch / Sales Subsidiary
  - - - manages relationships with a small number of high-importance clients
      - sales functions is transferred to the foreign market
    - - Traveling Salesperson - no real connection to international market
- - - - Both partners can leverage their respective expertise to grow and expand within a chosen market
      - political risks involved in joint-venture is lower due to the presence of the local partner
      - Enables transfer of technology, intellectual properties and assets, knowledge of the overseas market etc. between the partnering firms
      - one of the fastest modes of entry into an international business
    - - dissolution of a joint venture is subject to lengthy and complicated legal process.
      - possibility of cultural clashes within the organization due to the difference in organization culture in both partnering firms
  - - - Low cost of entry into an international market
      - Allows expansion in multiple regions with minimal investment
      - partner has knowledge about the local market
    - - might not be able to exercise complete control on its franchising partners in the overseas market
      - risks tarnishing its brand image and reputation in the overseas and other markets due to the incompetence of franchising partners
  - - - Low cost of entry into an international market
      - Allows expansion in multiple regions with minimal investment
      - partner has knowledge about the local market
    - - might not be able to exercise complete control on its licensing partner in the overseas market
      - can leverage the acquired knowledge and pose as future competition
  - - - helps the companies in saving huge capital required for setting up the production process
      - easy for companies to enter into different countries
    - - Quality Issues
      - lose the ability to respond to market conditions
      - Outsourcing Problems - Different countries have different cultures, traditions, language and lead times
  - - - help distribute responsibility better
      - able to save time and your resources
      - the organization receives expertise and experience
      - provide more continuity to an organization
    - - conflict of interest
      - transfers the operational control of your business to the management company
      - surrendering information about its products, finances and other such matters to another entity
- - - - helps you to protect your patents, goodwill, trademarks and other intangible assets
      - utilize the direct exporting strategy to test your products in international markets
      - select your foreign representatives in the overseas market
    - - good amount of lead time that goes into the market research
  - - - have little or no increased financial commitment
      - gain fast entry to the international market
    - - choosing the wrong market and the wrong distributor
      - receiving inadequate market feedback
      - erosion of your brand
  - - - merchant exporter assumes all sales and credit risks
      - takes care of all formalities related to documentation, shipping arrangements, financial, political
    - - Export merchants may not be available for all foreign markets
      - Middlemen sell products in which they are interested
      - charge commission for their services, increases the cost of the product and reduces the profitability to the manufacturer