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ENTERING FOREIGN MARKETS - Coggle Diagram
ENTERING FOREIGN MARKETS
Entry mode
Attractive exporting 1. avoid costs of establishing local manufacturing operating 2. helps firm achieve experience curve and location
Unattractive exporting - 1. lower-cost manufacturing locations 2. high transportation cost and tariffs 3. agents in foreign country not act in exporter's best interest
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The contractor handles every project for foreign client, including training operating personnel.
Attractive turnkey - 1. less risky than conventional FDI 2. earning economic returns from the required too assemble and run technologically process
Unattractive turnkey - 1. firm has no long-term interest in foreign country 2. can create competitors
Attractive - 1 avoid costs and risk to opening a foreign markets 2. firm quickly build global presence
Unattractive - 1. ability firms to take profits out of one country to support competitive in another 2. geographic distance can make difficult to detect poor quality
- Licensing - patents, inventions, process, design, copyrights, trademarks
Attractive licensing - 1. avoid development costs and risk associated 2. avoid barriers to investment 3. can capitalize on market opportunity
Unattractive licensing - 1. firm doesn't the tight control required for experience location 2. firm's ability to coordinate strategies moves across countries 3. proprietary assets can be lost
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- Joint ventures : a firm is jointly owned by two of more otherwise independent firms
Attractive - 1. the cost and risks of opening foreign market are shared 2. satisfy political considerations for market entry
Unattractive - 1. firm risks giving control of its technology 2. firm not have tight control to realize experience location economies 3. shared ownership
- Wholly owned subsidiary : firm owns 100% of stock, example : IKEA
Attractive - 1. reduce risk to losing control over competencies 2. firm hold tight control over operations in difference country that necessary for engaging 3. required to realize location and experience economies
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