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Entry Marketing Strategies - Coggle Diagram
Entry Marketing Strategies
Licensing
Advantages
Protection against barriers such as tariffs and quotas
The lincensee has knowledge on establishing into an market
Limits political risk
Royalty payments can last a long time, depending on the licensee
Low cost entry method
Disadvantages
Will only receive a portion of profits from sales
If service or products do not sell well you will not receive payments
Lose control over your product or service
Could damage the reputation of both parties
A licensee can be named as the licensors rival
Piggybacking
Advantages
increase sales
Low risk
Can easily get a product
Easy international entry
Can take over export transaction in the future
Disadvantages
Problems with maintaing the quality
Continuity of supplies can become a problem
May not be able to sell
Lose control
Partnering
Advantages
Alliance will expand customer base
Better quality
Financial assistance
Access to knowledge and experience
Can reach goals quicker
Disadvantages
Disgreement can lead to lawsuits
No independent legal status
Unclear agreement
Unlimited liability
Split profits
Joint venture
Advantages
You are not the only one taking a risk. Both parties share the risk and cost
Save money
Opportunity to gain new insights
You can sale what is yours
Access to better resources
Disadvantages
May be hard to terminate contract
Unreliable partners
Clash of cultures
Objective can be unclear
Work is not distributed equally
Direct Exporting
Disadvantages
Maybe not be able to respond quickly to each local customer
More responsibilities
Requires more time and energy
Must build customer base on your own
Greater financial risk
Advantages
Feedback is faster
More flexibility with improvements
Company knows customers personally
Better clarification on your target market
More control over transaction
Franchising
Advantages
Speed of Growth
Limited Risk and Liability
Promotes multi-unit expansion
Customer Loyalty
Creates Capital for Expansion
Disadvantages
Sales are competitive
Bad reputation from other franchisees
Less Control
Sharing profit
Cost
Greenfield Investments
Advantages
Has complete control
Bypass trade restrictions
Boost earnings and profits
Creating jobs for the economy
Brand expands
Disadvantages
High risk investment
Government restrictions
A lot of time
High market entry cost
TurnKey Projects
Advantages
Investors make payments until you get paid for the entire project
Low cost
Reduced timelines
Less management work
Disadvantages
High cost
High risk
Risk of revealing companies secrets to rivals
Can create future competitors
Lack of authority
Buying a company
Advantages
Immediate cash flow
Experience can be shared
Access to customer base
Brand has already been established
Product or service has already been established
Disadvantages
High cost for the initial investment
May be difficult to make it your own
Business could have a bad repuation
May need to honor or renegotiate outstanding contracts
You could get scammed